For the third year in a row, the proposed budget for Lower Merion Township for 2014 does not include a tax rate increase.
If passed, the township’s millage rate will remain at 4.19 as it has remained for the past three years.
In a press release the Township writes: “Better than anticipated business performance across all sectors, and the accompanying additional business tax revenue, is a key factor in the Township outperforming the 2013 General Fund (GF) Budget – revenues are estimated +4.8 percent for 2013. In addition, estimated 2013 expenditures are down -3.3 percent from the 2013 Budget. (The 2013 revenue estimate exceeds expenditures by approximately $1.4 million.) “
That’s a lot of government speak for increased revenues from business taxes led to an expected $1.4 million surplus.
Revenues for the township increased 4.8 percent in 2013, while costs fell 3.3 percent.
The increase in revenue can also be attributed to an increase in real estate transfer taxes, meaning that more homes sold in the township in 2013 than was expected.
What follows is the full report from Township Manager Doug Cleland as to why no tax increase is recommended.
Cost Containment: 2013 has been another fiscally strong performance year for the Township. Instead of the nearly -$3.2 million deficit, a projected operating GF surplus of +$1.4 million is anticipated. This is being accomplished through $1.9 million in additional budgetary savings (above the nearly -$0.7 million savings budgeted as a negative appropriation), and $2.6 million in additional revenue referenced above. Likewise, the Township’s Proposed 2014 Budget is lean, and contains many additional expenditure savings and reductions.
Continued cost containment efforts throughout the budget have been realized and are continuing; In fact, after implementing dozens of expenditure reduction measures since the economic downturn began in 2008, more than $9 million in GF cost savings or avoidance have been realized. Service delivery levels have remained moderately constrained and stable.
Stabilized General Fund Revenue: General Fund revenue continued to grow in some key areas, such as the real estate transfer tax and business taxes. “This is clearly one of our strengths, and it continues the trend experienced in recent years,” said Dean Dortone, Chief Financial Officer. “Moderate growth is expected to continue in 2014 and beyond.”
Staffing Levels: The Township was financially able to fill many staffing vacancies in 2013 as they suited operational needs in various departments. However, some staffing vacancies have remained unfilled during recent years, and many other vacant positions have been eliminated from the budget.
Drawdown of Fund Balance: The Proposed 2014 Budget calls for the 2014 ending GF fund balance to fall to approximately 28% of 2014 expenditures, above the Township’s 15% to 18% policy level.
“As with recent years’ budgets, major GF spending categories remain the cost of our employees and debt service for our capital improvement program,” noted Cleland. “In fact, over 40% of the proposed 2014 GF budget is for public safety—which is clearly one of the most important priorities for the Township.”
A rate increase of approximately +5.4%, across the board was adopted by the Board in October for the Township’s 2014 residential Solid Waste Fee (SWF) subscriptions. The rear yard collection fee will increase to $210 (from $200). The primary reason for the increases has been the recent volatile resale market for recycled materials – creating unfavorable revenue performance on the resale of mixed paper and increasing costs for the disposal of commingled recyclables. The combination of decreased revenues, higher recycling disposal costs, and flat to minimally declining customer subscriptions created the need for new net revenue to balance operating revenues and expenditures for solid waste in 2014.
“We have not only carefully evaluated and implemented additional cost reduction and containment opportunities in our operating budget, but have closely monitored the Township’s spending strategies in our six-year Capital Improvement Program (CIP),” added Dortone. “We borrowed $10 million of new money in 2013 at historically low interest rates to fund the 2013 CIP, and anticipate another $10 million in new money borrowings for 2014. This is where our blue-chip, double triple-A credit ratings serve the Township so well.”
“Lower Merion continues to be an exemplary Township in terms of its fiscal leadership and thoroughly professional staff,” said Board of Commissioners Vice-President Paul McElhaney, Finance Committee Chair. “This leads to Township businesses that thrive, home values that remain robust even through difficult times, and an atmosphere of confidence among our residents that our financial house is in order.”
The budget message includes an updated Five Year Forecast, a history of the Township’s Real Estate Tax and alternative revenue measures and other background information and data.
“Once again, I applaud Manager Cleland’s 2014 Proposed Budget, which for the third straight year attains the goal of a zero percent tax increase for the residents of Lower Merion Township,” stated Elizabeth Rogan, Board President. “As he oversees his final Budget before retirement at the end of January, it’s more evident than ever that his financial management expertise and consistent, even-handed stewardship for more than 20 years has been a crucial component to the Township’s long string of remarkable budgetary successes. Combined with the terrific performance of a reduced Township staff that we have come to expect, the highest quality of services and programs to our citizens has been maintained.”
The first Public Hearing on the 2014 Proposed Budget will take place on Wednesday, November 20th at approximately 8:00 p.m., and the second Public Hearing will be held on Wednesday, December 4th at approximately 6:30 p.m. in the Board Room of the Township Administration Building. The 2014 Proposed Budget and six-year Capital Improvement Program for 2014—2019 are scheduled for adoption on December 20th.
“As with past Budget hearings, I hope our citizens will participate in the upcoming public hearings,” added President Rogan. “Their input is vitally important to our Board deliberations.”
The 2014 Proposed Budget can be accessed directly from the home page of www.lowermerion.org. Citizens unable to participate in the public hearing process are invited to e-mail firstname.lastname@example.org to provide feedback.