The State College Borough Council unanimously approved Monday an operating budget of more than $31 million for 2009, preserving support for Penn State programs and avoiding layoffs for borough employees.
After months of debate, the approved budget cuts slightly into reserve funds in order to postpone 16 or more planned layoffs until at least mid-2009, a provision discussed at a work session Friday.
Council President Elizabeth Goreham successfully lobbied for the reinclusion of funds for the University-Community Partnership Against Dangerous Drinking, the Central PA 4th Fest, the Spring Creek Canyon Watershed and the planting of flower beds outside the Municipal Building, 243 S. Allen St.
Mayor Bill Welch said the borough's continued financial commitment to the anti-drinking partnership will ensure that Penn State continues to fund the group.
"I think [the borough's] $5,000 is helping to leverage and guarantee [Penn State's] $25,000, at least for the year ahead," Welch said.
Some council members said they were surprised Borough Manager Tom Fountaine was able to maintain such a strong reserve fund balance in the face of such dire predictions. Initial projections had shown that a proportional reserve decrease from 12 percent of the borough's general fund to 10 percent would be necessary - but Fountaine found a way to do it with 11 percent.
"You've magically found, somehow, a way to avoid that 1 percent [dip into reserve funds] as opposed to ... restructuring," Council Member James Rosenberger said.
The budget presented Monday was simply the result of good math by Fountaine, Mayor Bill Welch said.
"Let's avoid characterizing such professionalism as supernatural," he said.
Council Member Peter Morris said he is glad the budget doesn't include layoffs, but said dipping into the reserve fund is "a rather irresponsible thing to do."
Of the nine actions on Monday's agenda, only one was disputed. The council voted 4-2 to increase the realty transfer tax rate by .25 percent, raising the tax to 1.25 percent for 2009, a move Rosenberger said was too much.
"By moving it up .25, we join Ferguson Township and have the distinction of having the highest [realty transfer tax] in the county," Rosenberger said. "I don't see this as being necessary."
Rosenberger and Council Member Ronald Filippelli voted against the tax increase. Council Member Silvi Lawrence did not attend Monday's meeting and did not respond to calls for comment.
Council Member Donald Hahn said he hopes the council will begin its budget process earlier next year.
"This budget scares the heck out of us, and I think it's wise that we not forget about it and go into hibernation until late spring," Hahn said.
Fountaine said January -- Hahn's suggested date -- is too early to begin addressing the 2010 budget, as issues raised by the current budget will still need attention.
Though serious during the budget review, the meeting had its moments of levity. A motion by Hahn to increase the mayor's salary in 2010 by $1,000 passed unanimously and with a joke.
"Will raising the mayor's salary possibly contribute to the grumpiness index?" Rosenberger asked with a laugh.
The next council meeting will be held at 3 p.m. on Jan. 5, 2009.
