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.
Old Business:
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.
New Business:
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.
Motion:
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.
Adjournment
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
6. Adjournment
If you are unable to attend this meeting, please notify Chairman Richard Weaver.