(News)

Frustrated members of city council traded sharp words Monday night while working on McKeesport's 2011 budget.

A $750,000 gap looms in the $19.5 million spending plan --- a hole that was supposed to be filled by an annual payment, or "host fee," by the city's sewerage authority into the city treasury.

That host fee is not going to be paid, predicted City Council President Regis McLaughlin, who also serves as chairman of the Municipal Authority of the City of McKeesport.

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Host fees are commonly assessed against landfills, sewage treatment plants and other environmental facilities to compensate cities and townships for damage caused to their roads and streets, and for offensive odors or smells, according to the 2002 book, The Economics of Waste.

McKeesport city council assessed a $720,000 host fee against the sewerage authority in the 2010 budget, which was passed last December by 6-0 vote.

But this year, the host fee is "off the table," said McLaughlin at Monday's work session, adding that the authority had a "slim to none" chance of paying it.

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Although the authority has approved a $30 million bond issue, every penny is needed for upgrades to the sewage treatment plant in the lower 10th Ward, he said.

Deficit spending is not permitted under the city's home-rule charter. Without the host fee, the budget is unbalanced, and either a tax increase, employee layoffs or both would be necessary.

The city laid off 10 employees at the end of 2008 to eliminate a $1 million deficit. McKeesport is not the only community struggling to balance its budget; Monroeville councilors are trying to plug a $1.9 million hole in their 2011 budget, according to the Monroeville Times-Express.

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During a meeting that stretched more than two hours and often turned argumentative, several members of council aimed their criticism at outgoing Mayor Jim Brewster.

Several of those councilors are expected to vie for Brewster's old job during next year's municipal election. McLaughlin is presumed likely to be appointed acting mayor at the Dec. 1 council meeting.

Councilman Darryl Segina charged that Brewster's revenue projections --- including the host fee --- were too optimistic. "Our revenues are always overstated," he said, using parking fees and violations as an example. "We have good intentions, but we never get around to collecting it."

Brewster, who did not attend the meeting, told the Almanac on Tuesday that he preferred not to address specific charges since he did not hear them directly. "If they have ideas of their own (instead of collecting the host fee), then I think we should hear them," he said.

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Segina and others also criticized Brewster for not providing all council members with a finished copy of a financial review of the city conducted by a consulting firm, Delta Development Group.

A draft copy of that report was leaked to the Daily News by City Controller Ray Malinchak, but has not yet been made public. Malinchak, who is recovering from injuries sustained in an accident, was not present at last night's meeting.

The Delta report "is a lot to do about nothing," Segina said, "except that we as council have not seen the report. I don't think there's anything sinister in it, and I'm not looking for any dirt, but we as a council should have seen that report before we vote on this budget."

City Administrator Dennis Pittman --- who said he has only seen pieces of Delta's unfinished report --- told council that Brewster has asked representatives from from Delta to explain the report at the Nov. 30 council work session. Council members said that wasn't enough time to digest the information before voting on the budget the following day.

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Several council members expressed surprise that $83,500 in deferred compensation for Brewster is included in the 2011 budget. The mayor's position is a full-time job, with a 2010 salary of $60,000. But under the city charter, mayors are paid 5 percent more than the next highest salaried employee, which would have bumped Brewster's salary to near $70,000 per year.

Brewster deferred that compensation until the city was financially stable. But as of Nov. 17 --- the day he was sworn into the state Senate --- he is off of the city payroll, and the city is potentially liable for deferred payments, Pittman said. The $83,500 figure also represents unclaimed sick days and vacation pay for which Brewster is also theoretically eligible, he said.

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"I have nothing against the man, but if we didn't have the money before, well, we don't have the money now, either," Segina said.

Pittman told the Almanac following the meeting that Brewster has not asked to be reimbursed, but that the line item is included because the city is potentially liable for the money.

Brewster confirmed that he has not asked for back compensation from the city. "My credibility and my reputation are more important than any money," he told the Almanac, and said he would leave it up to council to decide whether the payment was appropriate.

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Council discussed several strategies for closing the $750,000 gap, including increased enforcement of parking violations, aggressively prosecuting property owners who have delinquent taxes, and targeting businesses that have ignored the city's business privilege tax.

A move to centralized, countywide wage tax collection --- mandated for all Pennsylvania municipalities --- will help stabilize the city's income, Pittman said, but is unlikely to cause a dramatic increase in revenue. The city estimates that it collects 90 to 93 percent of the wage tax due already, he said, though some is paid late.

But Pittman and city Solicitor J. Jason Elash said existing labor contracts make it difficult to shift wage tax employees into other roles, such as targeting delinquent fees and taxes. Teamsters Local 205 of White Oak, which represents city clerical workers, is not willing to change employee job classifications unless those employees receive raises, both men said.

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Council's next scheduled meeting is a work session at the public safety building, 201 Lysle Blvd. at Market Street, at 7 p.m. Nov. 30. Under the home rule charter, the budget must be approved by Dec. 31.