The proposed preliminary 2013 budget was unveiled at Wednesday’s Board of Supervisors meeting to a sparse audience – I didn’t count but there must have been fewer than a dozen residents in the attendance. As stated in an earlier post, three of the seven members of the Board of Supervisors were absent from the BOS meeting, including Chair Michelle Kichline, Vice Chair John DiBuonaventuro and Phil Donahue. Supervisor Paul Olson presided over the meeting as acting chair.
Acting Township Manager (and Finance Director) Tim Klarich presented the proposed 2013 preliminary budget, which includes a 5.5% tax increase, from 2.308 to 2.435 mills. Supervisor Mike Heaberg was the only representative from the Finance Committee in attendance at the BOS meeting and assisted Klarich with questions on the proposed preliminary budget.
According to Klarich, the 2013 expenses are slightly lower than the 2013 budget, but 7% higher than the 2012 forecast. I noted that the 2012 forecast is more than $1M lower than the budget for 2012 due to vacancies and a mild winter. The proposed 2013 budget indicates that the greatest expense increase next year, at 69%, is in salary and benefits category. The 2012 budgeted salary and benefits at $11.4 million, however due primarily to unfilled vacancies the forecasted 2012 amount is $10.7 million. Budgeted for 2013 in salary and benefits is $11.5 million which indicates the 69% increase. Currently there are 13 vacancies in the township, with the township manager vacancy to be filled shortly. As to how many of the remaining 12 vacancies are to be filled in 2013, I am not certain. In the reviewing the proposed preliminary 2013 budget, it appears that there are police vacancies that will not be filled.
An open issue that I hope will be addressed prior to finalizing the 2013 budget is the results from the police department staffing study. If you recall, this $49K consulting study was discussed at the June BOS meeting and then approved 6-1 at the July BOS meeting. The one dissenting supervisor vote was from John DiBuonaventuro; his non-support of the support of the study was that he thought that the money could be better spent on bringing the staff level in the department up to projected 47 officers (from the current 41 officers as of July 2012) or for police department equipment. Police Supt Tony Giaimo appeared to supportive but asked that the consultant expedite the study and that the final report take less than 125 days.(Presumably, so that the results would assist in the 2013 budget decisions). The consulting contract was approved in July, so it would seem that there should be results by this point.
However, based on the response given by Klarich and Supervisor Heaberg at Wednesday’s BOS meeting, it appears that the results will not be public prior to the Nov. 17 BOS meeting, when the final preliminary 2013 budget is presented. To be clear, I do not like the idea of paying more taxes (5.5% tax increase proposed) but I am more troubled that this tax increase may not include filling all police department vacancies.
Is it my imagination or lately does there appear to be an increase in crime (auto, house break-ins, and robberies) in Tredyffrin and some of which have occurred in broad daylight? So, if this is correct and that there is an increase in crime, how is it that the township can consider decreasing the size of the police department? If anything, wouldn’t an increase in crime suggest the need for an increase in the police department? I would think that the report from this $49K police department staffing study would be vital to understanding the police department needs so that the BOS can make an informed decision for the 2013 budget.
According to Klarich without a real estate tax increase, the 2013 revenue be flat compared to 2012. With the proposed 5.5% tax increase, 2013 revenue is 3% higher than 2012. Klarich explained that the four General Fund changes in 2013 are: (1) staffing and compensation; (2) Retiree medical funding; (3) Repair and maintenance funding and (4) Real estate tax increase.
According to the proposed 2013 preliminary budget, some (but not all) of the vacancies will be filled. Again, I am unclear how many vacancies will remain unfilled in 2013 and of those that remain unfilled; exactly how many are in the police department. There is a new health care plan that will save money but as Klarich explained, the new plan cannot be put into place until the police arbitration is completed. He spoke as if arbitration may be close to resolution but will be it in time for the budget approval – I do not know. There are raises in the 2013 budget – per contract and merit-based raises and bonuses for non-union staff. There was no background information provided on the formula for bonuses/merit-based raises. I would like to understand the criteria for employee bonuses.
