Board of Supervisors
Minutes of November 5, 2008
The Newtown Township Board of Supervisors met on Wednesday, November 5, 2008 in the Township meeting room at 6:00 PM. In attendance were Supervisors: Chairman Thomas Jirele, Vice-Chairman Robert Ciervo (late), Secretary/Treasurer, Mike Gallagher and members Philip Calabro and Jerry Schenkman. Also in attendance wereTownship Manager Joseph Czajkowski, Assistant Manager, John Boyle, Finance Director Elaine Gibbs and Department Heads: Kathy Pawlenko, Parks and Recreation; Don Harris, Emergency Services; Chief Henry Pasqualini, Police Department and Ronald Weaver, Director of Inspections and Infrastructure Management.
Call to Order: Chairman Thomas Jirele called the meeting to order at 6:25 PM explaining the evening’s agenda; Mr. Czajkowski would present the 2008 budget followed by questions from the Board and public comment. This would be followed by a few items of business.
Mr. Czajkowski thanked the Supervisors and thanked the department heads 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 Fund Balance (or reserve) is shown. The result of operations, comparing revenues with proposed expenditures is shown.
The 18 funds are divided as follows:
The total budget appropriation of $24,580,813 is divided as follows:
The proposed budget maintains municipal services at current levels. Department staffing levels are adequate at this time to maintain current levels of service. The budget provides for maintenance and improvements to infrastructure valued at $36,000,000, including buildings, streets, parks and all public assets as noted in the 2007 financial comprehensive annual financial report prepared in compliance with GASB34 requirement to value public assets.
The budget maintains the current tax rate of 2.625 mills, with specialty taxes for fire company, parks and recreation and debt. One mill generates approximately $318,180. about $187 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 $125 per year.
Operating budgets are balanced. Projected revenues with an infusion from the reserve fund equals proposed expenditures. No tax increase is proposed, although a tax increase will be necessary in the Debt Service Fund in 2010 to make payments on the municipal expansion construction bond. This is the fourteenth year without a property tax increase other than a voter approved increase for the fire company in 2003. The Park and Recreation operating fund is balanced.
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 58% of total general fund revenue, or $5,700,000. The EIT is projected to decrease 0.08% from 2008 to 2009 due to current economic conditions. There had been an increase of 4.1% from 2007 to 2008.
Permit and development fees continue to generate revenue to offset expenses of the Zoning and Code Enforcement Department, although it is projected to be down from the prior year. In 2009 an estimated 151 new dwelling units are anticipated, an occupied total of 7,500. There is a budgeted decrease in permit activity from new housing projects form $480,000 in 2008 to $350,000 in 2009. There are 500 new housing units approved for construction in the next several years, however the current economy will have a detrimental effect on building and the Township can expect lower numbers in the future. Non-residential development is also expected to slow, with the approved 515,000 square feet of non-residential development to remain slow to develop.
Steady sources of income include:
Intergovernmental agreements generate income with some offsetting expenses:
The 2008 projected revenue of 9$9,931,407 is $29,243 under budget of $9,960,650.
The 2009 revenues are estimated at $9,831,000, a $129,550 (1.2%) decrease from the 2008 budget and $32,307 under projected 2008 revenue collections:
Expenditures, the total Expenditures, including transfers to capita and total operating expenditures, the day to day operation expenses for 2008, are projected at $10,334,012 or $137,488 under budget of $10,471,500.
Expendituresfor operations are projected at $179,988 under budget, a 1.9% variance from budget/ This equals a $162,395 positive result from operations (budgeted at $79,650) added to the Reserve Fund of $2,607,424. .
The total proposed appropriations for operations in 2009 are $10,207,946 , an increase of $326,946 (3.3%) increase over the 2008 budget. The additional appropriations, include increases in:
The Township will continue the practice of purchasing police vehicles and computer systems from the operating budget.
