Pattye Benson

Community Matters

Tredyffrin Township

“Neither rain, nor snow, nor sleet, nor hail shall keep the postmen from their appointed rounds” – but lack of money may!

December 5, 2011
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Facing $15 billion in debt and on the verge of bankruptcy, the US Postal Service has about maxed out their credit card. In the age of email, Facebook and Twitter, not to mention FedEx and United Parcel Post, the US Post Office announced last week that it lost $5.1 billion in the last year.

The postal service can’t keep limping along year after year. . . Changes are coming and you better plan on an extra few days for delivery of those birthday cards. Struggling to stay afloat, the USPS is finalizing their budget cuts. Higher rates are obviously part of the plan – as of January 22, a first-class stamp will cost 45 cents and I wouldn’t be surprised if that increase quickly grows to 50 cents or more.

Another part of the post office plan includes closing half of the country’s mail processing centers. It’s expected that 250 of the 500 processing centers may close as early as March. The Post Office has not released the list of potential processing center closures – I wonder if Southeastern PO will be on the list. The consolidation of the mail processing centers is in addition to the planned closing of 3,700 local post offices – didn’t St. Davids Post Office recently have its last day. The closing of post offices and processing centers means major job losses. It is expected that as many as 100,000 post office workers may lose their jobs due to the various closures.

We should prepare ourselves for a slowdown in our first-class mail service. According to the news, the USPS is pushing ahead with cuts to first-class mail that by next spring will slow delivery and will eliminate any chance for stamped letters to arrive the next day. I don’t know about you, but I don’t remember the last time I mailed something and it was received the next day.

In some important respects, the problems facing the USPS mirror those of private firms in sectors affected by technological change. The rise of email, instant messaging, online banking, and other forms of electronic communication have dramatically reduced demand for the Post Office’s core business — the transportation of letters.

But technology alone does not account for the financial woes of the Post Office. Congress has mandated that the USPS must annually prepay $4.5 billion in health retirement benefits that go beyond what would be required of a private firm. Back on September 4, 2011, the New York Times reported (“Postal Service Is Nearing Default as Losses Mount”) that the Post Office is close to default unless Congress intervenes.

The report cites that 80% of the postal service’s cost is labor, as compared with only 53% at UPS and 32% at FedEx. It also cites that postal workers get more generous health benefits than even most other federal employees. Is the solution for Congress to bail out the Post Office. But if Congress were to intervene, what form of bailout? What about privatization of the Post Office?

“Neither rain, nor snow, nor sleet, nor hail shall keep the postmen from their appointed rounds” – but the lack of money may!

Much Awaits PA Legislators – Privatization of State Liquor System, School Vouchers, Redistricting and Marcellus Shale drilling policy

December 4, 2011
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There is much awaiting lawmakers when they return to Harrisburg tomorrow. Several major areas require legislator’s attention before they depart for the winter holidays in three weeks – privatizing the state liquor system, school voucher program, proposed redistricting and natural gas drilling policy of Marcellus shale.

Since taking office last January, Gov. Corbett has been unwavering on certain agenda items, including the privatization of the state liquor system and pushing a school voucher program. Much has been discussed on these topics over the past 11 months and Corbett is seeking resolution by the close of 2011.

Speaking of the state liquor system, did you see that the PA Liquor Control Board has changed the rule on shipping alcohol? Shipping wine or liquor to PA residents was previously prohibited, but the LCB quietly changed the rule last week. Just in time for the holidays, residents can order from LCB’s online Fine Wine & Good Spirits store for home delivery.

This is a service that wine fans in the rest of the country take for granted but now is available to Pennsylvanians. However, the UPS delivery is pricey, $14 for up to 3 bottles, then $1 for each additional bottle delivered.

Initially I was excited about the change, until I realized that the new shipping rule was only applicable if you were purchasing wine from the LCB — buying from out-of-state wineries is still off-limits!

We know that Corbett wants the state out of the liquor business. A private firm reporting to Corbett has released a Public Finance Management Report that estimates a return of up to $1.6 billion for privatizing the state liquor system. So why bother rolling out an alcohol delivery program on the eve of this vote?