Tredyffrin Township’s unfunded liability of retiree medical funding currently stands at $40M; $31M from uniformed retirees and employees and $9M from non-uniformed retirees and eligible employees. The non-uniformed union has agreed to changes but as Klarich again points out, the police department remains in arbitration so any possible changes that could help in the future are unknown at this time. Klarich explained that it is recommended that $2M should be budgeted annually to ‘buy down’ the $4M unfunded liability. In 2012, the budgeted amount was $250K and Klarich has budgeted $500K for 2013. At a rate of $500K per year, it will take the township 80 years to pay off this debit (and that assumes that the unfunded liability does not continue to increase.)
Here are some highlights in the repair and maintenance expense category contained in the proposed 2013 preliminary budget – - an increase of $114,500 for streets drainage. Considering only $15K was budgeted for street drainage in 2012, this is no doubt an increase that is long overdue. Building maintenance was budgeted in 2012 at $76K but has been increased by $63,320 in the proposed 2013 budget for a total of $139,320. No details offered as what is included in the $139K line item, AC/heating system for township building, repair of township building front steps?? I was disappointed to see that the proposed 2013 preliminary budget decreases maintenance in the township parks from $50K to $46,600. If anything, I think that Wilson Farm Park could use additional funding not less.
Real estate tax generates ½ of the General Fund revenue. Real estate tax is based on the assessed value of properties as set by Chester County. Tredyffrin’s tax base was only growing marginally before the recession, due to little development. Unfortunately, since 2009 the tax base has been declining, primarily based on successful assessment appeals. Therefore, it stands to reason that without a tax increase, the revenue will continue to decrease.
The proposed 5.5% tax increase for 2013 includes 3.1% increase in funding for the unfunded medical long-term obligations (doubling the $250K contribution budgeted in 2012 to $500K for 2013 – remember, the current outstanding debt obligation is $40 million!) and 2.4% increased funding for services ( $198K increase). The proposed 5.5% tax increase equates to a $448K increase in the $16.7M budget.
Following the presentation of the proposed 2013 preliminary budget, residents Carol and Raymond Clarke asked whether there would be public budget workshops, as held in previous years. There were also questions about a budget summary as former township manager Mimi Gleason prepared in prior years. If you recall, Gleason remained on as a consultant to the township after her resignation, primarily to assist Klarich and the other township department heads with the 2013 budget. The Clarke’s and other audience members were looking for background and supporting information behind the preliminary budget numbers. Supervisor and Finance Committee member Heaberg suggested that he would be available to discuss the budget with individual citizens. However, to the credit of Carol Clarke, she requested a public meeting so that all citizens with budget questions could attend.
Kudos to Carol for her follow- up with Heaberg; as a result, a public meeting to discuss the proposed 2013 preliminary budget is scheduled for Tuesday, November 13, 8:30 AM at the township building. If you have questions about the proposed 2013 preliminary budget, you are encouraged to attend.
The timeline for the 2013 township budget is for the BOS to approve the preliminary budget November 19 and to approve the final budget December 17, with a public hearing on either December 17 or January 2 to adopt the real estate tax increase. I do not recall a public hearing last year, regarding the 2012 tax increase. Someone help me here – was there a public hearing for the tax increase of 2012 and I am simply not recalling it?
In case you forgot, the preliminary budget for 2012 included a 6.9% increase which was ultimately revised downward (and approved) to a 3.5% tax increase. The township amended the 2012 preliminary budget by reducing professional fees, decreasing funding for IT, department expense reductions and deferring the equivalent of two police officers’ salaries and benefits until July 1, 2012. Holding off hiring of two police officer’s for 6 months added $127,400 to the overall budget expense reduction. Unfortunately, it looks like the 2013 budget may also going to include a decrease in the police department staff … stay tuned.