Beaver County has been spending more each year than it brings in from taxes and other regular revenues — if significant actions are not taken by the Board of Commissioners the county’s finances will soon face unsustainable yearly deficits, according to a study funded by the Pennsylvania Department of Community and Economic Development.

The Beaver Countian has obtained a draft copy of a report produced by Public Financial Management (PFM) and presented to county officials as part of an Early Intervention Program grant awarded by the state. The study reveals the actual scope of Beaver County’s financial problems, validating earlier reporting by the Beaver Countian that some officials have been misleading the public about the true nature of the county’s economic condition.

The independent analysis sought to understand Beaver County government’s financial position and the major factors underlying its performance. Beaver County was compared to other similarly sized counties in the region for benchmarking purposes and projections were made about its financial situation in coming years if the status quo is maintained.

The report addresses both the financial opportunities and challenges faced by the county.

“Beaver County has unique economic development opportunities related to the Shell ethane cracker plant in Potter Township,” note analysts. “Estimates for that project are eye catching — $6 billion to $7 billion in private sector investment, 6,000 construction related jobs and hundreds of new permanent jobs directly created at the site with thousands more related to its activity.”

Despite the “eye catching” numbers, the report concludes that the county’s budget will see very little direct benefit from the massive undertaking.

“The most likely benefit that County government would receive from the cracker plant development would be increased real estate tax revenues related to the spin-off growth, separate from the plant site itself. There may also be increases in more minor revenues (business licenses, real estate transfer tax), but those account for a very small part of the County’s budget,” notes the report. “The plant itself will generate an additional $100,000 per year in payments-in-lieu-of-taxes that are included in our projections.”

The report asks a fundamental question, “The key question is what other development projects can we reasonably project will be completed and added to the County’s tax roles before the end of our projection period in 2022?”

The report notes that actual revenues generated for the county by each individual down-stream project is also relatively small. The report takes into account approximately $10 million in planned economic development projects county officials are currently aware of — under the county’s current taxing scheme about $68,000 in yearly tax revenue will be generated as a result.

“It will take even more development to reach the level that would generate significant revenue for the County,” say analysts.

Beaver County current has several specially designated “Keystone Opportunity Zones” where new development projects would not be required to make property tax payments to the county at all.

With property taxes being the only significant direct benefit seen by the county’s general fund budget, hundreds of millions of dollars in development could equate to only hundreds of thousands of dollars in revenues — at best — for an operating budget that will be seeing a projected yearly defect of over $10 million within five years.

Analysts are predicting a yearly budget deficit of $1.3 million for 2018, $3.7 million for 2019, $6.1 million for 2020, $8.7 million for 2021 and $10.8 million by 2022 — the county’s year-end fund balance will be -$30.7 million by 2022 if major changes are not made.

The report also shows Beaver County has no “reserve fund” to allow for unbudgeted expenses which may arise during the course of a year, leading to even greater financial instability. The report notes the Government Finance Officer’s Association recommends counties maintain 16.7% of yearly operating expenditures in reserves. Rather than maintaining positive yearly reserves, Beaver County had a negative balance of -5.6% during study year 2015 — compared to positive reserves of 2.8% in Fayette County, 12.8% in Butler County, and 27.7% in Washington County. Only Cambria County scored worse in the benchmark among other 4th class counties in geographic proximity to Beaver County which were analyzed for the report.

Debt per capita chart as contained in the report.

Beaver County is currently defending against litigation that could see a reassessment of all properties in the county for tax purposes. County officials have been privately resigned to a belief they will be losing that litigation, and have publicly stated a county-wide reassessment would be an enormous expense.

