Citizens' Summary - 2011 Proposed Budget

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Township of Lower Merion
Montgomery County, Pennsylvania

2011 Proposed Budget
Citizens’ Summary

November 5, 2010

Bruce D. Reed
President, Board of Commissioners

Commissioner Mark Taylor
Chair, Finance Committee

Douglas S. Cleland
Township Manager

Dean J. Dortone
Chief Financial Officer


2011 PROPOSED BUDGET HIGHLIGHTS

Key Dates

Distribution of Budget to the Board, Libraries, Staff and the Media:

  • November 5, 2010

Public Hearings:

  • November 17
    December 1

Budget Adoption:

  • December 15

Personnel

Full-Time Positions are reduced from the 2010 Budget level of 428 to 421 for 2011.

Taxes and Fees

  • Real Estate Tax increased from its 2010 level (of 3.78 mills) to 4.26 mills (a +12.7% or 0.48 mill increase) for 2011.
  • The current 2010 SWF structure is a one container per week subscription ($254) plus $50 for each additional container and a RYCF ($200) for refuse and recycling placed more than 5 feet from the curb line. The 2010 fee structure is proposed to remain unchanged for 2011.
  • The 2011 Proposed Budget anticipates an increase to the sanitary sewer rental fee in the range of +9%. However, it is anticipated that most of the proposed rate increase can be eliminated with higher water consumption and budgetary savings for 2011. The Sanitary Sewer Rental Rate will be further reviewed before the official 2011 Sanitary Sewer rental rate is adopted by ordinance and billed in May 2011.

General Fund Summary

2010 Estimated Actual:

  • The 2010 Revenue is estimated at $50,858,000, an increase of $664,155 or +1.3% as compared to the 2010 Budget.
  • The 2010 Expenditures are estimated at $51,850,099, a decrease of $28,071 or -0.1% as compared to the 2010 Budget.
  • The 2010 Estimated Actual expenditures exceed revenue by $992,099, requiring a budgeted drawdown of fund balance.
  • The 2010 ending fund balance (undesignated) is estimated at $10,195,705 or 19.7% of the 2010 Estimated Actual Expenditures.

2011 Proposed Budget:

  • The 2011 Revenue is budgeted at $53,845,000, an increase of $3,651,155 or +7.3% as compared to the 2010 Budget.
  • The 2011 Expenditures are budgeted at $54,745,775, an increase of $2,867,605 or +5.5% as compared to the 2010 Budget.
  • The 2011 Proposed Budget expenditures exceed revenue by $900,775, requiring a budgeted drawdown of fund balance.
  • The 2011 Proposed Budget ending fund balance (undesignated) is estimated at $9,294,930 or 17% of the 2011 Proposed Budget Expenditures.

This table shows all Township funds subject to the annual appropriation process.

2011 PROPOSED BUDGET
ALL FUNDS SUMMARY
FUND
BEGINNING
FUND
BALANCE
+
REVENUE
-
EXPENDITURES
=
ENDING
FUND
BALANCE
 
GENERAL
$10,395,705
 
$53,845,000
 
$54,745,775
 
$9,494,930
EQUIPMENT
13,914,072
3,545,813
3,830,680
13,629,205
SANITARY SEWER
12,914,488
7,658,700
7,629,699
12,943,489
SINKING
0
10,000,081
10,000,081
0
CAPITAL PROJECTS
14,613,070
13,432,000
26,901,000
1,144,070
HIGHWAY AID
0
1,174,000
1,174,000
0
SPECIAL REVENUE
0
4,507,666
4,507,666
0
SOLID WASTE
669,663
6,806,000
6,872,005
603,658
APPLEFORD
101,000
0
0
101,000
SUBTOTAL
$52,607,998
$100,969,260
$115,660,906
$37,916,352
 
TRANSFER BETWEEN
FUNDS
0
 
(14,906,494)
 
(14,906,494)
 
0
 
TOTAL
$52,607,998
 
$86,062,766
 
$100,754,412
 
$37,916,352

REVENUE SUMMARY BY MAJOR CATEGORY
Revenues
2009 Actual
2010
Estimated
Actual
2011 Budget
 
Program Revenues:
Charges for Services
$14,507,777
16,601,801
$16,645,013
Grants
$7,430,947
17,063,948
$19,491,666
Departmental Earnings
$2,170,982
2,810,000
$2,926,000
Licenses and Permits
$3,718,697
4,994,000
$4,205,400
Fines and Forfeits
$1,068,952
1,075,000
$1,175,000
 
