Board of Supervisors
Minutes of October 15, 2013
The Newtown Township Board of Supervisors met on Tuesday, October 15, 2013 in the Township meeting room at 7:45 PM for a special budget presentation. In attendance and voting were Supervisors: Chairman Michael Gallagher, Secretary/Assistant Treasurer Ryan W. Gallagher and Philip Calabro and Robert Ciervo, members. Also in attendance were: Kurt Ferguson, Township Manager, Police Chief Henry Pasqualini, Fire Chief Glenn Forsyth and Public Works Director Ronald Weaver.
Call to Order: Chairman Gallagher called the meeting to order at 7:45 PM.
Township Manager Kurt Ferguson provided the Board members with copies of the 2014 Manager’s Recommended Budget for review.
The 2014 Manager’s Recommended Budget retains the millage rate at 2.5 mills. It also retains staffing at its current levels. This budget will also invest in the Township’s capital needs and begins to set plans for moving beyond 2014.
Mr. Ferguson noted that the Board has placed significant emphasis on the overall fund balance number over the last several years. After beginning with Fund balance and reviewing most of the funds, he presented a coordinated summary of the recommended investments of 2014 and several punch-list goals moving to 2015 and beyond.
This budget, as presented, has a 2014 estimated fund balance of 14.30% or $1,634,086.
The 2013 end year fund balance is projected to be $2,006,061. On the surface this translates to a year-to-year decrease in fund balance of $376,975. That difference is very misleading, as several factors have affected both our 2013 and 2014 year end balance:
Taking these points into account it translates in the following way:
Estimated 2013 year end fund balance $2,006,061
2012 EIT revenue (+$208,000)
Benefit Obligation (+$40,000)
2013 fund balance-with factors $1,758,061 (for 2013)
2014 fund balance-with factors $1,674,086 (accounting for $40,000)
The 2014 budget absorbing the Act 537
Study, when the revenue was received in 2013
Factoring these adjustments (EIT in 2012
Act 537 carrying over) difference in fund
balance between 2013 and 2014 $83,975
This is the real difference in fund balance from 2013 to 2014.
In this budget will be one new expense, the 27 th pay fund, recently created to offset what will be 27 pay periods in 2015.
The 2014 budgeted revenues total $11,026,037. This represents a very conservative $30,181 (.003%) increase over our 2013 budgeted revenue total of $11,026,037
The most significant revenue for the Township is the Earned Income Tax.
The 2012 actual collection was $6,257,197. As a reminder the Township received $208,000 E.I.T. this year, which should have been received in 2012. The basis for collection, moving forward, will utilize that adjusted amount beginning in 2012.
2012 Adjusted 2013 Year end %increase 2014 %increase
(adjusted) (over 2012) (over 2013)
$6,465,197 $6,577,000* 1.73% $6,708,000 2.00%
*The actual 2013 year end EIT will actually be estimated at $6,785,000. ($6,577,000+$208,000)
The 2014 budgeted expenditures total $11,428,194. This represents an increase of $502,252 (4.6%) over the 2013 budgeted expenditure total of $10,925,942
27 th pay fund (01-493-187)
Every 11 to 12 years, because of the way the calendar falls, Townships face the prospect of accounting for twenty-seven (27) pay periods. In the early 2000’s the Fair Labor Standards Act ruled that all 27 pay periods needed to be paid (versus factoring actual 26 pay period wages over 27 pay periods).
Mr. Ferguson recommended that the Township set aside 1-day’s pay every year. After 10 years the Township will have 2-week’s pay set aside that it will utilize for the extra pay in the 11 th year.
In 2015, the Township will have 27 pay periods. To help offset that full expense in 2015, Mr. Ferguson recommended that the Township set aside 50% of the 2015 expense.
The $84,000 expense is a new expenditure item for 2014. As outlined in the fund balance overview, the Township will be drawing on the 2013 fund balance by $83,975. This being an entirely new expense would account for drawing on the 2013 final number. After 2015 that annual expense will be approximately $17,000-$18,000 annually until the next 27 th pay in 2026.
