Budget moves ahead

Taxes level, but officials warn subject must be revisited in 2018

The 2018 budget for North Wales Borough is moving ahead, after several changes were discussed at length by borough council Tuesday night.

Taxes will stay level for another year, but borough officials warned a conversation about raising rates will need to happen again a year from now.

“We need to really mind our P’s and Q’s, if you will,” said Councilman Mark Tarlecki.

“We always have. We did the tax increase last year, and that was for the hiring of a new (police) officer, but in order to sustain, we have to stay very close to what we have budgeted,” Borough Manager Christine Hart replied.

Talks started earlier this month on a proposed

2018 budget with expenses of roughly $2.089 million, roughly $2 million in estimated revenues, and a gap between the two that will largely be made up by using funds left unspent in 2017. Several changes have been made since a first draft of the budget was discussed two weeks ago, and council spent much of Tuesday night going over those changes.

The borough’s police department has increased their budget for police clerical work from $15,000 to $24,900 due to a request from Police Chief Don Fantry to hike staff time from 20 to 30 hours per week, according to Hart. Other police contracted services were originally budgeted at $7,500 in 2017 and slated to drop below $1,000 in 2018, but the 2018 amount has been restored to $7,500 since a new Montgomery County records system will be enacted that police will need to learn how to use.

“There will be contracted services and professional services to install that, and training and so forth,” Hart said.

“We are a test site, and will be one of the first in the county, so it’s essentially a free asset for us, because we are lacking a record management system,” she said.

Another increased expense from earlier drafts of the budget is an increase in the contracted services line item for tree removal at borough parks, due to the expected damage from the emerald ash borer and spotted lanternfly. The 2017 budget included $2,000 for that purpose, but just shy of $3,700 was ultimately spent, so the budgeted amount in 2018 was increased to $10,000. An additional Parks-related increase will be on the line item for park supplies, where $1,000 was budgeted in 2017, but members of the borough parks board have asked for much more to tackle several needed repairs and maintenance projects in multiple parks — $5,000 is now included in the draft budget, which will be transferred from the borough’s recycling fund reserves.

After the changes to the draft budget were outlined, Tarlecki asked if staff had done nay long term projections of revenues over the next three to five years, and the impact of new development on the borough’s bottom line.

Hart said staff have started to look into that topic, and warned that the bottom line impact of new development will be minimal, even in a relatively small borough: seven new houses have been approved over the past year, but only two have been finished and begun paying taxes, therefore increasing the total assessed value of borough properties.

“We only saw a slight increase of about $400,000 on our assessed valuation, which means a couple thousand in tax dollars. That’s not much, not even for us,” Hart said.

Annual salary increases are typically budgeted at between two and three percent, Hart told council, and revenue from earned income taxes has decreased slightly in recent years, while real estate tax revenue has remained level.

Could that combination of flat revenues and rising expenses make another tax increase necessary? Tarlecki asked, and Hart’s answer was not optimistic.

“I would say that’s more than a possibility — the tax base is, unfortunately, what we rely on,” she said.

In the first quarter of 2018, Hart said, she will encourage council to consider a long term borrowing of a bond or loan to fund infrastructure projects and capital purchases, and at that time she expects to hold a deeper conversation about the town’s long term financial picture.

“In February through April, we’ll discuss things more at length, and then we’ll devise a plan where we decide how much (debt) we can sustain,” she said.

Council voted unanimously Tuesday night to advertise the 2018 budget for public comment and feedback, and final adoption could take place when council next meets at 7 p.m. on Dec. 12. That meeting will be held at the borough municipal building, 300 School St.

“We only saw a slight increase of about $400,000 on our assessed valuation, which means a couple thousand in tax dollars. That’s not much, not even for us.”