Citizens' Summary - 2014 Proposed Budget

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Township of Lower Merion
Montgomery County, Pennsylvania

2014 Proposed Budget
Citizens’ Summary

November 8, 2013

Elizabeth S. Rogan
President, Board of Commissioners

Commissioner Paul McElhaney
Chair, Finance Committee

Douglas S. Cleland
Township Manager

Dean J. Dortone
Chief Financial Officer


2014 PROPOSED BUDGET HIGHLIGHTS

Key Dates

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

  • November 8, 2013

Public Hearings:

  • November 20
    December 4

Budget Adoption:

  • December 18

Personnel

Net Full-Time Equivalent (FTE) Positions will decrease (-1.8) from the 2013 Budget level (from 481.4 ) to 479.6 in 2014. Refer to the Personnel Section of Budget Message for more details.

Taxes and Fees

  • The Real Estate Tax millage rate will remain unchanged for 2014 (third consecutive year).
  • The adopted 2013 Solid Waste Fees will increase +5.4% in 2014 as follows: one mini can to $205 (from $195), one container per week subscription to $292 (from $277) plus $58 (from $55) for each additional can. The RYCF ($210) for refuse and recycling placed more than 5 feet from the curb line was increased by $10 (from $200) for 2014. The 2014 Solid Waste Fees were adopted by the Board of Commissioners on October 16, 2013 and are effective January 1, 2014.
  • The 2014 Budget anticipates the possibility of a moderate rate increase to the Sanitary Sewer Rental Fee and drawdown of fund balance reserves to balance operating revenue with expenditures and maintain a 10% fund balance reserve. The Sanitary Sewer rental rate will be further reviewed before the official 2014 Sanitary Sewer rental rate is adopted by ordinance and billed in May 2014.

General Fund Summary

2013 Estimated Actual:

  • The 2013 Revenue is estimated at $57,688,000, an increase of + $2,630,000 (+4.8%) compared to the 2013 Budget.
  • The 2013 Expenditures are estimated at $56,321,244, a decrease of -$1,898,144 (-3.3%) compared to the 2013 Budget.
  • The 2013 Estimated Actual revenues exceed expenditures (surplus) by + $1,366,756.

2014 Proposed Budget:

  • The 2013 ending fund balance (undesignated) is estimated at $18,214,404 (32.3%) of the 2013 Estimated Actual Expenditures.
  • The 2014 Revenue is budgeted at $57,185,000, an increase of $2,127,000 (+3.9%) compared to the 2013 Budget.
  • The 2014 Expenditures are budgeted at $59,035,416, an increase of $816,028 (+1.4%) compared to the 2013 Budget.
  • The 2014 Budget expenditures exceed revenue by $1,850,416 requiring a planned budgeted drawdown of fund balance to balance operating revenue with expenditures.
  • The 2014 Budget includes -$1,500,000 of estimated negative appropriations (budgetary savings) in Non-Departmental (Department 70).
  • The 2014 Budget ending fund balance (undesignated) is estimated at $16,363,988 (27.7% of the 2014 Budget Expenditures). 
     

2014 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
$18,414,404
 
$57,185,000
 
$59,035,416
 
$16,563,988
EQUIPMENT
14,204,767
3,529,997 
4,001,137
13,733,627
SANITARY SEWER
14,256,314
7,293,500 
8,287,617
13,262,197
SINKING
11,285,015 
11,285,015
CAPITAL PROJECTS
2,239,975
48,217,025 
50,457,000
HIGHWAY AID
-
1,139,800
1,139,800
SPECIAL REVENUE
3,769,640 
3,769,640
SOLID WASTE
673,558 
7,093,000
6,991,427
775,131
APPLEFORD
101,000
101,000
SUBTOTAL
$49,890,018
139,512,977 
$144,967,052
$44,435,943
 
TRANSFER BETWEEN
FUNDS
 
(16,207,036)
 
(16,207,036)
 
 
TOTAL
$49,890,018
 
$123,305,941
 
$128,760,016
 
$44,435,943
REVENUE SUMMARY BY MAJOR CATEGORY
Revenues
2012 Actual
2013
Estimated
Actual
2014 Budget
 
