NEWTOWN TOWNSHIP >> Without much debate, the board of supervisors approved the $13,081,611 final general fund operating budget for the 2020 fiscal year beginning Jan. 1.
The fiscal package, which was passed by a 5-0 vote at the Dec. 11 supervisors’ meeting, includes no property or other tax hikes even though anticipated real estate transfer tax collections are expected to drop in the coming fiscal year, as well as some other revenues.
It also has funds to hire an extra police officer, as well as other capital spending, and pretty much mirrors the preliminary budget which was approved last month.
Voting to formerly adopt the 2020 final budget were: Chairman Phil Calabro, along with Supervisors John Mack, Linda Bobrin, Dennis Fisher and Kyle Davis.
State law mandates that a final operating budget has to be in place no later than Jan. 1 and that it must be balanced.
At a budget briefing in October, township manager Micah Lewis had told the supervisors that real estate transfer taxes have “decreased drastically this year” down to an estimated $750,000 by year’s end, and are still expected to be lower than originally projected in 2020.
As a result, Lewis had dropped the anticipated real estate transfer tax revenues next year from $800,000 to $750,000, the second year in a row that these collections have dipped.
“This figure and its impact on the budget is consistent with the volatile nature of revenue in the budget,” he had explained at the budget briefing, “Factors beyond our control can affect a decline in real estate transfer taxes such as diminishing supply, rising costs, increased interest rates and many other things.”
Another key tax revenue is also on the decline.
Because surrounding municipalities have enacted Earned Income Taxes (EIT), such as Middletown and Bensalem Townships, Newtown Township’s tax coffers have taken a hit because these non-resident tax revenues are instead going to the employees’ home municipalities.
The EIT is by far the largest revenue generator in the operating budget and is collected on the wages of residents, whether they work in or outside the township, as well as those non-residents who are have jobs in Newtown Township.
This tax accounts for more than half of all Newtown’s revenue collections in the general fund operating budget.
Under revised estimates, the non-resident EIT is now expected to generate about $2,050,000 in 2020, down from the original forecast of $2,125,000.
For 2019, non-resident earned income tax receipts, which were anticipated at $2,078,500 by this year’s end, will instead be around $2,000,000, according to Lewis.
Despite the dip in both the EIT and real estate transfer tax, in the final budget Newtown will still end the 2019 fiscal year on Dec. 31 with a healthy estimated surplus of about $2,372,029.
However, this surplus, known as the general fund balance forward, is also on the down swing.
For the end of the 2020 budget year it’s projected to be much less, about $1,322,287, a figure still at the recommended minimum level to maintain a good municipal bond rating.
According to Lewis, this barely healthy surplus is expected to drop even more over the next few years, resulting in the township to “significantly cut back expenditures in the proposed 2020 budget to offset the projected shortfalls” in the future.
In addition, the township is running into a budget shortfall on debt service to pay off its outstanding bonds.
A recent bond refinancing with TD Bank has allowed the township to make payments without a tax increase. But Lewis had told the board at the October budget briefing that the township’s current millage rate doesn’t adequately cover future bond payments.
While these payments are enough for the 2020 fiscal year, the debt service fund eventually will fall short by about $100,000, so a small property tax hike might be needed in the coming years, according to the township manager.
Lewis had also acknowledged that the fire tax millage, which is also paid by property owners, might have to be increased in 2021 to offset expenditures to continue to fund fire and emergency service operations at the current levels.
Although the township generates most of its tax revenue from the one-percent EIT, it also currently imposes 4.5 mills on property owners.
One mill equals about $345,000 in revenue.
In 2019, land owners with homes assessed at the township average of $400,000 paid roughly $196, and will pay about the same amount next fiscal year.
Also at the meeting, in a routine 5-0 vote the supervisors approved the 4.5-mill property tax rate to stay in affect for the coming fiscal year, as required by state law in order to continue to collect these monies.
With the revenue shortfall, Lewis has said that capital spending in 2020 will be “dramatically less than in the previous years,” and that he has dropped plans to add any township employees.
Currently, the township has 65 full-time workers and four part-time employees.
The final budget calls for about $171,000 in capital spending for the police department, which will allow the township to hire one more officer, as well as purchase two new motorcycles, five new ballistic vests and three new Tasers®.
