Budget shows boost to bottom line
‘Luxor’ development fees impact borough finances
LANSDALE >> It may not be much to look at yet, but a project underway on Broad Street has already given a big boost to the borough’s bottom line.
Council members heard this week that the borough’s 2021 budget is already tracking ahead of 2020 figures, due in part to the “Luxor at Lansdale” project currently under construction.
“Revenues to date are up 22 percent. Part of that is a result of COVID; last year, in the middle of March of 2020, we were in COVID and some of our revenues were down,” said Finance Director Melissa Gemelli.
“And another big piece of this was in the capital fund, there was a $322,000 payment that’s in there,” she said.
That $322,000 payment now appearing in the borough’s revenue column is a payment from developer Westrum for sewer EDUs, Gemelli and borough Manager John Ernst told council’s admin
istration and finance committee on Wednesday night; an EDU is an “equivalent dwelling unit” and the fees are meant to reserve capacity at the borough’s wastewater treatment plant.
In late 2019 council approved plans for Westrum to build a 205-unit apartment building just east of Broad Street, after roughly a year of public discussion and plan revisions. Westrum then secured a five-year phase-in on the taxes on that property, from both the borough and North Penn School District, and this past March council approved their request for a three percent discount on the building’s electric bills for three years under the town’s economic development incentive.
Westrum officials have said they estimate construction on the Lansdale Luxor project to last roughly 18 months from groundbreaking in late 2020, and a listing on the company’s website lists it as “Opening 2022” alongside other sites under construction. On a recent visit to the project site, a deteriorating warehouse building that had been overgrown with vegetation has now been removed, and mounds of soil are now covered with straw and grass seed where that building once stood.
Back to the books: Gemelli told the committee that compared to 2020 levels, borough electric revenues are slightly up, and expenses down by six percent from the prior year. The town’s balance of state liquid fuels grant money is down from prior years, largely due to mother nature.
“We spent a lot more this year on things like salt, and different treatments for the roads, because of the snow that we had this year compared to last year,” she said.
Both expenses and revenues are tracking slightly below projections for 2021, Gemelli added, with most year-to-year discrepancies likely due to the timing of certain payments. Revenues could increase later in the year due to two particular items: whether and when council begins collecting late fees and penalties in borough electric bills, and summer parks and recreation programs like the town’s two pools.
“They’ve had a pleasantly surprising response to pool memberships so far. Typically, by this time of the year, they have a certain number, and they’ve surpassed that number at this point,” Ernst said.
And a smaller item will cause a onetime bump in revenues, or more accurately three smaller items: Gemelli also told the committee that three property assessment settlement agreements will be up for council approval on May 19, and “they fortunately are all in our favor, for very small amounts.”
One of the settlements will bring the borough roughly $10,000 in new revenue, while two others will bring roughly $3,500 each, Ernst added, and councilman Leon Angelichio joked that the borough should celebrate a rare instance of a settlement bringing more tax revenue, not less.
“Circle this date on the calendar, in a big red circle. This never happens,” he said.