Program Revenues:
Charges for Services
$16,750,764
$17,596,963
$16,830,497
Grants
7,100,850
6,221,509
44,584,162
Departmental Earnings
2,945,662
2,903,500
3,039,500
Licenses and Permits
4,611,691
4,714,000
4,894,000
Fines and Forfeits
1,100,330
1,120,000
1,140,000
 
General Revenues:
Real Estate Taxes
$30,963,973
$30,956,000 
$31,003,000
Business Taxes
13,161,715
11,490,000
10,959,000
Real Estate Transfer Tax
2,949,282
3,250,000
3,300,000
Investment Income
179,531
74,472
82,178
 
Other:
Proceeds from the Sale of Bonds
$11,387,983
$8,944,328
$8,859,025
Transfers In
19,369,023
13,468,334
13,996,215
Other Revenue
1,308,943
1,831,583
825,400
 
Transfers Between Funds
(15,498,842)
(15,933,302)
(16,207,036)
 
Total Net Revenues
$96,330,905
$86,637,387
$123,305,941
EXPENDITURE SUMMARY BY FUNCTION
Function
2012 Actual
2013
Estimated
Actual
2014 Budget
 
General Government
$15,203,429
$9,119,615
$9,766,461
Public Safety
22,066,872
23,051,446
24,199,263
Building and Planning
3,331,655
3,324,545
3,503,398
Community Development
1,676,931
1,090,226
1,182,258
Public Works
11,553,596
12,266,454
12,346,378
Libraries and Recreation
6,576,072
7,109,784
7,461,175
Debt Service
19,755,526
19,870,623
20,772,075
Capital Outlays
24,561,931
10,850,000
50,457,000
Sanitary Sewer
7,367,452
7,968,060
8,287,617
Solid Waste
6,595,810
6,627,545
6,991,427
 
Transfers Between Funds
(15,498,842)
(15,933,302)
(16,207,036)
 
Total Net Expenditures
$103,190,432
$85,344,996
$128,760,016

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
 
2012 ACTUAL
2013 BUDGET
2013
ESTIMATED ACTUAL
2014
BUDGET REQUEST
 
FUND BALANCE - JANUARY 1
$18,416,963
$12,548,650
$17,047,648
$16,563,988
DESIGNATED TO BALANCE BUDGET *
3,161,388
1,850,416 
REVENUE
58,580,222
55,058,000
57,668,000
57,185,000
TOTAL RESOURCES AVAILABLE
76,997,185
70,768,038
74,735,648
75,559,404
EXPENDITURES
59,949,537
58,219,388
56,321,244
59,035,416
TOTAL RESOURCES REQUIRED
59,949,537
58,219,388 
56,321,244
59,035,416
 
FUND BALANCE - DECEMBER 31 **
$17,047,648
$12,548,650
$18,414,404
$16,563,988
 
Sources of Revenue: Real Estate Taxes (59.9%), Other Taxes (19.1%), Licenses and Permits (8.6%), Fines and Forfeits (2%), Departmental Earnings (4.2%) and Other Revenue (6.2%).
 
Sources of Expenditures: General Government (11.9%), Public Safety (40.9%), Building and Planning (5.9%), Public Works (12.5%), Libraries and Recreation (12.7%) and Debt Service (16.1%).
 
Budget Changes: The 2014 Revenue Budget increased approximately +$2.1 million (+3.9% ) in comparison with the 2013 Budget. This is primarily attributed to better business and mercantile tax, real estate transfer tax, current year real estate taxes and building and electrical permit fees performance projected in 2014. The 2014 Real Estate Tax (RET) millage rate remains unchanged and is proposed at 4.19 mills. This is the third consecutive year of no RET millage rate increase. Revenues are projected to increase in business and mercantile tax (+11.3%), real estate transfer tax (+20%), current year real estate taxes (+0.7%) and building and electrical permit fees (+4.2%) . For more detail, see the General Fund revenue categories and discussion of significant trends and assumptions.
The 2014 Expenditure Budget increased approximately +$0.8 million (+1.4%) in comparison with the 2013 Budget. This is primarily attributed to salary and wages (+1.6%) and employee benefits (+9.1%), and debt service (4.4%). The 2014 Expenditure Budget increased approximately +$2.7 million (+4.8%) in comparison with the 2013 estimate.
The 2014 Expenditure Budget includes $1.5 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 2014 with an actual operating deficit of approximately $1.8 million, thus reducing GF undesignated fund balance to approximately $16.4 million or 27.7% of the GF 2014 forecasted expenditures, and above the Township's fund balance policy goal range of 15% to 18%. The 2013 Estimated Actual ending GF undesignated fund balance is projected at approximately $18.2 million or 32.3% of the 2013 GF forecasted expenditures.
 