Total Expenditures (with inter-fund transfers) is budgeted at $10,423,447, with interfund transfers as follows:
The beginning fund balance in 2008 was $3,010,158 but is projected to decrease to $2,607,424. he Township anticipates a reserve balance of $2,004,447 by the end of 2009. Use of reserves is consistent with the reserve policy adopted by the Board of Supervisors in Resolution 93-R-13 in May of 2003.
While the Township expects non-residential development to continue, this could be slower due to the economic downturn. Residential development is also expected to slow down over the next few years. The Township is fortunate to be involved with the Delaware Valley Insurance Trust (DVIT) and DVHIT, as they smooth out fluctuations seen in the commercial insurance and health insurance markets. The Township expects a 6% increase as opposed to the 15-20% increase predicted in the open market. The administration will continue multi-year budget forecasting and long term financial projections with the Financial Planning Committee, keeping in mind demographic changes, development potential, employment, etc. Beginning with the 2010 budget the recently purchased MuniCast software will assist in multi-year budget forecasting. The Township must explore ways to reduce reliance on the General Fund for capital projects.
The Street Light Fund
The Street Light Fund has a balance of $215,000 for 2008. These assets are used for capital improvements to the system, which currently includes 1,500 street lights, with new lights added as new developments are dedicated. The budget includes $10,000 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 $272,500 is paid directly to support Newtown Fire Association.
The Rescue Squad Fund
The Rescue Squad’s dedicated tax was eliminated in 2008. This item, $90,500, is fully funded from the General Fund.
Park and Recreation Fund
Park and Recreation is also funded by a dedicated tax of 0.75 mills, which generates $233,000 to support recreation administration and park maintenance including staff salaries, fringe benefits, supplies and insurance. The 2008 revenue is projected at $660,000, as follows:
2008 expenditures are approximately $622,000, or $3,000 under budget:
The fund is projected to end the year with a negative $5,491 reserve balance. Recreation programs operate at 85-90% self-sufficiency. Programs, including three summer camps, are expected to generate $430,000 in 2009, a $10,000 increase over 2008’s forecasr of $420,000. The Department offers 1200 programs with 4100 participants.
2009 Appropriations are $678,000:
$73,141 decrease over 2008 budget of $625,000:
The Township is discussing development of a new park facility; operating and maintenance costs will require additional revenue in 2010. The fund balance for 2009 is $57,300. The current budget leaves one full time employeer position vacant. The administration recommends that a part-time position (20-25 hours per week) be added. This would still leave the fund with a positive balance and bring staffing to pre-2006 levels.
The Debt Service Fund
The Debt Service Fund is funded by a dedicated tax of 0.875 mills, which generates $278,408 for payments on outstanding debt. The Township has completed payment of debt for the purchase the Wiggins tract. With the current fund balance of $159,263 and the current levy there is no need to raise this fund this year. An increase will be necessary in 2010 to pay the principal and interest on the Municipal Complex bond.
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 2014, which is reviewed by the Financial Planning Committee. Expenditures are funded with General Fund reserves and grants.
The 2008 Capital Fund expenditures totaled $446,000, including:
The 2009 Appropriations, totaling $367,000, include:
There will need to ba a $125,000 transfer from the General Fund Reserve - $11,300 balance.
The Recreation Capital Fund
The Recreation Capital Fund is dedicated to construction and improvement of recreation facilities and is funded by fees for 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 $50,000 in impact fees in 2009 and estimate $390,000 in 2009.
2008 projects totaling $399,400 include:
2009 appropriations totaling $121,000 include:
Total appropriations of $2,054,990 consists of $121,000 for park system improvements and $1,933,990 for Woll tract park.
In response to Mr. Jirele’s questions, Mr. Czajkowski explained that the water bypass valves allow the Township to tap into water lines without paying a sewer fee as well. The water is needed for field maintenance.
Mrs. Gibbs said that the recreation capital fund is based on impact fees. Some of these fees could be moved to the Woll tract fund.
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 and cannot be used for “repair, operation or maintenance of existing or new capital improvements”. The combined fund balance in 2008 was $2,155,827. $65,00 in fees were collected in 2008.
2008 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 $892,000 in new fees in 2009
The 2009 appropriations, totaling $510,000 include:
The 2009 ending balance is expected to be $2,170,000.
