Layoffs possible in Jeannette's effort to avoid 'distressed' status

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Officials in Jeannette have advised municipal workers that some of them could be laid off next month as the Westmoreland County city seeks to avoid declaring bankruptcy or being declared a distressed community.

Mayor Robert Carter and city council members met last week with state consultant Michael Foreman to discuss the community's budget woes. Mr. Foreman is the southwest regional representative of the state Department of Community and Economic Development.

The city has about three dozen employees, and almost all are covered under union contracts. Those pacts require a two week notice of any reductions in staff.

Options the city may have to consider in an effort to return to fiscal health include cutting the size of the police force, raising property and earned-income taxes, refinancing a 1998 bond issue, and doing away with the paid fire department. With the exception of bond financing, all of the measures are likely to prove unpopular. Raising tax rates, which are now at the maximum allowed under the state's Third Class City Code, would require approval from the Westmoreland County Courts.

The city, which has a population of about 9,600, has been losing residents since the 1960s.

In an effort to improve its finances, Jeannette has been part of a Pre-Act 47 Early Intervention Program for several years. Participation in that program is designed to help the city avoid being declared distressed and have its finances placed under state supervision. Act 47, the Financially Distressed Municipalities Act, gives the state broad powers over local budgets.

The best-known community in the program is Pittsburgh. Other southwestern Pennsylvania municipalities under Act 47 protection include Aliquippa, Altoona, Braddock, Clairton, Duquesne and Homestead.

Last week's discussions with council centered on ways to keep the city in the Early Intervention Program and avoid an Act 47 filing, Mr. Foreman said in an interview this week. "Working within the early-intervention framework gives us -- the city and the state -- more flexibility," he said. "It makes for a more cooperative relationship. I don't think the city wants to go down the Act 47 road."

As part of the early-intervention effort, the state has provided $58,000 toward the cost of installation of a new computer system for financial management. The city contributed $25,000 toward the project.

Based on experience in other communities around Pennsylvania, direct state supervision of a distressed municipality under Act 47 likely would last for many years.

Jeannette officials will discuss municipal budget options at a public meeting before making final changes in the 2013 spending plan. No date or location has been announced for that session.

The budget originally passed by council totaled about $5.1 million. Bill Bedont, chairman of council's finance committee, said that number could rise as high as $5.6 million as a result of the additional expenses the city faces.

The city needs to make both an overdue $350,000 contribution to the police pension fund and a court-ordered payment of $235,000 to a city property owner and his lawyer. Jeannette could face additional expense as the result of upcoming arbitration for a new contract with its police force.

In an effort to raise additional revenue, council last fall adopted an ordinance that requires property owners to buy and use city-issued plastic bags for their nonrecyclable trash. Council members also have asked department heads for lists of little-used equipment that could be sold to raise cash.

neigh_east - neigh_westmoreland

Len Barcousky: lbarcousky@post-gazette.com or 724-772-0184.


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