Another important agenda item for Corbett since taking office is the school voucher program. Corbett has been transparent in his push for a voucher system, which would permit money to go to parochial and private schools. One of the foundations of this country is the plan for children from all backgrounds to go to school together but if Corbett gets his way, a legislative vote may change public school education in Pennsylvania.

Although the state constitution prohibits using public money to send children to private schools, Corbett and other advocates of school vouchers, think they have a way around that legal matter. Instead of giving the money directly to private schools, they will give the money to parents who in turn give money to schools.

Is the voucher plan a new twist on constitutional law – give the money to parents to give to the schools will magically transform the money so it’s no longer taxpayer money?

Personally, I am opposed to Corbett sidestepping the constitution and continue to be opposed to taxpayer dollars funding nonpublic education. Funneling taxpayer dollars through parents to private schools ultimately weakens the public education system. If there are problems with specific school districts, then I believe that the state has a responsibility to ‘fix’ the school district. And giving some parents money to leave their failing school districts is not the answer nor does it fix the school’s problems for those students that remain. Moving the best students out of a failing school further weakens failing schools.

Besides legislative discussion on liquor privatization and school vouchers, lawmakers have to approve the state and congressional redistricting maps by the end of the year. This week closed the 30-day public comment period on the proposed redistricting and now the matter is in the hands of the legislators.

Redistricting is a powerful tool for elected officials to protect their own and undermine opponents and I have previously stated that sweeping nonpartisan redistricting reform is unlikely. However, I failed to mention that former State Rep Paul Drucker (D-157) introduced legislation (H.B. 2005) to reform Pennsylvania’s redistricting process in 2009. In describing his redistricting reform House Bill 2005 in a November 2009 press release, Drucker stated,

My legislation would establish a nine-person committee made up of the top eight legislative leaders in the House and Senate, or their designees, plus a chairman appointed by the Pennsylvania Supreme Court.

Under the bill, the chairman would have to be a registered voter in Pennsylvania for at least two years, could not hold a federal, state or local office, and not have held a position within a political party in the previous 10 years. The commission would meet in public and be held to specific rules designed to avoid districts drawn for political reasons. Any plan created by the commission would need to be approved by six of the nine members before moving to the full legislature for final approval.

Drucker’s redistricting reform bill would have increased the commission size from five to nine; established a PA Supreme Court appointed chair and created transparency of the redistricting process with public meetings! Unfortunately, Drucker’s redistricting reform bill did not get out of the House State Government Committee. If you are interested, here is link to House Bill 2005.

Another major issue for Harrisburg legislators to discuss in the next 3 weeks is the state policy on natural gas drilling in the Marcellus shale. The state House and state Senate have passed Marcellus shale bills that include per-well impact fee and a series of new environmental regulations but differences between the bills needs to be worked out.

Differences between the two proposals will need to be reconciled over the next few weeks if lawmakers are going to get a bill to the governor’s desk before they leave in mid-December.

Increase in Sales Tax Rate – According to Local CPA, Don’t be Surprised!

December 2, 2011
38 Comments

A couple of weeks ago, the T/E School Board voted against an EIT voter referendum question for the April primary. (School Board members Kevin Mahoney and Anne Crowley favored taking the EIT question to the voters).

I received an interesting comment from Jim Newhard in response to T/E School District’s response the November 15 post. Rather than adding to the earlier post, I thought it could make for interesting commentary. A small business owner in Paoli, Jim Newhard is a CPA. I served with Jim on the board of the Paoli Business & Professional Association. Thanks Jim for weighing in – anyone else think economics may eventually lead to an increase in our sales tax rate?

From Jim Newhard, CPA

There is no tax related decision at any level that does not produce winners and losers. Retirees don’t mind EIT because they generally don’t have earned income; high EI earners see big tax without offsetting benefit and are then chastised as the “evil 1%” for their success; property owners have no assurance that any savings will be realized, particularly since the school district needs to plug deficit holes.