The Traffic System Capital Fund
The Traffic System Capital Fund had a fund balance of $6,700 at the start of 2008. No projects are expected in this fund in 2009. The 2009 fund balance is expected to be $6,825.
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 2009 with a beginning balance of $1,993,990. Current estimates for construction are $2,600,000, with final numbers expected in December. A pre-bid meeting was held this morning and was very well attended.
Municipal Complex Improvement Fund
The Municipal Complex Improvement Fund accounts for the revenues and expenditures associated with the development of the new public works and administration facilities. Police facility renovations have been deferred. Latest construction estimates for this project are $7,400,000. Final bid numbers are expected in early December, with a project completion in November of 2009.
In response to Mr. Gallagher’s question, Mr. Czajkowski said that other money in this fund will be used for non-construction purchases such as telephone systems and furniture.
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. In2008, $378,300 was received. A decrease to $378,300 is expected in 2009, although this could be higher with submission to PennDOT of recently dedicated roads. In 2008, $485,000 was spent:
The year-end fund balance is expected to be $447,078.
$500,000 is proposed for roadway maintenance in 2009:
Due to increased costs due to increased oil prices the Township must cut back on the program of find a new funding source.
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 $7,280,000 in assets as of December 31, 2008. The funds are invested by professional managers with oversight by the Pension Committee. Some increases or losses are anticipated due to recent market trends. The required contribution for 2009 is $895,862 with pension system state aid totaling $331,400. $564,462 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 2009 budget maintains municipal services at present levels, while providing necessary resources for the Township organization to meet the expected levels of service to which Township residents are accustomed. The budget reflects a hiring moratorium (two police officers, a public works assistant and a Park and Recreation programmer). The administration recommends that a part time programmer be added to the Park and Recreation Department. No increase in property tax is proposed although an increase will be necessary in 2010 to pay the municipal complex bond. Newtown Township maintains one of the lowest municipal property tax rates in the County. The Township is in decent financial condition for the short term, but monitoring of the economy will be necessary looking to 2010 and beyond.
Mr. Czajkowski thanked the department heads, Mr. Boyle, and the staff, and especially Mrs. Gibbs for the work done to bring this budget to the Supervisors.
Board Member Budget Comments
Mr. Calabro thanked everyone who worked to prepare the budget. He said that he had no specific questions, but would like to review the budget more carefully before commenting.
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. He asked for a copy of Mr. Czajkowski’s narrative to help with his review of the budget. He thanked everyone for the additional work to make changes and further reductions based on the recent Supervisors/Financial Planning meeting.
Mr. Jirele echoed Mr. Schenkman’s thanks to all who worked on the budget. He said that going forward, he would begin working on some inter-municipal cooperation on services and Mr. Schenkman would investigate economic development. He also would like to take time to carefully review the budget before commenting, but he does want to emphasize that it is important that the Township continue to work well.
Mr. Gallagher said that he has some very specific questions but would prefer to send them to Mr. Czajkowski and Mrs. Gibbs in the office, to allow them time to research and provide information. He said that last year’s budget had included some recommendations for possible tax increases.
Mr. Czajkowski said that looking ahead, with a new park being opened there will be associated maintenance costs. A funding source will be needed at that time, but he does not have any immediate recommendations.
Mr. Gallagher questioned the smaller projected increases for insurance and professional consultants.
Mr. Czajkowski said that the previous budget had over-estimated the insurance costs. The Township is not participating in a different medical insurance program, which has kept increases lower than in previous years. The Township’s engineer and solicitor have been more cost effective than previous consultants. The budget does not over-estimate their costs.
Mr. Jirele suggested that the Board review the presented budget, and if there are questions, they should be e-mailed to the administration with other Board members copied. He asked that responses to questions be forwarded to all Board members. This should avoid duplication of questioning. The budget could be discussed further at the next two Board meetings.
Mr. Schenkman said that going forward the Township would be seeing a tax increase. He asked Mr. Czajkowski to provide some information, including some numbers, to help prepare residents for the increase.
