Tredyffrin’s 2012 Preliminary Budget Indicates 6.9% Increase . . . But the Math Doesn’t Add Up!

At Monday’s Board of Supervisors meeting, our township manager Mimi Gleason presented Tredyffrin’s preliminary budget for 2012 that indicates a 6.9% millage real estate increase will be required to balance the budget. As she does each year, Gleason presented a budget summary, which was designed as an overview of the township’s current financial picture.  Included in the summary are 2011 budget and forecasted revenue and expenditures through the end of the year plus the 2012 preliminary budget. Two summary tables marked ‘General Fund Revenue’ and ‘General Fund Expenditures’ are part of the township manager’s document dated November 10, 2011.

I do not know about you, but when I review budget data, I look at the totals, the ‘bottom line’ – just assuming that the math is correct.  Laying no claim as a financial expert, when I reviewed the township’s budget memorandum, I accepted Ms. Gleason’s summary information as correct and her math as accurate.  As the hired professional and chief executive officer of the township, in my view, she is the expert and I had no reason to question the accuracy of the information.

Resident and former township supervisor John Petersen reviewed Ms. Gleason’s budget summary and discovered multiple mathematical errors in the report. I learned of the mistakes in the budget information when I was copied on emails to Gleason, along with township supervisor John DiBuonaventuro and resident Ray Clarke.

In review of Gleason’s budget summary, the totals for the General Fund revenue and expenditure summary tables are incorrect.  The 2012 budget revenue should be $16,467,175, and the difference vs. the 2011 Forecast is ($141,748).  On the expenditure summary table totals, the 2011 Forecast should be $16,916,736 the 2012 Budget should be $16,926,204, and the difference vs. the 2011 Forecast should be $9,468.  If you use these corrected totals from the revenue and expenditure tables, similar errors are now contained in Gleason’s summary description.  In referring to 2011, Gleason states, “the year is forecast to end $377,000 under budget.”  Due to mathematical error, this information is incorrect; the year is forecast to end $355,160 under budget, not $377,000.  Gleason states the “General fund revenue is projected to decrease another $130,000 in 2012, for a total decrease of $330,000 versus the 2011 budget.”  Correcting the math, the 2012 general fund revenue is projected to be $255,950 less than the 2011 budget, not $330,000.

What does all this mean to us the taxpayer and to the budget process?  With declining revenues and increasing costs of our current economic climate, it is more important than ever to account for every dollar.  As taxpayers, we trust that the financial information is accurate – isn’t this information checked and re-checked. After all, the township manager’s budget information would have multiple in-house reviews before it goes public, correct. Finance Director, Township Manager, Supervisor Finance Committee, Board of Supervisors . . . all of these people have access to this information before the public sees it.  Where is the accountability?  Are these kinds of mathematical ‘mistakes’ OK?  These errors are in the budget summary . . . are there additional errors in the budget line listings?

Reading the township revenue and expenditure summaries, I find it confusing and difficult to understand.  There is not an adequate breakdown of the department expenditures and the account detail worksheets do not provide sufficient explanation (particularly of increased costs).  Can the public please have a complete township budget with all details? If you look at the school district, they are far more transparent, providing complete information, including every check written from TESD. The last budget update from TESD was 180+ pages and provided the public with complete information.  The township budget is a fraction of the school district budget; should we not expect similar public information?

We were all caught up in the EIT campaign hype over the last month leading up to Election Day.  We were inundated with Republican campaign mailers, robo-calls and yellow signs all claiming ‘No EIT’ and then the defense from the Democratic camp. As was the case when I ran for the Board of Supervisors in 2009, the Republican campaign materials implied that if voters elected a Democrat candidate, residents would be in line for an increase in taxes.

Election Day 2011 was only a week ago and we know from the results that Tredyffrin Township will continue as an all-Republican Board of Supervisors and the School Board will be Republican-majority in its membership. Democrats were not elected because they presumably would ‘raise taxes’.   So how is it that a week after the election, the Republican Board of Supervisors present a budget that contains a 6.9% tax increase?

There were two 2012 township budget workshops, late August and October 1.  The supervisors would have known that a tax increase would be required for 2012.  Rather than indicate or suggest the possibility of a 2012 tax increase, the supervisors choose to wait until after Election Day.  And the Republicans said it was the Democrats who would raise taxes . . . guess this is ‘politics’.

Between the tax increases from the township and the school district, what do you guess the overall increase will be for the Tredyffrin taxpayer . . . 10%, 12%?

 

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12 Comments

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  1. Obviously, since Republican members of the Board have pledged not to raise taxes, the 6.9% must be merely a “revenue enhancement” and not a tax. Right?

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  2. Checking my own math . . . .

    If the school tax increase is say 4 pct for 2012 . . .

    And the township increase is say 6.9% for 2012 . . .

    wont the total tax increase be less than five percent?

    the pctg increases are increases in the tax levels of different taxes. .

    The school tax is the largest component of property tax.