In a Commonwealth with a heavy union population, the unfunded pension liability will not likely be reduced — just refinanced and spread over a longer period to create a false sense of short-run fiscal “balance” or “stability.” Future monies likely to come from a fee/tax levied on the Marcellus Shale natural gas exploration are not going to help southeastern PA and will have nominal impact of the state general fund (will certainly be mostly ear-marked for “road & environmental” implications from the drillers.

With a heavy practice in PA local taxes (especially EIT), analyses on tax distributions are quite the challenge, and are always a moving target. As we continuously monitor state budget and fiscal results — don’t look to Harrisburg (or the feds) for a stimulus windfall. In fact, do not be surprised if there might be a sales tax bump with extra bump amount designated/elected to be retained by the county (for example, there may come a day when the sales tax in Chester County is 7% with 6% to the Commonwealth and the 1% staying in Chester County).

Just because you’re paranoid doesn’t mean that someone isn’t out to get you!

Supporting our Local Shops and Restaurants — ‘Shop Small’ this Holiday Shopping Season

December 1, 2011
10 Comments

Reading about the expansion planned for King of Prussia Mall, www.kingofprussia.com you would not know there is anything wrong with the local economy.

As the King of Prussia Plaza and the Court developed over the years, it seemed like a waste of valuable property to have the two sections of the mall connected by an open breezeway. I don’t know about you, but I would drive to either the Plaza or the Court side of the mall, but I don’t recall ever walking outside from one side to the other.

The planned expansion will enclose the covered walkway, link together the mall’s two wings and add 40 additional stores. The 140,000 square foot addition will now let shoppers walk from one end of the mall to the other without going outside.

This latest expansion news is separate from the addition currently being built at the site of the old Wanamaker’s department store. That redevelopment two-story project scheduled for completion by the end of 2012, will add 122,000 square feet of retail space with 10 new stores.

Several of the news stories report that the King of Prussia Mall is the largest shopping mall in theUnited Statesat nearly 3 million feet of retail space. In fact, I thought that the KOP mall was second in size to the Mall of Americas in Minneapolis. A quick check on Wikipedia indicates that King of Prussia Mall is the largest in square feet of shopping space (Mall of Americas is second is square footage) but that Mall of Americas is first in number of stores (522+) and that King of Prussia Mall is second at 400+ stores. Not sure how many annual visitors Mall of Americas can claim but King of Prussia Mall website is boasting they attract more than 25 million visitors per year.

Beyond the King of Prussia Mall expansion plans, the surrounding mall area has exploded in development in the last few years, Seasons 52, Home Depot, Sullivan’s Steakhouse, Maggiano’s, Crate & Barrel, Costco, 16-screen movie and IMAX theater, etc. Wegmans atKing of PrussiaonGulph Rd.is scheduled to open in spring 2012.

In the shadow of the King of Prussia Mall and Valley Forge National Historic Park, the Valley Forge Casino Resort is preparing for a March opening. Counting down to the casino opening, Pennsylvania’s latest gambling hall is finding itself in a desperate situation … they still need 300 dealers. Demand has outstripped supply and by January, management is preparing for an outreach program to New Jersey and Florida.

All of this is very exciting news for the local economy but I find myself reflecting on this past Saturday, which was the 2nd annual Small Business Saturday. There was a major national advertising campaign by American Express and others to ‘Shop Small’ by encouraging us to visit our favorite local stores and help to fuel the economy — I hope that many of our community’s small businesses benefited from the advertising campaign.

I recently drove from Bryn Mawr to Malvern; purposely taking the Lancaster Ave. route. Although there are pockets of growth and development along Route 30 (most notably in the Wayne area), there was an overwhelming number of empty storefronts and leasing signs. Even when the economy was healthy, small businesses in this area struggled to compete and find their niche against the many offerings of the King of Prussia Mall. So although the explosion and development in King of Prussia is wonderful for the job market and local economy, how is it possible for the small businesses along Rt. 30 to survive? The commercial giants like Costco, Home Depot and Wal-Mart can weather the economic challenges but how long cam small businesses realistically survive? The large mega-retail discount chains have developed such strong competitive advantages that threaten the ‘Main Streets’ and sadly the ‘Mom and Pop’ stores are becoming a dying breed.

