Board of Supervisors
Minutes of November 3, 2010
The Newtown Township Board of Supervisors met on Wednesday, November 3, 2010 in the Township meeting room at 6:00 PM. In attendance were Supervisors: Vice-Chairman Matthew Benchener (late) , Secretary/Treasurer, Jerry Schenkman and members Philip Calabro and Michael Gallagher. Also in attendance were Township 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, Gary Crossland, Public Works and Ronald Weaver, Director of Inspections and Infrastructure Management.
Call to Order
Secretary/Treasurer Jerry Schenkman called the meeting to order at 6:15 PM explaining the evening’s agenda; Mr. Czajkowski would present the 2010 budget followed by questions from the Board and public comment. He noted that Mr. Benchener should arrive shortly.
Mr. Czajkowski thanked the Supervisors and thanked the department heads for their input in preparing the budget. He explained that the proposed 2011 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 17 funds are divided as follows:
5 operating – General, Street Light, Fire Protection, Debt Service, Highway Aid (the Park and Recreation Fund was rolled into the Fund in 2009)
7 capital – Capital Projects, Recreation Capital, TSA 1, TSA 2, Traffic
System, Woll Site Improvement fund, Municipal Complex Improvement Fund
4 trust – Police Pension, Municipal Employees Pension, Firefighters
Pension, Benefit Obligation
- Fund Balance (or reserve) is shown; also Result from Operations – comparing projected revenues with proposed expenditures, and whether any fund balance (or reserve funds) are used for operations
$14,874,756 total budget appropriations are divided as follows :
- $13.1 M Operating
- $1.1 M Capital
- $594,650 Trust Fund
Proposed Budget maintains municipal services at current levels
- Department staffing levels adequate at this time to maintain current services
- Provides for maintenance and improvements to infrastructure valued at $36M as noted in the 2007 Comprehensive Annual Financial Report prepared in compliance with GASB 34 requirement to value public assets (owned by the residents and taxpayers)
- Proposes a tax rate of 3.775 mills – specialty taxes for Fire Company, debt service; as well as general fund operations – One mill generates approximately $324,384.
- About $141 for property assessed at the township average of $37,459; $188 for property assessed at $50,000; home price - $500K
- Operating Budgets are balanced; Projected Revenues with an infusion from the reserve fund = or > Proposed Expenditures
Tax increase will be necessary in Debt Service Fund in 2010 for payment of interest and principal on the Municipal bond and for general fund operations
General Fund – Largest Operating Fund
Police– routine patrols, bike patrols, truck safety inspections, traffic enforcement, DARE education, house checks, bank checks, etc. (40% of budget)
Public Works – maintenance of roads (plowing, salting, sweeping, patching, striping), curb repairs, drainage system maintenance, and traffic control signs, traffic signals, street lights, building & facilities maintenance, fire hydrant maintenance
Emergency Services - BLS, fire suppression, fire education, fire safety inspections, emergency management
Zoning Administration/Code Enforcement – Land development & ZHB application processing, Construction and Use Permits,
Parks and Recreations – Includes the maintenance of all Township park facilities, coordination of facility use with various sports leagues, operation of 3 summer camps, and 900 programs with nearly 4000 participants.
Board and Commission Services– Board of Supervisors, Planning Commission, ZHB, EAC, HARB, Joint Historic Commission, Joint Zoning Council
Support Services – Tax Collection, Legal & Engineering Services, finance & accounting, general administration, technology
Miscellaneous Costs – Property & Liability Insurance, Employee benefits
- Earned Income Tax (56% of total revenues, $5.8 Million)
- Significant source, we project a slight increase from 2010 to 2011 due to current economic conditions
- Remained flat from 2009 to 2010;
- Projected at $5.9 Million in 2011
- Permit & Development fees continue to generate revenue to offset expenses of the Zoning and Code Enforcement Department although they are down from the prior years
In 2011, we estimate 50 new dwelling units; (occupied total - 7,560)
- Budgeted decrease in permit activity from new housing projects -
From $285,000 to $220,000
There are 500 new housing units approved for construction in the next several years, though the current economy will have a detrimental effect on building over the next few years and we anticipate lower numbers in the future.