    Not saying 5% isnt huge in a zero inflation environment, but dont think its10 or 12 pct net increase.

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  3. And we need to remember that this was a ‘preliminary’ budget — there’s a couple of more meetings on the budget. The BOS has to get to the ‘draft’ budget and then they have to approve the final budget.

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  4. I agree with you, Pattye. The public deserves a summary that is both accurate and conveys simply the underlying forces at work in the budget. This piece fails those tests. Fortunately John caught raised the flag while the draft is still preliminary. Hopefully the next iteration will restore our confidence.

    The amount of detail is an interesting question. I’m not sure I want the details of every check paid by TESD, for example – but the unusual items ($19,000 to Wawa? $14,000 to Big Ass Fans? (!)) could merit a word or two. However, I do want to know that someone is doing the detailed analysis, and if summary numbers don’t add up and big cost drivers are not all explained (in this case of the Township, not TESD), then there’s no confidence in that.

    Mimi’s budget memos have been mostly on track in previous years, but this one leaves much to be desired. At the risk of suggesting another error-inducing table or two, it would be really nice to see:

    [1] A table with every line item that varies more than say $50,000 from the current year forecast along with an explanation. So we could see the components of the $500,000 salary and benefits changes, the gross and net costs of the zoning ordinance changes, the reason for a $237,200 (12 fold!) increase in “Insurance”, etc.

    [2] A tabulation of the revenues, expenses and surplus/deficit all in one place. (That might be a good cross-check on all the other info!)

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  5. MA is correct, of course. Proportionality is key. The proposed 6.9% municipal tax increase amounts to .15387 mill or $34 for the average assessed property of $221,000.

    If this tax increase is approved, the average Tredyffrin tax would go from $493 to $527 a year.

    By contrast, our county tax (no increase in 2011) sets us back $876 for every $221k of assessed value.

    And our school tax – as of July 1, 2011, amounts to $4,121 for a home assessed at $221k . That reflects a 3.77% increase over last year – about $150 for the average taxpayer.

    So this average taxpayer paid $5,490 in municipal, county and school taxes in 2011. A $34 increase in Tredyffrin tax would represent a mere .62% increase in the total tax burden.

    From my perspective, a bargain for living in this county, this township and enjoying the benefits of T/E schools.

    See below from http://www.tredyffrin.org

    TOWNSHIP REVENUE
    Real Estate Property Tax (2.23 mills)

    Tredyffrin’s tax rate in 2011 is 2.23 mills. “Mills” are the amount each property is taxed per $1,000 valuation. For example, a property with an assessed value of $100,000 would pay $100,000 x .00223 = $223.

    Real Estate Tax Millage Rates
    Tredyffrin Township 2.23 (2011)
    Chester County 3.965 (2011)
    Tredyffrin-Easttown School District 18.647 (2011)

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  6. Unbelievable. Wheres the math ability of the township staff? How do we know the 6.9% is accurate. It’s simple math so someone isnt reviewing. Very careless.

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  7. I find math errors disturbing, but I am equally annoyed that someone who found a math error apparently took some “gotcha” delight in sharing it.
    Pattye above said 10-12% — clearly a math error by adding the increases….but hardly noteworthy. If we are all working together, scrutiny to improve the outcome is useful — to intimidate the process, disappointing.

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    TE Parent Reply:

    Well said, Township Reader.

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  8. No excuse for those mistakes – none.

    As for the R versus D issue on taxes I love it when D’s at the local level get all bent out of shape. The fact is when it comes to these issues, both R’s and D’s have very little flexibility. Local govs cannot print money to cover deficits. Even the approach to fixing the problem can’t be that much different. In the end, it has to be a combination of cuts and tax increases. The extremes either want all cuts or all revenue (tax) increases. The extreme views will not win out on either side.

    We are all going to pay for past sins. R or D doesn’t matter much in the end. The bottom line is until the environment for creating jobs radically improves, this is going to be an issue.

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  9. Yes, the Township budget is under $30 million, while the School Board budget is roughly $100 million, so a tax increase by the Board of Supervisors is a proportionately smaller hit. What is equally large is the level of hypocrisy of Republican candidates who run every election promising to “hold the line on taxes” and then waiting till just after the election to announce a tax increase. The public sessions in September are an improvement, but did you hear the word tax increase mentioned then?

    After Ms. Gleeson laid out a case for why our revenues have been slowly decreasing for several years and can be expected to decrease further in 2013, what did she offer for a solution? How about a five year plan and a way to study how unsustainable our current financial model is? No, she suggested a citizen advisory group to examine which services township residents would be willing to do without. That’s the Republican approach to “maintaining our quality of life.”

    Remember your all Republican Board of Supervisors, unlike the School Board, can enact an Earned Income Tax by a simple resolution. Where’s the outcry from the TTRC asking all BOS members for a Grover Norquist pledge that they will not enact an EIT?

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  10. Although this is a 0-inflation environment, it is also a poor economy environment so that means the cost of doing business still going up because shortfall on revenues is being pushed up the line from somewhere.

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