Some of the communities around us have done a better job of embracing and supporting the main street shopping formula – we see it in Media, Wayne, Phoenixville,West Chesterand in near-by Malvern. Visionaries created a purpose for people to visit these communities and then a reason for the visitors to return over and over, but what about Tredyffrin.

Last February, when I suggested an Economic Development Committee, the purpose was to find ways to support our local small business community and explore ways to help fill empty storefronts. Many people pointed out there are limitations on our local government to provide incentives, zoning options, etc. for development. A few weeks ago, the supervisors announced the members of the economic advisory council and certainly, this is a good sign. However, I am guessing that the members will likely focus on area commercial real estate, vacant office buildings and the large empty box stores.

Small businesses are competing against the chain stores and the shopping malls this holiday shopping season. Pumping money into the local economy this holiday shopping season will help keep their doors open so let’s all make a commitment to support our independent stores and restaurants. Besides who needs ToysRUs when we have the Toy Department at the Paoli Hardware Center!

Public Comment Period on Proposed Redistricting Ends Wednesday at Midnight

November 29, 2011
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Just a couple of days remain for public comment on the proposed redistricting of Pennsylvania’s election district boundaries. Wednesday, November 30 is the closing date for comments on the proposed redistricting maps. Granted, these are preliminary maps but I get the sense that they are not likely to change. We have until midnight on Wednesday to email comments to the Legislative Reapportionment Commission at:

http://www.redistricting.state.pa.us/Contact.cfm

The General Assembly in Harrisburg decides the boundaries for the Congressional districts but the top four minority and majority leaders of the General Assembly make up the Reapportionment Commission that decides the boundaries for state house and senate districts with the help of a fifth member they appoint as a tie-breaker. The process of redistricting in Pennsylvaniais unsatisfactory; five individuals conduct this entire process without any requirement for public input until the final plan is put on public view for 30 days before its passage.

The outcome of Pennsylvania’s 2011 redistricting plan should come as no surprise. Although the Republican Party is in power for this redistricting process, given the next 10 years and the next census, the power shift could change to the Democrats. Regardless of which party holds the majority at the time of Pennsylvania’s redistricting, without some form of redistricting reform, sadly a similar politically driven outcome is all but guaranteed.

Redistricting reform is needed, including an independent nonpartisan redistricting commission for all electoral levels. Such a commission would require people who would not have a personal stake in the outcome of the redistricting; unlike the way it is done now. No elected or political party officials could serve on this independent commission; the new redistricting process should prohibit the inclusion of party registration data and voting history.

The realty is that sweeping nonpartisan redistricting reform is unlikely. Redistricting is a powerful tool for elected officials to protect their own and undermine opponents. Depending on who is in power at the time of redistricting is what determines the election boundaries — thus minimizing the role of the voters in the political process. By gerrymandering the districts, legislators have been able to choose the voters before the voters have had an opportunity to choose them. Without nonpartisan redistricting, the cycle will continue . . . regardless of which party is in power.

Although it is too late for redistricting reform in 2011, you can still send in your comments to the redistricting commission. Much has been written about the proposed redistricting changes, but if you are not sure how it will affect you, there is a good online resource. The Legislative Reapportionment Commission website includes interesting interactive maps of the voting districts across the state. You can see the overlay of maps from 1991, current 2001 and proposed 2011 for the House, Senate and Congress. The maps detail the geographic boundaries and the changes in the districts as the population has shifted. In addition to the interactive maps, the website contains the 2010 US Census population statistics.

http://www.redistricting.state.pa.us/Maps/index.cfm

Tredyffrin’s Preliminary Budget Approved with 6.9% Increase, but Chairman Bob Lamina hopes we can do better!

November 22, 2011
62 Comments

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.

