(News)

There's no property tax increase planned for city residents and businesses, but McKeesport's finances remain delicately balanced.

"There are serious concerns regarding escalating costs of fringe benefits, especially medical insurance and (pensions)," says outgoing Mayor Jim Brewster in his final budget message to city council.

A public hearing on the city's 2011 spending plan is scheduled for 6 p.m. Monday in city council chambers at the Public Safety Building, 201 Lysle Blvd. at Market Street.

The budget message also confirms rumors that the parent company of Equitable Gas is considering the construction of a regional service facility Downtown.

To be located in the RIDC industrial park on the old U.S. Steel National Works site, the facility would employ 65 people and include a fueling station for natural gas-powered vehicles, Brewster says.

Interest from Equitable and a proposed solar-panel factory "indicates the viability of (the RIDC site) as a significant employment center in our future," Brewster says.

. . .

The 2011 budget is the last prepared during Brewster's administration. The two-term mayor, who was sworn into the state Senate on Wednesday, is expected to submit his resignation to city council at the Dec. 1 meeting.

Without new sources of income, Brewster cautions council and his successor, "a balanced city budget would become not only difficult but impossible."

Wage and property tax collections are not keeping pace with expenses, he says, recommending that council and the next mayor aggressively pursue drilling for Marcellus shale gas, as well as the treatment of the so-called "fracking" water used in the drilling process.

"While other opportunities may present themselves, these two solutions are imminent answers to the future funding gap," Brewster says.

. . .

The projected 2011 budget, not yet made public, will project $19.5 million in expenses --- about $500,000 more than this year's budget --- while property taxes would remain 4.26 mills on buildings and 16.5 mills on land. Earned income taxes stay the same at 1.2 percent.

But the municipal service fee, which covers trash collection, street lights and other expenses, would increase by $20 per year. The increase would have been more, Brewster says, if the city had not switched its trash collection to Nickolich Sanitation in 2009.

In addition, restructuring the health insurance plans for all city employees will actually result in the costs decreasing 11 percent in 2011, he says.

The cost savings are the result of careful cash management and a "dedicated effort" by department heads and city employees to control expenses, Brewster says.

. . .

In his four-page budget message, Brewster also addresses a report, provided to the Daily News by city Controller Ray Malinchak, which suggested the city would be running multi-million dollar deficits within five years unless major changes are made to both expenses and income.

The report by Mechanicsburg-based Delta Development Group, which has not yet been officially released, "did not reveal any issues of which this administration was not aware of during the past seven years," Brewster says.

Brewster notes that several projects begun this year will "come to fruition" in 2011, including:

• the new flyover ramp, now under construction, connecting the RIDC industrial park with Lysle Boulevard;


• addition of the proposed solar-panel factory and an Equitable Gas facility in the RIDC park; and


• the reconstruction of Fifth Avenue, Downtown.

Those developments and existing facilities, including the McKees Point Marina, will continue to make McKeesport "the viable hub" of the surrounding area, Brewster says, adding that as mayor, he has tried to "show McKeesport's detractors" that the city remains "the leader of the Mon Valley as a place to work, live, worship and raise a family."