Surprise!

The Borough Council presidents of Sayre, Athens, South Waverly, and the Athens Township board chairmen meet quarterly to discuss issues of interest to our communities. Our last meeting was in September 2007 and our guest was Doctor Musto, chairperson of the Valley Joint Sewer Authority (VJSA). By the way, Dr. Musto is a local dentist and a former member of the Sayre Borough Council, having served during the 1980s.

Dr. Musto informed us that the VJSA plant must undergo significant changes in the next five years in order to meet the requirements levied by the Chesapeake Bay 2000 agreement.

Background: In June of 2000, the Commonwealth of Pennsylvania,the State of Maryland, the Commonwealth of Virginia, the District of Columbia, the U.S. Environmental Protection Agency and the Chesapeake Bay Commission, signed Chesapeake 2000 (available here as a PDF file), a new Agreement for restoration of the Chesapeake Bay.

The signatories pledged to achieve over 100 specific actions designed to restore the health of the Bay and its living resources. These actions, called the Chesapeake 2000 commitments, are grouped into the Agreement’s five major categories:

• Living Resource Protection and Restoration
• Vital Habitat Protection and Restoration
• Water Quality Protection and Restoration
• Sound Land Use
• Stewardship and Community Engagement

What Dr. Musto presented deals with the third item, water quality. In order to meet the requirements of this agreement, entities along the Susquehanna River must reduce their nitrogen and phosphorus discharge. The current design of the sewer plant cannot meet this requirement without major upgrades. The initial estimates for this overhaul are about $14 million, making Sayre Borough’s share at about $7.2 million. This is the best estimate at this time – the VJSA won’t put it out for bid until FY2009. Oh, they have to overhaul the plant while keeping it online to serve the Valley.

Here is more information on the Chesapeake Bay Program. It’s a worthy goal and much needed, because if the Bay is clean, our river is clean!

Chesapeake 2000 (web site)

The Chesapeake Bay Program (web site)

Chesapeake Bay Commission (web site)

Alliance for the Chesapeake Bay (web site)

Chesapeake Bay Foundation – Pennsylvania (web site)

Department of Environmental Protection – Chesapeake Bay Program

Local Services Tax?

One of the biggest problems facing boroughs in Pennsylvania is revenue. Sayre collects tax revenue from Earned Income Tax and property taxes. And those are limited sources. The Commonwealth legislature is “working” on the problem, but no solution is in sight.

Our borough, as mentioned in an earlier post, is facing serious infrastructure issues. As an example, we began working on upgrading our sanitary sewers in late 2006. This was phase 1. It ended in late Summer 2007 and cost us around $3.2 million. The estimate for the rest of the borough is around $40 million – this is a generational project!

The big question: how are we going to fund it? There are grants and there are certainly loans available. I’m not too sure about grants as we are not the only community facing this issue; we have lots of competition. As for loans, there is a statutory limit on the amount of debt we can carry. I don’t know what that number is – it is based on a formula, but we haven’t calculated it as I write this.

So, given the challenge of funding, what are we to do. One possibility might the be Local Services Tax (Act 7 of 2007). This is a revamping of the Emergency and Municipal Services Tax (Act 222 of 2004). Act 7 fixed some issues with Act 222’s policies and procedures and changed the name. Under this Act, Council can enact a tax on individuals who work in our borough. The maximum amount we can levy is $52.00 annually. Under the law, 25% must be used for police, fire and emergency services. The other authorized uses are road construction and maintenance, and property tax reduction through the homestead and farmstead programs. (I don’t know how those work exactly – needs more research on my part).

The interesting thing about this tax, although it would hit residents who work within the borough, it also tags nonresidents. According to information provided by the tax office last year, about 4000 people work within the borough. Most of them are from out of town/state. These people benefit from the protection afforded by our police and fire departments, and they contribute to the wear and tear of the roadways. How many of them are eligible for this tax hasn’t been determined. There are exemptions, e.g., disabled vets, active duty military, and folks who earn less than $12,000.

It’s unfortunate that the tax would hit our residents, but perhaps we might be able to offset it with a decrease in a property tax increase dollar-for-dollar. The key question: how many people who do not pay taxes to the borough are affected and what would the amount of revenue be? Who collects it? Who handles all the paperwork? Do we share with the Sayre Area School District? How much should we designate? $10, $20, or $52? Can we bank it in Capital Reserve until we need it?

More info on the subject is at the Department of Community and Economic Development’s web site covering the topic.