There was some forward movement on the budget last night at the Board of Supervisors meeting. At the onset of the budget discussion, Mimi Gleason apologized to the supervisors and to the public for the errors contained in the preliminary budget that was presented at the last BOS meeting. There were math errors in the budget summary tables that were carried forward in the township manager’s narrative. Gleason offered that the week before there had been a number of last-minute changes in the benefit numbers as her explanation.
I am glad that John Petersen reviewed last week’s preliminary budget and caught the discrepancies and notified the township. It was good to see that responsibility was taken for those mistakes and I am hopeful that going forward, there will be greater oversight from the Finance Commission and the supervisors. For the record, there never was a response to the residents from last week’s emails. Some would suggest that since the message was received and changes made, no response was required. Although I am a proponent for process, there is not closure on the issue and we can move on.
There was much discussion and questions from the supervisors to Gleason and the finance director in regards to the budget. Although there were mistakes in the budget summary, the numbers in the budget remain the same – there is a $500K deficit in the 2012 township budget. Without any adjustment to the preliminary budget, the deficit would mean a 6.9% millage real estate tax increase. Using an average assessed property value of $221,000, the increase would equate to approximately $34 per homeowner. The major contributing factors to the deficit are the decrease in transfer and real estate taxes and a significant decrease in the recycling grant money. Both residential and commercial property reassessments have greatly reduced real estate taxes.
Several areas in the budget were reviewed in detail. Specifically, there is a $106K in the budget for website and software upgrade. Of that amount, $6,500 earmarked for a citizen notification system. This system could provide notifications for emergencies, road closures, special events, etc. The approximate $100K remaining funds is split with $50K for contact management system and $50K to permit greater flexibility and to keep making progress. The goal is to make the website more user-friendly, including the ability to reserve sport and summer camp programs online, a complaint and work order tracking system for public works, a third-party credit card system, etc. The $106K website and software upgrade would come from reserves.
There remain some open issues surrounding the employee health insurance costs. I was very surprised to learn that the current budget includes 100% paid insurance. I suggested that almost everyone pays a co-pay of $15/20 and had that been considered? Although Mimi responded that this is part of the union negotiations, I am not confident that the insurance situation is going to change. With the school district negotiations starting in January, this may offer some bargaining power for the teachers.
Tim Klarich, the township finance director alluded to the large unfunded medical and retirement liability but did not state the total. It was my understanding that several years ago, there was $25 million in this unfunded liability and I asked that number to be qualified. Very surprised to learn that the township’s unfunded liability as of January 1, 2011 was $36 million! Although Klarich stated that at this time, there is no minimum contribution requirement for this liability, it does make you wonder what our increase would be if the taxpayers were forced to fund $36 million liability! When and how does that liability receive funding? Is this a bond issue?
Currently the 2012 budget summary is available online but I asked if the township could provide the full budget online for the residents. Bob Lamina asked Mimi if that was possible and she agreed to provide the information. I am not sure if it will confuse us more or help us – but at least this way, we will be able to review the department budgets and see the line listings that make up the individual budgets.
Although the budget discussion ended with the unanimous approval of the preliminary budget with its 6.9% millage real estate tax increase, there was the sense from the supervisors that they are going to continue their review. Lamina stated that he believes that they can do better than the 6.9%. He is not certain that they can get the budget down to a zero percent increase but between now and the next BOS meeting on December 5, they are determined to try.