Dear Editor Reading Eagle 12-10-09

Gennaro A. Marino P.E.
409 W. Main St.
Kutztown, Pa 19530
Editor of the Reading Eagle
Dear Editor,
With a Budget of $60 million and a population of 80,000 people the City of Reading spends $750 per capita and is accepted by the Commonwealth as a Distressed City is cutting spending, laying off Policemen, Firemen and other City Employees. The Borough of Kutztown with a Budget of $21 million and a population 5,000 spends about $4,200 per capita and according to the Borough Council, the Mayor and Borough Officers everything in Kutztown is wonderful. This is great being the Borough does not employ a Degreed Accountant or retain a CPA. The Borough is in the process of raising our electric rate 2 and one half percent to finance a recreation project. The Borough has doubled our water, sewer, electric tax rate in the last few years to maintain this high life style and finance Hometown Utilicom which loses about $1 million a year.

Gennaro A. Marino
Former Mayor of Kutztown
e-mail kmayor@ptd.net
website www.marinoreport.com
610-683-7977
Faxed to Editor 12-10-09

Distressed city???

Now that I have your undivided attention I would like you all to know that the Borough of Kutztown does not have one penny in reserve. If the electric department loses a transformer where will the Borough Council find $500,000 to replace it. The Borough just raised the electricity rate for funds for recreation.
According to the Borough Budget the Borough spends $4,200 per resident and The City of Reading, a city ACCEPTED by the Commonwealth as a DISTRESSED city, only spends $750 per resident. Kutztown isn’t distressed because we own an electric department and residents can not shop for lower electric rates and the Borough raises Real Estate Taxes and utility rates regularly.
Yes our Borough Officials illegally transfers funds within the Borough to pay for the $1 million a year that Hometown Utilicom loses.
Yes our Borough Officials falsify the Budget and the Borough Solicitors and the Borough Auditors are aware of it.
It would be nice if I had some feedback on these facts instead of questioning me through no names. The above facts are very clear and simple.
And by the way the borough will raise the electric rate again when the caps come off. Thanks again. Sincerely Jerry

Nov. 7, "09 Special Council Meeting

Special Council Meeting Minutes of November 7, 2009
Borough Manager\Treasurer Khalife provided an overview of the 2010 budget, stating that either a 1 mil increase in real estate tax (0.45 mil for general purposes and 0.55 for recreation purposes) or a 2.5 percent increase in electric rates will be required to balance the 2010 budget. I say the budget presently available at the desk in the Borough Hall indicates the 2010 budget is balanced with revenue and expenses at $1,316,685.80, so what is he talking about?
Then the Council votes to sell off 1.75 MW of the Borough’s 2010 committed power to save the Borough $200,000 toward the cost of power in 2010. I say if the sale saves the Borough $200,000 why do we need a rate increase to raise $100,000?
Mr. Khalife also noted that a lot of capital projects, including items carried over from the 2009 budget because of budget constraints. I say this points out that the Borough is does not have the expertise or knowledge to manage a budget.
He also indicated that $100,000 revenue raised would be committed to matching funds for grant for North Park. I say does the Borough need park improvements with all of our budget constraints?
The Council also voted for eligible employees to take advantage of the retirement incentive. I say does the Borough have too many employees? And what is the incentive?
All the above noted action by the Borough Council reveals that they do not have a clue about finances. The Borough has to cut spending and get rid of HU which loses about $1 million a year. I state the Borough is on the road to financial disaster.
Thank you. I remain Jerry

2008&9 Budgets 11-30-09

Annual
2008 2009
Account Budget Amount Budget
$ 31,160.00 $ 32,250.60
$85,740.00 $ 83,150.60
$330,883.00 $ 363,441.00
$85,740.00 $ 83,150.60
$245,143.00 $ 280,290.40
Total BOK Revenue $19,432,641.00 $ 21,311,904.62
Total BOK Expense $17,666,247.00 $ 20,997,123.37
NET $1,766,394.00 $ 314,781.25
Expense Totals:
Revenue Totals:
Expense Totals:
Fund Police Pension Fund NET GAIN/:
Department 483 Pension Payments Totals:

