Manager: Finances ‘pretty solid’

With September rapidly approaching, talks on Lansdale Borough’s 2019 budget are now just around the corner.

Internal budget discussions have already begun, borough Manager John Ernst announced last week, and the public will start to see the town’s upcoming financial picture next month.

“All departments’ budgets were due to me today, so hopefully by next week or so, we’ll have our first draft,” said Ernst.

“I plan on making a presentation to council, and the public, in the September business meeting,

on the 19th: a ‘state of the borough’ presentation on the budget,” he said.

Each year borough staff typically begin public discussions on the next year’s budget in September, by focusing on planned expenditures, with revenues discussed the next month, and the full budget picture in November as a first draft is advertised, then adopted in December. In 2017, the budget process ran later than usual, as council was forced to call a special meeting on Dec. 31 to override a veto by then-Mayor Andy Szekely of a tax increase included in that budget.

Ernst told council’s administration and finance committee last week that the same timeline will likely be followed this year, but his first budget presentation since taking over as manager at the end of 2017 will have a different look than in prior years.

“We’re planning on doing it very similarly to some of the dashboards we’ve seen with our IT department, so it becomes a budgeting dashboard, and you can see pie charts and click on different categories,” he said.

“I will tell you, we’re looking pretty solid going into 2019,” Ernst said.

A particular focus of the

2019 budget presentation will be capital projects, both currently underway and scheduled for future years, so residents can see what road repairs and large infrastructure like electric transformers are scheduled for upgrades, and council can see how much those projects will cost.

“We’ll let you know what we have on the list, some of our expenses, some of our revenues,” said Ernst.

Councilman Leon Angelichio, chairman of the administration and finance committee, said he was interested in the capital project information because increases in interest rates at a national level could produce higher borrowing costs for Lansdale.

“My personal fear is that, as we look at a lot of the capital projects we are going to do, it is starting to get prohibitively expensive to the borough. Borrowing is starting to get rough,” he said.

Ernst said the rising interest costs are not the only cost the borough would have to consider.

“It’s also getting prohibitively expensive to get the work done, because bidding prices are going up, costs of construction are going up, delays in construction are costing money,” he said.

Also included in the budget presentation will be a snapshot of grant applications the borough has submitted in recent years, those approved by various state agencies, and the local matching funds needed.

“That will be part of our conversation. We’ve approved 20 grant (applications) over the last couple of years, and each grant has a match, so suddenly we’re on the hook for $5 million,” Ernst said.

Staff could recommend that council slow down on pursuing outside grants,

Ernst told the committee, since focusing on grant funds could cause borough staff to slow work on other ongoing projects to hit deadlines for new grant applications.

“What tends to happen is that, when you are working with five or six or eight different grant projects, you suddenly come to a grinding halt, because somebody waved this flag that says ‘Hey, there’s this grant here,’” he said.

“Resources, in terms of staff and administrative time, are redirected to make some deadline for some agency who has $500,000 they’re waving at you, and with a 50 percent match, we end up potentially having to come up with $250,000 on some project,” Ernst said.

Chris Kunkel, the borough’s Manager of Code Enforcement and Community Development, said his department is using new technology tools to develop long range project plans that should provide a clearer picture of what grants and other funding sources to focus on.

“We’ve made that shift, and we have our planning for five years out now. We’ve

already begun the process of designing projects for next year, and what’s happened is that grant opportunities pop up, and we can say ‘This is a perfect for that,’” he said.

“Whether the number of grants goes up or down, the amount of revenue we capture goes up or down, we can guarantee it’s going to be much more efficiently used, a much better bang for our buck, the way we’re managing them now,” Kunkel said.

Finance Director John Ramey also gave an update on the borough’s 2018 budget, and said so far revenues and expenditures are both roughly ten percent above their levels at the same time last year. Engineering costs have gone up over prior years due to large construction projects within the town, but should be offset by developer charges, and the biggest unexpected expense so far in 2018 was for winter snow removal.

“This year, between salt, overtime for Public Works employees, and contracted snow removal because we can’t handle it all, we actually spent almost $103,000 more than last year, because of all the little oneinch

storms that required salt,” Ramey said.

“Budget-wise, we’re definitely over budget already, and that’s with October, November and December — you never know what’s going to happen,” he said.

Each year’s budget line items for snow plow time and salt purchases are calculated based on a rolling five-year average, Ramey said, so a year full of snowstorms will lead to an increase in the projections for next year.

“Over the span of that time, usually there’s going to be one year that’s going to be an anomaly, so hopefully this year and the next couple of years will balance that out,” Ramey said.

Angelichio said he thought the rolling projections of snow costs made sense, since the amounts of snow, and the costs to remove it, can vary so widely each year.

“Snow removal is definitely one of those things where it’s witchcraft. You

can aim high, and put yourself in a position where there’s no snow, and people are screaming at you because you took the extra money and didn’t have to use it,” Angelichio said.

“Or you can aim a little low, and hope, and wind up with the budget blown up completely,” he said.

Council member Carrie Hawkins Charlton added that any resident interested in learning the finer points of borough budgeting is invited to attend a borough Civics 101 course focused on that topic, scheduled for 7 p.m. on Aug. 9 at the borough municipal building, 1 Vine St.

Borough council next meets at 7 p.m. on Aug. 15 and Sept. 19 and the administration and finance committee next meets at 7 p.m. on Sept. 5.