Citizens' Summary - 2012 Proposed Budget

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Township of Lower Merion
Montgomery County, Pennsylvania

2012 Proposed Budget
Citizens’ Summary

October 21, 2011

Elizabeth S. Rogan
President, Board of Commissioners

Commissioner Paul McElhaney
Chair, Finance Committee

Douglas S. Cleland
Township Manager

Dean J. Dortone
Chief Financial Officer


2012 PROPOSED BUDGET HIGHLIGHTS

Key Dates

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

  • October 21, 2011

Public Hearings:

  • November 16
    December 7

Budget Adoption:

  • December 21

Personnel

Full-Time Positions will not change from the 2011 Budget level of 422 for 2012.

Taxes and Fees

  • The Real Estate Tax millage rate will remain unchanged for 2012.
  • The SWF structure of 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 2011 fee structure will remain unchanged for 2012.
  • The 2011 Proposed Budget anticipates the possibility of an increase to the sanitary sewer rental fee.  The Sanitary Sewer Rental Rate will be further reviewed before the official 2012 Sanitary Sewer rental rate is adopted by ordinance and billed in May 2012.

General Fund Summary

2011 Estimated Actual:

  • The 2011 Revenue is estimated at $53,633,292, an increase of $249,292 or +0.5% as compared to the 2011 Budget.
  • The 2011 Expenditures are estimated at $53,845,873, a decrease of $899,902 or -0.6% as compared to the 2011 Budget.
  • The 2011 Estimated Actual expenditures exceed revenue by $212,581, requiring a budgeted drawdown of fund balance.
  • The 2011 ending fund balance (undesignated) is estimated at $10,604,476 or 19.7% of the 2011 Estimated Actual Expenditures.

2012 Proposed Budget:

  • The 2012 Revenue is budgeted at $54,202,370, an increase of $818,370 or +1.5% as compared to the 2011 Budget.
  • The 2012 Expenditures are budgeted at $55,648,981, an increase of $903,206 or +1.6% as compared to the 2011 Budget.
  • The 2012 Proposed Budget expenditures exceed revenue by $1,446,611, requiring a budgeted drawdown of fund balance.
  • The 2012 Proposed Budget includes $1.4 million of estimated negative appropriations (budgetary savings) in Non-Departmental (Department 70).
  • The 2012 Proposed Budget ending fund balance (undesignated) is estimated at $9,157,865 or 16.5% of the 2012 Proposed Budget Expenditures. 

2012 PROPOSED BUDGET
ALL FUNDS SUMMARY
This table shows all Township funds subject to the annual appropriation process.
FUND
BEGINNING
FUND
BALANCE
+
REVENUE
-
EXPENDITURES
=
ENDING
FUND
BALANCE
 
GENERAL
$10,754,476
 
$54,202,370
 
$55,648,981
 
$9,307,865
EQUIPMENT
14,161,963
3,252,715 
3,916,009
13,498,669
SANITARY SEWER
13,156,066
7,394,250 
7,904,975
12,645,341
SINKING
11,017,605 
11,017,605
CAPITAL PROJECTS
7,648,209
12,566,791 
20,215,000
HIGHWAY AID
-
1,199,975
1,199,975
SPECIAL REVENUE
4,574,481 
4,574,481
SOLID WASTE
510,065 
6,757,000
6,707,835
559,230
APPLEFORD
101,000
101,000
SUBTOTAL
$46,331,779
$100,965,187
$111,184,861
$36,112,105
 
TRANSFER BETWEEN
FUNDS
 
(15,750,340)
 
(15,750,340)
 
 
TOTAL
$46,331,779
 
$85,214,847
 
$95,434,521
 
$36,112,105
REVENUE SUMMARY BY MAJOR CATEGORY
Revenues
2010 Actual
2011
Estimated
Actual
2012 Budget
 
Program Revenues:
Charges for Services
$17,324,976
$16,383,095
$16,270,515
Grants
9,491,680
20,348,457
13,772,331
Departmental Earnings
2,141,996
2,833,000
2,984,500
Licenses and Permits
5,116,299
4,312,500
4,531,000
Fines and Forfeits
1,069,849
1,115,000
1,140,000
 
General Revenues:
Real Estate Taxes
$28,056,534
$30,887,792 
$30,837,000
Business Taxes
8,626,654
9,295,000
9,433,000
Real Estate Transfer Tax
2,549,347
2,350,000
2,460,000
Investment Income
434,587
562,631
239,575
 
Other:
Proceeds from the Sale of Bonds
$36,513,322
$23,537,990
$4,805,791
Transfers In
11,616,421
2,601,000
13,715,685
Other Revenue
1,069,164
1,309,757
775,790
 
Transfers Between Funds
(13,829,053)
(15,124,253)
(15,750,340)
 
Total Net Revenues
$110,181,774
$100,411,969
$85,214,847
EXPENDITURE SUMMARY BY FUNCTION
Function
2010 Actual
2011
Estimated
Actual
2012 Budget
 