General Revenues:
Real Estate Taxes
$27,397,479
28,019,000
$31,386,000
Business Taxes
$11,344,144
8,900,000
$8,896,000
Real Estate Transfer Tax
$2,078,930
2,332,000
$2,404,000
Investment Income
$532,265
494,794
$459,000
 
Other:
Proceeds from the Sale of Bonds
$23,770,812
20,081,000
$0
Transfers In
$12,991,916
2,517,000
$12,574,081
Other Revenue
$1,000,408
773,025
$807,500
 
Transfers Between Funds
(15,068,608)
(13,818,928)
(14,906,494)
 
Total Net Revenues
$92,944,701
$91,842,640
$86,062,766

EXPENDITURE SUMMARY BY FUNCTION
Function
2009 Actual
2010
Estimated
Actual
2011 Budget
 
General Government
$10,025,124
$8,935,151
$9,103,943
Public Safety
20,459,689
21,386,042
22,572,103
Building and Planning
3,056,350
3,035,363
3,101,048
Community Development
1,499,725
2,083,879
1,923,602
Public Works
11,111,461
11,772,143
12,008,363
Libraries and Recreation
6,675,927
6,709,676
7,107,388
Debt Service
16,636,447
16,735,949
18,441,755
Capital Outlays
25,365,735
12,603,000
26,901,000
Sanitary Sewer
7,191,417
7,335,915
7,629,699
Solid Waste
6,655,251
6,692,862
6,872,005
 
Transfers Between Funds
(15,068,608)
(13,818,928)
(14,906,494)
 
Total Net Expenditures
$93,608,518
$83,471,052
$100,754,412

Function and Description: The General Fund accounts for the financial resources of the Township which are not included in any other Fund. Principal sources of revenue are taxes, licenses and permits, and departmental earnings.

GENERAL FUND
 
2009 ACTUAL
2010 BUDGET
2010
ESTIMATED ACTUAL
2011
BUDGET REQUEST
 
FUND BALANCE - JANUARY 1
$12,011,615
$9,060,689
$11,387,804
$9,494,930
DESIGNATED TO BALANCE BUDGET *
0
1,684,325
900,775
REVENUE
51,162,727
50,193,845
50,858,000
53,845,000
TOTAL RESOURCES AVAILABLE
63,174,342
60,938,859
62,245,804
64,240,705
EXPENDITURES
51,786,538
51,878,170
51,850,099
54,745,775
FUND BALANCE RESERVE
0
9,060,689
0
9,494,930
TOTAL RESOURCES REQUIRED
51,786,538
60,938,859
51,850,099
64,240,705
 
FUND BALANCE - DECEMBER 31 **
$11,387,804
$0
$10,395,705
$0
 
Sources of Revenue: Real Estate Taxes (62.7%), Other Taxes (16.5%), Licenses & Permits (7.8%), Fines and Forfeits (2.2%), Departmental Earnings (4.1%) and Other Revenue (6.7%).
 
Sources of Expenditures: General Government (11.5%), Public Safety (41%), Building and Planning (5.7%), Public Works (13.5%), Libraries and Recreation (12.9%) and Debt Service (15.4%).
 
Budget Changes: The Proposed 2011 Revenue Budget increased approximately +$3.65 million (+7.3% ) in comparison with the 2010 Budget. The 2011 Budget includes a +12.7% Real Estate Tax (RET) millage rate increase (from 3.78 mills) to 4.26 mills, effective January 1, 2011. In addition, increased revenues are projected in real estate transfer tax (+12.8%), other revenues (+61%), cable television franchise fees (+12.1%), recreation pool membership fees (+17.8%), indirect costs - Solid Waste and Sanitary Sewer Funds (+4%), plumbing permit fees (+30.3%) and alarm registration fees (+9.4%). The building permits are projected to fall (-8%), while decreases are projected in ordinance violations (-10.9%), parking fees (-5%), district justice fines (-9.2%), zoning and subdivision fees (-8.5%) and police grants and gifts (-26.9%).

The Proposed 2011 Expenditure Budget increased approximately +$2.87 million (+5.5%) in comparison with the 2010 Budget. This is primarily attributed to transfers to the Debt Service and Solid Waste Funds (+12.2%). employee fringe benefits (+9.8%), salary and wages (+2.5%), other charges (+25.6%), other personal services (+20.8%) and subscriptions and periodicals (+992%). Machinery and equipment expenditures are projected to decrease significantly (-94.6%), while decreases are projected in utilities (-3.9%), communication expenditures (-5.4%), professional technical services (-2.2%) and office and furniture equipment (-95.8%).