Mr. Czajkowski said that he will be able to make some estimate of the necessary increase to cover the bond repayment. He will also begin to work on estimating costs associated with maintenance of the new park. That amount will change over time as the park comes into use. Once the construction is completed, it will take time and effort to bring the fields into playing condition.
Mr. Czajkowski reviewed the schedule for adopting the budget, which must be advertised in advance of adoption. A motion will be needed to authorize advertisement, and advertisement must take place 20 days prior to adoption, which is scheduled for the December 17, 2008 meeting.
(Dr. Ciervo arrived at this point)
Mr. Jirele said that there have been recent complaints from neighbors about the use of the shooting range late at night. He asked that the Board discuss a policy on the use of the range at an upcoming Board meeting.
Chief Pasqualini said that a policy does exist, which prohibits use of the range after 9:00 PM. He has been working on reducing the number of groups permitted to use the range, which should cut down on the noise. There had been a recent incident of use after the 9:00 PM closing, but this has been addressed. Going forward, the Police Department will be reviewing and re-enforcing the policy for use of the range.
Mr. Jirele asked that the Board be provided with a copy of this policy.
Mr. Jirele asked that discussion of the proposed intersection improvements at Stoopville and Washington Crossing Road be added to the next Board agenda. Although the intersection is not within Newtown Township, it is widely traveled by Township residents.
Mrs. Gibbs asked the Board to approve the current bills list, as some of the bills must be paid before the next regular meeting. Due to the changes in the Board schedule, this is necessary. It has occurred in November of past years, and previous Boards have approved bills lists at special meetings and/or work sessions.
Mr. Calabro said that typically, the bills list is advertised on the Board agenda and is available for the public to review prior to approval. He would prefer not voting on the bills list until it has been made available to residents.
Dr. Ciervo said that he had not reviewed the bills list in advance of this meeting because he understood that it was not to be approved until the next regular meeting on November 12, 2008. He would be unwilling to approve the bills until he has had an opportunity to carefully review the list.
Mr. Jirele suggested that the Board take a brief recess to review the bills list. The members could then vote to approve the payments, however copies could be made available to the residents at the November 12, 2008 meeting for discussion.
Mr. Gallagher moved to authorize payment of bills totaling $389,106.45. Mr. Schenkman seconded.
Discussion of motion: In response to Dr. Ciervo’s questions, Mrs. Gibbs explained that the Township Engineer has inspected roadwork performed by Bray Brothers and has recommended payment. This is not the first payment and there will be additional payments.
In response to Dr. Ciervo’s question, Mr. Czajkowski said that the replacement window at Helen Randle Park is for the snack shed sales window, which was damaged by vandals. The replacement will be covered by insurance. Since this vandalism incident, the Public Works Department has installed a security light and camera at the snack shed.
The motion passed 4-0-1, with Mr. Calabro abstaining.
Mr. Gallagher moved to authorize interfund transfers from the General Fund for payroll totaling $180,000. Mr. Schenkman seconded and the motion passed 4-0-1, with Mr. Calabro abstaining.
Mr. Jirele asked that this bills list be made available to the public at the November 12, 2008 meeting and discussion of the list be included on the agenda.
Board Member Reports
Mr. Gallagher reported that he and Mr. Schenkman had attended the County Commissioners meeting. At this meeting it was reported that there had been 85% voter turn-out for this year’s election, with no problems at the polls. The County is working on selecting a site for a dog park at Core Creek Park.
Mr. Gallagher said that the Open Space Committee is continuing to work with the Bucks County Planning Commission on the open space comprehensive plan.
Mr. Gallagher announced that the Morrell Smith Post of the VFW will hold a Veteran’s Day Ceremony at Council Rock North to honor Council Rock Veterans.
Mr. Jirele reported that Wrightstown will dedicate its War Veterans Memorial at the Wrightstown Township Building on Saturday at 2:00 PM. This memorial is the Eagle Scout project of Newtown resident Matthew Piette.
The meeting adjourned at 7:40 PM.