Penn Hills residents would see a 2-mill tax hike under the draft budget for next year, though at least some council members believe a smaller increase could keep the municipality on sound fiscal footing.
The property tax raise floated by Manager Scott Andrejchak would bring the millage rate from 6.444 mills to 8.444 mills — a 31% increase.
That means the owner of a home assessed at $100,000 would pay $844 a year in real estate taxes, up from $644.
The total budget comes in at $71 million, compared to just $61 million in projected spending this year. Penn Hills initially budgeted $67 million for 2024.
Andrejchak has framed the rise as a preventive measure, predicting a steady depletion of reserves without it.
Like many municipalities, Penn Hills got a sorely needed reprieve from budgetary constraints during the pandemic, thanks to $17 million in American Rescue Plan funds.
By the end of 2019, the municipality had whittled down its reserves to less than $4 million. That year, council passed a 1-mill tax increase to make ends meet and rebuild the fund balance.
Federal stimulus, however, played the most significant part in bolstering the reserves, which stood at about $13 million at the close of 2023. That was a $1.1 million decrease from the year prior.
“The challenge for Penn Hills is going to be finding ways that we don’t just end up where we started,” Andrejchak said.
He also has asked council to consider a policy to require a minimum balance in the municipality’s rainy day fund.
“For a town our size and the services we deliver, we should probably maintain at least a $10 million fund balance,” he said.
Mayor Pauline Calabrese wants to explore other ways to right the ship.
“I’m not necessarily prepared to entertain the proposal that’s out there right now,” she said.
Some possible alternatives, according to Calabrese: “Not necessarily cut services, but maybe freeze them, maybe raise taxes incrementally. The other way to increase our revenue is increasing home ownership.”
As a bedroom community, Penn Hills is heavily dependent on residential property taxes.
Councilwoman Joanne Fascio said she’s keeping an open mind on the tax hike, but “I’m going for a bit less than what’s proposed,” she said.
Councilman Shawn Kerestus is also skeptical that the full 2-mills are necessary.
Council members Catherine Sapp and Alan Waldron did not return requests for comment.
2024 projections versus 2025 budget
Much of the proposed cost increases come from the police budget, which would increase from $10.8 million to $12.7 million, primarily due to an extra $1.2 million set aside for the patrol division.
Penn Hills has beefed up its police force in recent years to become one of the largest in Allegheny County, other than Pittsburgh.
Emergency medical services spending would go from $2.6 million to $3.4 million.
As part of an automated collection contract reached in 2023 with Republic Services, garbage costs would climb from $3.3 million to $3.7 million. This was the lowest offer, officials have noted.
Planning department spending would move from $936,000 to $4.6 million, a change driven by $4.1 million in maintenance and repairs. That category, however, is a bit of a misnomer, said Planning Director Chris Blackwell, since it’s made up of grant money for road reconstruction and other projects.
Penn Hills will come into an extra $3 million to $4 million each year once bond payments from the general fund are complete.
Other notable general fund items include:
• $2.8 million for public works administration, up from $2.7 million;
• $1.5 million for paving, up from $1.3 million;
• $1.2 million for recycling, up from $1.1 million;
• $910,000 for code enforcement, up from $780,000;
• $783,000 for senior services, up from $613,000;
• $572,000 for the library, the same as this year;
• $428,000 for parks maintenance, down from $537,000.
As expected, residential sewage charges would go from $24.63 to $26.35 per gallon. This increase tracks with Alcosan’s planned 7% annual rate hike through 2026 to fund runoff treatment infrastructure. The municipality’s $20 service charge remains unchanged.
Alcosan processes about 75% of sewage flows from the community, while the remainder is handled by the Penn Hills Water Pollution Control Department.
Other notable sewer fund items include:
• $8.3 million in Alcosan payments, up from $7.9 million;
• $2.3 million for Water Pollution Control Department operations, up from $2 million;
• $892,000 for Water Pollution Control Department administration, up from $834,000.
The capital improvement fund would hit $3.5 million, compared to $2.8 million this year.
At a public budget hearing Nov. 18, library board member Larry Choby made his case for an additional $50,000 for engineering and architectural studies ahead of possible renovations.
John Capone, chief of the North Bessemer Volunteer Fire Department, asked council to appropriate funds to pave near the station.
A second hearing was scheduled for 7 p.m. Nov. 25 at the government center, 102 Duff Road.
Council is expected to pass a final budget Dec. 16.
Copies of the draft budget are available for review at pennhillspa.gov or at the government center.