Non-residential development also projected in next several years –
At this time we are still waiting for the Promenade to proceed, which is proposed for the old ACME site on Sycamore St. additionally;
613,000 square feet of Non-residential development is on the books, but again, we are sure to see that spread further into the future because of the economy
- Steady sources of income
- Business licenses/permits – CATV fees, leases ($452,500).
- Processing fees for SDLD, ZHB, CU applications, plan reviews ($96,900)
- Police fines ($101,000)
- Employee contributions to benefits ($115,500)
- Escrow Administration fees ($30,000)
- LST ($450,000)
- Interest Earnings on idle funds – down from prior year ($10K - $8K)
- Grants (2009-2010)
- SRO - Council Rock pays, $46,000)
- Recycling performance grant - $69,000
- Pension System State Aid - $334,000
- DARE program - $0 (no longer funded by the state);
- Intergovernmental Agreements - generates income with some offsetting expenses
- Borough Fire Safety Inspections and EMA services ($10,200)
- Wrightstown Police Services ($494,948)
- 2010 projected revenue $9,995,115 or $49,246 under budget of $10,044,361
- Projected EIT collections - $5.8 Million - Expected to meet budget
- Permit fees - $200,000 ($85K under budget)
- Transfer taxes - $725,000 - $25,000 over budget
- Interest Earnings - $7K ($3,000 under budget)
- CATV Fees – $25,000 over budget at $375,000
- Land Development, ZHB Fees - $53,500 under budget
- LST - $450K at budget
- Escrow Administration Fees - $10,000 under budget
- 2011 revenues estimated at $10,424,432 or $380,071 (3.8%) increase over the 2010 budget and $429,317 over projected 2010 revenue collections
- Transfer Taxes – projected at $700,000; budgeted at 2010 estimate
- EIT - $5,900,000 – Budgeted up slightly from 2010
- Real Estate Taxes – Budgeted at $324,384
- Permit Fees - $220,000 (down $65,000 from 2010 budget)
- Pension system state aid - $7,000 increase
- Wrightstown Police Services Agreement - $22,400 increase
- CATV fees - $375,000 – increased slightly
- LST - $450K – budgeted flat
- Other Revenue categories budgeted at or below 2010 budget levels
- Total 2010 expenditures projected at $10,736,703 or $52,669 under budget of $10,789,372
- Represents .06% variance from budget
- An estimated $671,588 negative Result from Operations is projected to leave the General fund reserve at $1,170,450 at year end
- Total proposed appropriations for operations in 2011 are $10,424,432, a $380,071 (3.7%) increase over 2010 budget of $10,044,361. Much of the increase is a result of increases in:
- Salaries & Wages - $41,430
- Other Employee Benefits - $16,800
- Medical Insurance Premiums - $68,722
- Pension Contributions - $14,613
- Property and Liability Insurance - $23,000 increase
- Anticipated increases in electric costs - $31,000
- Anticipated increases in motor fuel costs - $13,000
- Vehicle Maintenance - $15,000
- Fire Hydrant Costs - $15,000
- Workers Comp and Unemployment Comp - $17,800
Additionally, a couple of items of note - we have added $5,000 for Animal Control in the Police Budget and $19,000 for maintenance of the Chiller and Boiler in the new Admin and Public Works Buildings.
Continue practice of purchasing of police vehicles, computer systems from operating budget
- Total Expenditures (with Inter-fund Transfers) is budgeted at $11,413,869;
Proposed Inter-fund transfers include:
- $84,400 to the Capital Projects Fund
- $240,000 to Park and Rec Capital (to pay the final payment of the Veterans Park construction to be used only if we do not receive recreation impact fees. In 2010 the Township did not receive expected impact fees. As those fees are paid, the general fund will be re-imbursed)
- The Beginning fund balance in 2010 was $1,912,038 but is projected to decrease to $1,170,450 by years end. We anticipate the reserve balance to be $164,013 by the end of 2011
- While we expect non-residential development to continue, we expect it to be slower over the next couple of years due to the economic downturn.
- Residential development has slowed down and we do not see any major increases over the next couple of years.
- Township is fortunate to be involved with DVHIT as they have a track record of smoothing out the fluctuations seen in the commercial insurance and health insurance markets. (We anticipate a 5.1% increase in Health Insurance costs this year as opposed to the 15 – 20% increases predicted in the open market).
- Continue multi-year budget forecasting and long term financial planning project with the Financial Planning Committee to improve long term financial projections; examine demographic changes, development potential, employment, etc.