HU '06 Totals

Account 2006 Actual 2007 Actual 2008 Actual 2009YTO 10112 2009 Budget 2010
Department: 493 Intrafund Transfers $ -
4287 Transfer to Reserve $ - $ - $ - $ - $ - $ -
4288 Transfer to Capital Reserve $ - $ - $ - $ - $ - $ -
4289 Transfer to Operations $ 194,200.00 $ - $ - $ - $ - $ -
pepartment:•~3"ntrafUridTransf." ';',\ .. ,'. , I> ..... ,. , .. ,' , '." ' ..
totals: ' ~$' .', 1$4.2oo.0Q• $ .' ...• •• Is••. ,-' ... $ ." '.', $ - $, -
Department: 499 Depreciation $ -
4820 Improve Other than Bldgs. (dep) $ 4,000.00 $ 4,000.00 $ 4,000.00 $ - $ - $ -
4830 Buildings (dep) $ 3,800.00 $ 3,800.00 $ 3,800.00 $ - $ - $ -
4840 Machinery and Equipment (dep) $ 428,932.00 $ 431,133.00 $ 396,972.00 $ - $ - $ -
.....
"
Department: 499. Depreciation total$:, ,$436,732.00 '$ 438~e,33~OO ' $ 404.i712.0.0 ' S . $ - $ -
Revenue Totals: $ 1,235,975.57 $ 1,093,056.74 $ 911,424.75 $ 1,673,232.83 $ 1,964,761.00 $ 1,316,685.80
Expenditure Totals: $ 1,648,148.13 $ 1,521,377.10 $ 1.471,898.64 $ 1,174,252.21 $ 1,964,759.00 $ 1,316,685.80
IFund Totals: Telecommunications
Fund $ (412,172.56) $ (428,320.36) $ (560,473.89) $ 498,980.62 $ 2.00 $ 0.00


