Board of Supervisor Minutes
November 10, 2004
MINUTES WERE APPROVED at the regular meeting January 12, 2005. MINUTES OF 11/10/04 BUDGET HEARING: Mr. Harp moved to approve the minutes of the 11/10/04 budget hearing. The motion was seconded by Mrs. Goren and passed unanimously.
Present: Dick Weaver, Chairman; Scott R. Harp, Vice Chairman; Anne M. Goren, Treasurer & Secretary; Raymond “Skip” Goodnoe, Member; Thomas Jirele, Member; Robert M. Pellegrino, Township Manager; Elaine Gibbs, Finance Director.
Department Heads/Personnel Present: William Wert, Parks and Recreation; Don Harris, Emergency Services; Chief Martin Duffy, Police Department; Ronald Weaver, Technology; Thomas Harwood, Codes and Public Works.
Others Present included: Nancy Crescenzo
Attached to these minutes is the agenda of the meeting.
Mr. Weaver called the meeting to order at 7:05 pm. He explained the meeting’s format: Mr. Pellegrino would give a presentation, followed by comments and questions from the Board, public comment, and any closing comments by the Board.
Mr. Pellegrino presented the budget, and said he would give an overview of the proposed 2005 budget, with a general overview of significant budget items and a review of each fund. He said that the budget format is the same as in 2004, following the DCED Chart of Accounts. Highlights of his remarks included:
¨ Funds: He noted that the Township arranges its functions in the Budget among 16 different operating funds, each with a specific purpose, and uses a variety of sources of revenue sources to fund appropriations for these funds. Mr. Pellegrino noted that aside from the voter-approved increase in the Fire Tax in 2003 by ½ mill, the Township has not increased real estate taxes since 1995.
General Fund Revenues
¨ Current year revenues are expected to exceed $7,869,000 or approximately $327,000 over budgeted revenues of $7,542,850.
¨ A significant source of General Fund revenues, which pays for most municipal services, is Earned Income Tax. This is expected to generate approximately $4.45M in 2004, a $175,000 decrease from the 2004 budget amount of $4.625M; this was not unanticipated. This reduction is the net effect of an increase in the projected resident portion of the earned income tax, and a decrease in the non-resident portion, resulting from the adoption of the tax by other municipalities in the area.
¨ Business Licenses, permits, occupational privilege tax, pension system state aid, police fines and employee contributions to benefits are consistent sources of income. Revenue from permit activity in the proposed budget is expected to remain the same as the prior year budgeted amount. Mr. Pellegrino said that he will present recommendations of changes to the fee schedule; it has been nearly five years since any schedule revision.
¨ Approximately the same amount in Federal and state grant funds is expected in 2005 as was received in 2004. In 2004, a $380,000 grant was received for creek restoration, Council Rock School District paid half the salary of the Resource Officer at the high school, and over $50,000 was received in recycling income; another grant is expected in 2005 for the DARE program. Mr. Pellegrino noted that the $291,000 in state aid offsets township pension contributions.
¨ Intergovernmental agreements with the Borough for fire and safety inspections and with Wrightstown Township for police services generate income with some offsetting expenses. Revenues from these services will generate revenues of $370,000 in 2005.
¨ Interest earnings are down as rates are low, and are below $50,000.
¨ 2005 projected revenues are $7,616,750, a $73,000 or 1% increase from 2004 budgeted levels. Mr. Pellegrino said this was a conservative but realistic estimate.
General Fund Expenditures
¨ Total Projected 2004 Expenditures of $7,933,000 show a decrease of $389,000 under the 2004 budget of $8,322,850, and is directly related to the delay in purchasing additional property from the Archdiocese of Philadelphia adjacent to the municipal complex at an estimated cost of $400,000, and to money not paid to the Sycamore Street project.
¨ Mr. Pellegrino noted that several new total lines have been added to the budget document to show Total Operating Expenditures and Result from Operations. He noted the positive result from operation in 2004 prior to inter-fund transfers estimated at $258,000.
¨ Proposed expenditures in 2005 are $8,461,100, which is a $139,000 increase over the 2004 budget of $8,322,850. Increases in the total operating expenditures are directly attributable to increases in employee salary and fringe benefit costs. The proposed budget includes a projected overall increase of 30.6% in medical benefit costs over 2004 premiums.
¨ Mr. Pellegrino referred to distributed handouts detailing Operating Appropriations (attached) and Department Activity Levels.
