Board of Supervisors
Minutes of November 7, 2007
The Newtown Township Board of Supervisors met on Wednesday, November 7, 2007 in the Township meeting room at 6:00 PM. In attendance were Supervisors: Chairman Anne Goren, Vice-Chairman Phillip Calabro, Secretary/Treasurer, Jerry Schenkman and members Thomas Jirele and Richard Weaver. Also in attendance were Acting Township Manager John Boyle, Finance Director Elaine Gibbs and Department Heads: William Wert, Parks and Recreation; Don Harris, Emergency Services; Chief Martin Duffy, Police Department; Ronald Weaver, Technology; Michael Solomon, Codes and Zoning, and Gary Crossland, Public Works.
Call to Order
Chairman Anne Goren called the regular meeting to order at 6:00 PM explaining the evening’s agenda; Mr. Boyle would present the 2007 budget followed by questions from the Board and public comment.
Mr. Boyle thanked the Supervisors and introduced department heads, thanking them for their input in preparing the budget. He explained that the proposed 2008 budget has been prepared in line item format in accordance with the Pennsylvania Chart of Accounts for local governments published by the State Department of Community and Economic Development. It is a bottom-up budget with detailed reviews of departmental budgets by the Township Manager and Finance Director, and includes the involvement of the volunteers on the Financial Planning Committee.
The format continues the practice of separating Operating funds from Capital Funds.
The 18 funds are divided as follows:
The total budget appropriation of $14,500,000 is divided as follows:
The budget maintains municipal services at current levels; toward that end, the Township organization anticipates the need for one additional public works employee. The workload has increased with new development dedications, expanded park facilities and Sycamore Street improvements. The Public Works Department currently has 9 employees. Other department staffing levels are adequate to maintain current service levels, however as population growth continues to place additional demands on our resources, expanding staff levels in small increments will be necessary.
The budget maintains the current tax rate of 2.625 mills, about $197 to homes assessed at $75,000, or a value of $700,000; for homes assessed at $50,000 or a value of $500,000, the property tax is $131 per year. This proposed budget is a balanced budget. No tax increase is proposed. It is important to note that Newtown Township has one of the lowest property tax rates in the County, ranking 47 th out of 54 municipalities. Our operating budgets are balanced and we project a surplus of approximately $12,000. There is no proposed use of reserve funds for operations. This is the thirteenth year without a property tax increase other than the voter approved increase for the Fire Company in 2003.
Regarding the Park and Recreation Operating Fund, an increase in the Park and Recreation Tax in 2009 to fund increased maintenance costs of new and existing recreational facilities should be considered by the Board. A ¼ mill increase represents about $19 per year in additional real estate tax to property owners based on a $75,000 assessed valuation. The fund is projected to have a $200 surplus at the end of 2008, in large part the result of the $30,000 transfer from General Fund Reserve in 2007.
The General Fund
The General Fund is the largest of the operating funds, which includes expenditures for:
The General Fund revenue comes primarily from the Earned Income Tax (EIT). The EIT provides 57% of total general fund revenue, or $5,800,000. The EIT is projected to steadily increase as new development occurs; non-resident EIT is also increasing because of new development in the Newtown Business Commons and other non-residential construction. There was an 8.9% increase from 2006 to 2007.
Permit and development fees continue to generate revenue to offset expenses of the Zoning and Code Enforcement Department. 140 permits were issued for new homes in 2007, up significantly from the previous year. An increase in permit activity is projected for 2008 for Delancey Court (75), Villas at Newtown (100), Newtown Walk (77), Goodnoe Tract (15) and Melsky (30).
We are also projecting an increase in non-residential development in the next several years at Silver Lake Executive Campus, Tudor Square III, First Evergreen, Village at Newtown South, Goodnoe’s Corner and the Deluca Corporate Center – approximately 515,000 square feet, in total. $665,000 is budgeted from permit fees.
Steady sources of income include:
Intergovernmental agreements generate income with some offsetting expenses:
The 2007 projected revenue of $10,126,000 is $784,000 over the budget of $9,342,000 (by year end):
We estimate the 2008 revenues at $10,135,650, a $794,000 (7.8%) increase over the 2007 budget and approximately $10,000 over 2007 revenue collections:
Total Expenditures in 2007, including transfers from the reserve fund, is estimated at $9,919,000, or $216,000 over the budgeted amount of 9,703,000. This amount includes $400,000 from the reserve fund for capital projects.
