Draft budget: No tax increase

Utility rates also level in early version of budget

It’s still early in the process, but the first draft of next year’s budget looks likely to bring welcome news for Lansdale’s taxpayers in 2019.

“I sent out to council this afternoon a balanced budget. There’s no tax increase worked into the current budget,” said Finance Director John Ramey.

Last winter council passed a roughly $47 million budget with a real estate tax increase of one mill to 5.5 mills, an increase of roughly $120 for

the average borough household. After a veto by thenMayor Andy Szekely, council called a special meeting on Dec. 31 to override the veto and approve that budget, and at that time council members said the increase was meant to build back funds after years of using reserves to balance the budget, and deferring infrastructure projects like road and capital equipment repairs.

Ramey told council’s administration and finance committee Wednesday night that his first draft of the 2019 budget contains several noteworthy changes, including a hefty increase in the budgeted amount for police pension costs.

“The police MMO went up by $249,000. that’s a 27 percent increase for them,” Ramey said, referring to the minimum municipal obligation required for police pension and retirement costs. That increase was largely caused by a one-time drop

in the borough’s police pension plan assets in 2015, Ramey said, along with a change in mortality tables used for actuarial calculations that account for more modern lifespans and medical care.

Health insurance costs are projected to increase by five percent in 2019, which would equate to a $156,000 increase in spending, Ramey told the committee. That figure could change as soon as October as more data comes in, he said, and the 2017 budget’s health insurance hike was only three percent, which Ramey said was the lowest in recent memory.

On the positive side, Ramey told the committee, interest income on borough reserves held in various accounts is projected to jump by roughly $150,000 next year thanks to higher market interest rates.

“We were able to work with Univest and get some of our larger investments up to 2 percent a year. They were at 0.2 percent before, so we were able to get that up with very little restrictions,” Ramey said.

Real estate tax revenues

are also trending up, with projections of roughly $36,000 in new income for 2019 over the current year, and Ramey said that figure is based on assessed valuations provided by Montgomery County and updated each month.

Committee chairman Leon Angelichio said he was glad to hear taxes, as well as electric and sewer rates, stay level, and asked if new construction in town, such as the Andale Green development of townhouses on Hancock Street or apartments atop the Madison Parking Lot, had been factored into the new budget.

“No. Right now, I’m just going off of what the county is giving us. We thought Andale would be up and running already at this point, but we don’t want to count our chickens...” Ramey said.

Committee member Carrie Hawkins Charlton asked for details on projected revenues for fines in 2019 versus actual revenues in 2018, and Ramey said the draft now features a new column of projections for the end of the current budget year, in addition to the upcoming

year.

At the start of 2018, the borough had roughly $2.8 million set aside in its unassigned fund balance to be used for operational needs, and Ramey and borough Manager John Ernst said that’s just over twice the town’s monthly expenses.

“It’s unrestricted, which means we can use it for the daily operating budget of the borough. It pays for salaries, expenses that come up on a day-to-day basis. It costs about $1.2 million a month to run the borough,” Ernst said.

Angelichio and council President Denton Burnell asked if the draft was available to the public, and Ramey said he held it back for council members to see first.

“Let’s get it out there. It’s going to change anyways,” Burnell said.

Angelichio said residents and council members are both asked and encouraged to take a close look at the draft budget, and bring their feedback to future council and committee meetings.

“Look through it, and ask questions. We are, in my

opinion, being much more thorough with our budgeting, and getting a better handle of spending and revenues,” he said.

“We always provide great services. Let’s see if we can do it as well, and as cost-effectively, as we have in the past,” Angelichio said.

As of Thursday afternoon, the first draft of the 2019 budget was posted for public review on the boroguh’s website www. Lansdale.org. Borough council next meets at 7 p.m. on Sept. 19 at the borough municipal building, 1 Vine St.