Tax rate to stay the same for next year

LOWER SALFORD >> Expenses will be up a little bit for the 2019 budget, but the property tax rate won’t change, township officials said during discussion of a draft version of the budget at the Oct. 17 Lower Salford Township Board of Supervisors morning work session.

The proposed budget will be presented in November, with a final vote in December.

The Oct. 17 discussion was a follow-up to a similar one last year after the township in recent years shortened the time it will take to repay money it previously borrowed, but part of the funding to make those repayments is being taken from township reserves, Township Manager Joe Czajkowski said. The debt had originally been scheduled to be paid off in 2032, but it now will be completed in 2027, he said.

The proposed 2019 budget is not much more than this year’s budget, he said.

“On the expense side, we’re only showing a 2.8 percent increase, which is basically following cost of living,” Czajkowski said.

The reserve fund remains strong, he said, but is decreasing each year.

“You hear this every year from the auditors, our finances are in very good shape, our reserve is in good shape. It’s a healthy reserve,” Czajkowski said. “It was healthier, but it’s still very healthy.”

Board member Chris Canavan said although the future can’t be predicted with certainty it doesn’t appear that the township will have larger than normal expenses in the time until the current debt is paid off.

“Once that debt is retired, that’s a significant chunk of change in the budget that will not be obligated,” Canavan said. “We have an end date in sight.”

Even if there are unexpected costs and the township decided to borrow for that, the amount being borrowed would not be as much as was borrowed for the current debt, which was for the township building and the Lederach Golf Club, he said. The township owns the golf course.

If the property tax rate were to be increased, a one-quarter mill increase would add about $5 to the bill for a home assessed at the township average, with a half mill increase adding about $10, Czajkowski said.

A one-quarter mill increase would add about $26,000 to the amount of property tax collected, with a half mill adding about $53,000, Canavan said, but said he thinks the township finances are healthy enough to not need a tax hike.

“Just to play the devil’s advocate, inflation is obviously on the rise,” board member Doug Johnson said.

“If inflation keeps running in the next year or two, then we’re going to be forced to raise it just for the operating account alone,” Johnson said, “and we’re still falling behind on the reserve.”

Inflation is going up in general, Canavan said, but said Lower Salford has already taken steps so that some of the rising costs won’t hit the municipality so hard.

“Because we fixed everything at a very low interest rate, rather than riding a variable, we’re not susceptible to that,” he said.

Czajkowski said the township is part of a trust that has kept health care cost increases to about 5 percent in recent years, “which in the world of health insurance is fantastic.”

On the expense side, wages are increasing, but the amount brought in by earned income taxes will also increase, Canavan said.

If it’s decided a tax increase is needed at some point, Johnson and board Chairman Doug Gifford said, they would rather see incremental increases than attempting to avoid tax hikes, then having a large hike all in one year.

“We’ve seen some of our neighboring municipalities go into that pit,” Johnson said. “I don’t want to see us go in that pit.”

Making the change in the debt payments when the municipality did it was a good move, Canavan said.

“With where interest rates are going, it turned out to be a pretty good decision,” he said.

In other matters at the Oct. 17 meeting:

• Lower Salford officials echoed concerns raised in Franconia about mud on the streets from the dirt hauling in connection with the widening of the local section of the Pennsylvania Turnpike’s Northeast Extension. More of the problems are occurring in Franconia, but there have also been some in other towns, including Lower Salford, the officials said.

Canavan said he recently drove on one of those roads.

“The side of my car,” he said, “four feet up was just a different color, but it’s slippery, too. If you had to stop, you’re not stopping on that.”

The Lower Salford officials said they are continuing to coordinate with Franconia and the Montgomery County Conservation District in attempting to deal with the concerns.

• Cjazkowski said 38 people applied for the public works director position following Lorenzo Cuoci’s resignation from the job.

Initial interviews are planned with about six of the applicants, after which the pool will be narrowed to one or two for the board to interview in early November and make its decision, Czajkowski said.