COMMISSIONER’S YEAR END REPORT
DECEMBER 3, 2016
THANKSGIVING is over and at this point the left-overs should be over. The hangover from the election should be over (OK, maybe not). It appears the Eagles are over (61 days until pitchers and catchers report). However, before we turn over a new year at the Township, a few key items remain. The highlights – most notably the 2017 Budget - are the subject of this report.
WHAT IS COMING OUT OF YOUR WALLET? As it relates to Township taxes the answer is nothing (more). For the sixth straight year the Township has been able to hold firm with its tax rate and there will be no increase. Given the fact that the County (which is 10% of the local taxes you pay) and the School District (which is 78% of the local taxes) both have submitted increases, how do we at LM maintain the tax base without compromising services? Funny you should ask.
First a Look Back.
2016 Revenues were higher than budgeted by $3.4M mainly due to business tax payments, permit revenues and real estate transfer taxes.
2016 Expenses were $2.1M higher than expected, but in large part due to a $2.5M transfer from our General Fund to the Capital Project Fund so that we could reduce new debt to pay for projects. (That is a good thing). Other expense savings were from personnel savings from job vacancies not yet filled and the mild winter reducing snow storm expenses. In short we had a good year leaving a $19.6M fund balance.
A Forward Glance.
2017 Revenues are projected to be $61,268,573. 51% comes from real estate taxes and the next largest source is business tax (17.6%), followed by licenses and permits (10%) and the remainder from other assorted sources. This projection constitutes a 3.7% increase from the 2106 Budget, but a 2% decrease from 2016 actual revenue (as noted we collected more than expected).
2017 Expenses. Almost 40% ($25M) is dedicated to Police/Public Safety. Since we are in negotiations with the FOP for their contract, the exact final budget number is uncertain. Our next highest expense is debt service which is 15.6% of our budget ($10M). To curtail our increasing debt, in 2016 we instituted a Debt Policy designed to track the same criteria as the rating agencies which continue to rate LM as AAA – which only a handful of municipalities in the nation hold. Our debt has decreased from its high in 2010 of $113M to $105.8M in 2016. Other major expenses are Public Works (13.9% or $8.9M), General Gov’t (12.6% or $8M), Libraries (6.9% or $4.4M), Building & Planning (6.4% or $4.1M), Recreation (5.6% or $3.6M). Permeating each category is the personnel costs which comprise 64.2% of the budget. In 2016 we entered into a new Workers Assoc. Agreement which covers 4 years over which there is a 12% increase which, with insurance offsets will cost the Township $384,000. In 2017, there is a projected deficit which will be closed by use of the excess funds in the General Fund and the elimination of 3 fulltime positions and further reduced debt service.
New Initiatives. Included in the 2107 Budget are funds necessary to start the re-write of our Zoning Code –which was one of the major recommendations as a result of the newly adopted Comprehensive Plan. We also are going to update the prioritization of roadway improvements with a new inventory study and a separate study for maintaining the Township trees. We also continue to update technology and, if you have not visited the revamped website, it is a treat (searches actually lead to something), plus the new Report-It App which allows you to take a photo of a problem and send it to the Township which through GPS will know the location of the issue to be addressed.
TRULY ALRMING. The Lower Merion Fire Department responds to approximately 2,000 alarms per year. Almost one-half are false alarms. The drain on the Fire Department by unnecessary wear and tear of equipment but, more importantly, personnel needs to stop. Measures thus far have been ineffective. Accordingly, a new Ordinance has been put in place to hold those responsible – responsible. In short, fines will be imposed for false alarms. As for residents, however, State law precludes any fine unless there are more than 3 false alarms in a given 12 month period. In other words 4 strikes and you are out (of money). The major parts of the new Ordinance are:
* Alarm systems must be registered.
* Permits are required to install Alarm Systems
* Alarm Monitoring Services need contact Alarm users or and Emergency contact before transmitting the alarm.
* Must maintain the system in good working order
* Contractors (the biggest culprits) must disable alarms before starting work
* Citations will be issued in amounts of $200 for first violation, $400 for eh second and $600 for the third.
ANOTHER SCHOOL OF THOUGHT. The LM Board of Commissioners and the LM School Board are separate political bodies with different jurisdictions, but serve the same population. In 2106 we reconstituted an Inter-political Body Committee consisting of members of both Boards designed to merely share concerns and ideas, not set policy. Most recently, there has been much discussion about School taxes and recent litigation questioning that need. Although that is a School Board issue, it has led to discussion of whether new multi-family residential units approved by the LM Board has contributed to an increased need to expand our schools. I write only to share some statistics (as you can tell, I like data) generated by the Montgomery County Planning Commission. Their Report was presented to the LMSD on November 14, 2016. In short, new construction is not the major source of student population increase. The MCPC explained, “new construction has been balanced by reduction in average household size.” Contributors to increase in students includes an increase in births. In 2002 the birthrate was the highest at 660 (2001 must have been a cold winter) and dropped to a low of 532 in 2103. The rate is back up to 604 in 2015. In the meantime, private school enrollment has declined where in 2011-12, 31.4% of all new students went to private school. In 2014-15 that number dropped to 18%. The MCPC also reported that, “Older developments with more of a garden style apartment design tend to have more students, while newer developments with higher density that are closer to the employment centers in the District often have few children.” Of the 5,525 existing units there is 0.082 students per unit. Sales activity reported 299 incoming students from units sold, but at the same time outgoing students from units sold were 350 for a net loss of 51 students. MCPC also projected student increases if 1,769 proposed units “on-the-books” were actually built by 2022 (which I submit is highly unlikely). Over that 6 year period they projected an increase of 75 students.
In short, school population will increase, and in that regard we are a victim of our own success. Families want to reside in our Township because of all that it offers – including fine schools. However, as we analyze the situation, the data does not support the mantra that new approved residential developments are the major source of increased school enrollments and those actual enrollments need be carefully studied.
INAUGURATION. No, not that inauguration. In January 2017, I have the distinct honor of becoming our Township Board president. Over the past year I have served as the VP as per the Board’s vote in 2015 where current Board president Paul McElhaney and I switch roles. We have accomplished a lot in 2016 with finally adopting the Comprehensive Plan, a new Debt Management Policy, a new Workers Association Contract, a new Manager’s Contract and the budget referenced above. In 2107, we have equal challenges with a new contract for the FOP, re-writing our Zoning Code, infrastructure maintenance including upgrades to our Police Building, a new fire Apparatus Policy and the list goes on. The strength of our community is our community. The residents and their success is a key factor in our AAA rating. I look forward to the opportunity to serve in a slightly different capacity and to your continued comments and suggestions upon which I truly rely.
Hope you have a happy holiday season,
Daniel S. Bernheim
Lower Merion Township Commissioner,