- Must find ways to reduce reliance on the General Fund for capital projects
Street Light Fund
- $211,062 balance from 2010
- Assets used for capital improvements to the system (1,500 lights at present) New lights added as developments are dedicated
- Budget $10,000 for upgrades in various locations throughout Township
Fire Protection Fund – dedicated tax
- Currently .875 mills dedicated to support Newtown Fire Association - $275,274
- Will pay total of $277,000 to Fire Association; paid directly to NFA after review of bill payments.
Rescue Squad Fund – dedicated tax eliminated in 2008 – This item now fully funded out of the General Fund. Resolution passed by the Board in 2009 states that 25% of the LST (Local Services Tax) should be dedicated to the Rescue Squad.
Parks & Recreation Fund (other significant operating fund) – This fund was incorporated into the General Fund in 2010.
Debt Service Fund – dedicated tax
- Currently 1.625 mills levied generating $527,124 for payments on outstanding debt
- An increase of .275 mills is necessary in 2011 to pay the principal and interest on the Municipal Bond. Estimated payments in 2011 are $412,759 in interest and $260,000 in principal. We anticipate a fund balance of $7,016 at the end of 2011.
Capital Projects Fund
- Used for capital expenditures that meet general policy guidelines; over $25,000 with lifespan of 5 years or more
- Twp has a capital improvement program through 2016 reviewed by Financial Planning Committee
- Expenditures are funded with General Fund reserves, Highway Aid, grants, etc
- 2010 expenditures total $5,000 including:
- $5,000 for Police Department body armor
- 2011 appropriations total $115,250 include:
- Video Units for half of the police patrol vehicles - $53,000
- Miscellaneous equipment for police - $14,250 (Body Armor, and Rifles and Mounts for Police Patrol Vehicles)
- Emergency Services Special Services Vehicle - $30,000
- Public Works Radios - $13,000
- Requires $84,400 transfer from General Fund Reserve; $9,021 balance at end of 2010
Recreation Capital Fund
- Dedicated to construction of recreation facilities – fee on new development that funds park system improvements
- $5,165 – new home
- $1,291 per each 1,000 sq feet in lieu of dedicating open space
- Hope to collect $176,163 in impact fees in 2010 – estimated at $592,466 in 2011
- 2010 projects - $122,000
- Staples Field – Skate Park - $60,000
- Helen Randle Park Maintenance – $12,000*
- Roberts Ridge Composting Toilets (held over from 2009) $50,000
- 2011 Appropriations ($397,700) include:
- Veterans Park Improvements – Shed, Doors installed on large supply structure, Dugouts - $94,200
- Helen Randle – water - $12,000 ***
- Woll Park Transfer - $240,000
- Clark House painting - $30,000, Septic Tank Replacement $8,000 (Grant)
- Various Safety Improvements (stream Rails in Clark, and Silver Lake) $2,500
- Chandler – Bleacher Replacement (per DVIT) $4,000
- Roberts Ridge - Solar lighting (Security) $7,000
(Mr. Benchener arrived at this point.)
Transportation Service Area Funds
- Revenue from impact fees collected under Act 209 (Land use assumptions report, roadway sufficiency analysis and capital improvement plan) that divides township into 2 areas – The Traffic Impact Study is currently being updated
- Funds are restricted to use in specific districts
- Combined fund balance in 2010 was $1,760,115
- Collected $142,915 in fees in 2010
- 2011 expenditures for construction Newtown-Yardley Road improvement project (TIP); 80% federally funded; Township pays engineering and 20% construction;
- Expect to receive $592,466 in new fees in 2011
2011 appropriations total $626,000:
- engineering/inspections for the Newtown-Yardley Township corridor TIP project ($20,000), and construction ($225,000)
- Terry Drive Extension – Engineering and Construction – $360,000
2011 ending balance expected to be $1,727,581 Million
- Per Act 209, these funds cannot be used for “Repair, operation, or maintenance of existing or new capital improvements.”
Traffic System Capital Fund
- Undesignated contributions for traffic system improvements
- Approximately $1,500 fund balance 2009
- No projects expected in this fund in 2010
- 2010 fund balance expected to be $1,502
Woll Site Improvement Fund
- Will account for revenues and expenditures associated with development of the property as a municipal park
- Expect to need $240,000 from Park and Rec. Capital (possibly from the General Fund) to finish project in 2010.
