Board approves $11M budget, debates selling easement rights
NEWTOWN TOWNSHIP - In a 3-2 vote, the Board of Supervisors approved the $11,011,577 general fund budget for the 2013 fiscal year beginning -an. 1 that holds the line on taxes while maintaining township services at current levels.
However, the debate continues on whether to sell landeasement rights under the privately-owned cell phone tower on township land at the municipal complex on Durham Road.
At the Dec. 19 meeting, Supervisors Rob Ciervo and Philip Calabro were the dissenting votes on the budget.
Both questioned whether the projected one-time payment of $550,000 to the township for the land easement for the life of the cell tower trumps getting the annual $42,000 rental fee that American Tower Corp., which owns the structure, now pays Newtown to lease the land.
“I’m concerned about (the $550,000 figure) being in the budget,” Ciervo said, “I don’t know what the easement is valued at.”
“If we keep this for 15 years, then we get $640,000 Ein rent),” he added.
The proposed sale of the land easement, along with a projected $230,000 balance at the end of the 2013 fiscal year would bring the general fund reserve to roughly $780,000, which is then carried over into the 2014 budget year.
That reserve, which is known as the ‘fund balance forward,’ would represent more than 7.5 percent of the 2013 general fund, and is considered an appropriate budgetary safety net by township officials.
“This is not right, the only reason Ethe land easement sale) is in the budget is to bring Ethe reserve) up to 7.5 percent,” declared Calabro. “We’re going to pass the budget without a figure we don’t have proof of yet.”
“In the past figures have been juiced up to have the budget balanced,” Calabro said. “If you’re going to sell assets to survive it’s the wrong thing to do.”
But the sale of the township land easement is not a forgone conclusion, and the supervisors still would have to approve it in the coming fiscal year.
“Is $550,000 a fair value? I don’t know,” Supervisor Ryan Gallagher interjected. “The deal is not signed, we might have another buyer coming in at more money.”
Meanwhile, Vice Chairman Matt Benchener supported the proposed sale, noting the corporations often sell assets to balance their books.
“We weathered a unique time in American financial history and Newtown Township financial history,” Benchener said of the 2008 economic downturn. “Selling the easement puts us on the right path.”
All three of the residents who addressed the budget in the public comment part Wednesday’s meeting, which lasted more than threeand-a-half hours, also questioned the benefit of selling the cell tower land easement.
-ay Sensibaugh of Newtown Crossing told the supervisors that it was “a bad idea” to sell the easement for a one-time cash payment.
Oscar Szigeti agreed, saying that the true value of the property should be ascertained.
“Perhaps it can be worth a lot more staying with us,” he noted.
In a prepared statement, township resident -ennifer Dix argued that the 2013 budget resorts to “selling off an asset just to stay afloat.”
“This asset was earning about an eightpercent return each year, and now at best, that money will be in a bank account earning a fraction of that,” she asserted.
According to Dix, for the past five years the supervisors have been outspending revenues.
“Without selling off this asset we would be deficit spending yet again in 2013,” she claimed.
But Supervisor Ryan Gallagher said that Newtown is suffering through the same economic hard times plaguing other municipalities, and that the easement sale is only an option at this point.
“Some Esupervisors) make it sound like a stop gap measure,” he said. “We can talk about it next year, but right now we have to pass a budget.”
revenue projections for the coming fiscal year are slightly better than originally thought when the budget was first presented on Nov. 14.
In the 2013 budget, the township’s Earned Income Tax EEIT) and the real estate transfer tax are anticipated to bring in a total of roughly $40,000 in increased monies than first estimated.
The real estate transfer tax revenues for the coming fiscal year are now projected to be $550,000, up from the $535,000 estimate when the preliminary budget was unveiled.
In addition, the EIT revenues for next year are now pegged at $5,300,000, higher than the $5,275,000 first estimate in November. More than half of the Newtown’s budget comes from the Earned Income Tax that residents and non-residents who work in the township pay.
The new budget, which is 1.26 percent higher than the 2012 fiscal package, also allocates $30,000 for a new police car, providing the money is available early next year from the anticipated higher tax receipts.
As in many municipalities, Newtown’s police department receives the lion’s share of funding. Nearly 40 percent of the township’s budget, about $4.2 million, is earmarked for police services, more than half of which will go towards officers’ salaries.
According to Township Manager Kurt )erguson, the proposed budget also has been adjusted to include the recent raises in union contracts: 3.5 percent for police, three percent for emergency services and two percent for the township’s unionized support staff.
)erguson also noted that the finance director’s position will not be filled in the coming fiscal year, saving the township more than a hundred thousand dollars in salary and benefits. The duties now will be split between the existing administrative staff as well as the township manager.
4uestions also arose about the $112,500 allocated tin the budget to the local ambulance squad.
“Can you explain why we keep on giving this organization so much money,” Calabro asked.
Although the funding was approved, several supervisors requested that the township will meet with the rescue squad to ascertain how the money is being spent, and how much it will actually need in the future.
8nlike many other municipalities, Newtown’s general fund is not financed by real estate taxes. cor the last 17 years, property taxes have only been used to support the debt service and fire protection funds, which are separate from the general fund which handles day-to-day township operations.
In the 2013 budget about $805,000, 2.5 mils, is anticipated from real estate taxes.
The supervisors also unanimously approved resolutions formally adopting that millage rate, as well as the 2013 pay scale for the township’s uniformed and non-uniformed employees.
In other action, the board voted 5-0 to no longer extend partial retirement health benefits to future township employees who are not covered by collective bargaining agreements.
The issue arose because four past retirees are receiving lifetime partial health care benefits that were approve by a former township manager without express consent from the supervisors.
“You don’t continue on with something that was approved by a past manager in error,” Ciervo explained.
The change does not affect those retirees already receiving the benefits.
The supervisors have scheduled a -an. 7 reorganization meeting with a public work session slated for gan. 9.