¨ The proposed budget includes $511,000 from reserves to fund capital expenses; the maximum limit as established by policy is $1,168,000.
¨ Interest from Streetlights Fund is being used for capital maintenance of the street light system; over 1300 streetlights are presently maintained at a cost of approximately $9000 a year.
¨ Fire Protection Fund is generated from a 3.5-mill real estate tax dedicated to fire protection services. The 2005 budget includes a $20,000 transfer from the General Fund to the Fire Protection Fund; approximately $300,000 will be paid in 2005 to the Newtown Fire Association for fire protection services.
¨ Appropriations to the Rescue Squad Fund are estimated at $79,400, and include revenues generated by a ½ mill tax levy and a $41,000 transfer from the General Fund.
¨ 2 mills support a portion of Park & Recreation administrative and park maintenance costs and is expected to generate approximately $143,000 in revenues. The Park & Recreation Fund is expected to end the year with a deficit of $16,000. Mr. Pellegrino noted that the current 2-mill tax levy is no longer sufficient to fund future operating expenses. Since the final payment was made in 2004 for the 1997 bond issue, Mr. Pellegrino recommended shifting 1 mill from debt service to Park & Recreation. $357,000 is expected from P & R program revenues; Park & Recreation programs operate at 90% self sufficiency. Mr. Pellegrino said there has been some discussion of park improvements, which would require increased revenues.
· Debt Service Fund - The current tax levy of 4 ½ mills was insufficient to cover debt service; transfers from the General Fund and Recreation Impact Fund provided the additional revenue needed. In 2004, the Township made its final payment for the 1997 bond issue, allowing for a reduction in the debt service tax to 3.5 mills. The only remaining debt service lefts are payments on the acquisition of the Wiggins Tract (to be paid off in 2008) and Silver Lake (to be paid off in 2006). Mr. Pellegrino noted the low rate carried by the Township.
¨ Capital Projects Fund revenues come primarily from the transfer of cash reserves from the General Fund. A 3 mill increase would be required, based on projected % rates, for the municipal expansion. Mr. Pellegrino recommended continuing the current debt service so as to be paid off earlier. The single largest expenditure in 2004 was for the Sycamore Street reconstruction project; the project was 80% funded through a grant, with additional federal grant funding (100%) for streetscape enhancements. Additional appropriations included funding for the lease purchase of a dump truck, land acquisition, architectural services related to the municipal expansion, engineering for the roadway maintenance program, document imaging project, and storm sewers at Mardot Village. Mr. Pellegrino noted that a bond issue would fund the design costs for the municipal expansion.
¨ Recreation Capital Fund revenues are derived solely from recreation impact fees; no tax monies are used. Just over $350,000 is expected to be collected in 2005. Projects include fencing and bleachers at the Staples site, sewers at Chandler, field reconstruction at Helen Randle Park, Clark house and barn improvements, and engineering costs for the Woll Tract. There is no money in the budget for improvements at Roberts Ridge or the Woll Tract.
¨ Transportation Service Area Funds: Expenditures are projected at $86,000 and include a flashing pedestrian signal West Hanover Street and Richboro Road, pedestrian crossing signals at Mill Pond Road and Richboro Road, engineering services for the Buck Road/Newtown bypass improvement project. Mr. Pellegrino suggested that the installation of battery backup units with LED lights at several intersections, and a video detection system to assist with the closed loop system and timing of traffic lights be paid for out of unspecified impact fee funds, since they don’t qualify under specific TSA funds. Technology Director Ron Weaver has suggested phasing in the closed loop system.
¨ 2004 expenditures from the Traffic System Capital Fund were for traffic calming study and a traffic-calming program on Fountain Farm Lane and Mill Pond Road, and the installation of stamped asphalt crosswalks on these streets. Mr. Pellegrino said he has received a proposal for a traffic responsive closed loop system at a cost of $42,000 for engineering services; he said the Board should consider adding this expense to the budget if they want the system to be traffic responsive.
¨ The Highway Aid Fund will be used towards roadway maintenance, equipment acquisition, traffic light expenses and streetlight electricity. Proposed appropriations from the fund in 2005 totaling $577,000 include funding for lease purchase payments on major equipment, minor equipment purchases, crack sealing throughout the Township, patching materials, storm sewer repairs and installation in Mardot Village, and roadway resurfacing.
