Citizens' Summary - 2015 Proposed Budget

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Township of Lower Merion
Montgomery County, Pennsylvania

2015 Proposed Budget
Citizens’ Summary

November 5, 2014

Elizabeth S. Rogan
President, Board of Commissioners

Commissioner Paul McElhaney
Chair, Finance Committee

Ernie B. McNeely
Township Manager

Dean J. Dortone
Chief Financial Officer


2015 PROPOSED BUDGET HIGHLIGHTS

Key Dates

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

  • November 5, 2014

Public Hearings:

  • November 19
    December 3

Budget Adoption:

  • December 15

Personnel

Net Full-Time Equivalent (FTE) Positions will decrease 3.1 FTE's from the 2014 Budget level (from 479.6) to 476.5 in 2015. Refer to the Personnel Section of Budget Message for more details.

Taxes and Fees

  • The Real Estate Tax millage rate will remain unchanged for 2015 (fourth consecutive year).

  • The adopted 2014 Solid Waste Fees will remain unchanged in 2015 as follows: one mini can ($205), one container per week subscription ($292), plus $58 for each additional can and the Rear Yard Collection Fee for refuse and recycling placed more than 5 feet from the curb line ($210).

  • The 2015 Budget indicates the possibility of a rate increase to the Sanitary Sewer Rental Fee and drawdown of fund balance may be needed to balance the budget and maintain a 10% fund balance reserve. The Sanitary Sewer rental rate will be further reviewed before the official 2015 Sanitary Sewer rental rate is adopted by ordinance and billed in May 2015.

     

General Fund Budget Summary

2014 Estimated Actual:

  • The 2014 Revenue is estimated at $57,289,000, an increase of $104,000 or 0.2% compared to the 2014 Budget.

  • The 2014 Expenditures are estimated at $59,003,948 is projected flat compared to the 2014 Budget.

  • The 2014 Estimated Actual expenditures exceed revenues (deficit) by $1,714,948.

  •  

2015 Proposed Budget:

  • The 2014 ending fund balance (undesignated) is estimated at $18,257,758 or 30.9% of the 2014 Estimated Actual Expenditures.

  • The 2015 Revenue is budgeted at $58,233,600, an increase of $1,048,600 or 1.8% compared to the 2014 Budget.

  • The 2015 Expenditures are budgeted at $60,474,872, an increase of $1,474,125 or 2.5% compared to the 2014 Budget.

  • The 2015 Budget expenditures exceed revenue by $2,241,272 requiring a planned budgeted drawdown of fund balance to balance operating revenue with expenditures.

  • The 2015 Budget includes $1,400,000 of estimated negative appropriations (budgetary savings) in Non-Departmental (Department 70).

  • The 2015 Budget ending fund balance (undesignated) is estimated at $16,016,486 or 26.5% of the 2015 Budget Expenditures.


2015 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
$18,457,758
 
$58,233,600
 
$60,474,872
 
$16,216,486
EQUIPMENT
14,196,718
3,569,722 
4,311,523
13,454,917
SANITARY SEWER
14,458,823
7,519,800 
8,240,954
13,737,669
SINKING
11,380,777 
11,380,777
CAPITAL PROJECTS
4,644,413
39,025,587 
43,670,000
HIGHWAY AID
-
1,360,600
1,360,600
SPECIAL REVENUE
4,060,456 
4,060,456
SOLID WASTE
999,637 
7,078,500
7,319,317
758,820
APPLEFORD
101,000
101,000
SUBTOTAL
$52,858,349
132,229,042 
$140,818,499
$44,268,892
 
TRANSFER BETWEEN
FUNDS
 
(16,715,124)
 
(16,715,124)
 
 
TOTAL
$52,858,349
 
$115,513,918
 
$124,103,375
 
$44,268,892
REVENUE SUMMARY BY MAJOR CATEGORY
Revenues
2013 Actual
2014
Estimated
Actual
2015 Budget
 
Program Revenues:
Charges for Services
$18,262,283
$17,852,997
$17,655,422
Grants
7,507,016
6,033,917
34,434,716
Departmental Earnings
2,354,755
2,413,000
2,452,000
Licenses and Permits
5,247,353
5,343,000
5,250,000
Fines and Forfeits
1,142,692
1,074,000
1,110,000
 
General Revenues:
Real Estate Taxes
$31,038,504
$31,154,000 
$31,402,000
Business Taxes
12,097,694
10,601,000
10,987,000
Real Estate Transfer Tax
3,539,509
3,200,000
3,360,000
Investment Income
76,495
76,669
80,440
 
Other:
Proceeds from the Sale of Bonds
$8,944,328
$9,778,994
$10,296,087
Transfers In
13,475,658
13,954,489
14,377,377
Other Revenue
1,231,562
1,927,050
824,000
 