The Proposed 2011 Expenditure Budget includes $800,000 of projected actual expenditure savings throughout the budget, which is expected to occur through ongoing cost containment and budgetary savings practices. Such savings would result in the General Fund ending 2011 with an actual operating deficit of approximately $900,775, thus reducing undesignated fund balance to approximately $9.3 million or 17% of the General Fund 2011 forecasted expenditures, and within the Township's fund balance policy goal range of 15% to 18%. The 2010 Estimated Actual ending General Fund undesignated fund balance is projected at approximately $10.2 million or 19.7% of the 2010 General Fund forecasted expenditures.
 
* A portion of the December 31 fund balance is appropriated to balance the following year's operating budget. The 2010 Estimated Actual projects a deficit of -$992,099 thus reducing beginning fund balance at January 1 (from $11,387,804) to $10,395,705 at December 31. In the 2011 Proposed Budget, $900,775 is being designated from the estimated actual 2010 ending fund balance to create a balanced 2011 Proposed Budget.

** It should be noted that approximately $0.2 million of the fund balance is designated for open encumbrances and not included in the Township's undesignated General Fund fund balance policy calculation.

GENERAL FUND - REVENUE SUMMARY
 
2009
ACTUAL
2010
BUDGET
2010
ESTIMATED
ACTUAL
2011
BUDGET
 
TAXES:
REAL ESTATE - CURRENT YEAR
$26,716,585
$27,477,845
$27,342,000
$30,684,000
- PRIOR YEAR
559,677
574,000
566,000
566,000
- INTERIM
65,941
100,000
54,000
79,000
ACT 511 - REAL ESTATE TRANSFER
2,078,930
2,132,000
2,332,000
2,404,000
- EMST/LOCAL SERVICES TAX
1,584,007
1,517,000
1,550,000
1,550,000
- BUSINESS & MERCANTILE
9,760,137
7,339,000
7,350,000
7,346,000
TOTAL TAXES
40,765,277
39,139,845
39,194,000
42,629,000
 
LICENSES & PERMITS:
BEVERAGE
20,000
20,000
19,000
19,000
BUILDING & ELECTRICAL
1,236,226
1,610,000
2,237,000
1,482,000
BUSINESS PRIVILEGE & MERCANTILE
116,306
110,000
141,000
130,000
PLUMBING
150,409
155,000
348,000
202,000
STREETS
189,009
160,000
154,000
154,000
HEALTH
65,174
66,000
69,000
69,000
RECREATION
431,825
444,000
498,000
523,000
FRANCHISE FEES
1,088,536
1,053,000
1,113,000
1,180,000
ALARM REGISTRATION FEES
394,187
385,000
390,000
421,000
OTHER LICENSES & PERMITS
27,025
23,000
25,000
25,000
TOTAL LICENSES & PERMITS
3,718,697
4,026,000
4,994,000
4,205,000
 
FINES & FORFEITS:
ORDINANCE VIOLATIONS
677,538
842,000
650,000
750,000
DISTRICT JUSTICE
391,414
468,000
425,000
425,000
TOTAL FINES & FORFEITS
1,068,952
1,310,000
1,075,000
1,175,000
 
DEPARTMENTAL EARNINGS:
PARKING
1,201,587
1,285,000
1,150,000
1,221,000
POLICE SERVICES
291,806
333,000
323,000
336,000
RECREATION
197,007
196,000
205,000
213,000
ZONING & SUBDIVISION
408,789
437,000
350,000
400,000
HIGHWAY SERVICES
67,943
53,000
95,000
52,000
FIRE SERVICES
3,850
4,000
4,000
4,000
TOTAL DEPARTMENTAL EARNINGS
2,170,982
2,308,000
2,127,000
2,226,000
 
OTHER REVENUE:
PAYMENT IN LIEU OF TAXES
55,276
53,000
57,000
57,000
INVESTMENT INCOME
274,592
300,000
227,000
284,000
INDIRECT COSTS - SOLID WASTE
695,000
723,000
723,000
752,000
INDIRECT COSTS - SANITARY SEWER
517,000
538,000
538,000
560,000
REIMBURSED EXPENSES
242,327
300,000
419,000
313,000
HIGHWAY AID
1,219,513
1,174,000
1,168,000
1,174,000
GRANTS AND GIFTS - POLICE
218,579
108,000
78,000
79,000
OTHER
216,532
214,000
258,000
391,000
TOTAL OTHER REVENUE
3,438,819
3,410,000
3,486,000
3,610,000
 
TOTAL REVENUE
$51,162,727
$50,193,845
$50,858,000
$53,845,000