YARDLEY BOROUGH >> The Yardley Borough Council on Dec. 15 voted 6 to 1 to approve a final budget for 2021 that includes a four mill tax increase, part of which is needed to shore up a deficit created by the pandemic.
Prior to the vote, borough manager Paula Johnson briefed council on the final budget, which hasn’t changed significantly from a preliminary spending plan adopted by council in November.
“2020 brought a lot of unexpected financial challenges to Yardley Borough with the onset of the pandemic,” said Johnson. “The pandemic caused a revenue deficit of $54,000.”
Johnson said revenue is down across the board from real estate transfer taxes, fines and violations, special police services, building permit fees and contributions from private sectors.
“As a result we had to defer expenses that were budgeted in 2020 to 2021, including the roof on the annex building, replacement of doors at borough hall, additional maintenance and upkeep of Borough Hall, the Mary Yardley Footbridge replacement project and a new police car.
“We also anticipated transferring about $37,000 to our emergency fund, which we highly recommended not doing because of the deficit,” said Johnson.
To make up the deficit and to build-up the borough’s capital reserve fund, the budget includes an increase of four additional mills for 2021, with two mills going into the general fund, which supports day-to-day operations, including police, administration, legal, zoning and planning and public works, and two mills, or about $70,000, allocated to its capital reserve fund for future projects.
The increase would boost millage rates in the borough from 24.73 to 28.73 mills with each mill equating to $35,004.
That would mean a resident with a property assessed at the borough’s average of $27,644 would see their municipal taxes increase by $110.57, from $683.64 to $794.21.
Of the 28.73 mills, equalling just over $1,005,000, 22.66 mills are earmarked for general purposes with the remaining 6.07 mills allocated toward dedicated funds, including fire protection, street improvements, street lighting, ambulance and rescue squad, recreation and capital reserve with the new two mills.
“Focusing on the future and key projects, this tax increase will enable us to deliver on some high priority community initiatives while driving continued improvements to our services, one being the Mary Yardley footbridge,” said Johnson. “We continue to apply for grants to complete the North Main Street sidewalk, some of which have required matches from the borough. Acquiring the PECO lot in Morgan Avenue would increase our open space benefiting our CRS program and minimizing new construction in the floodplain.
“Looking beyond 2021 we would like to complete the North Main Street sidewalk to Dolington Road and continue to look for ways to expand and upgrade borough hall,” said Johnson.
Yardley Borough residents have not seen a municipal tax increase since 2017.
“While it’s not ideal, particularly the timing, it’s important for two reasons,” said Councilman Matt Curtin of the tax increase. “The two mills to the general fund supports our ability not only to break even, but to address some of our historical maintenance and necessary expenses that have been ignored. And the two mills to the capital fund puts us in a position where we will have reserves to do a lot of the long term projects that are necessary.”
Councilman Uri Feiner said he likes the “balance” that the budget strikes between addressing long term maintenance and capital issues and raising taxes.
“That said, nobody wants a tax increase during a pandemic. I’m sure everyone on council feels that way, but you get to a point where there is no other option,” he said. “Given that, this is the responsible thing to do. It would be easy to kick the can down the road, but that wouldn’t be right. It would cost us in the future.”
Councilman John McCann, who voted against the spending plan, commended the administration and council’s general government committee for the work they put into the budget.
“Philosophically I am not anti-tax,” he said. “I know it’s important to raise taxes incrementally over the years to cover the cost of salaries and all the things we find important in the borough. I agree with that principally. But for me the timing is tough. It is a global pandemic. There are people in the borough who are struggling. It’s a regressive tax. Those things for me weigh into my vote.
“I support all the capital projects. I think they are all important,” McCann said of the projects outlined in the spending plan. “I’d like to see us use the line of credit more fully,” he added, referencing a line of credit the borough has with the First National Bank of Newtown.
“If we’re going to raise taxes, perhaps this is the time to get rid of the per capita tax,” he continued. “The occupation tax is cumbersome to collect. Maybe people would be willing to support this if that were on the table.”
Councilwoman Caroline Thompson, who chairs the council’s general government committee, defended the budget and the tax increase.
“This tax increase was expected even before the pandemic hit,” she said. “If you saw our presentation last year we had a projected net income in 2020 of $400. We cannot move into a new year with cost of living increases when we only projected a net income of $400. We need to cover those cost of living increases, cover the deficit we have this year and plan for the future.
“This budget accomplished something that Yardley Borough has fallen short in doing in previous administrations and that is planning, planning, planning and saving, saving, saving,” said Thompson. “We are doing that in this budget and we also hope not to raise taxes every year. So this tax increase should cover us for some time so we don’t have to break your heart again next year right before the holidays.”
Regarding the line of credit, Thompson said the borough does not anticipate using all of it. “And we certainly did not secure it to help balance our checkbook and pay routine bills.
“The capital projects aren’t built into this budget,” she said. “We do plan to use that line of credit, but we do have to pay it back. That means we have to have the means to pay it back within our revenue stream. This budget helps us accomplish that,” she said.
Council President David Bria said while he understands the difficulty in approving a tax increase in the current economic climate, he noted, “this was something we discussed a year ago. But what I really return to is that every time I go through this budget, I get to the end not having found those magic numbers. This budget is tight. There is no waste in it.
“Everyone who has worked on it has done a good job keeping expenses in check while also planning ... In my opinion if we were to look at no tax increase I don’t know how we would balance it on the expense end,” he said.
During public comment, resident David Appelbaum commended the borough on a “fantastic job of putting this budget together.
“The comment from Councilwoman Thompson about breaking our hearts, I’d like to say that my heart is not broken,” he said. “The people involved have done a fantastic job and if this is what we need to do to get by through this next year then it has to be done.”
Resident Don Carlson, who reviewed the budget line item by line item, suggested a two mill increase instead, which he said would cover expenses and fund a few capital projects.
“I’m not a person who says we shouldn’t raise taxes, but I think we need to look at how the budget was built and the numbers that are in there,” he said. “And I believe in looking at it there’s a lot of conservative numbers.”
Carlson pointed to the real estate transfer tax as an example. “The budget for this year was $91,000,” he said. “Through November we’re at $84,900. And if December winds up like November you’ll end the year with transfer tax revenues at $94,000, which is $3,000 higher than budget. Next year, it has been dropped down to $77,300, an 18 percent drop in expected revenue from real estate transfers. With interest rates being so low the real estate market is booming and there’s no reason to think it’s going to be lower than this year.
“If you budgeted next year’s real estate transfer at this year’s actual that would be over $20,000, which is .6 of a mill right there,” said Carlson. “That’s not taking any hardship away from anybody. It’s just being not so conservative on the budget.”
Carlson said he believes the borough needs at least a mill for general expenses. “But doing all two mills at once in the capital budget seems like a big bite - an eight percent increase just for the capital. A more conservative approach would be a two mill increase. You can balance the budget with a two mill increase. Just making that change in transfer tax almost does it,” he said