* A portion of the December 31 fund balance is appropriated to balance the following year's operating budget. The 2013 Estimated Actual projects a surplus of $1.4 million. In the 2014 Budget, approximately $1.8 million is being designated from the estimated actual 2013 ending fund balance to create a balanced 2014 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
 
2012
ACTUAL
2013
BUDGET
2013
ESTIMATED
ACTUAL
2014
BUDGET
 
TAXES:
REAL ESTATE - CURRENT YEAR
$30,043,347
$29,968,000
$30,110,000
$30,186,000
- PRIOR YEAR
768,428
652,000
701,000
702,000
- INTERIM
84,960
25,000
85,000
55,000
ACT 511 - REAL ESTATE TRANSFER
2,949,282
2,750,000
3,250,000
3,300,000
- EMST/LOCAL SERVICES TAX
1,780,823
1,700,000
1,739,000
1,739,000
- 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
67,238
67,000
60,000
60,000
INVESTMENT INCOME
123,524
153,000
44,000
49,000
INDIRECT COSTS - SOLID WASTE
782,080
813,000
813,000
846,000
INDIRECT COSTS - SANITARY SEWER
582,400
606,000
606,000
630,000
REIMBURSED EXPENSES
214,906
206,000
220,000
229,000
FEDERAL BAB'S SUBSIDY
210,850 
211,000 
202,000
229,000
HIGHWAY AID
1,199,977
1,149,500
1,181,000
1,140,000
GRANTS AND GIFTS - POLICE
129,035
110,000
69,000
69,000
OTHER
209,522
258,000
696,000
263,000
TOTAL OTHER REVENUE
3,519,532
3,573,500
3,891,000
3,525,000
 
TOTAL REVENUE
$58,580,222
$55,058,000
$57,688,000
$57,185,000
GENERAL FUND - SOURCES OF REVENUE
 
2012
ACTUAL
2013
BUDGET
2013
ESTIMATED
ACTUAL
2014
BUDGET
 
REAL ESTATE TAXES
$33,846,017
$33,395,000
$34,146,000
$34,243,000
OTHER TAXES
13,161,715
9,986,000
11,490,000
10,959,000
LICENSES & PERMITS
4,611,691
4,687,500
4,714,000
4,894,000
FINES & FORFEITS
1,100,330
1,100,000
1,120,000
1,140,000
DEPARTMENTAL EARNINGS
2,340,937
2,316,000
2,327,000
2,424,000
OTHER REVENUE
3,519,532
3,573,500
3,891,000
3,525,000
TOTAL:
$58,580,222
$55,058,000
$57,688,000
$57,185,000
GENERAL FUND - USE OF FUNDS
 
2012
ACTUAL
2013
BUDGET
2013
ESTIMATED
ACTUAL
2014
BUDGET
 
GENERAL GOVERNMENT*
$12,329,739
$6,505,097
$12,509,592
$6,925,943
PUBLIC SAFETY
22,031,574
23,815,095
23,051,446
24,149,263
BUILDING & PLANNING
3,326,671
3,404,346
3,324,545
3,503,398
PUBLIC WORKS
6,657,985
7,598,102
7,358,245
7,395,115
LIBRARIES & RECREATION
6,555,615
7,368,524
7,109,784
7,461,175
DEBT SERVICE
9,047,953
9,105,583 
9,091,288
9,487,060
TOTAL:
$59,949,537
$58,219,388
$56,321,244
$59,035,416
* Includes unbudgeted GF contributions/transfers ($1 million to Equipment Fund and $5 million to Capital Projects Fund) from GF fund balance reserves in 2012.