Analysts note their projections do not yet include the cost of a reassessment, and if such a reassessment occurs it would not automatically mean an increase in the county’s yearly tax revenues:

“Similar court challenges have occurred elsewhere. If Beaver County conducts a reassessment, that will not necessarily increase revenue. Reassessments by themselves are intended to be revenue neutral so the millage rate is lowered to offset higher property values. Washington County’s tax rate dropped from 24.9 in 2016 to 2.43 in 2017. Counties can, by special vote, increase tax revenue up to 10 percent following a reassessment, but that’s separate from the reassessment itself. There will be significant costs associated with reassessment, which we will factor into our projections when the timing is known. For example, Washington County’s Controller estimates that the entire process costed $8.75 million over seven-plus years.”

After their extensive review of the county’s finances, analysts have issued a harsh warning to county officials.

“The County is projected to incur an operating deficit and completely exhaust the fund balance beginning in 2018 absent corrective action,” concluded the report. “The 2017 debt refunding has provided the County with short-term budgetary relief to begin implementing initiatives to address the structural imbalance.”

Although the Board of Commissioners are aware of the report’s findings, there has been little talk during public work sessions about addressing the fundamental structural imbalances in the county’s budget. The county’s credit rating has been downgraded twice over the past two years due to these imbalances.

Under a proposal discussed during public meetings and included in the current draft budget for next year, County Commissioners plan to “balance” the 2018 budget by not making over $1 million in estimated payments into the county employee pension fund. While the nonpayment of the county’s pension contribution in 2018 will not affect checks going out to retirees, it will likely mean the prospect of needing to make an even larger pension fund contribution in 2019 — a time when projections show the county’s financial situation will be far more dire.

Pensions for county employees are funded with contributions made by current workers, returns on investments of those contributions, and an Annual Required Contribution (ARC) payment made each year by the county from tax revenues. The ARC payment represents a mathematical calculation of how much the county needs pay into the plan in order to balance returns from its long-term investments with outgoing pension payments being made to retirees.

County Commissioners have told the Beaver Countian that a withholding of the 2018 contribution to the pension fund has not been discussed with unions representing the county’s public workers.

The Beaver County Employee Pension Fund has long been a source of pride for the Board of Commissioners, being one of the few in Pennsylvania to be fully funded — due in part to bonds issued to fill shortcomings in years past. With the county now running out of one-time revenue streams to plug its structural budgetary gaps, a shortchanging of the county’s pension fund will enable the Board to pass next year’s budget without making politically difficult decisions on implementing real initiatives toward restructuring government to become financially sustainable.

Public Financial Management is set to begin the next phase of its state-funded study of Beaver County’s finances, which is expected to produce a list of recommendations or initiatives as part of a five-year financial plan for Commissioners to consider.

County Commissioners previously failed to implement any of the cost savings measures they publicly backed at the end of 2016 when passing the structurally imbalanced budget for this year. The Beaver Countian questioned the Board of Commissioners about the 2018 proposed budget’s structural imbalances and their plans to skip a 2018 employee pension fund payment during a public work session held on October 25th. The exchange can be heard in full below.

Listen to the Beaver Countian’s John Paul questioning County Commissioners about next year’s budget:

49 COMMENTS

  1. Tax the hell out of homeowners !! Then the only people who will have money are the welfare recipients . We all know how they create jobs…increased size of Police forces, public housing development, drug rehab, Dollar Generals , ambulance services, store security, pediatricians , home security system installers , ammunition sellers , and I could go on and on.

     
  2. Say goodbye to your pension if you are an at work county employee. It blows my mind that these so called leaders aren’t in jail for operating at a deficit on purpose. Spend, spend, spend and then attack the very people that actually do some work by eliminating a negotiated benefit. The workers will most likely lose 50% or more af their accrued benefit when the PBGC takes over the underfunded plan, with a $0 increase in their wages. It amounts to little more than legalised theft and a legal contract violation. I love government. They turn anything they touch into one giant fiasco. Put a few of these criminals in prison and watch things straighten out virtually overnight.

