Newtown Township

Board of Supervisors

Minutes of December 29, 2010

The Newtown Township Board of Supervisors met on December 29, 2010 in the Township meeting room at 7:30 PM. In attendance and voting were Supervisors: Chairman Robert Ciervo, Vice Chairman Matthew Benchener, Secretary/Treasurer Jerry Schenkman and Philip Calabro and Michael Gallagher, members. Also present were: Joseph Czajkowski, Township Manager and Jeffrey Garton, Township Solicitor.

Call to Order: Chairman Robert Ciervo called the regular meeting to order at 7:30 PM with a moment of silence and an invocation by Pastor John Stange of Newtown Community Church. This was followed by the Pledge of Allegiance.

Public Comment: Resident Jay Sensibaugh thanked the Public Works Department for its excellent work clearing snow. His development, Newtown Crossing, was plowed well and early.

Resident Peter Beckschi said the everyone is being hurt financially by the current economy and the Township should retain only essential services and look for ways to provide for the safety and welfare of the community without adding to the tax burden. All options should be considered including employee benefits.

Reports of Committees, Boards and Commissions

Chairman: Dr. Ciervo reviewed the accomplishments of the Township in the past year, noting that the skate park is open, Woll tract is near completion and renamed Veterans Park, the new municipal complex has been completed with the administration and public works departments in new buildings and the police building being updated and the Township has spent $100,000 less than anticipated. Since 2007 the Township has increased spending only 1.5%. With the earned income tax remaining flat over two years, the Board and administration has worked hard to keep spending under control while retaining essential services.

Dr. Ciervo noted that the Township provides some support to a number of non-profit entities including the Rescue Squad and Fire Association. He urged residents to consider the local non-profits as they plan their year-end charitable giving.

Other Board Members: Mr. Gallagher said that Newtown Borough has been rated one of the “coolest small towns” by This acknowledgement is good for both Township and Borough.

Reports of Officials


Resolution 2010-R-22, Establishing a Policy for Reserve Fund Balance: Mr. Czajkowski explained that this resolution would establish the Board policy on the reserve. The Board had adopted a policy, 2009-R-33, establishing a reserve of 10% last year. That resolution would remain in effect until such time as the Board adopts a new resolution. 2009-R-33 also states that the Board should re-evaluate the policy annually.

Mr. Schenkman asked whether the Board would consider some stronger language if adopting a new resolution. As presented, the policy uses the words “recommends” and “should be re-evaluated.”

Mr. Gallagher said that prior to last year, the policy used the word “requires.” The Board had decided against using that language going forward. It is a policy, a guideline, not a requirement.

Mr. Calabro asked whether the policy could be changed at any time, or is the annual re-evaluation the only opportunity.

Mr. Czajkowski said that this is a policy which can be re-evaluated or rescinded at any time. If a new resolution is not adopted, the existing resolution carries over.

Mr. Schenkman said that the continuance of a 10% reserve might not be realistic.

Mr. Czajkowski said that the currently presented budget will have a reserve at year end of $1.1 million. The reserve will not always be that number but fluctuates throughout the year as revenues are received and expenses are paid. The DCED recommends at least a 5% reserve. The reserve percentage is the aim for the end of the year, not a daily number.

Mr. Benchener supported leaving the reserve percentage at 10%.

Mr. Schenkman said that he would not want the reserve below 10% but at this time, the Board does not know the outcome of some of the aspects of this budget.

Mr. Gallagher had some concern about establishing resolutions which dictate how the Board does its job.

Dr. Ciervo asked the members to consider rescinding 2009-R-33 and adopting a 2010 resolution.

Mr. Schenkman said that he would support a new resolution with some language to clarify that the reserve is the amount to be carried over into the new year, not the daily balance.

Mr. Calabro said that he feels the second provision of the resolution, to re-evaluate every year, provides a guideline for boards to do a good job of keeping the Township in a sound financial situation. He suggested that perhaps an addition to the resolution clarifying that the resolution could be revisited at any time during the year could be added.

Mr. Gallagher said that he did not feel a resolution would be necessary as it tells future boards how to govern.

Mr. Calabro disagreed, stating that the resolution serves as a valuable guideline for future boards; it can be rescinded if future boards disagree.

There was not a motion to either rescind 2009-R-33 or adopt 2010-R-22.

Resolution 2010-R-23 – Adoption of 2011 Budget: Mr. Czajkowski reminded the Board that the budget has been advertised for twenty days. All of the Board’s requested changes have been made. He noted that the Township’s insurance carrier has notified him that the estimate on 2011 premiums was close to $65,000 too high. The budget has been adjusted to reflect that change. As presented, the budget assumes some concessions from the bargaining units, including pay freezes, elimination of the 457 match and some pension contributions. The budget will show a reserve of 11.1% on an $11,176,550 budget. This anticipates $10,589,660 in transfers from the general fund.

Mr. Benchener noted that in recent weeks the Board has discussed the current budget, reduced spending where possible and has sought some concessions from the unions rather than seek a tax increase. He reviewed the budgets since 2002, noting that expenses have risen by over $3 million since 2002, but the Township had also seen dramatic increases in revenues in the years between 2002 and 2007. Since 2007, expenses have continued to grow, but revenues have either decreased or remained flat. At the time the union contracts were signed, the Township was enjoying rapidly growing revenues. Since that time, the national economy has suffered a recession which has impacted the earned income tax and the collection of fees and other revenue sources. For this reason he said that the government should run more like private business, tightening belts during lean times.