Overview of categorical expenditure items
Total expenditure % of budget
Salaries/wages $3,942,825* 34.5%
Health Insurance $1,296,391 11.3%
(net contributions with an
estimated 9% increase in premium rates)
Pension/Deferred Comp. $795,990 7.0%
(net state aid)
Township insurance $490,906 4.3%
Capital Expenditures $150,100 1.3%
*Does not include Fire Chief’s salary, which is in the Fire Protection Fund.
Mr. Ferguson noted that the Township’s insurance carrier, DVIT, has advised using 9% as a guide, as this should be the average increase for municipalities.
Debt Service Fund
The Debt Service Fund projects a 2013 year end fund balance of $410,084. With 2014 estimated revenues of $516,900 and payments of $671,996, the Township has a projected end year 2014 fund balance of $254,998.
Under the current tax structure, the Township, via existing fund balance and future projected tax revenue will have enough funds to make bond payments through 2015.
In 2016, the Township (via fund balance and tax collection) will have an estimated $617,385 in revenue with a bond payment of $672,483.
Fire Protection Fund
The Fire Protection fund brings in revenue from a tax of .875 mills, which is anticipated to generate $278,950 in revenue in 2014. With the anticipated $120,406 in fund balance will create total available of $399,371.
With anticipated expenses of $309,728, the Township anticipates a 2014 end year fund balance of $89,632.
Recreation Capital Fund
The Recreation Capital Fund, via fund balance and anticipated revenues, is budgeted to have $195,998.
The 2014 recommended expenditures include:
Mr. Ferguson noted that there is a $120,000 fund balance in the Recreation Capital Fund. There is still outstanding litigation on completion of Veterans Park. It is unknown what the outcome will be, but this fund would cover any possible outstanding debt.
Capital Projects Fund
Total Recommendation-$35,000 (this amount would not be part of the three year financing to be discussed.)
Mr. Ferguson recommended that this year the Township begin to utilize short term financing (36 months) in its police capital purchases in 2014. He also recommended that the Township finance capital purchases in other departments as well and that these are packaged as one loan. He has received preliminary quotes for 36-months at a rate of 1.45%. That percent is used in the outline.
Police cruisers 3 cars including new laptops $108,000
prisoner cages, and 1 light bar
Police cameras Cameras for 14 patrol cars
and server for download $82,000
Total for cars and cameras $190,000
Financed at 1.45% for 2014-payable for 3 quarters $48,569
Vests 4 sets-net of JAG grant $2,808
Total 2014 police capital budget $51,377
Discussion of Police Capital: Mr. Ferguson said that the austerity measures of recent years have made it necessary to begin to catch up on a replacement program and undergo some capital spending.
Chief Pasqualini explained that the traditional Crown Vics are no longer available and the existing prisoner cages and laptops in the cars to be taken out of service cannot be transferred to the new cars. The laptops have become outdated and he would like to upgrade them as new cars come on line.
Regarding the cameras in vehicles, this has been under consideration for more than five years. They will help both with training and accountability. Most police forces in Bucks County already have cameras in the cars and the Department is frequently asked to provide film in court cases.
Mr. Ferguson said that DVIT has indicated that the addition of cameras could favorably impact liability insurance.
In response to Mr. M. Gallagher’s questions, Chief Pasqualini said that the new cars will be CV-3’s. These are all-wheel drive SUVs, which will be much more useful in snowy weather. Only one light bar is being purchased because two can be salvaged from cars coming out of service. This might not always be possible with future purchases.
Mr. M. Gallagher asked the Chief to provide the specs for the cameras and servers to the Technology Committee.
Chief Pasqualini agreed, noting that he has been looking at some automated servers and a few vendors are available.
Mr. Ferguson said that the cameras and cars are included in his recommended financing package.
