Tonight the Tarentum Borough committee meeting came to terms with financial deficits that have the potential for becoming a serious problem. The meeting was 70 minutes long and focused on the report of the Borough's auditor. Because of a previous commitment I had to leave for part of the meeting, but the Valley News Dispatch sent Wynne Everett to cover the meeting, so I expect to read a more complete report of the meeting in Tuesday's paper.
Council President Carl Magnetta explained that this year the Borough was about $800,000 in the red, and he called on auditor Rich Hill to explain the situation. Hill explained that the 2006 budget is overbudgeted by about $831,000. This is a more serious deficit than the Borough experienced in 2004 which had a $510,000 deficit.
The Borough has been able to get by through the income from water and electricity. However, the borough has not been setting aside any profits from these utilities as a reserve to be available for capital improvements. Instead, the excess monies have been used to cover expenditures from the rest of the budget. The result of the lack of a maintenance reserve is that a major failure in the water or electric systems could create a crisis when the Borough is not able to pay for necessary repairs.
Hill explained that the deficits have grown in recent years, but that the Council does have excellent monthly budget-to-actual reports that should enable it to stay on top of the situation.
There had been some confusion about whether the Council was going to deal with the skateboard park at this meeting. I had understood the sense of the previous month's committee meeting to have included an intention for the Parks and Recreation Committee to meet tonight. There had also been a communication from Blank Skate Supply that tonight's meeting was to include plans for the Tarentum skateboard park. However, the Parks and Recreation Committee was not prepared to move to that stage of planning tonight, and the meeting was intended to focus on the Borough's finances.