TOWANDA - The Towanda Borough Council on Monday approved a payment-in-lieu-of-taxes agreement with Trehab on its planned $11 million development and also approved a tentative $6.4 million borough budget for 2013.

The council is scheduled to vote on whether to adopt the budget at a special meeting at 6 p.m. on Dec. 27.

The budget includes funding for an additional full-time police officer.

However, the council would still need to take an additional vote at a later time on whether to go forward with the new hire, council President Mark Christini said after the meeting.

The council will not agree to hire an additional officer unless the retirement plan for the new officer is a "401(K) or something like that," Christini said.

Currently, full-time officers in the department have a defined-benefit retirement plan.

Under the terms of the borough's contract with the police officers, the Teamsters Union, which represents the officers, would need to enter into negotiations with the borough on the terms of the retirement plan that the new officer would receive, Christini said. It's expected that the union would agree to switch to the new retirement plan for the new hire, he said.

The budget includes no tax increase.

The council also unanimously approved the Trehab Center's proposed payment-in-lieu-of-taxes (PILOT) agreement, under which Trehab would pay a PILOT for 15 years on the $6 million building it would build in the 400 block of Main Street, Towanda Borough Manager Tom Fairchild Jr. said.

The PILOT would be equivalent to 50 percent of the property taxes that would be owed on the property, if the property were fully taxable.

Based on the 2012 millage rates, the building, if fully taxable, would generate $87,272 in property taxes annually, so the PILOT would be half that amount, or approximately $43,600 annually, he said.

The Towanda School District's share of the $43,600 PILOT would be $26,110; the county's share would be $7,291, and the borough's share would be $10,250.

The building would have elderly housing on its upper floors and commercial space on its ground floor.

Borough officials have discussed the proposed PILOT with the Bradford County commissioners, who have agreed to the 50 percent PILOT agreement, Fairchild said.

There would also be a $5 million parking garage built on the site that would not be taxable, as it would be owned by the borough or a parking authority, Fairchild said.

Currently, the only parcel at the site which generates property taxes is a parking lot area owned by the C&N Bank, which generates a total of $242 annually in property taxes, he said.

After 15 years, Trehab would pay full property taxes on the building, he said.

In addition, the council heard a presentation from Bradford County Branch YMCA officials on recent improvements at the local Y, and continued discussions on the terms of a planned 25-year lease for the Y's continued use of the borough-owned Susquehanna Collegiate Institute building.

At the beginning of the meeting, the new executive director of the Bradford County Branch YMCA, Charity Field, discussed some of the recent improvements at the Y, which is located at 9 College Ave., Towanda.

The Y has made $18,000 worth of improvements over the last year, she said.

One of the improvements is a supervised "child care room" at the Y, where parents can bring their children when they go to the Y to exercise or take a class, she said.

"We're hoping to expand the hours of the child care room," she said. A DVD/VCR machine was recently donated for the child care room by Borough Councilman Rex Klinger.

Other improvements include new basketball hoops and painting of the bathhouses for the pool, she said.

The Y is also looking at making other possible improvements, including installing a new gym floor and air conditioning, she said.

The Y is trying to secure a 25-year lease for the building, which it needs in order to apply for grants to help fund the Y, she said.

At issue is whether the Y should pay at least some of its utility bills.

The council on Thursday defeated a proposed lease where the Y would not pay any utility bills, but would put any profits it makes into improving the S.C.I. building.

Until now, the borough has been paying the utility bills.

Last year, the utility bills amounted to $16,000.

But council President Mark Christini said the borough saves $10,000 a year in having the Y operate the S.C.I. Building's outdoor pool.

The council decided to have the Y come up with a schedule whereby it would pay a certain amount each year toward the utility bills, and that amount would increase over time.

It is now up to the Y to propose the amount it would pay each year. The Y's proposal will need to be approved by the borough council.

James Loewenstein can be reached at (570) 265-1633; or email: