2020 Budget – UPDATE: BUDGET ADOPTED MAY 18TH
UPDATE FOR 5/19/2020: BUDGET ADOPTED BY BOROUGH COUNCIL AFTER PUBLIC HEARING ON 5/18/2020.
UPDATE FOR 5/11/2020: MORE DETAILS/NOTES ADDED…
AS INTRODUCED ON 4/20/2020: Palmyra Borough 2020 Introduced Budget
The 2020 Budget was Introduced during the Virtual Council Meeting on Monday, April 20, 2020 at 6:30 PM. The Public Hearing and Final Adoption of the 2020 Budget is scheduled for May 18, 2020 at 6:30 PM. Comments and questions on the 2020 Budget will be accepted at the Public Hearing, prior to Final Adoption, on May 18, 2020. Amendments to the 2020 Budget may be considered at that time.
Members of the public were invited to “attend” the Virtual Council Meeting but all members of the public participating in the meeting were muted and their video image disabled.
Public comments/questions were required to be emailed in advance using the link provided in the agenda. Given the unprecedented circumstances and limited access to technology by some members of the public, the opportunity to submit questions expired at 4:00 PM on April 17, 2020.
Comments submitted in a timely and complete manner were reviewed and read during the virtual Council Meeting and/or it may have been necessary to follow-up with persons submitting comments at a later date. All comments will become part of the record and included with the Meeting Minutes.
Agenda: April 20, 2020 Regular Council Meeting (select link to view agenda)
2020 Budget Information
BUDGET MESSAGE:
COVID-19 HAS SEVERELY IMPACTED LOCAL, COUNTY AND STATE BUDGETS. REVENUE PROJECTIONS IN PARTICULAR HAVE BEEN HARDEST HIT: LOSSES IN INTEREST INCOME, CONSTRUCTION FEES AND PERMITS, MUNICIPAL COURT FEES AND FINES, AND OTHER SOURCES ARE EXPECTED TO EXCEED $150,000 AND SIGNIFICANTLY AFFECT THE BOROUGH’S 2020 BUDGET, AND, UNFORTUNATELY, RESULT IN A TAX INCREASE. LESS REVENUE ANTICIPATED IN THE BUDGET MEANS AN INCREASED AMOUNT NEEDS TO BE RAISED BY TAXES IN ORDER TO SUPPORT AND BALANCE THE MUNICIPAL BUDGET.
Notes Added 5/11/20: This loss actually amounts to $157,714 less revenue than in 2019, which alone accounts for $50.67 of the $79.89 increase in the Local Purpose Tax noted below *.
Another significant revenue loss that is not included in the figure above is a Safe & Secure Grant for the second half of 2020 in the amount of $19,742 that pays for a portion of the lowest-ranking police officer’s salary. As of the Introduction date of the 2020 Budget the Borough had not yet been awarded this grant. If the Borough does not receive this grant additional cuts may become necessary.
AS A RESULT THE BOROUGH HAS BEEN FORCED TO MAKE SIGNIFICANT CUTS IN SPENDING. SOME DISCRETIONARY SPENDING, AND NON-DISCRETIONARY SPENDING IN PARTICULAR, IS UP IN A NUMBER OF LINE ITEMS HOWEVER.
A REDUCTION IN THE TAX COLLECTION RATE IS ALSO EXPECTED AND INCLUDED IN 2020 BUDGET CALCULATIONS. MORE PEOPLE ARE OUT OF WORK UNFORTUNATELY AND SOME MAY BE UNABLE TO PAY THEIR TAXES ON TIME, WARRANTING THE DECREASE. THIS DECREASE, OR REDUCTION IN THE TAX COLLECTION RATE, OF JUST .25% HAS AN APPRECIABLE IMPACT ON THE STATE-MANDATED “RESERVE FOR UNCOLLECTED TAXES” THAT IS ADDED TO THE BOROUGH’S TOTAL BUDGET, THEREBY ALSO RESULTING IN AN INCREASE IN THE LOCAL PURPOSE TAX.
Note Added 5/11/20: This reduction in the Tax Collection Rate from 96.75% to 96.5% accounts for another $15.48 of the $79.89 increase in the Local Purpose Tax noted below *.
IN ADDITION, AN INCREASE OF $380,899 IN THE PALMYRA SCHOOL DISTRICT’S 2020 TAX LEVY WILL RESULT IN A SIGNIFICANT SCHOOL TAX INCREASE, WHICH ALSO TRIGGERS AN INCREASE IN THE ABOVE NOTED RESERVE FOR UNCOLLECTED TAXES. THE RESERVE FOR UNCOLLECTED TAXES IS THAT PORTION — OR PERCENTAGE — OF THE SUM OF ALL TAX LEVY’S THE BOROUGH IS RESPONSIBLE TO COLLECT [THE SCHOOL DISTRICT TAX LEVY OF $10,914,744; THE COUNTY’S AT $2,397,000 (ESTIMATED); AND THE BOROUGH’S LOCAL PURPOSE TAX LEVY OF $6,174,697.45], THAT IS NOT EXPECTED TO BE COLLECTED IN A TIMELY MANNER. THE RESULT IS A RESERVE CALCULATION FOR 2020 OF $682,025.45, WHICH IS THEN ADDED TO THE BOROUGH’S TOTAL BUDGET. THIS AMOUNT IS AN INCREASE OF $71,530 OVER 2019’S RESERVE FOR UNCOLLECTED TAXES.
Note: The Borough is responsible to pay the School District and the County their respective tax levies whether the Borough collects those taxes or not; the Reserve for Uncollected Taxes is essentially an “added tax” required by the state, and dictated by the Tax Collection Rate, to ensure those payments can be made.
Note Added 5/11/20: The increases in the School District’s and Burlington County’s Tax Levy’s accounts for $4.81 of the $79.89 increase in the Local Purpose Tax noted below *.
FINAL STATE AID AMOUNTS ARE UNCERTAIN
Note Added 5/11/20: Due to COVID-19 the state has extended their fiscal year until September and their 2020/2021 Budget has not yet been adopted; and amounts of 2020 state aid to municipalities have not yet been determined. The Borough was expected to receive $558,255 in state aid for calendar year 2020. Any reduction in this amount and additional cuts may become necessary.
WHILE THE BOROUGH PRESENTLY MAINTAINS AN APPRECIABLE SURPLUS FOR A MUNICIPALITY OF OUR SIZE ($3,279,754 AS OF 12/31/2019), PRUDENT FINANCIAL PLANNING DEMANDS DELIBERATE USE OF THIS “FUND BALANCE” IN A PRESCRIBED, RESPONSIBLE MANNER OVER THE NEXT SEVERAL YEARS IN ORDER HELP KEEP TAXES AS STABLE AS POSSIBLE WHILE STILL DELIVERING THE SERVICES OUR RESIDENTS AND BUSINESSES REQUIRE. THIS YEAR WE’RE USING – OR “ANTICIPATING” – $1,314,800 OF THAT FUND BALANCE (IN CURRENT FUND REVENUES) TO OFFSET THE TAX LEVY. IT’S ALSO IMPORTANT TO NOTE THAT THE BOROUGH RELIES ON SURPLUS TO PAYDOWN THE DEBT SERVICE ASSOCIATED WITH CAPITAL AND INFRASTRUCTURE IMPROVEMENTS (PRIMARILY THE RECENT INCREASE IN ROAD IMPROVEMENT PROJECTS AND THE RECENT PURCHASE OF A NEW FIRETRUCK).
IN ORDER TO COUNTERBALANCE THESE BUDGETARY CHALLENGES, THE BOROUGH HAS HAD TO MAKE A SIGNIFICANT NUMBER OF CUTS IN THE 2020 BUDGET:
Cuts in the proposed 2020 Budget include:
- All 2% across-the-board increases have been eliminated for all staff saving $16,700.