Emergency Services Department-Capital
Mr. Ferguson recommended the purchase of a 2014 Ford Expedition to be utilized as a special service quick response unit, which will replace a 2005 Ford Expedition with 96,000 miles. The vehicle will be equipped with first aid equipment, AED, and emergency medical equipment.
Total cost including outfitting and striping $41,902
Financed at 1.45% for 2014-3 quarters $10,712
Total 2014 Emergency Services Capital Budget $10,712
Discussion of EMS Capital Fund: Fire Chief Forsyth explained that the quick response vehicle is used to respond to medical calls; last year the vehicle responded to over 600 such calls.
Mr. Ferguson reminded the Board that EMS capital spending is from the Fire Protection tax of 0.875 mills. The Department employs 8 firefighters, who respond to calls during the day and also conduct inspections and plan reviews. The purchase of the vehicle would be included in the financing package. In response to Dr. Ciervo’s questions, Mr. Ferguson said that the financing package would be for three years. Because this is government purchasing, he must go to bid for the vehicles. The 1.45% financing is an estimate. He will search for the best financing available, but the 0% financing advertised for new car purchases might not be available for bid government purchases. The 1.45% is being used as a benchmark.
Mr. Ferguson recommended the purchase of a 2014 Single-axel dump truck. The 39,000 GVW single axel truck has a dump body, plow and spreader. This truck will replace a 1994 International Single Axel Truck.
Total cost $150,000
Financed at 1.45% for 2014- 3 quarters $38,344
Mr. Ferguson recommended the purchase of a 2014 PTO (Power take off) driven Wood Chipper. This chipper will be run off a tractor that the Township already owns. The Wood chipper will assist the Township in providing wood mulch for Township parks as well as assisting in cleaning debris when necessary.
Total cost $15,000 (purchase outright)
Total 2014 Public Works Capital Budget $53,344
Discussion of Public Works Capital Fund: Mr. Ferguson said that he intended to discuss a breakdown of the Public Works expenses later in the presentation, but noted that expenditures included in that final $53,344 number are repair of 50 inlets and seal coating and striping of the front parking lot.
Total 2014 recommended Capital Budget $150,433
2014 expenditure/plan overview
The budget for police includes 3 police cars (Capital Budget-$108,000 financed)
Cameras (and server) for 12 Police Cruisers (Capital Budget-$82,000 financed)
4 sets of Kevlar (Capital Budget- $2,800)
Purchase of 3 Police vehicles every year
Purchase of 2014 Ford Expedition-(Capital Budget-$41,902 financed)
Purchase of 3 sets of turnout gear (Fire Protection fund)
Purchase 3 additional sets of turnout gear in 2015
Purchase 3 sets of bleachers at Helen Randle Park ($13,000-Recreation Capital Fund)
Extend Water line at Helen Randle Park ($15,000-Recreation Capital Fund)
Purchase 4 sets of bleachers at Veteran’s Park ($10,540-Recreation Capital Fund)
Create walkway to concession stand/bathroom at Veteran’s Park ($4,000 Rec. Cap.Fund*)
Field maintenance agreement Veteran’s Park ($13,824 Recreation Capital Fund)
*Estimate by Township Engineer Michele Fountain
Purchase 4 sets of bleacher in 2015 and 2016 to complete Veteran’s Park
Purchase 3 sets of bleachers in 2015, 2016 and 2017 at Chandler
Continue field maintenance Agreement at Veteran’s Park in 2015 and 2016.
Mr. Ferguson noted that the bleacher replacement is recommended by DVIT for safety reasons.
Purchase 2014 Single axel dump truck (Capital Budget $150,000 financed)
Vehicle will replace 1994 dump truck
Purchase wood chipper (Capital Budget -$15,000)
Budget to repair 50 inlets in the Township ($35,000 in General fund at 01-436-319)
Sealcoat and restriping PD Front parking lot ($7,000 in General fund in 01-409-373).
Purchase lift gate for pickup truck ($4,500 in general fund in 01-430-260)
Purchase utilities locator ($4,500 in general fund in 01-430-260).