Citizens Should Matter More to Township Staff and Elected Officials

November 18, 2011
20 Comments

This is a follow-up to my last post on Community Matters. Without repeating the entire post, here is the short version – on Monday at the Board of Supervisors meeting, the township manager Mimi Gleason presented the 2012 preliminary budget including a power point overview of the budget. Copies of the preliminary budget and the township manager’s 4-page budget summary were available at the meeting and online. Included in the budget draft was a 6.9% millage real estate increase.

In his review of the preliminary budget, former township supervisor John Petersen found multiple mathematical errors in Gleason’s summary report. On Tuesday, Petersen sent several emails to Gleason detailing the mistakes. I was copied on all the emails as was resident Ray Clarke and township supervisor John DiBuonaventuro. Before writing my last post on Community Matters, I double-checked the budget summary numbers as did Ray Clarke and we agreed with John that errors were contained in both the revenue and expenditure summary tables. The errors when applied to the budget narrative further compounded the problems in the summary information,

With declining revenues and increasing costs of our current economic climate, it is more important than ever to account for every dollar. As a taxpayer, I want to feel confident in our local government. Beyond the troubling math errors, there was no response to any of John Petersen’s emails; absolutely no acknowledgement to him (or Ray Clarke or myself) from the township manager.

Our supervisors talk about the importance of communication to our residents, so what does this lack of response say? A resident takes the time to do an analysis of the preliminary budget and is not afforded the courtesy of a response. In addition to Petersen’s efforts, Clarke also reviewed the budget materials and reached a similar conclusion as to the errors. As residents and taxpayers in this community, do we not matter?

Here is another concerning point. Petersen, Clarke and I live in the western part of the township, in District 3 – Supervisor DiBuonaventuro serves this district (which explains why he was copied on the emails from Petersen to Gleason). DiBuonaventuro ran unopposed in last week’s election and was re-elected to the Board of Supervisors for a second 4-year term. During the early years of his first term, residents often remarked about DiBuonaventuro’s strong constituent service and quick resident response. The Petersen, Clarke and Benson families are all constituents in his voting district yet we received no email response or phone call in regards to this serious situation.

This got me thinking – if there is no acknowledgement from the township manager or response from our district supervisor, what does this really say about our local government. The supervisors received the budget information in their packets the week before the meeting so there was time to review the summary.

The township’s Finance Committee (supervisors DiBuonaventuro, Paul Olson and Phil Donahue) had been working with the township staff on the budget so it is expected they reviewed the preliminary budget before it was sent to the other supervisors.

If Gleason and DiBuonaventuro choose not to respond to the citizens, I then question if either of them bothered to advise BOS chair Bob Lamina of the errors in the budget summary. If the other supervisors were not told of the citizen concerns, how would they know there were mistakes in the budget summary – by reading Community Matters, TE Patch or the Main Line Media News?

This is not intended as some kind of ‘gotcha’ moment against the township staff or supervisors! We all make mistakes. Rather to ask where the respect is for the citizen who takes time to review the budget, sends emails and receives no response?

I want assurances from our elected officials that they are ‘watching the store’ for all the residents of this community. DiBuonaventuro should have responded with an email or phone call to tell us he appreciated the seriousness of the situation, and to assure us that, if warranted, the math errors would be corrected. Given that Supervisor DiBuonaventuro is a member of the township’s Finance Committee, our district supervisor and someone who repeatedly speaks from the dais on the importance of ‘due diligence’, I am disappointed.

Somehow, it seems we have lost our way. Township staff and elected officials – don’t you care about the residents of this community and doing what’s right?

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

November 16, 2011
12 Comments

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%?

 

No EIT for Tredyffrin Easttown School District in 2012!

November 15, 2011
48 Comments

Based on Ray Clarke’s notes below from the Finance Committee and the School Board meeting on the Earned Income Tax, sounds like it was quite a night! First off, the big news to report — there will be no EIT voter referendum question on the April primary election ballot. The same two people, Kevin Mahoney and Anne Crowley, favored taking the EIT to the voters as they voted similarly in October 2010. Please read Ray’s comments and I would like to hear from others who attended the meeting last night.

