FINANCIAL PLANNING COMMITTEE

APPROVAL OF MINUTES: 

On motion of member Gibbs, seconded by member Vance and approved by all members who had attended that session,  minutes of the meeting held on December 10, 2002 were approved as presented.  Member Dieterle abstained due to absence.

The Newtown Township Financial Planning Committee met on Tuesday,  December 10, 2002 in the Meeting Room of the Township Municipal Building,  100 Municipal Drive,  Newtown, Pa. 

Members present were  James A. Bowe, III;  Allen R. Fidler, III;  Philip Newmuis, Jr.;  Phil Vance;  Township Manager Robert Pellegrino and Finance Director Elaine M. Gibbs. 

Call to Order

In the absence of Chairman Richard D. Weaver,  Member Gibbs presided, calling the meeting to order at 8:45 A. M. 

Approval of Minutes

Minutes of the meeting held on  November 12, 2002  were approved on motion of member Fidler, seconded by member Newmuis and approved by all present. 

Old Business

Discussion continued on the RSM McGladrey correspondence dated November 8, 2002  received from Colleen Williams,  CPA.    Comments related to the Capitalization Policy of Fixed Assets, which is a project which must be developed by the Township.  

Discussion focused on the process to determine depreciation of assets such as roads, bridges, computer materials, furnishings,  grounds/lands, etc., and includes any and all physical inventory of the Township. 

Ms. Williams suggestion included providing for periodic physical inventory counts of tangible capital assets with completeness and accuracy. 

This will be a necessity as the Township considers further bond applications and the financial conditions of the Township  as part of the application(s). 

Member Vance suggested Finance Director Gibbs ask current bond holders how they might review the Township-owned material assets.  Ms. Gibbs noted that two matters which would be considered were companies and employees within the entire township as they form a tax base for repayment as well as the number of township residents and a perceived ability to re-pay, as well. 

The Financial Planning Committee  should recommend to the Board of Supervisors about decisions to be made in establishing the “useful life” of material entities and consideration of depreciation of such. 

Member Fidler noted consideration must be given to the disposal of certain assets,  i.e., vehicles,  computer materials/systems, public works equipment, etc. 

Ms. Gibbs suggested setting fixed asset limits and minimum purchase amounts, reviewing prior years’ records of inventory and noted that two sets of books would be required for records.  She noted that the year 2003 auditors would be new to the Township and will advise appropriately. 

Member Fidler noted that newly-dedicated roads which would be accepted by the Township Board of Supervisors would have serious impact on the over-all values which accumulate.  He asked Ms. Gibbs if there is State documentation available presently to use as reference? 

Ms. Gibbs stated that when dedication is accepted… developers records would assist in fixing the values, particularly regarding bridges, lights and other amenities within a particular development.   The Township Engineer would be helpful in fixing value on these items.  

The suggestion was to request Pennoni Associates to provide a value system and guidelines for what presently exists. 

A further suggestion is to ask the Township Investment Banker(s) for guidance in establishing process/information in this matter. 

Member Bowe suggested developing any policy at the present time is premature until guidelines are in place and could be used.  

Manager Pellegrino noted that guidelines should establish usefulness, condition and projected life of materials/possessions.   He stated that Ms. Williams had suggested terms:   5 years/$5,000. 

Member Bowe suggested setting limits at this time as a guide….member Newmuis noted more homework is needed prior to going to bond insurers and setting up books.  He suggested that the Board of Supervisors need to be “schooled”  in these matters “so that five years down the road,  any Board member would be informed by established guidelines”. 

Ms. Gibbs stated she would go to appraisers about their present activities in assessments throughout the township but members indicated the township should establish its’ own standards. 

Member Fidler noted that establishing the system,  getting all information into the program would be costly and the need is great to interpret to residents the value of the cost set-up (expenses) which support the long-tem value as increased bond amounts would be sought. 

Manager Pellegrino stated the expansion of the municipal building is presently estimated at six (6) million dollars and member Fidler noted it could correctly be estimated at seven (7) million dollars.  Mr. Pellegrino related that the projected amounts had been discussed about one month ago,  which would include debt service as well as land acquisition among other items. 

The consensus was to have Finance Director Gibbs ask for professional advice about the set-up costs of  the Capitalization Policy of Fixed Assets. 

2003 Budget

Manager Pellegrino indicated several items which were changed in the Proposed 2003 Budget and will be considered at the Board of Supervisors meeting on December 11, 2002 for final adoption.  Following adoption,  revised pages will be copied to members of the Financial Planning Committee for inclusion in personal copies distributed previously. 

In the year 2003 in development and preparation of the 2004 Budget,  it was decided to invite Department Heads to appear with requests to the Financial Planning Committee. 

Transferring Excess General Fund Balance into Reserve Fund

Member Vance asked if the 2002  year-end balance in the General Fund exceeds 20% of the over-all budget,  what amount would be transferred into the Reserve Account? 

Member Fidler asked if the Financial Planning Committee recommendation to the Board of Supervisors regarding the transfer of funds in excess of 20%  (referring to Vance question)  would be agreed to by the Board of Supervisors? 

Meetings in 2003

It was determined that the January meeting of the Financial Planning Committee would be cancelled.  The next meeting of the Committee will be held on Tuesday,  February 11, 2003 at 8:30 A. M.   The Capitalization Policy of Fixed Assets will be an agenda item. 

Manager Pellegrino stated he did not know who would be appointed as members of the Committee nor the Chairman  (designated by the Board of Supervisors)  for the year 2003. 

Interviews with Department Heads would be scheduled before the Committee beginning in March, 2003. 

Adjournment

There being no further business to come before the Committee,  the meeting was duly adjourned. 

Respectfully submitted,

_______________________
Ethel K. Hibbs, Secretary