FINANCIAL PLANNING COMMITTEE

TUESDAY JULY 20, 2004


Approval of Minutes: On motion of member Vance, seconded by member Fidler and approved by all members present minutes of the meeting held on July 20, 2004 were approved as presented.


The meeting of the Newtown Township Financial Planning Committee met on Tuesday, July 20, 2004 in the meeting room of the Municipal Building, 100 Municipal Drive, Newtown, Pa.

Members present were Ann Goren, Phil Vance, Phil Newmuis, Elaine Gibbs, Allen Fidler, III. Member Bob Dietrle was excused due to a work-related commitment. Township Manager Bob Pellegrino and Assistant to the Manager John Boyle and Board of Supervisor Chairperson Dick Weaver were present.

Call to Order

Chairman Ann Goren called the meeting to order at 8 A.M.

Approval of Minutes

On motion of member Fidler, seconded by member Vance and approved by all members present, minutes of the meeting held on June 15, 2004 were approved.

Berkheimer Presentation

Mr. Jim Hunt, Director of Sales & Client Services, Berkheimer Associates, Inc., was present to dialogue with the Committee about current and future collections. He distributed copies of profile sheets from the Company which indicated business reports of employees within the Township who pay tax to Berkheimer Associates, Inc., and become the receipts of the Township.

He stated that Senate Bill 100 entitled "The Homeowner Tax Relief Act" might enable the School District to take advantage of the new "slot monies" but noted that the District is not required to enact and EIT Tax.

He indicated he would prepare a document for the Township which would indicate the amount of monies from areas that have (or will) enact such tax during the years 2003 and 2004. The document will show that the possible loss to tax revenue to Newtown Township might be $148,086.98. He noted that the loss of revenue might result in an estimated $1,000,000. In the EIT revenue source should school districts opt into SB100.

 He explained how a computer program inter-acts with the U.S. Postal Services to trace residents within each Township which is being used by Berkheimer Associates, Inc., and indicated accuracy in tacking residents who must be charged appropriately.

He stated that Council Rock School District would have to go to a Referendum during an election in order to enact a Personal income Tax (PIT) with the Township not being able to share in the revenue receipts. he will develop a document which would indicate which school districts in the areas near-by might consider adopting the EIT Income tax program which have not done so at this time. Since many employees within Newtown Township might be taxed in their home districts, the revenue could be seriously reduced to Newtown.

Too, he stated that expected gains from racing/slot machine revenue might be realized in the year 2007 at the earliest.

He noted that a 3% increase in residents/employees within the Township might occur annually, but cautioned that this number is approximate and unknown at this time.

He discussed revenues to and from "reciprocating states", most notably all except New York.

After questioning, Mr. Hunt stated the Township could collect a "flat tax" from businesses but noted that a neighboring borough had done this earlier and then cancelled the tax assessment.

He stated that the realization is that there is "not much" the Township can do to make up for the revenue short-fall expected, expect look at ways to reduce expenses. Means by which taxes can be increased are nominal. I.e., tax on amusements and/or mechanical-device machines or manufacturing businesses was not feasible in Newtown Township.

He replied to a questions: "There is no way to expect contributions to the Township by asking businesses to contribute their 'fair-share' of $150. Per business per year for revenue to the Accounts. He will inquire about any other potential sources of revenue via taxation which might be considered and ceilings on those.

Chairman Goren summarized his address, noting that a loss of revenue should be expected in the future, possibly five or ten years hence. A likely loss figure of $800,000. should be projected with reality being closer to $500,000. in the General Fund Account.

New Business

Chairman Goren asked members if they were in receipt of a LaSalle Study completed in 1998. She will distribute copies to members for discussion purposes, even though some information is mis-leading.

Manager Pellegrino will provide copies of the Traffic Impact Fee Study done in 1996 and updated in 2001. Also, he will provide copies of the Land Use Assumptions Report completed by Michael Frank, Heritage Conservancy Group in 2001.

He stated there would need to be a 1% millage increase for Recreation to provide for maintenance and up-keep of additional properties which have been developed into recreational sites within the Township. Too, he indicated a possible 2-3 millage increase in Debt Service should the Board of Supervisors eventually endorse a Building Expansion Project. He noted that the General Fund would be diminished should the EIT revenue decrease as well as new permit fees drop.

Finance Director Gibbs stated that resident service requests increase as new development brings in residents from other municipalities. Member Vance encouraged adding moderate property tax increases in 2005 in order to provide required services and to acquaint residents to potential increases in future years.

Chairman Goren stated that houses bring in less cars/traffic while new business development results in thousands of vehicles along township and State roads. She noted that PSATS statistics indicate that 95% of employees to new business are from outside the Township in which the businesses locate.

Finance Director Gibbs and Manager Pellegrino are developing 5 and 10-year projected budgets for the General Fund and Recreation Fund. These reports should be ready for discussion at the meeting of the Finance Committee for the September 21st meeting. 

Meeting August 17, 2004: Mr. Leroy D. Klein, Jr., will make a presentation to the Committee. He represents the Delta Development Group, Inc., in Mechanicsburg, Pa. His topic will be entitled: "Community & Economic Development, Developing a Strategy with Economic Impacts".

Adjournment

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

 

Respectfully submitted,

 

____________________
Ethel K. Hibbs, Secretary