~

HU 2006 Revenue 11-29-09

Account 2006 Actual 2007 Actual 2008 Actual 2009YTO 10/12 2009 Budget 2010
Fund: 09 Telecommunications Fund $ -
Revenue $ -
341..o1\lnte •. ~.tl"c()m." •. •,j~m~~Q2J;I"I'••i:2j~,'O~'12! $ 1,203.16 $ 1,179.40 $ 1,783.00 $ 1,783.00
a42;'1Q:flerit;"ofl;arid; ..... ) S"$: •48~$24~3.9.1D ~:,: "$O~01:~28X $ 48,010.32 $ 47,842.09 $ 54,436.00 $ 54,436.00
375-10 Sales to Customers-Internet $ 216,086.44 $ 239,947.03 $ 282,365.13 $ 220,344.49 $ 280,000.00 $ 355,000.00
375-11 Sales to Customers-Television $ 253,251.86 $ 276,587.66 $ 284,501.12 $ 225,678.41 $ 290,000.00 $ 355,000.00
375-13 Bulk Sales $ - $ - $ - $ - $ 25,000.00 $ -
375-14 Priority Bdwdth (non-bulk sale) $ - $ - $ - $ - $ 1,000.00 $ 1,000.00
375-16 Internet Sales-Maxatawney Twp. $ 727.51 $ 988.80 $ 24,328.95 $ 58,615.60 $ 45,000.00 $ 51,000.00
375-17 Television Sales-Maxatawney
Twp $ 1,038.32 $ 1,447.44 $ 23,211.59 $ 51,891.34 $ 2,200.00 $ 50,000.00
375-20 Tariff- Res. Local Service $ 10,148.50 $ 7,351.00 $ - $ -$ 10,000.00 $ -
375-21 Tariff- Res. Long Distance $ - $ - $ - $ 4,124.02 $ 100.00 $ 100.00
375-22 Tarif- Com. Local Service $ 15,658.00 $ - $ - $ - $ 100.00 $ 100.00
375-24 Tariff- Com. Long Distance $ 35,528.52 $ 33,427.52 $ 51,120.52 $ 31,113.50 $ 37,000.00 $ 42,000.00
375-25 Fiber & Equip't Lease (external) $ - $ - $ - $ - $ 1,000.00 $ 1,000.00
375-30 Sale of Advertising $ - $ - $ - $ - $ 1,000.00 $ 1,000.00
375-31 Marketing Servo (from partners) $ - $ - $ - $ - $ 1,000.00 $ 1,000.00
375-40 Installation Services $ - $ - $ - $ - $ - $ -
375-41 Tariff-Altronics $ - $ - $ - $ - $ 100.00 $ 100.00
375-42 Telemetering Revenue $ 58,848.00 $ 73,262.00 $ 39,888.00 $ - $ 74,000.00 $ 30,000.00
375-80 Fiber & Equip't Lease (internal) $ 4,320.00 $ 9,120.00 $ 9,120.00 $ 6,840.00 $ 9,120.00 $ 9,120.00
375-81 Security Services (CCTV,
SCADA) $ 85,800.00 $ 108,900.00 $ 108,900.00 $ 81,675.00 $ 108,900.00 $ 108,900.00
375-82 AMR Data Service $ - $ - $ - $ - $ 1,000.00 $ 1,000.00
fl()UU~,~cc~unt:3~~S~I's,to •.. ' .• >:.;' .. ' ' '/' .... ,', ...•. ". > '.' ," •..•.•••• i
CU$torn~ •.• :tot.bl; '. ••$,881~401~1$;. 'j$.7G1It031,46.;$\823~S~~1'. ~.6eO~182~36 .. ,;$ ••886~520~OO'$ 1,006.320.00
380-00 General Miscellaneous Rev $ 1,547.90 $ 14,807.49 $ 4,082.16 $ 2,196.19 $ 10,000.00 $ 10,000.00
380-15 Payments From Other Funds $ - $ 235.11 $ (1,018.24) $ - $ - $ -
380-20 Sale of Material and Equip $ 448.88 $ - $ - $ 2,215.39 $ 47,838.00 $ -
~Ollu.f,):~C:~P"'~~:3~~:~Ettl.r:aI•• "\ .• : :!i" 1/ '.' ........•.•...••.••.....•.•. < '/.
Mlsc.llaneoU$\:t:t,v,tOfills: .' i \$' .;!I~ee~iiJ8:;: ;il$!;1~.Q4~;$Oi:,.I/'$i;3~083;92,;:!$.4~"1!1.58; /$ $7~838;OO '$ 10,000.00
392-07 Transf fl Electric Fund $ 305,000.00 $ 250,000.00 $ - $ - $ - $ -
392-87 Transfer to Reserve $ - $ - $ - $ - $ - $ -
392-89 Transfer to Operations $ 194,200.00 $ - $ - $ - $ - $ 239,146.80


'2.

Borough Finances 11-28-09

Borough Finances 11-28-09
I visited the Kutztown Borough Office and asked to see the Budget and was given a loose leaf notebook with the 2006 actual, 2007 actual, 2008 actual, the 2009 YTD (10\12), the 2009 Budget and the 2010 budget. These were the headings shown in the report.
For starters the pages were not numbered. I asked for and received copies of the section on Hometown Utilicom which was 9 pages.
On the 9th page under Fund Totals: Telecommunications Fund, was posted
2006 Actual $ (412,172.56)
2007 Actual $ (428,320.36)
2008 Actual $ (560,473.89)
2009 YTD 10\12 $ 498,980.62
2009 Budget $ 2.00
2010 Budget $ 0.00
The figures in parenthesis are negative numbers which proves Telecom loses money and the loss increases every year.
The reason 2009 figures are positive is because the Borough under Bond and Note Proceeds (3rd page) added $900,000.00 and $959,184.00 to the 2009YTD and the 2009 Budget respectively and noted them as revenue.
I will explain the 2006 Actual in this post. I will explain the others in future posts. When you add interest income of $1,875, rent of land $48,624, telemetering $58,848, security services of $85,800, transfer from electric $305,000 and transfer to operations of $194,200 to 2006 actual it equals what HU lost in 2006 which is $1,106,519. The above amounts are from services provided by HU to the Borough. There are more illegal transfers in the report. Don’t forget there are no figures noted as audited.
This can all be seen in the records at the Borough desk, just ask to see the Budget. I will, in the near future analyze the 2007, 8, and 9 budgets which all lose about $1 million a year. I think this is proof that HU is a loser and can’t wait to hear from you. Thanks. As always Jerry