     
  3. Time to make across the board pay cuts and personnel reductions! All supervisors and elected officials should take a minimum pay cut of 50% and each department should chop personnel to the minimum! It appears that the money from the sale of Friendship Ridge has been squandered and eaten up by the incompetent handling and misuse of proceeds by those involved with the sale! Too many people benefitting from abusing the system of checks and balances at taxpayers expense! Too many foxes in the henhouse!

     
  4. Beaver County is bankrupt thanks to the people in that courthouse. Financially bankrupt and morally bankrupt. Keep re electing these same people and there will be nothing left except sheriffs dept. cars and the projects.

     
  5. What has happened to all of the savings we were to see from the sale of Friendship Ridge and no longer under county ownership and responsibility? We had our property taxes raised which should have helped with more revenue for the county. How many times it has been reported that all departments took budget cuts? So why are we still talking a budget out of control?

     
    • You notice that, too, Dawn? The “windfall” from Friendship Ridge seems to have actually cost us money and now “The Game Changer” down along the river seems to be increasing our expenses. What are we going to do here, have the property owners underwrite everybody and everything in this hole? Businesses come in with our “Economic renaissance” and we are going to pay them to be here, the county staff grows larger and larger because we “only” have 10 people to stuff tax notices for two weeks instead of the “needed” 15 full-time year round staff and don’t forget the 15 school districts who can’t stand the thought of not getting a 3-4% annual raise so we don’t lose our “talented professionals”, the junk heads need money, the sheriff needs money and the coroner needs money to figure out if the dead guy with a bullet to the brainbox was shot. Sigh……..

      Put the county under outside management like they do with children, the senile, the simple minded and inept and get knowledgeable adults to run it for us.

       
  6. The people of this county have been lied to about fiscal reality for so long they refuse to believe that the gravy train left the station. Instead of getting informed they rely on politicians to tell them the truth. Wake the f-ck up people. You have been raped and plundered by the county politicians for 30 years. Wasteful spending, shady hiring and corrupt business practices have destroyed the tax base. Wait till the reassessment comes through. Shit holes like Aliquippa, Beaver Falls, Hopewell etc. are going to get crushed by Better’s legal team. Empty your wallets because between the school boards and the county no retiree will be safe. As noted above, the only ones living here in Beaver County will be section 8 derelicts with no skin in the game. Why is it so hard to tell the truth and make changes to fix this situation. Note that the study being done is not a partisan group. They are predicting serious shortages if no action is taken. Wheat will it take to make the taxpayers wake up? Beaver County will be one big ghetto.

     
  7. On a happier note, the county K-9 dogs got a new collar and a chewy toy this week…. “cuz there such good boys, yes they are!!!” HAHAHA

     
  8. I hope Sandie Egley is on top of this, because she is the only Commissioner who has the education, experience and smarts to understand it and do something about it. This all started with the previous Three Amigos.

    In the meantime, Jimmie Christiana, stop meeting with Shell reps and bullshitting about what a great deal that giveaway is. The only ones to benefit will be Heritage Valley Beaver, who will be able to afford a new respiratory diseases wing.

     
    • Raven could you elaborate on sandie’s education and/or experience? What specifically qualifies her alone as a commissioner? I personally don’t think any of our commissioners have the proper education or experience necessary for their current seats. A secretary, a teacher, and a dispatcher….sounds like the perfect experience to be a county commissioner to me.

       
      • She has extensive business education and experience. Google her. I don’t have time to copy and paste it now.

         
      • I don’t know what reality an associates degree from CCBC equates to “extensive business education” but it certainly would never be considered as such anywhere in the business world. If she is as experienced as you say, why the job changes every few years? Keep on licking sandie’s boots while the rest of us with any ioda of common sense know that there is not one qualified person sitting on our current board.

         
    • “Although the Board of Commissioners are aware of the report’s findings, there has been little talk during public work sessions about addressing the fundamental structural imbalances in the county’s budget. The county’s credit rating has been downgraded twice over the past two years due to these imbalances.”