A couple of fascinating school district meetings last night. Bottom Line: a motion to advise the townships of a possible intent to put an EIT on next year’s ballot was defeated 7:2 (Mahoney, Crowley).

My own take, but watch the action for yourselves….

The usual arguments were rehearsed by both Board members and audience, but the ones that I felt carried the day were that “now is not the time” and “we’re going to try really really hard to get Harrisburg to find another of your pockets to take the employee pensions from”. Dr Brake had a well-reasoned position that also made the point that the current political climate would not allow a thoughtful debate and the Board could avoid “roiling the community” further by not putting it to referendum now.

But that was not what kept this audience member awake. Just about every board member (campaigning or not) berated the political machine for the campaign tactics.

Dr Brake contrasted legitimate “contrast pieces” with “offensive” “making stuff up”. Then Republican operative Tom Colman launched a defense of the election tactics, and acknowledged that he had orchestrated a personal campaign against the Act 1 tax in 2007. That brought up Jenny Wessels to state that she had been miss-represented in the campaign and to commend the Board for their non-partisan approach. Then followed Debbie Bookstaber, in a long soliloquy berating her colleagues for their political statements. Must see TV!

A few interesting audience comments:

Ed Sweeney: strongly against an EIT and wants the tax policy to attract the “right people” (high income earners?)

Melody Price: a thoughtful appeal for a balanced approach that considers all potential solutions.

Unknown audience member: “three words – Taxed Enough Already” (that was helpful!)

Barbara Morosse: There is more expense for the district to cut, including through teacher salary structure changes.

Notable board member comments:

Rich Brake: wants to completely recalibrate the teachers’ contract, do away with the matrix.

Kevin Mahoney: a) lest anyone thinks that companies are not interested in property taxes, consider the multi-million dollar GSK assessment appeals, b) maybe school districts should be freed up from rules that limit investment options to be able to earn returns like UPenn endowment’s 15%

Betsy Fadem: Don’t think we can use the Fund Balance to balance the budget because the School Board has committed it….

Which brings me to the evening’s opening act, the Finance Committee. Four things to remark:

[1] The minutes that Pattye had puzzled over were corrected: the administration proposals for the $1.3 million funding restoration were not authorized by the last Finance Committee but referred back to the Education Committee.

[2] A discussion of the Fund Balance commitments, which include $7.6 million of “vested employee services”, along of course with $15.4 million of “future retirement plan stabilization”. The accounting is much different to the GAAP I’m used to, but here’s my takeaway:

  • These amounts are based on arbitrary board policies
  • The PSERS commitment is based on the next five years, the employee services on almost but not quite the full lifetime liability
  • They are only commitments to the extent that it takes a Board vote to change them
  • Few if any other school districts have a commitment for vested employee services, and pay as they go.

So, “vested employee services” appears to be another way to sit on taxpayer money without fully revealing what the actual liability is, what the additions and payouts are from year-to-year, and where the funding for the liability comes from. And, in general, the PSERS liability is going straight up for the next 5 years, holds flat for the next 10, and then starts to decline. So would the policy mean that the district sequesters say $25 million of taxpayer money until that decline starts in 2025 or so?

I think that Mahoney committed the next Finance Committee to review the policy. At the very least it would be good to know exactly how all this works, and why it is that TE policies need to be different from other school districts.

[3] Groundwork laid for the ongoing property tax-to-the-max strategy: next year’s Act 1 Index estimated at 1.7%, Exceptions for PSERS and special education 1.7%, total property tax increase 3.4%, $2.9 million.

[4] The fourth thing was …… err ……. ooops …… oh yes:

The Finance Committee approved a contract with a marketing agency for selling promotional space on district property. The net annual revenue to the district is projected to be $160,000. The agency was the only one that responded to the district RFP. The contract states that the District has to approve all content, sponsors, advertisements; in the meeting it was stated that the Board approval is required.

If I think of any else, I’ll add it as a comment.