Public works is slated to receive about $48,000 in capital spending which will purchase a new Ford F-550 utility vehicle for road and inlet repairs, as well as new dump trailer and a milling head.
The technology department sill see $5,000 for new computers, $12,500 for police evidence server and $2,000 for audio-visual booth to broadcast township meetings.
Newtown Township’s emergency service will get a new quick response Ford Expedition.
In addition, $50,000 will be spent on renovations of police headquarters, and $20,000 for a new police department air-conditioning unit. Total new capital spending to upgrade buildings and facilities is about $85,000.
The parks and recreation department will also be allocated $5,000 to plant new trees at Clark Nature Center in response to the emerald ash borer disease, and another $20,000 for new fences at the Helen Randle Park ball field.
As with most municipalities, running the police department takes up the lion’s share of Newtown Township’s general fund operating budget.
In 2020, nearly $5.4-million will be allocated for township police services, with more than $3.5-million of that going towards the salaries of the 26 full-time officers, the police chief, two lieutenants and four civilian staff members. The township does not use part-time officers.
The next biggest expenditure in 2020 will be the public works department which is slated to get around $1.6-million.
That money will be used for snow and ice removal, repairing traffic signals and signs, as well as cleaning and fixing storm sewers and drains.
Emergency services is budgeted at a little more than $1-million. There are eight paid full-time firefighters and a chief who are on duty from 6:00 a.m. to 6:00 p.m. Mondays through Fridays. During the other times, the all-volunteer Newtown Fire Association covers the township.
Parks and recreation will receive about $770,000 in 2020, with a good portion of that amount going towards township recreation programs.
A healthy resurfacing schedule will continue on the 71.3 miles of township-owned roads in the coming fiscal year. Twenty-four township roads covering roughly 5.52 miles are slated for repaving at a cost of about $1.7-million, most of that amount will be taken out in a loan.
From 2017 thorough 2020 the road program will have paved 16.53 miles, averaging a little more than four miles in each of those years.
Extension of the township’s trails is also on the list for the coming fiscal year, now that Newtown will be receiving $375,000 in state grants for the planned Lower Dolington Trail.
Pennsylvania Department of Community and Economic Development (DCED) grant accounts for most of the funding.
The supervisors have already approved the DCED contract to start construction of the trail, which must begin within two years, according to the terms of the grant.
The township has allocated about $145,000 in local funding next year for this project which will be a one-mile, 10-foot-wide multi-use trail which will run from Frost Lane to Upper Silver Lake Road. It would have pedestrian crossings and several stop signs along the way to make it more of a safer route.
To help the township plan its financial future goals, the 2020 budget contains $40,000 to have a detailed fiscal study prepared.
It will enable the township develop comprehensive multi-year plans, as well as establish short-and-long term budgetary objectives and strategies over the next five-to-10 years, which are expected to have revenue shortfalls.
Earlier this year the DCED had awarded the township a $40,000 matching grant to pay for these economic reports.
Once the study is undertaken, it is expected to take eight-to-10 weeks to complete. The supervisors have said they hope to hire a consultant within the next few weeks.
In other action, although the township manager is not slated to receive any salary increase in the 2020 fiscal year, the supervisors unanimously voted to give Micah Lewis a one-time $5,000 pay raise, noting his “professional” service to the township in the year-and-a-half that he has held the manager’s job.
Last meeting for Linda Bobrin
The Dec. 11 meeting was also the last one for Supervisor Linda Bobrin, a Democrat, who successfully ran for Bucks County Register of Wills in November.
“This has been a real education,” Bobrin said of her one year as township supervisor, “I’m sad that I have to leave, but I’m glad for the experience that I have gotten here.”
In her brief remarks, Bobrin thanked fellow supervisors, as well as other township officials for helping her during her time on the board.
“I’m sad to see someone leave,” commented Chairman Phil Calabro, “It’s sad to replace you because you have been an asset to this board.”
Under state law, a new supervisor must be appointed within 30 days after Bobrin formally submits her resignation.
Because the board has passed the final 2020 budget there is no need for the tentatively scheduled Dec. 26 supervisors’ meeting, which now has been canceled.
The 2020 final budget is available on the Newtown Township building at 100 Municipal Drive during normal business hours, or on the township website at: http://www.newtownpa.gov/newtown-township-finance-department/