      No talk during meetings. 2 credit downgrades during Sandie’s tenure. Passed a structurally imbalanced budget for this year.

      Seriously Raven, just shut the fuck up already.

       
  9. Personally, I am thankful that there is finally an objective, quantifiable study that shows what Egley has been saying all along is 100% accurate. The annual reports should have been enough, but between Amadio’s incompetence and Camp’s blind hatred for Egley, they ignored what was in the report. Now the issue can’t be ignored.

    Anyone hoping to run for any elected position in this county is going to have to address this. It’s not going to matter what people believe is ‘doing the right thing’ (I genuinely hate that phrase). The ONLY thing is to keep the county from going under. Save your campaign rhetoric and give us answers. That’s all anyone wants to hear. If you don’t have any, no need to waste your time or ours.

     
    • The first step should be collecting the $500,000 in unpaid taxes the Unis operation owes. Why is no one going after this money?

       
      • Good question marshamoore. It’s even more sickening to think that the whole time he WASN’T paying his taxes he was PICKING UP $30,000.00 CHECKS for his demolition work from the county.

         
      • Unis should never get another contract for demolition until this debt is paid. Why is this bad behavior being rewarded? Is it the only demo company in the area?

         
  10. Grandfather the pensions out. They’re a thing of the past and the only way the county will stay afloat. The workers are entitled to what they have worked for up until this point, but going forward it should be eliminated. Otherwise, massive tax increases instead! Ugh.

     
  11. Long-term effects of an anti-business county and state that chases people and jobs away instead of attracting them. Shell is nice but state and local leaders woke up and smelled the coffee too late I think, or at least the change in leadership was too late to do anything about it. Remember the county pay scale that the BC published earlier this year that showed secretaries making over $50k a year.

     
  12. Google Sandie Egley’s LinkedIn profile. She is in a class by herself compared to the other two. If anyone can deal with the Courthouse challenges, she can. So don’t sell her short by thinking she is anything less.

     
    • Raven, Sandie my be all you think she is, sad to say, nothing will change. If there is ever a surplus she will spend it, just like her fellow commissioners. Sandie may have a great resume but can not reel in the Sheriff, the Treasurer nor the DA with their out stretched hands, oh, also an ice arena, new chimney for the Vicary House, maple syrup festival, flak jackets, county cars, 911 center. A great resume is good. Someone to take the gloves off and kick some ass, MUCH BETTER. When the budget can not be met, she will be in favor of raising your taxes, that is a given.

       
  13. Way too many county employees getting paid way too much money. County officials and county employees spending county money willy-nilly, loosy-goosy, plus grabbing every dime in the place with both hands. These fucking people are like King Midas full throttle in reverse.

    All the while the Sheriffs cars continue to make the trip from home to work and back again. If you want to save money, you watch the pennies and the dollars will take care of themselves. All these people are out for themselves and refuse to trim the fat.

     
  14. Well well well. All the many many years of voting in Democrats is finally catching up with this shit hole of a County. The Democratic machine played their games and played shell games for 70+ years and this is what’s left.

    First off get rid of that overly bloated Sheriff’s Office. This office does not need what they have. We do not need a K-9 unit, motorbikes and three shifts. Mandate that these inept security guards ONLY do the duties we need. Armed deputies at the doors are wasteful. A fifth grader can do that job. Deplorable

     
    • Yeah, I look around and see the absolutely inspiring work that Egley, Camp, Guy, Gabauer, Vogel, Marshall, Christiana, Rothfus and now Trump have done for us over the last decade of the “Republican Renaissance”.

      Seriously, if you can look at the Democrats and the Republicans and see some great difference as a Republican loyalist, then you are as foolish as the old straight ticket Democrats.