Tredyffrin’s 2012 Preliminary Budget + Business Development Advisory Council Announced

November 15, 2011
Comments

I attended the Board of Supervisors meeting last night but based on the notes from Ray Clarke, it sounds like the Finance Committee meeting and the EIT discussion of the school board was more action-packed. Because of the amount of information, I will present some updates from the BOS meeting and then separately provide Ray’s notes from the TESD.

The township economic advisory group that I advocated for on Community Matters in February 2011 has finally come together. Although this new group was approved by the supervisors in April, it has been a long process to finally have the group announced. Supervisors Donahue, Heaberg and Kichline have held meetings with local companies, real estate and leasing representatives, etc. during the last several months to create a model for this advisory group. Once they established the criteria, community members were asked to submit letters of interest and resumes and we were told last night that they received 20 applications for the committee.

The newly formed economic advisory group is to be called Tredyffrin Business Development Advisory Council. The announcement read, “This group was chosen for its cross section of business, strategic, planning and marketing expertise. They are highly skilled citizens who do not currently serve on our boards and commissions and have agreed to take a critical look at all aspects of the Township that relate to business development and business retention. This includes, but is not limited to zoning, transportation and marketing.”

The members of the TBDAC are Dan Fishbein, Eric Kleppe, Stanford Nishikawa, Jim Sanborn, John Susanin and Bill Thomsen. Although their individual backgrounds were not offered, a quick online search reveals this is an impressive group of people!

  • Dan Fishbein, VP of BNY Mellon/Urdang Capital (real estate industry)
  • Eric Kleppe, Director of Client Services at Turner Investments
  • Stanford Nishikawa, former junk-bond analyst who now runs his family’s investments
  • Jim Sanborn, VP and General Manager of Interstate & Ocean Transport Company
  • John Susanin, Partner in SSH Real Estate, brokerage and investment company
  • Bill Thomsen, Senior VP at Urban Engineers, Inc.

In addition to the three supervisors (Kickline, Donahue and Heaberg), the six citizens listed above, there will be four liaison members — Tory Snyder, Planning Commission; Beth Brake and Donna Shipman, Community Affairs and Small Business; and Dave Rowland, Paoli Business community.

As explained last night, the group will meet periodically and present a report in the next 4-6 months. It is intended that following their report, a long term business advisory group will be created.

A major topic of the evening was the preliminary 2012 township budget. Township manager Mimi Gleason presented her yearly budget summary. She forecasts that the general fund balance for 2011 will decrease by over $100,000 versus budget. General fund expenditures are forecasted at $240,000 over budget (due primarily to storms). Overall, Gleason forecasts 2011 to end $377,000 under budget. No surprises that the declining revenues are expected in 2012 and beyond. The general fund revenue is expected to decrease another $130,000 in 2012, for a total decrease of $330,000 versus the 2011 budget. General fund expenditures is expected to remain flat from 2011 forecast and 1.5% greater than the 2011 budget.

With the preliminary draft, the 2012 budget has a $500,000 hole versus the 2011 budget. So how is the budget balanced and what does this mean for the taxpayer? Unless there are reductions in costs or services, this means a 6.9% millage real estate rate increase.

What are the contributing factors . . . the downturn in the economy, decrease in real estate and transfer tax, and $70K decrease in recycling grant from the state all contribute to lower revenue. A number of township residents have had their homes reassessed, which is indicated by the lower real estate taxes paid to the township. But I didn’t think about commercial reassessments and Tredyffrin had two significant companies with property reassessments – Vanguard and De Lage Landen (Dutch company with its US headquarters on Old Eagle School Rd, Wayne). The combined real estate reassessments of these two corporate giants accounted for a major drop in revenue.

Remember this was just the first preliminary budget presentation; it is possible that the mileage real estate rate increase may drop. As explained last night, if no changes are made in the budget, the 6.9% increase is approximately $34/year increase. Don’t we wish that was the increase we were facing for the school district?

Here’s a link to the township’s 2012 preliminary budget.

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