Transfers Between Funds
(15,860,415)
(16,165,282)
(16,715,124)
 
Total Net Revenues
$89,057,434
$87,243,834
$115,513,918
EXPENDITURE SUMMARY BY FUNCTION
Function
2013 Actual
2014
Estimated
Actual
2015 Budget
 
General Government
$9,183,484
$9,627,700
$10,022,623
Public Safety
22,951,764
23,430,145
24,629,474
Building and Planning
3,339,930
3,516,518
3,660,486
Community Development
1,112,483
1,153,113
1,238,401
Public Works
12,256,805
13,845,915
13,356,945
Libraries and Recreation
6,960,867
7,518,169
7,594,947
Debt Service
19,840,185
20,442,641
21,085,352
Capital Outlays
8,552,974
10,803,000
43,670,000
Sanitary Sewer
7,435,924
8,124,546
8,240,954
Solid Waste
6,619,973
6,760,709
7,319,318
 
Transfers Between Funds
(15,860,415)
(16,165,282)
(16,715,124)
 
Total Net Expenditures
$82,393,974
$89,057,174
$124,103,376

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
 
2013 ACTUAL
2014 BUDGET
2014
ESTIMATED ACTUAL
2015
BUDGET
 
FUND BALANCE - JANUARY 1
$17,047,648
$16,598,657
$20,172,706
$16,216,486
DESIGNATED TO BALANCE BUDGET *
1,815,747
2,241,272 
REVENUE
59,258,205
57,185,000
57,289,000
58,233,600
TOTAL RESOURCES AVAILABLE
76,305,853
75,599,404
77,461,706
76,691,358
EXPENDITURES
56,133,147
59,000,747
59,003,948
60,474,872
TOTAL RESOURCES REQUIRED
56,133,147
59,000,747 
59,003,948
60,474,872
 
FUND BALANCE - DECEMBER 31
$20,172,706
$16,598,657
$18,457,758
$16,216,486
 
Sources of Revenue: Real Estate Taxes (59.6%), Other Taxes (18.9%), Licenses and Permits (9%), Fines and Forfeits (1.9%), Departmental Earnings (4.2%) and Other Revenue (6.4%).
 
Sources of Expenditures: General Government (11.7%), Public Safety (40.7%), Building and Planning (6%), Public Works (13%), Libraries and Recreation (12.6%) and Debt Service (16%).
 
Budget Changes: The Proposed 2015 Revenue Budget increased approximately $1.0 million (+1.8% ) in comparison with the 2014 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 2015. The 2015 Real Estate Tax (RET) millage rate remains unchanged and is proposed at 4.19 mills. This is the fourth consecutive year of no RET millage rate increase. Revenues are projected to increase in current year real estate taxes (+1.2%), building and electrical permits (+13.1%), highway aid (+19.4%), local services tax (+4.9%), real estate transfer tax (1.8%) and cable television franchise fees (+4.2%) . For more detail, see the General Fund revenue categories and discussion of significant trends and assumptions.
The Proposed 2015 Expenditure Budget increased approximately $1.5 million (+2.5%) in comparison with the 2014 Budget. This is primarily attributed to salary and wages (+1.6%) and employee benefits (+5%), debt service (2.4%) and machinery and equipment (+113%). The 2015 Expenditure Budget increased approximately +$1.5 million (+2.5%) in comparison with the 2014 estimate.
The Proposed 2015 Expenditure Budget includes $1.4 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 2015 with an actual operating deficit of approximately $2.1 million, thus reducing GF undesignated fund balance to approximately $16 million or 26.5% of the GF 2015 forecasted expenditures, and above the Township's fund balance policy goal range of 15% to 18%. The 2014 Estimated Actual ending GF undesignated fund balance is projected at approximately $18.3 million or 30.9% of the 2014 GF estimated actual expenditures.
 
* A portion of the December 31 fund balance is appropriated to balance the following year's operating budget. The 2014 Estimated Actual projects a deficit of $1.7 million. In the Proposed 2015 Budget, approximately $2.2 million is being designated from the estimated actual 2014 ending fund balance to create a balanced 2015 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
 
2013
ACTUAL
2014
BUDGET
2014
ESTIMATED
ACTUAL
2015
BUDGET
 
TAXES:
REAL ESTATE - CURRENT YEAR
$30,179,550
$30,186,000
$30,304,000
$30,547,000
- PRIOR YEAR
707,741
702,000
720,000
720,000
- INTERIM
91,465
55,000
70,000
75,000
ACT 511 - REAL ESTATE TRANSFER
3,539,509
3,300,000
3,200,000
3,360,000
- EMST/LOCAL SERVICES TAX
1,985,614
1,739,000
1,825,000
1,825,000
- BUSINESS & MERCANTILE
10,112,080
9,220,000
8,776,000
9,162,000
TOTAL TAXES
46,615,959
45,202,000
44,895,000
45,689,000
 