       
  15. If you are thinking of buying a house in Beaver County DON’T, your taxes will make the house payment unaffordable

     
  16. My comment was in answer to a person who thinks Egley only has secretarial skills. Like it or not, she is the only person who could understand the problems. The other two don’t have a clue about how to deal with these problems. A high school graduate and a high school history teacher. Neither has had math beyond the 8th grade. How do you expect them to manage county finances? I don’t know Egley personally, but you have to work with what you have.

    I’m beginning to think it’s time for John Paul to run for Commissioner to save us from the inevitable bankrupt end. What do you say, JP?

     
    • I absolutely agree. You need someone who is not out glad handing at every event. “You have to work with what you have,” I again agree. Camp or Amadio should never see another term as commissioner.
      It is time to elect someone who puts time and effort into researching matters.

      I would be 100% behind John Paul.

       
      • Sandie is not only out glad handing at every event, she’s taking advantage of every opportunity she can to have fun on the tax player’s dime. For example she went to the white house with the penguins mid day on a Tuesday during work hours. What could possibly be business related on a trip like that? Why does a commissioner of beaver county need to be at an event for an Allegheny county sports team when the mayor of Pittsburgh did not even attend. Let’s stop pretending that sandie is the savior of beaver county and start calling a spade a spade, all incumbent commissioners need to go every single one is unqaulified, undereducated, and out only for themselves.

         
  17. I was an employee of the county at Friendship Ridge. By selling the facility, Amadio, Spanik, & especially Dennis Nichols have planted the seeds of Beaver County’s financial ruin. 9% of every employee’s pay from the facility went directly into the county’s pension fund. That revenue stream is gone for good and forever, but there remain hundreds of retirees making thousands of dollars per month from the dwindling fund. It was a horrible deal for the county, the employees, and especially for the residents who are now at the mercy of a for profit company. It’s a matter of time before Beaver Countians will face huge & repeated tax increases to fill the massive gap left by the short sightedness of the commissioners.

     
  18. looks like they are following the typical republican steal from the poor and give to rich policy
    looks like the poor are out of money now

    defend freedom
    impeach trump and all the criminals he sold positions to

     
  19. Beaver Countians – You need to attend these meetings!
    People need a feel for who’s making decisions that will impact their lives as BC Residents.
    Please take another look at the above Debt per capita chart. If you find this shocking, and appalling, just wait. Wait for another year or so, and prepare yourselves for a financially crippling outcome.
    I am sure JP/BC will have a recap of today’s meeting. John Paul, as always thank you, and you would have my vote.

     
  20. NOW is the time for a home rule charter. We need ONE elected official with the business experience to run the county and the ELIMINATION of elected row offices. Now if the Queen doesn’t get her way she just doesn’t do the work that she’s legally mandated to do and we have no recourse. If the coroner doesn’t like what he’s told he ignores it and we have no recourse. With a structure similar to Allegheny County these positions would be hired and they can be fired at will by the county executive. It would take about a week for a skilled executive to make the necessary budget cuts to the row offices currently sucking off of the taxpayers’ teat. Other positions like the sheriff simply need to be told that there’s a line in the sand, here’s enough money to do what you’re legally supposed to be doing and provided NO additional money for staffing, vehicles and canines currently being used as the pretend county police force. This would also require the elimination of many of the current deputy positions and if the Midget needs to have an injunction filed against him in order for it happen then so be it.

     
  21. I would imagine the commissioners are going to wait until after the holidays to announce another increase in our property taxes. Best not to over due the spending for Christmas gifts. I still wonder how diligent are they in collecting delinquent taxes, judging from the Unis scenario, it would appear they just don’t care to pursue this .

     
  22. its time for each dept. to take a 50% cut close some of these county parks. just think what it takes to run a park there only open 4 mouth out of the year but net they pay men year round to run them , and in the fall winter and early spring theres nothing going on. so lay off half the works how much would that save ?also why do we need so many workers at the c house when i go there have the works are just sitting around . i see guys in new countys trucks just sitting around doing nothing wast. i see guys taking home county trucks must of them new trucks why? all of this ands up ………..

     

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