General Government
$9,180,842
$9,761,486
$10,009,253
Public Safety
21,118,193
21,855,081
22,716,340
Building and Planning
3,126,697
3,196,343
3,148,068
Community Development
2,051,465
1,378,376
1,256,389
Public Works
11,473,473
12,122,391
11,899,341
Libraries and Recreation
6,564,913
6,708,383
6,985,250
Debt Service
16,963,755
18,641,628
20,342,410
Capital Outlays
28,745,265
36,772,600
20,215,000
Sanitary Sewer
7,195,228
7,803,215
7,904,975
Solid Waste
6,626,415
6,646,053
6,707,835
 
Transfers Between Funds
(13,829,053)
(15,124,253)
(15,750,340)
 
Total Net Expenditures
$99,217,194
$109,761,304
$95,434,521

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
 
2010 ACTUAL
2011 BUDGET
2011
ESTIMATED ACTUAL
2012
BUDGET REQUEST
 
FUND BALANCE - JANUARY 1
$11,387,804
$9,033,930
$11,017,057
$9,357,865
DESIGNATED TO BALANCE BUDGET *
1,361,775
1,446,611 
REVENUE
51,225,121
53,384,00
53,633,292
54,202,370
TOTAL RESOURCES AVAILABLE
62,612,925
63,779,705
64,650,349
65,006,846
EXPENDITURES
51,595,868
54,745,775
53,845,873
55,648,981
FUND BALANCE RESERVE
9,033,930
TOTAL RESOURCES REQUIRED
51,595,868
63,779,705 
53,845,873
55,648,981
 
FUND BALANCE - DECEMBER 31 **
$11,017,057
$0
$10,804,476
$9,357,865
 
Sources of Revenue: Real Estate Taxes (61.4%), Other Taxes (17.3%), Licenses & Permits (8.3%), Fines and Forfeits (2.1%), Departmental Earnings (4.2%) and Other Revenue (6.7%).
 
Sources of Expenditures: General Government (11.7%), Public Safety (40.7%), Building and Planning (5.7%), Public Works (12.7%), Libraries and Recreation (12.5%) and Debt Service (16.7%).
 

Budget Changes: The Proposed 2012 Revenue Budget increased approximately +$0.8 million (+1.5% ) in comparison with the 2011 Budget. The 2012 real estate tax millage rate remains unchanged and is proposed at the 2011 level (4.19 mills). Revenues are projected to increase in cable television franchise fees (+13.6%), building and electrical permits (+11.3%), recreation fees (+9.4%), street permits (+7.1%), plumbing permits (+6.4%), Highway Aid (+6%), and indirect costs - Solid Waste and Sanitary Sewer Funds (+4%). Investment income revenue is expected to fall (-50.7%) and decreases are projected in other revenue (-27.9%) and reimbursed expenses.

The Proposed 2012 Expenditure Budget increased approximately +$0.9 million (+1.6%) in comparison with the 2011 Budget. This is primarily attributed to transfers to the Debt Service and Solid Waste Funds (+11.5%), salary and wages (+2.6%), professional technical services (+7.3%), other personal services (+10.6%) and other compensation (+2.1%). Employees benefits (-2.5%), Equipment Fund charges (-8.4%), utilities (-4.4%) and contracted services (-10.6%) expenditures are projected to decrease.

The proposed 2012 Expenditure Budget includes $1.4 million 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 2012 with an actual operating deficit of approximately $1,446,611, thus reducing undesignated fund balance to approximately $9.2 million or 16.5% of the General Fund 2012 forecasted expenditures, and within the Township's fund balance policy goal range of 15% to 18%. The 2011 Estimated Actual ending General Fund undesignated fund balance is projected at approximately $10.6 million or 19.7% of the 2011 General Fund forecasted expenditures.

 
* A portion of the December 31 fund balance is appropriated to balance the following year's operating budget. The 2011 Estimated Actual projects a deficit of -$212,581 thus reducing beginning fund balance at January 1 (from $11,017,057) to $10,804,476 at December 31. In the 2012 Budget, $1,446,611 is being designated from the estimated actual 2011 ending fund balance to create a balanced 2012 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.

