Updated draft 2021 budget hikes taxes
A 2021 budget and accompanying tax for residents is weeks away from vote.
NORTHWALES » A 2021 budget, and the accompanying tax increase for North Wales residents, is now just weeks away.
Borough council had their second look at a draft 2021 budget Tuesday night, voting it ahead for advertisement and possible adoption next month.
“We were waiting for some projections for expenditures, and we were also looking at some capital improvements” since the first draft, said Borough Manager Christine Hart.
In late October council saw the first draft of the 2021 budget, with total revenues and expenses balanced at $6.7 million and including a tax increase of 0.5 mills, which would be the first increase since 2016 for 2017 and which staff have said would equal a $40 to $60 annual increase for homeowners with the town’s average assessed value of $120,000.
On Tuesday night, Hart outlined the major changes since the first draft, noting that the main reason for a jump in both revenues and expenses over prior years was the town’s $2 million capital project borrowing, approved in September and meant to tackle projects on the “North Wales 2040” comprehensive plan.
“Our debt ser v ice, of course, has now gone up. We now have that obligation, and that has been plugged in,” Hart said.
That borrowing is ref lected several places in the draft budget, including an increase in the town’s debt ser v ice line item, from $60,000 in 2020 to $90,000 in 2021, with half of the new revenue from the tax increase going to debt service. A $585,000 transfer is also listed in the budget, but no specific spending on projects is specified.
“This $585,000 has been distributed out to be budgeted for ‘revitalization and infrastructure,’ as the comprehensive plan calls for,” she said.
“The work has not been approved. We’ll continue to talk about this going into 2021, but we need to budget accordingly,” Hart said.
The town’s parks and recreation board has identified projects in several parks that could be tackled in 2021 or beyond, including removal of tree stumps and terrain leveling in Weingartner Park, repairs to a bridge and gazebo in Ninth Street Park, and new mulch and gravel around the playground in Hess Park, among others.
Also modified since an earlier draft is the interest earnings page of the budget: with interest rates at near-historic lows due to COVID-19, Hart said, reserves will be kept as flexible as possible instead of following the town’s normal policy of staggering investments.
“We were doing quite nicely: we were able to take about $50,000 in income in 2018, and about $45,000 in 2019” before the pandemic hit in 2020, Hart said.
Total borough reserves are at roughly $3.135 million, derived largely from a $3 million sale of the town’s sewer system roughly a decade ago and the interest earnings on those funds, and the 2021 draft budget projects just over $25,000 in interest earnings on that balance.
“Our CDs that were laddered are maturing. Two just matured, they l it - erally just matured last week, so I pulled them down and did not reinvest — the best rate I could get was 0.10 (percent) for 18 months,” she said.
Those funds were instead put into a money market fund with an interest rate of 0.35 percent, which Hart said should be easier to remove and reinvest once rates rise again.
Total borough general fund expenses are projected at $1.6 million, and expenses are budgeted at $1.708 million, a difference Hart said should be made up by the forward fund balance of unspent funds from prior years.
“We’ve made very hard decisions over the years, we’ve run a very tight ship, we’ve made several cuts, but our forward fund balance is what carries us through,” she said.
“I think we’ll be able to make ends meet, and I think it will get us through. Without knowing how we’ll be affected in 2021, I’d like to not have to lean on our reserves, unless something else happens,” Hart said.
After further questions on specific figures, council voted unanimously to advertise the budget for public feedback, with a preliminary adoption possible when council meet son Nov .24 and final adoption on Dec .8, or Dec. 22 if necessary.