LICENSES & PERMITS:
BEVERAGE
20,687
21,000
21,000
21,000
BUILDING & ELECTRICAL
2,007,657
1,768,000
2,187,000
2,000,000
BUSINESS PRIVILEGE & MERCANTILE
141,839
140,000
140,000
140,000
PLUMBING
310,833
236,000
339,000
315,000
STREETS
257,033
235,000
180,000
200,000
HEALTH
67,233
67,000
68,000
69,000
RECREATION
529,860
522,000
484,000
500,000
FRANCHISE FEES
1,395,831
1,384,000
1,400,000
1,442,000
ALARM REGISTRATION FEES
482,381
489,000
494,000
533,000
OTHER LICENSES & PERMITS
34,009
32,000
30,000
30,000
TOTAL LICENSES & PERMITS
5,247,353
4,894,000
5,343,000
5,250,000
 
FINES & FORFEITS:
ORDINANCE VIOLATIONS
698,291
730,000
668,000
700,000
DISTRICT JUSTICE
444,401
410,000
406,000
410,000
TOTAL FINES & FORFEITS
1,142,692
1,140,000
1,074,000
1,110,000
 
DEPARTMENTAL EARNINGS:
PARKING
1,263,702
1,296,000
1,246,000
1,296,000
POLICE SERVICES
318,414
348,000
357,000
357,000
RECREATION
253,864
269,000
269,000
285,000
ZONING & SUBDIVISION
454,708
446,000
449,000
449,000
HIGHWAY SERVICES
60,592
61,000
87,000
61,000
FIRE SERVICES
3,350
4,000
5,000
4,000
TOTAL DEPARTMENTAL EARNINGS
2,354,630
2,424,000
2,413,000
2,452,000
 
OTHER REVENUE:
PAYMENT IN LIEU OF TAXES
59,748
60,000
60,000
60,000
INVESTMENT INCOME
46,407
49,000
49,000
56,000
INDIRECT COSTS - SOLID WASTE
813,000
846,000
846,000
880,000
INDIRECT COSTS - SANITARY SEWER
606,000
630,000
630,000
655,000
REIMBURSED EXPENSES
175,696
229,000
150,000
155,000
FEDERAL BAB'S SUBSIDY
201,678 
196,000 
196,000
196,000
HIGHWAY AID
1,181,042
1,140,000
1,270,000
1,360,600
GRANTS AND GIFTS - POLICE
536,518
112,000
50,000
50,000
OTHER
277,482
263,000
313,000
320,000
TOTAL OTHER REVENUE
3,897,571
3,525,000
3,564,000
3,732,600
 
TOTAL REVENUE
$59,258,205
$57,185,000
$57,289,000
$58,223,600
GENERAL FUND - SOURCES OF REVENUE
 
2013
ACTUAL
2014
BUDGET
2014
ESTIMATED
ACTUAL
2015
BUDGET
 
REAL ESTATE TAXES
$34,518,266
$34,243,000
$34,294,000
$34,702,000
OTHER TAXES
12,097,694
10,959,000
10,601,000
10,987,000
LICENSES & PERMITS
5,247,353
4,894,000
5,343,000
5,250,000
FINES & FORFEITS
1,142,692
1,140,000
1,074,000
1,110,000
DEPARTMENTAL EARNINGS
2,354,755
2,424,000
2,413,000
2,452,000
OTHER REVENUE
3,897,445
3,525,000
3,564,000
3,732,600
TOTAL:
$59,258,205
$57,185,000
$57,289,000
$58,233,600
GENERAL FUND - USE OF FUNDS
 
2013
ACTUAL
2014
BUDGET
2014
ESTIMATED
ACTUAL
2015
BUDGET
 
GENERAL GOVERNMENT
$6,532,223
$6,984,736
$6,643,424
$7,068,851
PUBLIC SAFETY
22,951,764
24,149,263
23,389,545
24,604,474
BUILDING & PLANNING
3,339,930
3,503,398
3,516,518
3,660,486
PUBLIC WORKS
7,325,436
7,415,115
8,603,900
7,841,539
LIBRARIES
3,910,747
4,215,480
4,182,826
4,269,071
RECREATION
3,050,120
3,245,695
3,335,343
3,325,876
DEBT SERVICE
9,022,927
9,487,060
9,332,392
9,704,575
TOTAL:
$56,133,147
$59,000,747
$59,003,948
$60,474,872