Changes in the income limit and payroll deduction has reduced what the city will receive.

Oil City may be facing a budget crunch because of a legislative reworking of the Local Services Tax, a $52-a-year charge per person who is employed within the city limits.

Previously known as the Emergency and Municipal Services Tax, the levy is applied throughout Pennsylvania. Changes in the income limit - anyone making more than $12,000 a year has to pay it - and the payment period - payroll deduction over a full year - has reduced what Oil City will receive.

The reduction comes from an increase in the exemption income (Oil City had a smaller figure) and a payment schedule that goes into the next budget year.

The city's 2008 budget figures suggest the city will receive less of the income, perhaps as much as one-third less, reducing receipts by $40,000 to $50,000.

"That concerns me the most ...because we're not sure what percentage of that tax we'll get," said city manager Tom Rockovich at a council meeting Monday. "...It has a tremendous impact on the budget."

Worry over the Local Services Tax receipts is compounded by soaring gasoline costs and anticipated heating cost spikes, said Rockovich.

Those concerns have prompted city council, which typically begins reviewing budget figures for the coming year during the fall months, to start examining revenue and expenditure data earlier than usual.

However, there was some promising economic news offered at Monday's council meeting. Rockovich told council the new city swimming pool is generating "very favorable numbers" and that will help on the city's revenue side. The new facility is a popular one, too, he said.

"We've been getting a lot of good positive comments from everyone...and that's what we were hoping for," Rockovich said.

Measure could help

Another positive development may be on the horizon, Rockovich told council, and it involves a state legislative decision.

House Bill 2018, a measure that would create a tax exempt property municipal assistance fund to help reimburse communities with high tax exempt property ratios, is moving through the legislative system.

Oil City has a huge tax-exempt property load with 37.5 percent of all properties within the city classified in that category. The overall $338 million property value shrinks to about $216 million when the tax exempt properties, such as schools, parks, churches and others, are subtracted from the total.

Although those properties do not generate taxes, they do, in many cases, use city services.

"(State) staff is comfortable it will be brought up before the end of the session," said Rockovich, adding that a state study is underway to chart the impact of tax exempt properties on communities and is due to legislators by Nov. 30. Such a study, he indicated, would not have been directed without legislative interest in the bill.

Last month, city council adopted a resolution in support of the state House bill.

On that topic, Rockovich said the owners of many tax exempt properties do offer payments in lieu of taxes to the city. The 2008 budget notes the city expects to collect some $20,000 from non-taxable properties.

"The churches and clubs (in the city) have really stepped up to the plate and they don't have to do it," Rockovich told council. "A lot have responded...but some state aid would help."

Park work continues

In other matters, city public works director Butch Truitt told council Hasson Park is undergoing a transformation thanks to a broad array of volunteers who include master gardeners, adjudicated youth and mentors, city workers and others.

Truitt said the work has included special plantings, mulching, sidewalk and patio construction, stream bed stabilization and more and each experience has paired adults with young people in an educational experience.

"We're seeing a different part of the community than we are accustomed to...and there has been an improvement on everything in the park," Truitt said. "The whole community is pulling together to help Hasson Park."

Lee Mehlburger, a council member and an activist in rejuvenating Hasson Park, said the cooperative effort "has saved a tremendous amount of money" for the city.

Council also authorized two agreements that affect the city police department. One agreement allows for joint DUI enforcement with Franklin, Oil City, Polk, Emlenton and Sugarcreek. The other outlines a mutual aid agreement involving Oil City, Frnaklin and Sugarcreek police.

Council also gave its final approval to changes in public meeting procedures. The main change involves cutting the public's time to comment at a council meeting from 10 to five minutes.

Although hired in May and relatively new to the city staff, city library director Bruce George was lauded Monday for his efforts to ramp up the library offerings, especially those that pertain to computer-related projects and programs.

He has taken some real initiatives...in the projects being considered," said Rockovich, suggesting those pending additions will be announced at a later date.

Two groups who want to reserve Justus Park for summer events had their requests approved.

The South Side Neighborhood Association and Youth Alternatives will sponsor a dinner-and-a-movie event for teenagers from 7:30 to 10:30 p.m. Saturday, Sept. 6, in the park.

The Oil Region Alliance will hold a cruise-in for motorcycles and hot rods from 7 to 10 p.m. Aug. 9. It will be held in conjunction with a previously scheduled white water event that same day in the park.