Board eyeing tax increase for 2021 to pay for roadwork
TOWAMENCIN » It’s still two votes and about four weeks away from becoming official, but Towamencin taxpayers, get ready.
Early indications are that the township’s supervisors are preparing a 2021 budget with the first tax increase in nearly a decade.
“We’re basically putting our paving program into another gear, to make sure we can pave every road,” said supervisor Rich Marino.
“Actually, that’s the whole thing: we’re putting $600,000 more into the road program, and we raise taxes by $600,000,” board Chairman Chuck Wilson added.
In December 2019 the supervisors approved a 2020 budget with revenues and expenses of
roughly $15.2 million, which kept real estate taxes at the 3.808 mill level in place since 2010, and the township’s homestead and farmstead exception has been set at $45,000 since 2014.
Staff have given updates on the impact of COVID-19 on the current year’s budget in April, then June, and most recently in September, and in a series of budget workshops have refined the township’s fiscal picture for 2021. The most recent budget meeting followed the regular board meeting on Nov. 11, and in that meeting township Manager Rob Ford and Finance Director Brooke Neve outlined how both revenues and operational expenses will only increase slightly, but needed capital projects could be a main driver of increased spending next year.
“The 2021 revenues, they’re pretty in-line with where they are in 2020. We do not have any type of increases built into those revenue numbers, they’re pretty flat,” Neve said.
General fund expenses are projected to increase slightly, mostly due to a 2.5 percent increase in staff and police salaries and pension costs, Neve told the board, with other increases included of $21,000 for police vehicle maintenance and $35,000 for general facility maintenance. The township’s parks and recreation fund budget includes a $350,000 transfer to cover debt service on various park capital projects, and a placeholder figure of $1 million is included in the draft sewer fund budget for future sewer capital projects and debt service on a possible borrowing.
The sewer fund is also projecting a drop in revenues in 2021 due to Upper Gwynedd’s nearly-completed sewer flow diversion project, Neve told the board, an expected decrease and one staff have already discussed offsetting.
“The sewer committee had, at one point, looked at possibly including a rate increase for extra revenue, but after looking at the budget as a whole, we think we need to focus more on increased revenues elsewhere, and let the sewer fund go for next year,” Neve said.
The 2021 highway aid fund anticipates a drop of roughly ten percent in state grant money meant to road repairs, which Neve said is expected to drop from about $529,000 in 2020 to about $477,000 in 2021, and a placeholder figure of $1 million is also included there for a capital borrowing.
The 2021 parks capital budget includes $185,500 in planned projects for next year, which Neve said includes tile repairs at the township pool complex, a new electronic ballfield scoreboard, engineering costs for future trail projects, new recycling cans in each township park, and other projects specified in the township parks master plan, which was updated in October. Supervisor Laura Smith said she’s heard feedback from residents on another park project that wasn’t funded in 2020: installation of shade sails at Fischer’s Park, so equipment there is not overheated in summer.
The board also fielded a public comment on Nov. 11 asking if they had considered installing basketball courts at any of the township’s parks, a request the board also discussed during the workshop. Smith said she had heard prior talks about installing them in Firehouse Park near Bustard Road, and supervisor Dan Littley said he’s heard from a neighbor to that site who’s against them.
Marino said his son plays on courts in nearby municipalities as late as 10 or 11 p.m., and Littley said he’s seen that happen on private courts in the township too. Marino suggested staff look at whether it’s possible to find space at the township’s Bustard Road or Butch Clemens parks, and Smith suggested reevaluating the Firehouse Park site to see how far from neighbors they might fit — a site Littley warned could come dangerously close to noise walls running along the Northeast Extension of the Pennsylvania Turnpike.
Neve also showed the board a list of smaller capital items included in the draft budget, but possible to cut if deemed unessential. Those purchases included a new vehicle for the township manager, a new plow truck for the public works department, new window shades and safety panels for the township building reception area, a $100,000 roof repair for the police department, radio upgrades and body cameras for the police, and roughly $317,000 for stormwater upgrades on Central Drive.
Supervisor Dan Bell said he thought the roof repair cost estimate could be higher than the actual figure will come in, since contractors may be looking for work as the economy slows again due to COVID-19.
Neve told the board, staff have drawn up several budget scenarios for the board to consider. Each increase of 0.25 mills in the township’s real estate tax rate would generate roughly $222,000 in new revenue, so the 0.75mill increase would generate roughly $666,000 and a full 1.0-mill increase would generate roughly $888,000. Marino asked if the board could increase taxes and reduce the homestead exemption in the same year, and Ford said they could not; Marino also asked how long the board had gone without an increase, and Smith said a full decade.
A tax increase of 0.75 mills would equal an increase of roughly $79 for the average resident, while the 1-mill increase would be closer to $106, Neve told the board. Marino said he had three large future expenses in mind: ongoing road repairs and repaving, sewer system repairs, and possible projects needed to meet the township’s municipal separate storm sewer system (MS4) requirements.
Marino added that the township currently is responsible for paving and maintaining 62 miles of local roads, and near-zero interest rates may make this a better time to borrow than in the future.
“If we’re going to pave every road, every 20 years, you need to do two miles of road per year. We’ve been doing one, plus the curb ramps,” Marino said.
“... We need to do probably $1 million a year for...more than three (years). I don’t know that that catches us up, but that’s kind of where we have to be,” he said.
Ford said another risk the township would run if the road program falls behind would be that federal regulations for the curb ramp designs change, requiring upgrades on those repaved more recently.
“If we get behind on the road program, it just gets more expensive,” Ford said.
After further discussion, all five supervisors directed Ford and Neve to prepare a draft budget with the 0.75mill tax increase, for further discussion at upcoming board meetings. The supervisors will hold one more budget work session at 7 p.m. on Nov. 18, then a regular board meeting at 7:30 p.m. on Nov. 24 with preliminary budget adoption that night and final adoption at 7:30 p.m. on Dec. 9 or 23; for more information or meeting agendas and materials visit www.Towamencin.org.