Financial position in Chambersburg 'not bad,' official says

July 24, 2000

Financial position in Chambersburg 'not bad,' official says

By DON AINES / Staff Writer, Chambersburg

CHAMBERSBURG, Pa. - Midway through 2000 the financial position of Chambersburg is "not bad," according to Borough Manager Eric Oyer, but rate increases could be possible for some utilities in 2001.

"If you look at the general fund, all of our major expenditure categories are within budget," Oyer said Monday of the police, fire, ambulance, recreation and highway departments. Highway Department expenditures are down 15 percent because of the mild winter, he said.

The 2000 budget is about $38 million. The general fund is approximately $6.3 million with the rest being mostly enterprise funds for the borough's sewer, water, electrical and gas utilities.

Warmer-than-normal temperatures in the first part of the year meant less was spent cindering and plowing streets. "That same mild winter hurt us on the utilities side," Oyer said. Unlike other boroughs in Pennsylvania, Chambersburg owns its electrical and gas systems, buying electrical power and natural gas and reselling it to residential, commercial and industrial customers.

Electric sales are up slightly, but revenues are down about 3 percent, according to the financial review. "Gas is struggling" because use is down more than 2 percent and revenues are off more than 5 percent, Oyer said.

"Just as people have paid significantly higher prices at the gas pump, they will pay higher gas bills through the remainder of this year and probably into the early part of next year," Oyer said. In June 2000 the unit price the borough paid for natural gas was double the price paid in June 1999, the report said.

That increase is passed along to consumers through a "purchased gas adjustment" to their gas bills, which covers the additional costs incurred by the borough, he said.

Water and sewer sales and revenues are down slightly, in part because food processors have reduced water use, Oyer said.

The capital reserve funds for the sewer, electric and gas departments were all down because of capital expenditures, Oyer said. That included installation of a new 3 megawatt generator, gas department upgrades and continuing expenditures on the borough's $7 million share of an $18.5 million sewage treatment plant.

The financial report said the borough has seen increases in deed transfer taxes, interest income, recreation receipts, ambulance service receipts and building permits, the report said. The building permits showed $12 million in new construction during the first half of 2000, compared to $8.3 million for the first six months of 1999.

While only a dozen new housing permits were issued in the first half of 1999, 55 of the building permits this year have been for housing, the report said.

The borough was looking at a general fund deficit of about $500,000. "We had budgeted that our revenues would be down and some of our expenditures up," Oyer said. He expects the actual deficit, which will be covered by cash reserves, to be "not as bad as originally estimated."

The 2001 budget is to be presented to the Borough Council on Wednesday, Oct. 11.

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