Citizens' Summary - 2013 Proposed Budget

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Township of Lower Merion
Montgomery County, Pennsylvania

2013 Proposed Budget
Citizens’ Summary

November 5, 2012

Elizabeth S. Rogan
President, Board of Commissioners

Commissioner Paul McElhaney
Chair, Finance Committee

Douglas S. Cleland
Township Manager

Dean J. Dortone
Chief Financial Officer


2013 PROPOSED BUDGET HIGHLIGHTS

Key Dates

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

  • November 5, 2012

Public Hearings:

  • November 19
    December 5

Budget Adoption:

  • December 19

Personnel

Full-Time Positions will decrease (-1) from the 2012 Budget level from 422 to 421.

Taxes and Fees

  • The Real Estate Tax millage rate will remain unchanged for 2013.
  • The 2012 SWF structure will increase +9% in 2013 as follows: one mini can to $195 (from $179), one container per week subscription to $277 (from $254) plus $55 (from $50) for each additional can. The RYCF ($200) for refuse and recycling placed more than 5 feet from the curb line will remain unchanged from 2012. The 2013 Solid Waste Fees were adopted by the Board of Commissioners on October 17, 2012 and are effective January 1, 2013.
  • • The 2013 Proposed Budget anticipates the possibility of a moderate increase to the Sanitary Sewer Rental Fee. The Sanitary Sewer Rental Rate will be further reviewed before the official 2013 Sanitary Sewer rental rate is adopted by ordinance and billed in May 2013.

General Fund Summary

2012 Estimated Actual:

  • The 2012 Revenue is estimated at $57,661,830, an increase of $3,459,460 or +6.4% as compared to the 2012 Budget.
  • The 2012 Expenditures are estimated at $60,368,754, an increase of $4,691,877 or +8.4% as compared to the 2012 Budget.
  • The 2012 Estimated Actual includes $6 million (unbudgeted) of General Fund expenditures/transfers ($1 million to the Equipment Fund and $5 million to the Capital Projects Fund) from General Fund fund balance reserves. Details of these expenditures are explained throughout the Budget Message and in the Fund Summaries.

2013 Proposed Budget:

  • The 2012 Estimated Actual revenues exceed expenditures by $2,706,924.
  • The 2012 ending fund balance (undesignated) is estimated at $15,510,038 or 25.7% of the 2012 Estimated Actual Expenditures.
  • The 2013 Revenue is budgeted at $55,058,000, an increase of $855,630 or +1.6% as compared to the 2012 Budget.
  • The 2013 Expenditures are budgeted at $57,889,093, an increase of $2,212,216 or +4.0% as compared to the 2012 Budget.
  • The 2013 Proposed Budget expenditures exceed revenue by $2,831,093, requiring a budgeted drawdown of fund balance.
  • The 2013 Proposed Budget includes -$0.7 million of estimated negative appropriations (budgetary savings) in Non-Departmental (Department 70).
  • The 2013 Proposed Budget ending fund balance (undesignated) is estimated at $12,678,945 or 21.9% of the 2013 Proposed Budget Expenditures 
     

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

2013 PROPOSED BUDGET
ALL FUNDS SUMMARY
FUND
BEGINNING
FUND
BALANCE
+
REVENUE
-
EXPENDITURES
=
ENDING
FUND
BALANCE
 
GENERAL
$15,710,038
 
$55,058,000
 
$57,889,093
 
$12,878,945
EQUIPMENT
14,231,196
3,629,985 
3,929,776
13,931,405
SANITARY SEWER
13,236,496
8,139,700 
8,162,306
13,213,890
SINKING
10,796,151 
10,796,151
CAPITAL PROJECTS
1,074,181
21,217,819 
22,292,000
HIGHWAY AID
-
1,149,500
1,149,500
SPECIAL REVENUE
4,077,662 
4,077,662
SOLID WASTE
483,306 
6,967,700
6,811,032
639,974
APPLEFORD
101,000
101,000
SUBTOTAL
$44,836,217
$111,036,517
$115,107,520
$40,765,214
 
TRANSFER BETWEEN
FUNDS
 
(15,878,661)
 
(15,878,661)
 
 
TOTAL
$44,836,217
 
$95,157,856
 
$99,228,859
 
$40,765,214

REVENUE SUMMARY BY MAJOR CATEGORY
Revenues
2011 Actual
2012
Estimated
Actual
2013 Budget
 
Program Revenues:
Charges for Services
$17,531,672
$16,629,933
$17,588,985
Grants
10,288,064
6,473,022
17,969,465
Departmental Earnings
2,285,293
2,894,800
2,982,000
Licenses and Permits
4,403,394
4,520,500
4,687,500
Fines and Forfeits
1,033,529
1,030,000
1,100,000
 
General Revenues:
Real Estate Taxes
$30,737,925
$30,680,000 
$30,712,000
Business Taxes
16,182,147
12,956,000
9,986,000
Real Estate Transfer Tax
2,283,623
2,750,000
2,750,000
Investment Income
490,615
206,573
198,097
 