Expendituresfor operations, representing the cost of operations before interfund transfers, are projected to exceed the budgeted amount of $9,322,000 by approximately $112,000. This represents a 1.2% variance from the budget. The Result from Operations, the difference between current year revenue and current year expenditures is estimated at $691,500, a positive result. This will go into the reserve fund.
The total proposed appropriations foroperations in 2008 are $10,123,400, an increase of $801,000 (7.9%) over the 2007 budget. The additional appropriations, which are mostly personnel, include:
Total Expenditures is budgeted at $10,674,900, with interfund transfers as follows:
In 2007, the beginning balance of the Reserve Fund was $3,046,058, but it is projected to decrease to $2,506,000 after transfers. The use of reserve funds is consistent with reserve policy adopted by the Board in Resolution #93-R-13 in 2003.
Expansion in the non-residential sector in the short term (approximately 3-5 years) will boost tax revenue, particularly in permit fees and non-resident EIT. Residential development is expected to boost permit fees and enhance resident EIT, although there will also be an increased demand on Township services. The administration will continue to explore cost saving alternatives to present ways of doing business. We will continue multiyear forecasting and long term financial planning to improve long term financial projections and again we look forward to working together with the Financial Planning Committee.
The Street Light Fund
The Street Light Fund has a balance of $213,000. The operating costs have been borne by the General Fund since 1998. These assets are used for capital improvements to the system, which currently includes 1,670 street lights, with new lights added as new developments are dedicated. The budget includes $8,000 for upgrades in various locations.
The Fire Protection Fund
The Fire Protection Fund is funded by a dedicated tax of 0.875 mills. A total of $270,000 is paid directly to Newtown Fire Association. The Association uses 1/3 of this amount to fund its capital equipment replacement program.
The Rescue Squad Fund
The Rescue Squad is supported by a dedicated tax of 0.125 mills, which generates $39,000 of support. The General Fund contributes $51,000 for insurance and fuels for a total of $90,000. The Board should consider increasing the tax rate to reduce reliance on the General Fund. An increase to 0.185 mills would represent an increase in taxes of $14 for a home assessed at $75,000, or $9 for a home assessed at $50,000.
Park and Recreation Fund
Park and Recreation is also funded by a dedicated tax of 0.75 mills, which generates $230,000 to support recreation administration and park maintenance including staff salaries, fringe benefits, supplies and insurance. The 2007 revenue is projected at $697,000, as follows:
2007expenditures are approximately $670,000, or $18,000 under budget:
The fund is projected to have a $28,000 reserve balance at the year’s end. Our recreational programs are operating at 85-90% self-sufficiency, with program receipts paying for 85% of program costs. This number represents three summer camps, and 1100 programs. Programs are expected to generate $430,000 in 2008.
2008 Appropriations are $708,000:
The increase in appropriations represents an increase in park maintenance costs of $17,000, and program costs of $18,000, which hopefully will be covered by program fees. As the Township discusses development of new park facilities, operating and maintenance costs will increase. A $30,000 transfer from the General Fund was needed to balance the 2007 budget, as revenues did not equal expenditures. The Board may want to consider possibly increasing the dedicated tax by 0.25 mills, which would generate an additional $78,000. This would cost a homeowner whose property is assessed at $50,000, or a home valued at about $500,000, and increase in taxes of about $12.50.
The Debt Service Fund
The Debt Service Fund is funded by a dedicated tax of 0.875 mills, which generates $270,000 for payments on outstanding debt. The Township owes $230,000 for purchase of the Wiggins tract, and $5,000 from a general obligation note to purchase the Archdiocese property. The Wiggins debt will be paid off in 2008. If the Board moves forward with the municipal complex expansion and development of the Woll tract, a tax increase will be needed to support payments on a new bond issue. An accurate estimate of the increase will be determined after hard costs are developed for construction of the facilities after final design is complete.
The Capital Projects Fund
The Capital Projects Fund is used for capital expenditures that meet policy guidelines; over $25,000 in cost with a lifespan of five years or more. The Township has a six year improvement program through 2013, which is reviewed by the Financial Planning Committee. Expenditures are funded with General Fund reserves and grants (for example the Sycamore Street and Newtown Yardley Road projects).
