GREENVILLE Council considers way to repay bond issue

A state grant can be used to cover money borrowed from the bond issue, one official said.
GREENVILLE, Pa. -- Borough council may have found a way to repay the $500,000 the borough used from a bond issue that was to be spent on a recreation project and the town's new fire station.
Richard S. Houpt, council president, said Greenville was the recipient of a $2.2 million bond issue to help fund the recreation project back in 1999 and that money hasn't been tapped.
As Greenville advanced the money for the project, which is now nearly complete, it can tap those grant funds to repay the $500,000 to the bond account, he said Tuesday.
"The auditors are working on it now," he said, adding that a draw on the grant should more than cover the money used from the bond issue.
What was surprise: Houpt and other council members have said they didn't know the borough was using part of the bond issue (a $3.5 million fund) to keep municipal operations afloat in 2000.
They only learned about it recently as they tried to put together a budget for 2002 and began looking at the borough's past financial practices.
Former Borough Manager Peter Nicoloff resigned at the end of October, saying he was leaving for family reasons. Efforts to contact him were unsuccessful.
Houpt said council doesn't know if any of the bond funds were tapped in the 2001 budget. A fiscal audit for that year is expected in about a week.
Council may have resolved the $500,000 issue but it still doesn't have a final budget in place for this year.
Council did pass a $3 million spending plan at the end of December that included a 1.26-mill property tax increase, but it was predicated on a wage freeze for borough employees and still showed a $90,000 shortfall.
Some dissension: Not all employees agreed with the plan. The city's wastewater treatment plant workers agreed, but police and firefighters, who had negotiated wage increases for 2002, balked.
Firefighters said they would take the freeze but only if all other employees did too, the borough would agree not to reduce the number of firefighters, and the mayor and council would give up the salaries for their part-time jobs.
Police initially said they expected council to live up to their negotiated agreement that was to give them a 3.5 percent wage increase.
Houpt said most of those issues appear to have been resolved.
The police have agreed to take a wage freeze this year in exchange for a 3.5 percent increase later in their five-year contact that began Jan. 1. The terms of that pact called for 3.5 percent increases in each of the first three years and wage reopeners in the final two years. They're taking a wage reopener in the first year instead, agreeing to the freeze, Houpt said.
The only issue remaining with firefighters is mayor and council's pay and that should be resolved soon, he said.
The borough has asked the state Center for Local Government Services for some technical assistance with its financial problems. The state agency is expected to provide some recommendations for dealing with immediate budgetary problems but won't be a source of additional funds.
Houpt said Mercer County Regional Planning Commission has agreed to assist Greenville in preparing some long-range financial planning.

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