Commissioners Grapple With Budgetary Challenges, Reduce Proposed Tax Increase
Five successful motions will reduce the proposed tax increase by at least 2-3 percentage points in 2011.
For the second time this year, a Wednesday night budget hearing ended in the early morning hours of the following day, but this time more than half of a million dollars in changes were made to the 2011 proposal.
The Lower Merion Board of Commissioners held a finance committee meeting and public hearing on the 2011 proposed township budget from 6 p.m. on Dec. 1 to 1:10 p.m. on Dec. 2, more than seven hours with no breaks.
The commissioners voted on 21 motions, almost all intended to lower township expenditures and the need for increased taxes, and made by members of both political parties. Five of the motions passed, likely decreasing the proposed 12.7 percent tax increase by about 2-3 percentage points.
The changes made include: reducing the general fund balance (a reserve of township funds that acts as an emergency surplus) from the proposed 17 percent of 2011 expenditures to 16 percent, changing a free summer playground program to one that has a fee, creating a cap on longevity bonuses for non-contractual workers (money paid to township employees each year based on how long they have worked in Lower Merion) at 20 years, instructing Township Manager Doug Cleland to create a plan to reduce the vehicle fleet for township staff to only those vehicles absolutely necessary and instructing Cleland to create a hypothetical budget for review that would raise taxes 5 percent, as opposed to 12.7 percent.
How Much Money Will Be Saved?
The exact savings of the measures has yet to be calculated, although Lower Merion Chief Financial Officer Dean Dortone said after the meeting that lowering the general fund balance to 16 percent will likely replace about $500,000 to $600,000 of proposed tax increases, roughly equal to two percentage points from the 12.7 proposed. The summer playground program fees will add another $36,218 in township revenue, as reported in a previous Patch article when the commissioners first considered the proposal in November.
The potential savings of the other three successful motions is more difficult to calculate.
The cap on longevity bonuses, which average between $3,000 to $4,000 per year for non-contractual workers – mostly management level employees, will not yield any immediate savings in 2011 because the version of the motion passed allows employees who have already been working for the township for over 20-years to be grandfathered in to the new system.
Commissioner Scott Zelov's motion to ask for a reduction in township staff vehicles – a repeat of a motion that failed at the first public hearing – will result in a plan created by Cleland that can then be accepted or rejected based on the stated impact. Issues related to parking and reimbursement for vehicle use could potentially create more costs than savings, according to some of the commissioners' opinions.
The alternate budget the commissioners asked for will be created for review purposes only, and therefore may not impact the budget that is adopted by the board on Dec. 15, when the final vote is scheduled to take place. Commissioner Cheryl Gelber made the request, which passed narrowly, 7-6, and was supported by Democrats Gelber, Brian Gordon, and Steven Lindner, as well as all four Republicans Zelov, Jenny Brown, Philip Rosenzweig and Lewis Gould. Commissioner Jane Dellheim attended part of the meeting but left early. Dellheim has been absent at several recent board meetings for medical reasons.
Who Voted for What?
The votes on each of the motions, which were often split on party lines at the first public budget hearing, were more varied on Dec. 1.
Commissioners Brown, Zelov, Gould and Rosenzweig voted in favor of nearly every proposal for spending cuts, and Commissioners Mark Taylor, Liz Rogan, Paul McElhaney and Board President Bruce Reed voted against nearly all, for a variety of reasons. Commissioners Gelber and Gordon often joined the board's minority, and Commissioners Lindner, Rick Churchill and George Manos cast decisive swing votes on the motions that passed.
Gelber, Gordon and Manos joined the four Republicans in supporting the fund balance reduction, which passed 7-6. The summer playground program fees passed with the largest majority, 10-3. Reed, Taylor and Rogan were against.
Commissioner Gould first proposed altering longevity bonuses in a motion that would eliminate all longevity bonus payments for non-contractual employees, a total cost of $409,000 per year, according to Dortone. That motion was rejected along party lines. An alternate motion was made by Gelber to lower the current cap – set at 25 years for some employees and 35 years for others – to 20 years. Only Gelber and Gordon joined the Republicans on the vote, resulting in a 7-6 failure. Taylor then proposed a version that allowed employees over the new cap to be grandfathered in, which passed 9-4 – Taylor, Gelber, Gordon, Churchill and McElhaney all voted in favor, as did Brown, Zelov, Gould and Rosenzweig.
Along with the bipartisan passage of five of the 21 motions, a higher percentage of proposals at the second budget hearing garnered Republican and Democratic support than at the first, in which six of 11 motions ended in votes split along party lines. At the Dec. 1 hearing, six out of 21 motions failed on party lines, but the rest included support or opposition from members of both political parties.
What Proposals Were Rejected?
Despite the increase in bipartisan voting, 15 motions failed at the meeting. Most were made by the board's Republican members, and were intended to reduce costs in a variety of ways.
Commissioner Rosenzweig made eight motions that failed. His suggestions focused on reducing benefit payments for non-contractual workers, the only group of township employees that are not unionized and do not have protections against benefits changes without negotiation. Rosenzweig suggested freezing non-contractual employees salaries over two years – they are already budgeted to receive no salary increase in 2011 – require non-contractual employees to pay anywhere between 10 percent to one-third of their healthcare costs, or to instruct the township manager to reduce healthcare costs for non-contractual employees by 20 percent by increasing deductibles, premiums and others measures.
All of the motions failed with varying degrees of support. Rosenzweig and his Republican colleagues said that they viewed benefit payments in Lower Merion to be out of sync with what is seen in the private sector, and finding cost savings among the employees with malleable contracts would be a prudent start to cost control.
"One group must go first," Zelov said. "It's not budgeting the balance on the backs of a few employees, it's doing what needs to be done to lower costs and making progress toward reducing the cost of the benefits of all employees."
Commissions Taylor, Reed and Manos disagreed with the characterization. Reed and Taylor warned that make benefits changes for non-contractual employees would damage the township's fragile contract negotiations with the workers' union employees, whose contracts are set to expire at the end of this year.
Both Taylor and Manos said they felt it was inappropriate to target a small portion of the workforce to get the desired cost savings – the township has about 100 non-contractual employees.
"No one likes tax increases, but we're charged with balancing the economic burden of the community with the services and amenities we have to provide," Taylor said after the meeting. "We have to fix roads, provide police and fire protection, fix storm water drains and sewers and keep our buildings in good repair. We have to make difficult choices balancing the competing needs of the community, and we have to do so in a way that is equitable."
Most of the other rejected motions included earlier versions of motions that were later successful when tweaked, motions that were also rejected at the first hearing and unpopular proposals, including Gelber's motion to have township libraries stay open for 5-days a week instead of seven, with the exception of Ludington and Bala Cynwyd libraries, and Taylor's motion to approve the township's $28.3 million capital improvement program after 1 a.m., which was deemed too late for the commissioners' to properly consider.
When Seven Hours Isn't Long Enough
Despite the length of both of the budget hearings, the majority of the commissioners felt that more time was needed to continue to budget discussions before a final vote is taken at the Wednesday, Dec. 15 meeting.
The commissioners decided to schedule a finance committee meeting for Wednesday, Dec. 8 to continue their discussion, particularly of the capital improvement projects proposed for the next five years.