Although the county’s 2022 budget has not been officially released, it appears a tax increase will hit the wallets of county taxpayers next year.
The three major expenses contributing to the anticipated tax increase, according to chief clerk/county administrator Jamie Wolgemuth, are:
- The costs associated with construction of the new estimated $40 million 911 Center (a focal point of discussion at Thursday’s county commissioners meeting along with the budget),
- Existing healthcare costs at the county prison, and
- A pending jump of 9.2 percent in the cost of healthcare for county employees.
It was noted that the last increase in county taxes occurred in 2016, with the millage rate staying steady at 3.2925 percent since then. That means a homeowner would pay about $3 in property taxes for every $1,000 of assessed value on their home.
No specific increase in the Lebanon County millage rate for 2022 was discussed at the meeting.
The tentative budget will be introduced at the next commissioners meeting on Dec. 2, followed by a 20-day period for public review. It is scheduled for adoption on Dec. 23 at a special budget meeting of the commissioners.
County officials indicated that a tax increase can no longer be avoided.
“We’ve had a deficit the last three years,” said Wolgemuth. “A couple of things have been building (toward it). One thing literally being built is the 911 DES (Department of Emergency Services) building, and that is increasing our debt service by an estimated $1.4 million. That’s something we’ve been anticipating and have known was going to happen for a couple of years.
“The upside is that it (debt service) will go down slightly as some of our other debt drops off.”
Wolgemuth added that “another big expense” occurred in 2019 when the county entered an agreement with PrimeCare Medical, which is based in Harrisburg, to offer healthcare services at the county prison at a cost of $3 million annually.
“That is something we have not had offsetting revenue at the time and it is something that we have not had offsetting revenue since, and it has been a year-to-year, out-of-pocket (expense) that needs to be made up somewhere — either through revenue increases in millage or through some cuts that would make up that difference,” he explained.
Wolgemuth noted the budget deficit sits at $8.5 million and the ongoing deficit — which was caused, in part, by the PrimeCare contract — was paid for in the past with “carry-through cash to balance” the budget.
That’s something you can’t continue to do forever but was something that we were able to do the past couple of years,” he said. “The last millage increase was in 2016 and we were balanced for the next couple of years, but the PrimeCare contract sent us in the other direction. With everything increasing as it does, we’ve been increasing the deficit the past two years.”
Commissioner William Ames said while the county has been able to handle increases caused by utilizing services like PrimeCare and can anticipate costs with projects like the 911 Center, there is one cost that’s out of the county’s control.
“I think it is also important to note that our (the county’s) healthcare (plan) is going up by $1 million,” said Ames. “And that we continue to give our employees raises year after year after year. … We worked really, really hard and we bit the bullet on a tax increase to get the county in a good financial position.
“But just through the course of doing business day after day and keeping employees happy and providing services, that balanced budget erodes away just by the nature of the process.”
Chairman Robert Phillips said the commissioners “did what they could for as long as they could” but must now do something different to address the deficit.
“There’s a big faction out there that would just say, ‘make more cuts, do what you have to do and live within your means,’” said Phillips. “You can only do so much with six unions and, as Bill alluded, the general cost of things going up just catches up with you. We’re now facing these bigger projects and we have to find a way to make it work.”
When asked if residents should strap themselves in for an increase, Phillips said he “didn’t see a way that the county can avoid it.”
Ames added that the commissioners could avoid a tax increase by foregoing the construction of the new 911 Center, but said that’s not in the best interest of public safety.
“We know the existing 911 Center has serious issues and can not meet the need,” said Ames. “So what better reason to raise taxes than public safety. A great part of what we are going to have to do here is based on public safety needs and meeting those needs in the county.”
Phillips noted that the current emergency service radios, which are a big cost to replace, are at the end of their useful lives and are another expense that can’t be avoided.
“As Bill mentioned, 100 percent of the county will be impacted in a safety way, so you can’t do much better than that with your tax dollars,” added Phillips.
Commissioner Jo Ellen Litz said the impact of having a new 911 Center will be felt for generations to come.
“It’s one of those long-term investments that will not only serve us but give us peace of mind,” said Litz.
“I was looking at what we face in the basement with flooding, and being written up by PEMA (Pennsylvania Emergency Management Agency) and FEMA (Federal Emergency Management Agency) for crowded space — and that was before we had COVID,” she added. “To manage an emergency from down there right now is nearly impossible. So this 911 Center is something that’s really, really needed.”
Later in the meeting, Bob Dowd, director for the Department of Emergency Services, presented for approval bid proposals for five major services provided as part of the 911 Center: general contractor, fire protection, plumbing, HVAC, and electrical.
Contracts were awarded to the following construction contractors in each category followed by the corporate office location and their low bid price:
- General construction
eciConstruction, Dillsburg, $15.447 million
- Fire Protection
Triangle Fire Protection, Carlisle, $684,560
RJ Reynolds Plumbing & Heating, Willow Street, $1.08 million
Frey Lutz Corporation, Lancaster, $3.99 million
The Farfield Company, Lititz, $8.45 million
“I believe the project team has a lot of experience with these bidders and speaks highly of them,” said Dowd, “and we got excellent, low bidders.”
Dowd said the bids came in by under $70,000 than the estimated $29.5 million, which was worth noting given the current volatility of construction materials for a project that will take 14 months to complete from the date ground is broken.
“Another thing that is very important is that all the bids were very close,” said Robert Hoffman, manager of the Lebanon Office of Beers + Hoffman Architects. “The low bidder is not anyone that we have any concerns with missing something or whatever. The bids were incredibly tight.”
As a follow-up to Hoffman’s comment, Wolgemuth said the next lowest bidder for general construction was Lobar Construction, Dillsburg, at $15.660 million.
“A year ago when we estimated the pricing, it was before the lumber prices spiked in May, before concrete prices and steel prices went haywire and supply was almost impossible – and in some instances we’ve replaced the types of steel so the supply could be there,” said Wolgemuth. “All of that has transpired since that time and it still came $70,000 under the $29 million estimated cost.”
Dowd told LebTown following the meeting that no date has been announced for groundbreaking at the construction site.
It does appear that the county will be able to some of the $29 million it received as part of the American Rescue Plan Act and may potentially earmark money it receives through the recently passed Infrastructure and Jobs Investment Act.
“It’s something that’s on my radar,” replied Dowd to a reporter’s question about whether IJIA funding could be used to pay down the cost of the bond debt the county will incur as part of the 911 construction project. “But we don’t know yet whether that will be possible since it was just passed.”
In other county business, the commissioners:
- Received the quarterly update from representatives from STIFEL Financial, St. Louis, Missouri, who are the financial managers of the county’s retirement fund.
- Unanimously accepted the treasurer’s report.
- Approved several conference seminars.
- Approved two 100 percent disabled veteran real estate tax exemptions.
- Approved the minutes of the Nov. 4 meeting.
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