MIDDLETOWN, Pa. (WHTM) -
The sign in front of its borough building boasts, "Middletown is Dauphin County's oldest community."
At one point, it was apparently one of its wealthiest.
"Our former finance director told us at one point there was so much money coming in, he didn't know where to put it," said Middletown spokesman Chris Courogen.
But those days are gone. Middletown is drowning in red ink and is seeking help from the state. The borough wants to be accepted into the Act 47 early intervention program, which would pay for financial experts to pore over Middletown's books and come up with solutions to get it back in the black.
Courogen repeatedly stressed that it is not bankruptcy. It is not distressed city status, such as Harrisburg and Scranton.
"The Borough of Middletown is not bankrupt," he said. "We're not in imminent danger of not being able to pay our creditors. We're not going to start paying all of our employees minimum wage."
Experts will come up with a roadmap to prosperity and Borough Council will accept or reject its recommendations, although most members say it would be foolish to go through the process and then not implement the plan.
Middletown has 8,500 residents and about 67 employees. It's annual budget is roughly $6.8 million and its deficit is nearly half that, at $2.8 million, according to officials. Those numbers are unworkable.
How did Middletown get here? Officials say its a spending problem and an electrical problem. Years ago, the borough got a sweetheart deal of a penny a kilowatt for electricity. Middletown purchased it wholesale and sold it back to residents. At the time, they could sell it under market value but still at a huge profit. Those profits went to the general fund to pay the borough's bills.
The sweetheart deal dried up in 1998, according to officials, but the borough didn't react. Middletown's budget was still relying heavily on electric bills of residents to pay its bills. The cost of electricity skyrocketed for residents. Middletown kept on spending, according to Courogen.
"The borough has a structural deficit in its general fund and can no longer depend on huge transfers from high priced electricity to paper over the problem," he said.
"It's been 14 years and it hasn't been addressed," said Mark Morgan, a financial adviser for the borough. "And now it's ballooned to a larger dollar amount."
Borough Council president Chris McNamara wants to lead Middletown out of its fiscal crisis and feels the early intervention program is the best way.
"We've resigned ourselves that we're going to fix it and we can't do it ourselves," McNamara said.
But there is dissension in the council's ranks. Scott Sites doesn't support state intervention and thinks the borough can solve its problems on its own.
It does appear the borough is looking for a third-party to come in and outline tough medicine it needs to take. Officials concede that Middletown spends to much. Courogen specifically points to the police budget, which he calls too high. When I ask if they've done enough belt-tightening on their own, Courogen has a two-word answer, "definitely not."
Middletown officials say they have a verbal agreement with the state and they anticipate being accepted into the early intervention program by the Department of Community and Economic Development.