Municipal Complex Improvement Fund
- This fund accounts for the revenues and expenditures associated with the Police facility renovations.
- Currently working on a prefabricated sally port addition and some interior renovations to the building. $236,000 in fund for this purpose.
Highway Aid Fund
- Accounts for Township share of State Liquid Fuels Tax funds – cash basis
- Use of funds is restricted - roadway maintenance, equipment acquisition, traffic signal expenses, street light electricity, road materials, road maintenance contracts, etc; Do not use for all of these purposes
- Received $371,000 in 2010; we currently anticipate funding to remain flat into 2011, though we may see a slight increase with latest road dedications submitted to PennDOT recently.
- Spent $370,000 in 2010
- $335,000 for Road construction/improvement projects
- $15,000 for supplies (salt, patching materials)
- $10,000 Minor Equipment
- $10,000 Engineering
- Year end fund balance projected at $435,748
- Propose $500,000 in roadway maintenance in 2010
- Eagle Road – From Stoopville to Durham Road - $200,000
- Wrights Road – From Eagle to Durham Road - $200,000
- Slurry – Various Roads - $100,000
- Truck Purchase - $43,500 (first year of a 2 year lease purchase)
- Ending Fund Balance - $179,211
- Increase in costs due to oil prices; must cut back on program or find new funding source
Pension Trust Funds
Three funds for Police, Firefighters and Non-Uniformed Employees
- Approximately $9.4 Million in assets at end of 2010
- Invested by professional managers with oversight by pension committee and Board of Supervisors
- Anticipate marginal increases on the investments due to recent market trends
- State aid contributions fund $336,423 of the required contribution of $972,661 for 2011;
- $636,238 will be paid from the General Fund; $115,000 from employees (Police)
- Recent changes were made in the hiring of a new pension consultant.
- 2011 budget maintains municipal services at present levels. 1 mill real estate tax for General Fund is required to do this.
- Provides necessary resources for the township organization to meet the expected service levels to which residents are accustomed
- Budget Reflects Hiring Moratorium (2 police officers, Public Works Asst, Park and Recreation Programmer) and 2 layoffs in 2010. No new hires are budgeted.
- An increase in the debt service millage of .275 mills is necessary to pay the bond
- Township STILL maintains one of the lowest municipal property tax rates in the County Newtown would be 7 th out of 54 (currently tied for 5th) only Milford, Durham, Quakertown, Richlandtown, Trumbauresville and Silverdale are lower.
- Township is in decent financial condition at least in the short term; will need to monitor the greater economy to get indications for 2012 and beyond. May need to discuss new revenue sources in the future.
Budget – a statement of the financial position of an administration for a definite period of time based on estimates of expenditures during the period and proposals for financing them, and a plan for the coordination of resources and expenditures
The proposed budget represents an accurate estimate in dollar terms of the Township’s commitment to deliver quality municipal services
Mr. Czajkowski thanked Mrs. Gibbs, the Department Heads and Administrative Assistant Olivia Kivenko and Secretary Christy Holley for their efforts in putting together this year’s budget.
Financial Planning Committee Comments
Ryan Gallagher of the Financial Planning Committee explained that the Committee had met with each department head to discuss the proposed budget and to review the requests for capital expenditures. The Committee then prioritized the expenditures, first those items which should definitely be included in this year’s budget, then those items which could be included if funds are available and lastly those items which could bee deferred until 2012 or later. He provided copies of the lists, along with explanations of the requests and the Committee’s reasoning for prioritizing each item.
Of the Capital requests included in the budget, the Committee agreed that only four items should definitely be included:
- Police Department Body Armor
- Police Patrol Vehicles (while 3 are requested, the Committee suggests that the Department attempt to only replace 2 cars)
- Police Radios
- Public Works Radios
Both radio requests are to comply with Federal Mandates.
While all of the following requests had merit, the Committee felt that they should be added into the budget only if sufficient funds become available:
- Police Video Cameras for cars
- Police Rifles
- Public Works Dump Truck
- Public Works Road Resurfacing
- Technology Computer Replacement Program
- Clark Nature Center Painting and Septic Tank replacement (The committee felt that the estimates were high, but should be pursued in order to prepare the house for rental. It was suggested that lower estimates for the work be investigated.)
