TUESDAY SEPTEMBER 10, 2002
Approval of Minutes: Mr. Bowe moved to approve the September 10, 2002, minutes; Mr. Vance seconded the motion, which passed unanimously.
The Newtown Township Financial Planning Committee met on Tuesday, September 10, 2002 in the meeting room of the Township Building, Municipal Drive, Newtown, Pa.
Members present were Richard D. Weaver, Supervisor; James A. Bowe, III; Allen R. Fidler, III; Philip Newmuis, Jr.; Elaine M. Gibbs; Robert A. Dieterle; Phil Vance. Township Manager Robert Pellegrino and Supervisor Raymond W. “Skip” Goodnoe were in attendance.
Call To Order
Chairman Weaver called the meeting to order at 8:30 A. M.
Minutes of the meeting held on August 13, 2002 were approved as submitted.
The subject of the Newtown Township Capitalization Policy of Fixed Assets submitted to the Committee at the June 11, 2002 meeting was discussed.
As a result of the discussion it was decided that the proposed document would be reviewed by the Auditors and IRS guidelines would be researched. Further discussion will take place at the October meeting.
Presentation Plans for 2003 Budget
Manager Pellegrino related that the Board of Supervisors will schedule a hearing date for early November for a presentation of the 2003 Budget. Department Heads will make brief presentations by reviewing 2002 and their proposed budget for the year 2003.
Discussion followed regarding the Proposed Budget Resolution offered by Supervisor Goodnoe at the meeting of the Board of Supervisors on August 28, 2002 and the Memo from Manager Pellegrino and Finance Director Gibbs.
Member’s Comments: The budget must be in “today’s figures” setting aside Capital Funds separately. The BOS should review the Budget Resolution considering whether income and/or expenses are higher than two years ago, not budgeting with expectation that year-end income might be higher than expected as much of the fourth-quarter income might not be received until early in the new year. “Cash-flow” budgeting is critical. The goal of Financial Planning Committee should be to recommend how capital reserves might be allocated. The Committee members were in agreement that deficit spending is risky and unwise.
Manager Pellegrino stated he will survey developers regarding future projects allowing him to estimate income from building more accurately and make projections using this information. He also plans to work with the Financial Planning Committee to develop Capital Plans in a consistent format.
Member Allen Fidler suggested perhaps the way to establish a Capital Fund is by referendum to the voters who would determine the use of reserve revenue. The suggestion of initiating a referendum could be directed to the BOS from Financial Planning.
Supervisor Goodnoe outlined several matters of importance regarding budgeting/financial issues: The Township has not been defining capital and operating expenses as separate items in budgets; suggests using previous years’ audited funds as accurate and reliable on which to build; This plan leaves no “what-ifs” when funds are not received; revenue should not be under-estimated or over-estimated, but should be more accurately projected; the Year 2002 Budget spending is based on ½ million dollars which is not expected to be received.
Member Fidler suggested taking a base-line from three or four years of revenue streams and use as a guide for income projections.
Mr. Goodnoe noted a concern that revenue and expenditures, as currently budgeted, are defended by the comment: “We don’t expect that to happen”….his opinion is that items then should not be included in the budget.
It was of the opinion that budgeting based on Grant Monies which are anticipated is unreal since funds may or may not be received. The Township should not falsely take on projects based on “hoped-for” grant monies. This circumstance happened about ten years ago and was detrimental to the Township.
Manager Pellegrino noted estimating revenues can be accurate. He suggested building up the general fund reserve account and starting to set up a “Capital Reserve Account”. In his reply to the Goodnoe Proposed Budget Resolution he noted that the most recent balanced budget adopted by the Board of Supervisors was 1996. Since that time budgeted expenditures have exceeded current revenues.
On motion of member Bowe, seconded by member Dieterle, the following was approved by all members for submission to the Board of Supervisors.
1. To develop a balanced budget as accurately
as possible using actual revenue and
defining expenses realistically.
2. To separate operating and capital expenditures into two separate budgets.
3. Capital projects would not be undertaken unless adopted as part of the budget.
8:30 A. M. Meeting Room
Members: Richard D. Weaver Elaine M. Gibbs
James A. Bowe, III Richard A.. Dieterle
Allen R. Fidler, III Phil Vance
Philip Newmuis, Jr.,
1. Call to Order
2. Approval of Minutes: September 10, 2002
3. Old Business:
a. Capitalization Policy of Fixed Assets
b. Uses of Reserve Funds
4. New Business:
5. Privilege of the Floor
If you are unable to attend this meeting, please notify Chairman Richard Weaver.