Mr. Schenkman said that he has concerns about passing the budget with the concessions built in. He asked whether this would mean that without concessions the only way to balance the budget would be through layoffs.

Mr. Czajkowski said that the alternative would be to lower the fund balance expectation.
Dr. Ciervo said that the Township could look to some combination of concessions, further spending reductions and a revision of the reserve fund policy.

Mr. Calabro said that he does not want to approve a budget that assumes both union concessions and a $1.1 million reserve. He said that this budget, even with the possibility of receiving concessions, is only a band-aid. He said that he had some misgivings when the Board did not include the Woll tract in its bond, as had been recommended by the 2008 finance committee. This has impacted the reserve fund. He is also concerned that the Board may be trying to make political statements by not raising real estate taxes, even though for many years the Township has known that a tax increase would be necessary when the new facilities were built. He talked about the elimination of a tax which had been used for the rescue squad some years ago. This tax was replaced by a local services tax which now finances the rescue squad. Mr. Calabro said that the talk of concessions from the police union could jeopardize the Township’s $500,000 arrangement to provide police coverage to Wrightstown. He urged the Board to look for new sources of revenue, including a real estate tax increase, as the EIT has remained flat, and might at some point be diminished as other municipalities enact their own EIT’s.

Dr. Ciervo said that the rescue squad is now receiving 25% of the local services tax; this is less than they had been receiving from the Township in the past. The eliminated tax had generated only $41,000. He also said that the Board is not considering any reduction in services to the residents. There have not been any complaints from residents since the layoff of two employees last year.

Mr. Schenkman said that Mr. Benchener’s review of the Township’s financial history gave an accurate picture. He did feel, however, that there could be a detrimental effect to some of the budget cuts implemented to avoid a tax increase. Of particular concern, in addition to the possibility of layoffs, would be changes to the Township’s replacement plans. Postponing replacements of certain technology and vehicles could create difficulties later, as repair and maintenance costs increase and services are impacted when equipment is not maintained. The Township will face bigger costs later as the replacement plan falls farther behind. He also urged the Board not to make a comparison of running the government as a private business, as they have different structures and different goals. Mr. Schenkman noted that the local tax is only 2% of the residents’ real estate tax bill. The Township has worked hard to make the best deals possible, but still is coming up short. The residents love Newtown and trust the Board to do what is best for Newtown, which could include a small, temporary, tax increase.

Mr. Benchener disagreed, stating that the residents are already making sacrifices; our EIT has remained flat, indicating that the residents are not getting pay raises. While some residents have expressed willingness to pay a tax increase, many that he has spoken to are not supportive of increased taxes. He said that this is not a revenue problem, but an expense problem. The Board has already cut all discretionary spending; the only area left is employee expenses. The adjustment must come from the union contracts.

Dr. Ciervo said that a tax increase would need to be 1.5 mills, or $60 for the average household. He said that he would like the concession to come from changes to the employees’ health insurance contribution. He hopes the Township will be able to find a compromise.

Mr. Gallagher noted that residents have seen some tax increases, including a 2004 fire prevention tax and the local services tax enacted in 2007. In addition, employed residents see an increase in their earned income tax whenever their income increases. While people talk about no tax increase in fifteen years, in truth, residents have had increases in taxes, although not in property taxes. He also noted that much of this year’s spending on parks has come from developers fees which were paid specifically for parks and open space. He urged the Board to continue to hold the line on spending and to leave an adequate reserve for emergencies.

Dr. Ciervo moved to adopt Resolution 2010-R-23, appropriating specific sums estimated to be required for the specific purposes of the municipal government during the year 2011. Mr. Gallagher seconded.

Discussion of motion: Resident Karen D’Aprile said that the residents pay for the upkeep and maintenance of our parks although the original construction is paid from developers fees. The most important thing is to keep the Township safe. She urged the Board to keep parks “on the back burner” for next year and focus only on essentials. She does not want to see a tax increase but wants to see essential services intact. The Township depends on the employees for this.

Resident Jay Sensibaugh said that the general fund would begin 2011 with $1.283 in the reserve; he asked if the Township is expecting additional revenues to bring the reserve to that number.

Mr. Czajkowski said that the Township is still expecting to post additional 2010 revenues, including the 2010 EIT and cable franchises. Details of the budget will be posted on the Web site.

Mr. Benchener noted that numbers used in his discussion are based on the budget as posted on the Web site.

The motion passed 3-2, with Messrs. Calabro and Schenkman voting nay.

Mr. Gallagher moved to adopt Resolution 2010-R-24, fixing the tax rate for 2011:

Tax Rate for General Purposes 0 mills

Tax Rate for Debt Service 1.625 mills

Tax Rate for Fire Protection Services 0.875 mills

Total: 2.500 mills

Dr. Ciervo seconded.

Discussion of motion: Mr. Benchener noted that this is the same as the 2010 rate; there is no tax increase.

The motion passed 3-2, with Messrs. Calabro and Schenkman voting nay.

Public Comment

Resident Celia Lengel said that she has grown up in this area and wants to see the Township maintain its reputation as a wonderful place to live. She does not think it is unfair to ask the unions to be flexible and make some concessions. Tax increases are unfair to residents who are hurting due to lost income.

The meeting adjourned at 9:20 PM.


Respectfully Submitted:
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