Other:
Proceeds from the Sale of Bonds
$23,631,583
$11,387,983
$8,794,819
Transfers In
12,670,368
19,364,752
13,453,651
Other Revenue
944,669
1,240,383
814,000
 
Transfers Between Funds
(15,151,656)
(15,462,650)
(15,878,661)
 
Total Net Revenues
$107,331,226
$94,671,296
$95,157,856

EXPENDITURE SUMMARY BY FUNCTION
Function
2011 Actual
2012
Estimated
Actual
2013 Budget
 
General Government
$9,702,141
$15,147,758
$9,475,728
Public Safety
21,513,737
22,305,344
23,537,595
Building and Planning
3,186,107
3,180,363
3,392,346
Community Development
1,524,377
1,662,571
1,610,442
Public Works
12,141,888
11,718,884
12,555,813
Libraries and Recreation
6,421,596
6,775,028
7,368,524
Debt Service
18,641,596
19,755,525
19,901,734
Capital Outlays
34,422,794
25,709,983
22,292,000
Sanitary Sewer
7,797,768
7,903,555
8,162,306
Solid Waste
6,627,435
6,746,332
6,811,032
 
Transfers Between Funds
(15,151,656)
(15,462,650)
(15,878,661)
 
Total Net Expenditures
$106,827,815
$105,442,693
$99,228,859

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
 
2011 ACTUAL
2012 BUDGET
2012
ESTIMATED ACTUAL
2013
BUDGET REQUEST
 
FUND BALANCE - JANUARY 1
$11,017,057
$16,229,969
$18,416,962
$12,878,945
DESIGNATED TO BALANCE BUDGET *
1,474,507
2,831,093 
REVENUE
60,389,154
54,202,370
57,661,830
55,058,000
TOTAL RESOURCES AVAILABLE
71,406,211
71,906,846
76,078,792
70,768,038
EXPENDITURES
52,989,248
55,676,877
60,368,754
57,898,093
FUND BALANCE RESERVE
-
TOTAL RESOURCES REQUIRED
52,989,248
55,676,877 
60,368,754
57,898,093
 
FUND BALANCE - DECEMBER 31 **
$18,416,963
$16,229,969
$15,710,038
$12,878,945
 
Sources of Revenue: Real Estate Taxes (60.7%), Other Taxes (18.1%), Licenses & Permits (8.5%), Fines and Forfeits (2%), Departmental Earnings (4.2%) and Other Revenue (6.5%).
 
Sources of Expenditures: General Government (12%), Public Safety (40.6%), Building and Planning (5.9%), Public Works (13.1%), Libraries and Recreation (12.7%) and Debt Service (15.7%).
 
Budget Changes: The Proposed 2013 Revenue Budget increased approximately +$0.9 million (+1.7% ) in comparison with the 2012 Budget. This is primarily attributed to better business tax and real estate transfer tax performance projected in 2013. The 2013 Real Estate Tax (RET) millage rate remains unchanged and is proposed at 4.19 mills. This is the second consecutive year of no RET millage rate increase. Revenues are projected to increase in licenses and permits (+3.5%) and departmental earnings (+2.8%) and decrease in fines and forfeits (-3.5%). For more detail, see the General Fund revenue categories and discussion of significant trends and assumptions.
The Proposed 2013 Expenditure Budget increased approximately +$2.2 million (+4%) in comparison with the 2012 Budget. This is primarily attributed to salary and wages (+1.2%), equipment fund charges (+24%), professional technical services (+16%), insurance (+38%) and machinery and equipment (+558%). Debt service (-2.4%) and employee benefits (-0.2%) are projected to decrease. The 2012 estimate includes a $1 million contribution/transfer of fund balance reserves to the Equipment Fund and $5 million to the Capital Projects Fund. These fund balance contributions/transfers were not included in the 2012 Budget and are discussed in more detail in the budget message.
The 2013 Expenditure Budget includes $0.7 million of projected 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 2013 with an actual operating deficit of approximately $2.8 million, thus reducing GF undesignated fund balance to approximately $12.6 million or 21.9% of the GF 2013 forecasted expenditures, and above the Township's fund balance policy goal range of 15% to 18%. The 2012 Estimated Actual ending GF undesignated fund balance is projected at approximately $15.5 million or 25.7% of the 2012 GF forecasted expenditures. This includes the $6 million of unbudgeted interfund contributions/transfers in 2012.
 