Purchase 6,000 watt portable propane generator ($1,000 in general fund in01-430-260).
Budget $12,500 to paint road lines throughout the Township
Repair 50 inlets per year in 2015, 2016, 2017, and 2018.
Repaint 50% of the street lines in Township every year.
Pave back police parking lot in 2015.
Discussion of Public Works Capital Fund: Mr. Ferguson noted that Public Works Director Ron Weaver has done an exceptional job in finding the best prices for all of his recommended expenditures.
In reviewing costs, Mr. Weaver pointed out that he is recommending inlet repairs at 50 per year for $35000 per year for the next five years. He also recommended purchase of a new utilities locator. The current locator was purchased in the 1990’s and can no longer be repaired. The Township is required by law to mark utilities for construction projects. He also recommended the purchase of a propane generator because during power outages the generators used to run traffic signals must be refueled round the clock, resulting in overtime during evenings and weekends. He would like to re-institute a restriping program to repaint half of the roads over the next two years at a cost of $12,500 per year.
Mr. Ferguson said that he has been informed by PennDOT that some expenses in our road paving program cannot be covered by the liquid fuels fund.
Mr. M. Gallagher asked whether the Township would use the mulch from the wood chipper or share it with residents, as done in Lower Makefield.
Mr. Ferguson said that it was his understanding that at one time DEP allowed payment of some recycling equipment from recycling funds. For that reason some municipalities shared mulch with residents. This is no longer the case and he had not intended to make the mulch available. It is needed throughout the Township’s park properties.
Mr. Weaver explained that the new dump truck is needed because the old one is more than twenty years old. He has begun looking at prices and learned that Falls Township’s recently purchased truck was $160,000. He would not be purchasing a truck as large so estimated the price at $150,000.
Dr. Ciervo noted a reserve in the highway funds of $330,000. He said that the Township has estimated a road paving expense of $400,000. He suggested that the Township begin spending more on road paving.
Mr. Ferguson said that he had been keeping a balance in case of emergencies.
Dr. Ciervo said that he favors stepping up the road program and paving more miles each year. Many of our roads are in need of repair and using the current schedule it will take 40 years to repave the Township. He suggested considering using money from the reserve fund to pave up to four miles a year. He urged the Board to consider spending some of the reserve on infrastructure.
Mr. Weaver said that when preparing the bid package for the road program, he and Ms. Fountain have been including add alternates. This might allow the Board some comparison of prices when considering expanding the program.
Mr. Ferguson said that he has set a goal of $1.5 million for a fund balance. Moving forward the Board could consider a lower fund balance and more capital spending.
Mr. M. Gallagher thanked Mr. Weaver for his work on the budget and said he recently received a letter from a resident praising Mr. Weaver and the Department.
Mr. Ferguson suggested that the Board have a follow up budget discussion at the Board of Supervisors meeting on November 13, 2013. He mentioned scheduling a work session if needed for more in-depth discussion.
Dr. Ciervo asked why the Earned Income Tax projection is budgeted as flat when the Township has been seeing increased collections. He again suggested using some of the reserves to expand the road program.
Mr. Ferguson reminded the Board that this year’s collections appear artificially higher because of the collection of $208,000 which should have been in the 2012 collections. That money is actually for 2012 taxes. This makes the 2014 projection about 2% higher than the 2013 taxes. He has increased the budget for transfer taxes because this year, every month’s collections have been higher than budgeted. Generally, however, he was conservative in estimating increases to revenues. He used a long view in estimating revenues. He has tried to restore the reserve while reintroducing some capital spending. If the Board would like to adjust the reserve percentage he could build a balance for infrastructure spending.
Resident Jen Dix reminded the Board that some of the increases in Earned Income Tax and real estate transfer tax had been the result of a housing boom. New construction is beginning to level off and we cannot expect continued large increases in revenues.
Mr. M. Gallagher announced that the Board would remain for an executive session.
The meeting adjourned at 9:05 PM.
Mary Donaldson, Recording Secretary