York City mayor signs budget after council can't overturn veto

Julia Scheib

Mayor Kim Bracey signed York City's 2016 budget Wednesday after the city council failed to overturn her veto at an emergency meeting called that morning.

York City Council members Michael Helfrich and Renee Nelson discuss taking action on the 2016 budget. (Julia Scheib - The York Dispatch)

On Tuesday, Bracey vetoed the version of the budget council had amended and approved the day before.

The budget contains a 1 percent tax decrease, no layoffs or furloughs and no sewer rate increase for city residents. Per the mayor's wishes, on Wednesday the council passed a resolution to notify the York City School District that it will begin collecting its share of the realty transfer tax, which it has in the past ceded to the district. The council also voted to restore funding to the Department of Economic and Community Development (DECD), the Human Relations Commission (HRC) and the wastewater treatment plant that it had taken away.

After Wednesday's emergency meeting, Council President Carol Hill-Evans said she had thought the council would have the four votes needed to override the mayor's veto. Councilman David Satterlee, who had supported previous amendments, and Henry Nixon, who had not, both voted no on the override.

After the meeting Nixon called the cuts the council had made to various departments, particularly to the DECD, "irresponsible" and "short-sighted."

Primary areas of concern, the mayor wrote in a letter to council explaining her rationale, were the "artificial inflation" of the real estate tax assessment, that the HRC should not be forced to raise money to pay employees' salaries, and that the DECD, which has been "stripped to the bone in previous budgets," should be funded at "at least its current levels."

A trade-off: The council adopted several items Hill-Evans said Bracey had recommended, beginning with the collection of the city's share of the realty transfer tax it has in the past given to the school district. The council voted to give notice that it will begin collecting the money in July.

York City Mayor Kim Bracey

The tax would put about $150,000 into the city's coffers in 2016 and about $300,000 each year thereafter.

With that revenue boost, the council restored about $20,000 in salary and associated costs it had cut from the Human Relations Commission's budget, about $71,000 in salary and associated costs that had been cut from the Department of Community and Economic Development and $25,000 in overtime costs that had been cut from the wastewater treatment plant's budget.

"I don't understand why we would go down this road," said Councilman Michael Helfrich, who spearheaded the council's move to eliminate the proposed 6 percent sewer increase and opposed the city collecting the realty transfer tax.

He said he did not believe the apparent trade-off — adding a position in the DECD so there could be both a director and a deputy director, fully funding the HRC and paying what seemed to him an unnecessarily high amount in overtime costs at the treatment plant — was worth taking what, starting in 2017, will be about $300,000 a year from the school district.

Earlier this month, city Business Administrator Michael Doweary explained that by law, the city and the city school district should split the tax, but in a "gentlemen's agreement" years ago, the city agreed to let the school district have its share of the tax, and the school district agreed to let the city have the share of the local services tax it was entitled to.

Because the agreement is no longer fair, to the city's disadvantage, Doweary said, officials proposed that the city reclaim its portion of the realty transfer tax. The school district, however, can't start collecting its share of the local services tax because the statute of limitations has expired, he said.

Gary Miller, a spokesman for the state Department of Revenue, said York City is the only municipality in the county that cedes its share of the tax, and that the only other municipality in the midstate that does so is Cold Spring Township in Lebanon County. "To my understanding, the split is the most common practice," he said.

Concern for the most vulnerable: The discussion seemed to come down to concerns about helping and protecting York's poorest residents.

York City School Board member Michael Miller spoke to the council before they voted on the realty transfer tax.

"I ask that you not take money from students," he said. The school district, which, he said, gets 70 percent of its funding from the state and federal governments, is in a very shaky position because it is unsure of the amount it will get from the state this year.

The district could end up with a large shortfall at the end of the year, he said, a prospect made worse by the fragile position the district is in — the possibility that it will go into receivership and chartering if it does not budget carefully.

Two members of the Human Relations Commission also spoke to the council during the meeting. Commissioner Stan Sexton told council members, "Civil rights is an important part of our law," and asked, "Isn't the commission a law-enforcement entity?"

Sexton compared the commission, whose purpose is to enforce the city's anti-discrimination ordinance, to the police department and voiced his concern that the "poorest of the poor" would be without a voice if the semi-autonomous department was not sufficiently funded.

After the meeting, Hill-Evans expressed her frustration at having to vote for an action that takes money from a school district that serves so many disadvantaged children.

"What happened today was sad," she said. "Apparently necessary, but sad."

"In the end, the reason I voted 'yes' was that the mayor said that she and Michael Doweary had spoken with the school's administration. They knew this was coming — they didn't like it, but they'll do what they can to offset it," Hill-Evans said.

In the end: "What we did on Monday was not without effect," Helfrich said after the meeting. "We stopped the sewer fee increase. ... In the end, this process was not without positive effect."

By law, the council is required to pass a budget by the end of the year.

"There comes a time when, what are you going to do? Not have a budget?" Hill-Evans said, and expressed that she felt passing this version of the budget was the only alternative to going past Dec. 31 and having to shut down city services.

She was frustrated that the council hadn't been let in on budget planning earlier in the year and lamented the tight time frame within which the council had to consider and act on the budget.

Hill-Evans and Bracey were in communication, hashing things out to come up with a good compromise, from early Tuesday afternoon until around 11:30 that night.

"I give all credit to (Hill-Evans) for her willingness to compromise with the administration," Bracey said.

She added that council members have access to documents that have to do with the city's financial planning throughout the year, and that the business administrator's door is "always open" if they want to discuss anything to do with the city's finances.

"I hope this has given us a fresh start in how we work together," she said Wednesday afternoon.

— Reach Julia Scheib at jscheib@yorkdispatch.com.