* A portion of the December 31 fund balance is appropriated to balance the following year's operating budget. After the interfund contributions/transfers of $6 million, the 2012 Estimated Actual projects a deficit of $2.7 million thus decreasing undesignated beginning fund balance at January 1 (from $18.2 million) to $15.5 million. In the 2013 Budget, $2.8 is being designated from the estimated actual 2012 ending fund balance to create a balanced 2013 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
 
2011
ACTUAL
2012
BUDGET
2012
ESTIMATED
ACTUAL
2013
BUDGET
 
TAXES:
REAL ESTATE - CURRENT YEAR
$30,105,206
$30,105,000
$29,968,000
$29,968,000
- PRIOR YEAR
558,845
622,000
620,000
652,000
- INTERIM
19,082
55,000
25,000
25,000
ACT 511 - REAL ESTATE TRANSFER
2,283,623
2,475,000
2,750,000
2,750,000
- EMST/LOCAL SERVICES TAX
1,922,279
1,650,000
1,740,000
1,700,000
- BUSINESS & MERCANTILE
14,259,868
7,768,000
11,216,000
8,286,000
TOTAL TAXES
49,148,903
42,675,000
46,319,000
43,381,000
 
LICENSES & PERMITS:
BEVERAGE
19,550
20,000
19,500
19,500
BUILDING & ELECTRICAL
1,521,299
1,639,000
1,600,000
1,696,000
BUSINESS PRIVILEGE & MERCANTILE
132,856
126,000
134,000
121,000
PLUMBING
184,140
215,000
205,000
217,000
STREETS
219,316
165,000
200,000
190,000
HEALTH
68,609
70,000
67,000
67,000
RECREATION
545,164
538,000
529,000
529,000
FRANCHISE FEES
1,257,486
1,313,000
1,300,000
1,352,000
ALARM REGISTRATION FEES
423,823
419,000
438,000
468,000
OTHER LICENSES & PERMITS
31,151
26,000
28,000
28,000
TOTAL LICENSES & PERMITS
4,403,394
4,531,000
4,520,500
4,687,500
 
FINES & FORFEITS:
ORDINANCE VIOLATIONS
644,316
725,000
630,000
700,000
DISTRICT JUSTICE
389,213
415,000
400,000
400,000
TOTAL FINES & FORFEITS
1,033,529
1,140,000
1,030,000
1,100,000
 
DEPARTMENTAL EARNINGS:
PARKING
1,164,099
1,190,000
1,200,000
1,248,000
POLICE SERVICES
337,193
338,000
323,000
336,000
RECREATION
253,614
280,000
270,000
270,000
ZONING & SUBDIVISION
442,672
390,000
390,000
406,000
HIGHWAY SERVICES
83,515
52,000
57,000
52,000
FIRE SERVICES
4,525
4,000
4,000
4,000
TOTAL DEPARTMENTAL EARNINGS
2,285,293
2,254,000
2,244,000
2,316,000
 
OTHER REVENUE:
PAYMENT IN LIEU OF TAXES
54,792
55,000
67,000
67,000
INVESTMENT INCOME
141,822
140,000
146,000
153,000
INDIRECT COSTS - SOLID WASTE
752,000
782,080
782,080
813,000
INDIRECT COSTS - SANITARY SEWER
560,000
582,400
582,400
606,000
REIMBURSED EXPENSES
224,332
226,600
200,000
206,600
FEDERAL BAB'S SUBSIDY
240,719 
210,850 
210,850
211,000
HIGHWAY AID
1,200,070
1,244,000
1,200,000
1,149,500
GRANTS AND GIFTS - POLICE
116,673
79,000
110,000
110,000
OTHER
227,627
281,840
250,000
258,000
TOTAL OTHER REVENUE
3,518,035
3,602,370
3,548,330
3,573,500
 
TOTAL REVENUE
$60,389,154
$54,202,370
$57,661,830
$55,058,000

 

GENERAL FUND - SOURCES OF REVENUE
 
2011
ACTUAL
2012
BUDGET
2012
ESTIMATED
ACTUAL
2013
BUDGET
 
REAL ESTATE TAXES
$32,966,756
$33,257,000
$33,363,000
$33,395,000
OTHER TAXES
16,182,147
9,418,000
12,956,000
9,986,000
LICENSES & PERMITS
4,403,394
4,531,000
4,520,500
4,687,500
FINES & FORFEITS
1,033,529
1,140,000
1,030,000
1,100,000
DEPARTMENTAL EARNINGS
2,285,293
2,254,000
2,244,000
2,316,000
OTHER REVENUE
3,518,035
3,602,370
3,548,330
3,573,500
TOTAL:
$60,389,154
$54,202,370
$57,661,830
$55,058,000

 

GENERAL FUND - USE OF FUNDS
 
2011
ACTUAL
2012
BUDGET
2012
ESTIMATED
ACTUAL
2013
BUDGET
 
GENERAL GOVERNMENT
$6,205,878
$6,505,097
$12,509,592
$6,925,943
PUBLIC SAFETY
21,474,039 
22,651,406
22,224,171 
23,498,595
BUILDING & PLANNING
3,184,721
3,149,058
3,175,378
3,392,346
PUBLIC WORKS
7,141,594
7,091,742
6,661,239
7,598,102
LIBRARIES & RECREATION
6,410,686
6,954,769
6,750,421
7,368,524
DEBT SERVICE*
8,572,330
9,324,805
9,047,953
9,105,583
TOTAL:
$52,989,248
$55,676,877
$60,368,754
$57,889,093
 * Includes unbudgted GF contributions/transfers ($1 million to Equipment Fund and $5 million to Capital Projects Fund) from GF fund balance reserves in 2012.