The 2007Capital Fund expenditures totaled $465,000, including:
The 2008Appropriations, totaling $460,000, include:
The Recreation Capital Fund
The Recreation Capital Fund is dedicated to construction and improvement of recreation facilities and is funded by fees new development at $5,165 per new home, and $1,291 per 1000 square feet in lieu of dedication of open space for non-residential construction. We expect to collect $800,000 in impact fees in 2007 and estimate $677,000 in 2008.
2007 projects totaling $155,000 include:
There were debt payments of $73,000 for interest on the Wiggins loan and a $900,000 transfer to the Woll Site Improvement Fund.
2008 appropriations totaling $443,000 include:
The total appropriations of $443,000 consist of $397,000 for park system improvements, $11,000 for debt services for Wiggins loan interest.
The Transportation Service Area Funds (TSA 1 and 2)
The Transportation Service Area Funds (TSA 1 and 2) are funded by impact fees for transportation system improvements under State Act 209, which divides the Township into two areas. Funds are restricted to use in specific areas. The combined fund balance in 2007 was $1,364,000. $1,190,000 in fees was collected in 2007.
2007 expenditures included $12,000 for traffic signal maintenance and $60,000 for engineering services related to the Newtown Yardley Road improvement project scheduled for 2008. This is part of the TIP, which is 80% federally funded.
We expect to receive $786,000 in new fees in 2008. The 2008 appropriations, totaling $445,000 include:
This leaves a 2008 year-end balance of $2,900,000.
The Traffic System Capital Fund
The Traffic System Capital Fund had a fund balance of $38, 000 at the start of 2007. This fund can only be used for traffic system improvements, but not restricted to TSA 1 or TSA 2. In 2007 we spent approximately $30,000 on engineering for traffic calming measures along Stoopville Road. The remaining fund balance is $9,000. There are no appropriations from this fund for 2008.
Highway Aid Fund
The Highway Aid Fund , the Township’s share of State Liquid Fuel Tax funds, is restricted in use to roadway maintenance, equipment acquisition, traffic signal expenses, street light electricity, road materials, etc. In 2007 we had a fund balance of $877,000 and received $356,000. We spent $852,000 as follows:
The year-end fund balance is projected at $432,000.
Proposed appropriationsin 2008 include $75,000 for equipment purchases and $500,000 in roadway maintenance for Mill Pond Road, Newtown Yardley Road and various roads throughout the Newtown Grant development. We anticipate a fund balance of $286,000 in 2008.
The Woll Site Improvement Fund
The Woll Site Improvement Fund will account for revenues and expenditures associated with development of the property as a municipal park. The fund is projected to start out 2008 with a beginning balance of $2,041,000 toward an estimated $5.4 million project. In 2008 we estimate $3,400,000 in proceeds from a general Obligation Bond and propose to appropriate $325,000 for site engineering and $5.1 million for construction, if the Board chooses to move this project forward in 2008.
Municipal Complex Improvement Fund
The Municipal Complex Improvement Fund was set up in 2007 to account for costs associated with the municipal complex project. Expenditures from the fund included $710,000 for property acquisition and $200,000 for architectural services. Funding for these expenditures was realized in the form of a short-term loan that will be incorporated into any future long-term financing agreement. Proposed appropriations for architectural, engineering and construction costs in 2008 will be approximately $2.4 million, $6.3 million in 2009 and $4.2 million in 2010, if the Board chooses to move this project forward in 2008.
Pension Trust Funds
The Pension Trust Funds account for monies held in trust to provide benefit pensions for retired police, firefighters and municipal employees. The funds are expected to have approximately $6,800,000 in assets as of December 31, 2007. The funds are invested by professional managers with oversight by the Pension Committee. The required contribution for 2008 is $854,000 with pension system state aid totaling $327,000. $527,000 will be paid from the General Fund. The Pension Plan Advisory Committee is working on diversifying the portfolio to improve investment performance.
In conclusion , the 2008 budget maintains municipal services at or above present levels, providing necessary resources to the Township organization to meet expected service levels to which the residents have become accustomed. We expect increased development activity in the short term. No increase in property tax is proposed. Our Township maintains one of the lowest municipal property tax rates in Bucks County. The Township is in good financial condition in the short term; however as the community matures, we should do some long term projections working in conjunction with the Financial Planning Committee.
Mr. Boyle thanked Finance Director Elaine Gibbs, Administrative Assistant Toni Garcia, the Technology Department and all of the department heads for the hard work that has gone into the preparation of the budget.
Board Member Comments
Mr. Schenkman, as a member of the Finance Committee, also thanked those who participated in the budget preparation, which has been a very difficult job.
