Cost containment is a consistent discipline among all Township departments and this proposed budget certainly continues the constraint on spending for which we are known. Even with these efforts, however, a growing deficit is evolving due to our flat or falling GF revenue.
As our global economy began to tumble over the past two years, the Township has continued to pursue cost containment options and carefully study our fiscal plans and condition. The process continued with a mid-year Board Retreat focused upon educating Board members of our long-term financial planning and an update of the Township’s five-year financial forecast, which we also provided publicly in July. We have utilized the Finance Committee meetings this year to undertake further review of budgetary issues, including regular updates of our staffing levels, review of our solid waste procedures and fees, establishment of a new debt management policy, discussion of the long-term use of our well-funded Equipment Fund, review of our capital spending plans, and other timely matters. For the first time, we held public, televised CIP and budgetary workshops during the year to facilitate a dialogue between the Board and staff, well in advance of the upcoming public budget hearing process this fall.
After implementing nearly two dozen expenditure reduction measures for the 2009 Budget that resulted in GF cost savings of approximately $0.8 million, further expenditure reductions are reflected throughout the Proposed 2010 Budget and CIP. This has allowed for the RET rate increase to be somewhat contained for 2010 and beyond.
As a continuation of the budgetary procedure first included in the adopted 2009 Budget, anticipated GF budgetary savings of $1.2 million are budgeted as a “negative expenditure” in this Proposed 2010 Budget, as previously noted.
The following expenditure reductions were implemented for 2009, resulting in the above noted budgetary savings of approximately $0.8 million: (a) Elimination of seven full-time and three regular part-time positions; (b) Reductions in Township contributions to several outside agencies; (c) Elimination of separate annual employee physical exams for police officers; (d) Elimination of various consulting services; (e) Combination of the recycling education brochure and refuse collection schedule with the quarterly Information newsletters, elimination of refuse/recycling magnets and underwriting of the newsletters with advertisements; (f) No rate increases for the Township Solicitor, Township Engineer, Township Treasurer and Labor Counsel; (g) Elimination of Township funding for the Historical Architectural Review Board (HARB) and the Environmental Advisory Council (EAC) awards programs; (h) Base wage increases to management and non-union employees at a rate 1% lower than typically provided in comparison to union employees of the Workers Association (WA) and Fraternal Order of Police (FOP); (i) No increase in the longevity schedules for non-contractual employees, in comparison to typically tracking the benefit improvements provided to the WA and the FOP; and (j) Elimination of out-of-state travel in 2009 for professional conferences and seminars, except at the discretion of the Township Manager.
In addition, the refinancing of prior debt in April resulted in total GF cost savings of nearly $1.1 million combined for 2009 and 2010.
For 2010, the following expenditure reduction measures are recommended, and included in this proposed budget:
- Eliminate 4 full-time and 1.5 full-time equivalent (FTE) positions for a total of 5.5 FTE positions eliminated.
- Leave all currently vacant net full-time (10) and regular part-time (5) positions (or 12.2 FTE) unfilled for 2010. Only fill these vacancies upon determination that the core missions and goals of the Township are being compromised.
- Only fill new, upcoming GF-related vacancies during 2010 that are viewed as critical to the core missions and goals of the Township.
- Achieve budgetary savings in usage of miscellaneous materials and supplies, maintenance and repairs and other operating costs.
- Provide no increases in Township contributions to outside non-profit agencies, and no new contributions.
- Provide lower increases (+1% for 2010 compared to +5% for 2009) in Township operating contributions to the six volunteer fire companies.
- Eliminate funding for various consulting and professional services in the operating budget not supported by grant funding, including visioning for the Comprehensive Plan update, master planning for Rolling Hill Park, City Avenue re-zoning, and miscellaneous planning studies.
- For the second year in a row, continue to provide no rate increases for the Township Solicitor, Township Engineer, Township Treasurer and Labor Counsel.
- Reduce by 50% the amount that we would normally contribute to the Equipment Fund for future GF-related vehicle and radio replacement depreciation costs. This will result in $430,000 in reduced GF payments to the Equipment Fund in 2010.
- Implement the employee and retiree healthcare cost containment measures negotiated in the new 3-year FOP labor agreement.
- For the second year in a row, continue to provide base wage increases to non-contractual employees including management at a level lower than what is being provided to comparable union employees. For police management, a +3.2% increase is recommended (compared to the +3.75% increase for the FOP bargaining unit). For all other non-contractual employees including non-police management, a +2.0% increase is recommended (compared to the +4.0% increase for the WA membership).
- For the second year in a row, continue to not provide the improvement to the longevity schedules for management and non-union employees, in comparison to typically tracking the benefits provided to the labor unions.
- For the second year in a row, continue to restrict out-of-state travel for professional conferences and seminars, except at the discretion of the Township Manager.
- Discontinue the deer management program commenced in 2009, resulting in no funding recommended to be budgeted for 2010. The funding allocated during 2009 will allow for phase one of the program to be undertaken as planned during the winter of 2009/2010.
- Continue to delay many capital improvement projects beyond 2010, thus delaying some new debt service expense for 2011.
- In addition, there have been many miscellaneous expenditure reductions and efficiencies accomplished by various departments, including: lower natural gas costs achieved by changing providers; reduced electricity costs due to conversion of street lights to metal halide and traffic signals to LED; reduction of HVAC costs due to an in-house maintenance program; reduced risk management costs due to excellent claims experience, performance dividends and effective employee safety programs; payments for police equipment purchases and training with drug forfeiture funds; reduction in consulting and other professional services costs; leveraging of services from the Township’s healthcare consultant; negotiating low-cost banking relationships; zero cost letters of credits; lower bid prices on the tree removal contract and road salt supply; use of synthetic oils resulting in reduced fleet maintenance costs and extension of vehicle life; lower utilization of the Township Engineer and labor counsel for labor contract negotiations; reduction in DARE program materials; a wellness program resulting in a 2% healthcare premium reduction; increased cost savings from participation in the Township’s employee healthcare opt-out program; elimination of printing and postage costs for quarterly residents’ newsletters due to advertising subsidy; reduced postage for mass mailings that can be accomplished via postcard; use of non-violent County prisoners to perform clean-up at parks and along roadsides; and numerous successful grant applications.
The GF cost savings associated with implementing these expenditure reduction measures and efficiencies for 2010 is estimated to be in the range of $2.4 million, including the budgeted -$1.2 million of budgetary savings. This exceeds the 2009 budgeted expenditure reductions of $2 million which also included a budgeted -$1.2 million in budgetary savings.