 

2012 Proposed Budget General Fund Actual

GENERAL FUND - REVENUE SUMMARY
 
2010
ACTUAL
2011
BUDGET
2011
ESTIMATED
ACTUAL
2012
BUDGET
 
TAXES:
REAL ESTATE - CURRENT YEAR
$27,312,658
$30,180,000
$30,154,000
$30,105,000
- PRIOR YEAR
635,076
566,000
624,000
622,000
- INTERIM
52,060
79,000
55,000
55,000
ACT 511 - REAL ESTATE TRANSFER
2,549,347
2,404,000
2,350,000
2,475,000
- EMST/LOCAL SERVICES TAX
1,759,114
1,550,000
1,750,000
1,650,000
- BUSINESS & MERCANTILE
6,867,540
7,346,000
7,545,000
7,768,000
TOTAL TAXES
39,175,795
42,125,000
42,478,000
42,675,000
 
LICENSES & PERMITS:
BEVERAGE
18,400
19,000
20,000
20,000
BUILDING & ELECTRICAL
2,287,109
1,482,000
1,490,000
1,639,000
BUSINESS PRIVILEGE & MERCANTILE
144,974
130,000
126,000
126,000
PLUMBING
346,781
202,000
200,000
215,000
STREETS
162,261
154,000
175,000
165,000
HEALTH
69,713
69,000
68,500
70,000
RECREATION
506,657
523,000
538,000
538,000
FRANCHISE FEES
1,138,890
1,180,000
1,250,000
1,313,000
ALARM REGISTRATION FEES
416,904
421,000
419,000
419,000
OTHER LICENSES & PERMITS
24,610
25,000
26,000
26,000
TOTAL LICENSES & PERMITS
5,116,299
4,205,000
4,312,500
4,531,000
 
FINES & FORFEITS:
ORDINANCE VIOLATIONS
659,397
750,000
700,000
725,000
DISTRICT JUSTICE
410,452
425,000
415,000
415,000
TOTAL FINES & FORFEITS
1,069,849
1,175,000
1,115,000
1,140,000
 
DEPARTMENTAL EARNINGS:
PARKING
1,182,020
1,221,000
1,190,000
1,190,000
POLICE SERVICES
340,272
336,000
325,000
338,000
RECREATION
213,144
256,000
272,000
280,000
ZONING & SUBDIVISION
307,342
400,000
365,000
390,000
HIGHWAY SERVICES
94,692
52,000
54,000
52,000
FIRE SERVICES
4,525
4,000
4,000
4,000
TOTAL DEPARTMENTAL EARNINGS
2,141,995
2,269,000
2,210,000
2,254,000
 
OTHER REVENUE:
PAYMENT IN LIEU OF TAXES
56,741
57,000
54,792
55,000
INVESTMENT INCOME
218,485
284,000
140,000
140,000
INDIRECT COSTS - SOLID WASTE
723,000
752,000
752,000
782,080
INDIRECT COSTS - SANITARY SEWER
538,000
560,000
560,000
582,400
REIMBURSED EXPENSES
702,599
313,000
220,000
226,600
FEDERAL BAB'S SUBSIDY
-
-
241,000
210,850
HIGHWAY AID
1,168,186
1,174,000
1,200,000
1,244,600
GRANTS AND GIFTS - POLICE
118,042
79,000
79,000
79,000
OTHER
196,130
391,000
271,000
281,840
TOTAL OTHER REVENUE
3,721,183
3,610,000
3,517,792
3,602,370
 
TOTAL REVENUE
$51,225,121
$53,384,000
$53,633,292
$54,202,370

 

2012 Proposed Budget GF Sources of Revenue

 

GENERAL FUND - SOURCES OF REVENUE
 
2010
ACTUAL
2011
BUDGET
2011
ESTIMATED
ACTUAL
2012
BUDGET
 
REAL ESTATE TAXES
$30,549,141
$33,229,000
$33,183,000
$33,257,000
OTHER TAXES
8,626,654
8,896,000
9,295,000
9,418,000
LICENSES & PERMITS
5,116,299
4,205,000
4,312,500
4,531,000
FINES & FORFEITS
1,069,849
1,175,000
1,115,000
1,140,000
DEPARTMENTAL EARNINGS
2,141,995
2,269,000
2,210,000
2,254,000
OTHER REVENUE
3,721,183
3,610,000
3,517,792
3,602,370
TOTAL:
$51,225,121
$53,384,000
$53,633,292
$54,202,370

 

2012 Proposed Budget GF Use of Funds

 

GENERAL FUND - USE OF FUNDS
 
2010
ACTUAL
2011
BUDGET
2011
ESTIMATED
ACTUAL
2012
BUDGET
 
GENERAL GOVERNMENT
$6,131,493
$6,318,066
$6,239,681
$6,500,097
PUBLIC SAFETY
21,049,590 
22,447,953
21,770,931 
22,629,510
BUILDING & PLANNING
3,126,697
3,101,048
3,196,254
3,148,058
PUBLIC WORKS
7,108,737
7,367,043
7,391,163
7,091,742
LIBRARIES & RECREATION
6,544,425
7,069,991
6,675,514
6,954,769
DEBT SERVICE*
7,634,926
8,441,674
8,572,330
9,324,805
TOTAL:
$51,595,868
$54,745,775
$53,845,873
$55,648,981
 * Includes $210,850, of debt interest expense directly offset by a Federal subsidy (BAB's) budgeted as a revenue source in the General Fund.

 

2012 Proposed Budget Twp Employees by Serv Area (FTE)