Mr. Jirele echoed Mr. Schenkman’s thanks to all who worked on the budget. He said that he has a number of very detailed and specific questions that might best be addressed directly to Mrs. Gibbs. He suggested that he e-mail or phone Mrs. Gibbs and copy the rest of the Board with his questions. He had some specific concerns about certain projects, for example fencing of rhododendrons at the Clark Nature Center. These plants have been growing for 100 years, co-existing with deer. He said he would like more information on this project before voting on it. He also asked about the upcoming meeting schedule, as he would like more opportunity for public discussion before the vote takes place.
Mrs. Goren and Mr. Boyle reviewed the schedule of meetings, noting that “budget discussion” would be part of each agenda. Currently there is a regular meeting scheduled for November 14, and a work session scheduled for November 19, with the vote to be taken on December 12, 2007. Mr. Boyle pointed out a need for advertising of the budget meetings, as required by law. The budget must be adopted by December 31, 2007.
Mr. Jirele suggested possibly adding a work session to the December schedule, or possibly changing the November 19 meeting to a televised meeting or a regular meeting.
Mrs. Goren thanked Mr. Boyle, the department heads, the finance director and the finance department for the work that went into the preparation of the budget. She opened the floor for public comment.
Mr. Schenkman introduced the members of the Financial Planning Committee: John Stranford, Jennifer Dix, Allen Fidler, III, Philip Newmius, Jr., Wade Suthard, John Nejman and Angela Evans.
Philip Newmius, speaking on behalf of the Financial Planning Committee said that the Committee has spent a great deal of time reviewing financing options for a municipal complex expansion. The facilities have been in existence since 1988. The staff and Township has grown considerably since then. An expansion of the facilities is desperately needed for the staff to efficiently execute their duties. Currently space is rented for storage and trailers are used for some departments. A goal should be to have all facilities under one roof.
Mr. Jirele said that he agreed with this statement, and would like to see facilities expansion made a priority in the coming year. He would like to work toward phasing in an expansion.
Park and Recreation Director Bill Wert and Park and Recreation Board Chairman Andrew Levine reviewed the current status of the Woll Tract, along with future plans for its development. Mr. Levine said that engineering has been completed. The Planning Commission has reviewed and recommended final plan approval. It is to be on the Board of Supervisors’ November 14 agenda for review. Plans are posted on the Township Web site for residents’ review.
At this point, preliminary financial estimates are being made. Possible phasing in of the project has costs estimated as follows:
A more detailed budget is being worked on, but at this point is would be possible, with money currently allocated, to build the fields with lights, without paved parking.
Mr. Levine briefly discussed possible financial contributions from sports organizations for lights and field construction. Sports organizations would conduct fundraising and apply for grants, but would need a commitment from the Township for fully approved plans. He discussed some financial contribution arrangements that have been made in other communities; some organizations have contributed to certain field costs in exchange for exclusive use of the fields. He also reviewed some opportunities for use of volunteer labor for field construction and storage facility construction, as well as some in-kind contributions.
Mr. Calabro expressed some concern about doing a partial construction.
Mr. Levine agreed that the Park and Recreation Board would like the full build out of the park, but if funds are limited, would be willing to work on a phased in project, as playing fields are desperately needed. He briefly discussed the use of temporary field lights, which are only appropriate for rectangular field sports, and the use of artificial turf. He suggested that the Township consider working with sports leagues to seek contributions for artificial turf at the field behind Staples, as a test site.
In response to Mr. Jirele’s earlier comment, Mr. Levine said that the Park and Recreation Board would not strongly object to removal of deer fencing from the proposed budget.
In response to questions from Jennifer Dix of the Financial Planning Committee, Mrs. Gibbs and Mr. Wert briefly reviewed the use of recreational impact fees, which will be applied to improvements in other parks. A bond issue would be needed to fully fund the complete build out of the park.
Mrs. Goren congratulated Dr. Ciervo and Mr. Gallagher on their recent election to the Board of Supervisors. She asked Mr. Boyle to provide the Supervisors Elect with Board packets for upcoming meetings, and invited them to attend upcoming work sessions and meetings.
Mr. Weaver moved to offer Joseph Czajkowski a contract as Township Manager. Mr. Jirele seconded and the motion passed unanimously.
Mrs. Goren thanked Mr. Boyle for his excellent work as acting Township Manager, and for preparation of this budget.
The meeting adjourned at 7:45 PM.