- Helen Randle Park Phase II Water Line
- Safety Rails and Bleacher Replacement (DVIT has expressed some concern that this could pose a safety risk and exposure to liability. This should be considered a priority if funds become available.
The Committee had no opinion on computers for Police and EMS vehicles or replacement of servers requested by the Technology Department.
Mr. Schenkman noted that the list provided recommends postponement of some field improvements requested by Council Rock Athletic Association, including dugouts, sprinklers and sheds. He asked whether the Committee had considered an arrangement of private fundraising with the Township providing matching funds.
Mr. Gallagher said that this had not been discussed, but he would bring the concept to the Committee’s attention.
Mr. Calabro asked whether Mr. Gallagher had a total savings amount for the items recommended to be postponed.
Mr. Gallagher did not have that number available.
Supervisor Gallagher thanked the Financial Planning Committee for its recommendations. He said that all of the departmental requests have merit and must be carefully considered as the budget is discussed in coming weeks.
Mr. Schenkman suggested that it might be helpful to have a Financial Planning member in attendance as the Board discusses the budget at the remaining Supervisors meetings.
Mr. Benchener said that the department heads have worked hard on their budget requests and the Financial Planning Committee has given consideration to every budget item. He said that in the current economy, and going forward as the economy improves, for the Board to evaluate the essential functions of government and to plan budgets accordingly.
Mr. Czajkowski explained that the Township Administration has prepared the budget according to State mandate for presentation of a draft at the first meeting in November. The budget will appear as an agenda item on every meeting going forward. At the November 17, 2010 meeting, the Supervisors will “hang” the budget, which posting the budget for advertisement to the public. The budget must be hung twenty days prior to adoption, and must be adopted prior to January 1, 2011. During the time between hanging and adoption, the draft budget can be discussed and changes can be made.
Mr. Schenkman noted that the budget as proposed will have almost exhausted the reserve by the end of 2011. It contains the first Township tax increase in fifteen years.
Mr. Benchener noted that the budget presented last year for 2010 was altered greatly before it was adopted. This is very early in the process; every decision will need to be justified.
Resident Joanne Bintliffe Ritchie said that many of the revenues in the budget are only estimates. It would be helpful to the public if some information was provided as to how those estimates were determined and how much variance is estimated within those estimates. Ms. Bintliffe Ritchie said that more information should be provided to residents on tax comparisons as residents do not feel that they are paying lower taxes than surrounding communities.
Mr. Gallagher said that the budget is an estimate of expected revenues and expenses. It is impossible to be accurate in estimating revenues and some expenses, but the estimates are based on past experience. Regarding tax comparisons, it is difficult to compare with other communities as each school district is also collecting taxes and some communities are collecting earned income taxes and some are not; but other communities are paying 4 to 10 times more municipal real estate taxes.
Mr. Czajkowski confirmed that the average tax is $96 per year.
Resident Jay Sensibaugh asked the total millage increase and its dollar equivalent.
Mr. Czajkowski said that the budget proposes a millage increase of 1.275 mills, about a $46 increase for the average homeowner.
Mr. Sensibaugh noted that the reserve will dip well below 10% and said that this would require a resolution to change Township policy.
Resident Ian Franklin, a member of the Financial Planning Committee, urged the Board not to raise taxes and to seriously consider any proposed spending which will cause a tax increase.
Mr. Sensibaugh announced that due to predicted inclement weather the Newtown Creek Coalition cleanup day, scheduled for Saturday, November 6, 2010 has been canceled. He noted that one of the Coalition’s goals, improvement of pedestrian access on the Centre Avenue bridge, has begun.
Mr. Gallagher asked that, as reorganization of the Township’s committees, boards and commissions approaches, that those whose terms are ending consider seeking re-appointment and residents interested in joining a committee contact the Township Manager.
Mr. Schenkman suggested that the vacancies on committees, boards and commissions be posted on the Township Web site.
The meeting adjourned at 7:45 PM.
Mary Donaldson, Recording Secretary
Joseph S. Czajkowski, Township Manager
Robert Ciervo, Chairman
Matthew Benchener, Vice-Chairman
Jerry Schenkman, Secretary/Treasurer
Philip Calabro, Member
Michael Gallagher, Member