¨ Pension Funds: Each of the four funds operates under an ordinance adopted by the Board of Supervisors and managed by the Pension Committee, which meets quarterly. The required Township contribution to the plans is $301,000, which was funded by $253,000 in state aid and $48,000 from the General Fund. The Township’s out-of-pocket cost for the plans will be approximately $29,000 in 2005. The Fire Fighter Pension Fund was begun this year; the Township will receive approximately $27,000 from state aid as a result of separating out the Fire Fighter plan.
The 2004 beginning fund balance was $2,925,103. Mr. Pellegrino noted that this is the first year since he has been Manager that money has been taken from reserve to cover operating costs. He suggested that the only option to reduce operating costs would be to cut personnel, laying off three police officers and two public works staff. He said the Township needed to reduce the need to spend reserve funds for capital projects, and that he doesn’t see any significant upcoming capital needs except for the municipal building expansion.
Mr. Pellegrino said he was looking into a municipal benefits pool to reduce costs, and said that medical/health insurance costs needed to be evaluated.
Mr. Pellegrino said that two ordinances would be considered at the next Board of Supervisors meeting: one to create the Fire Fighters Fund, and one to update the Non-Uniform Pension Plan.
Mr. Pellegrino noted that a budget is a statement of financial position for a definite period of time, and that it represents estimates of revenues and expenditures. He observed that the budget maintains municipal services in such areas as police protection, code enforcement, fire protection, and public works at present levels; this includes no expansion or reduction of staff. Mr. Pellegrino noted that the Township maintains one of the lowest municipal real estate tax rates in the county, and said the Township strives to deliver services to the community according to it mission statement.
Mr. Pellegrino concluded his presentation by thanking Ms. Gibbs for her work on the budget, and commended her staff and his staff, including secretaries and support staff, for their considerable efforts. He thanked all Township employees for their hard work this year.
Mr. Weaver introduced the Department Heads present and informed that Board that they were present to answer any questions.
Board Comments and Questions
Mr. Weaver complimented Mr. Pellegrino, his staff, and the department heads on their work on the budget.
Mr. Jirele thanked Mr. Pellegrino and Ms. Gibbs for their work and said he was looking forward to further review of the budget. He noted that this was the first budget meeting, and asked for the budget review schedule. Mr. Pellegrino detailed the schedule:
¨ Wed. November 17, 2004 – BOS meeting – recommendation of the preliminary budget – “hang the budget”. The budget then becomes available for public display and must be available for at least 20 days.
¨ Discussion of the budget at the December 1, 2004 BOS meeting
¨ December 15, 2005 – BOS meeting – earliest date possible for the adoption of the budget
Mr. Pellegrino noted that additional discussion time would be scheduled if necessary, and that the law requires the adoption of the budget by 12/31/04. He distributed a chart of municipalities of similar size as Newtown, detailing population, number of employees, square mileage, and annual budget, to demonstrate where Newtown stands. Mr. Harp noted that the Township was ranked 11th lowest in 54 communities listed.
Mr. Pellegrino suggested that there might be budget reductions possible, through personnel cuts, decrease in contributions to various organizations, or deferring of the replacement of a police vehicle and speed board,
Community Comments and Questions
Nancy Crescenzo asked if the naturalist had been re-funded; Mr. Pellegrino confirmed that he has, at a cost of $7000. Ms. Crescenzo said the issue of field grooming should be addressed, saying that they were not in good shape and had resulted in player injury; she said that at the end of the summer after young adult workers returned to school that there were not enough staff to properly maintain the fields. Recreation Director Bill Wert said this had happened only once, and that no report of player injuries had been brought to him.
It was clarified that two police officers are management; there are 26 total officers.
Ms. Crescenzo asked if any of the municipalities on the list of similar communities had community centers or libraries; Mr. Pellegrino said none of them had community centers, and noted that libraries were not a recreation item.
Ms. Crescenzo said it was clear in the last year that the Park & Recreation maintenance budget needed to be increased; Mr. Pellegrino said he has suggested taking 1 mill from the debt service to cover costs.
Ms. Crescenzo said that, with insurance and health costs on the rise, she thought it was important to find ways to offset increased costs, and challenged the board to find a way to eliminate deficit spending. She said she thought the Township had been inactive regarding the Municipal Expansion; Mr. Pellegrino noted that there has been a great deal of work done on the development of project details, which he feels will reflect the construction standards set by the Board.
On motion by Ms. Goren, and without objection, the meeting was adjourned at 8:40 pm.
Respectfully Submitted by:
Leslie. Dunleavy, Recording Secretary 12/14/04