- Merit increases for part-time and several full-time staff members have been eliminated saving $9,800.
- Exercise Facility Director position to be eliminated effective May 7th saving $621.
- Digital Evidence Technician position to be eliminated effective May 7th saving $20,820.
- Proposed Police Dept. new hires – Parking Enforcement Officers — have been eliminated saving $24,000.
- All donations to various non-profit organizations have been substantially reduced or eliminated. Those budgeted to receive $2000 each include: War Memorial Committee (for park maintenance); Palmyra Community Center Program Board (who we hope will be able to offer programs later this year); the Palmyra Senior Citizens Program; and the Halloween Parade Committee (hopefully this is over by then, hopefully…). Awards for two graduating Palmyra High School Seniors remains fully funded at $500 ($250 each for one boy and one girl), which is also the amount to be donated to the Riverton Library this year. Sadly the Borough had to eliminate funding for the Post Prom Committee this year as we just can’t be sure there will even be a Prom.
- Public Events line item has been slashed by $8000 to just $2000. (We’re still hopeful to celebrate Santa Claus Coming to Town!)
- YMCA Summer Camp Program has been cancelled saving $6,000 to $10,000.
- Community Center Scheduling staff will stop receiving estimated hourly wages and be paid for hours worked only, or be furloughed/laid-off, effective May 7th. Affected staff are eligible for unemployment compensation and payments under the CARES Act.
- Crossing Guards will stop receiving full salary and be paid for shifts worked only effective May 7th. School is now closed at least through May 15th. Affected staff are eligible for unemployment compensation and payments under the CARES Act.
- Proposed Construction Office new hire – Technical Assistant to the Construction Official (to replace a former employee who left the Borough) – has been eliminated saving $14,000.
- The Fire Company had requested an increase in their annual lease agreement totaling $7,500 over three years – from $15,000 to $17,500 in 2020 — this increase has been delayed saving $2,500.
- All proposed new vehicle purchases for Police, Fire and Sewer Departments have been eliminated saving $216,500.
- Even though we’re presently planning on moving ahead with over $2,000,000 in capital projects at this time, mostly road improvements (Temple Blvd in particular at $1.7M), no funding has been appropriated in the Capital Improvement Fund; we’re relying on $305,734 in reserves in this trust account to make the necessary 5% down payments on the larger capital projects and for payment in full for all smaller capital projects. This account will require additional funding in the next several years however, in order to complete planned capital improvement projects in the near future.
- And many more cuts to individual line items in every department have also been implemented.
Despite our best efforts to reduce costs, a number of discretionary and non-discretionary appropriations in the proposed 2020 Budget have increased. The following appropriations have increased the most over their respective 2019 line items:
- Police Salaries: up $47,831
- Police Pension Contributions: up $38,605
- Public Works Salaries: up $23,615
- General Liability Insurance: up $16,906
- Landfill and Solid Waste Disposal Costs: up $13,000
- Public Employees Pension Contributions (non-Police personnel): up $10,738
- Unemployment Compensation: up $10,000
- Utility costs are up varying amounts and various Debt Service Appropriations are up a total $29,977
And a new line item has been added this year: Office of Emergency Management, Reserve for Emergencies – Coronavirus Expenses, in the amount of $25,000.
Note: The above line items alone added $215,672 in additional spending to the 2020 Budget.
After careful and considerable deliberation, with the above-noted cuts and additions to the 2020 Budget the Borough’s 2020 Appropriations — the Total Budget — stands at $8,153,215, which is just $10,990 over 2019 Appropriations at $8,142,225.
Notes Added 5/11/20: This increase in spending of just $10,990 over 2019 only amounts to an increase of $3.53 in the Local Purpose Tax as noted in the blue paragraph immediately below * – or just .19% over 2019.
The balance of the $79.89 increase * – $5.40 – is due to fluctuations in the Net Valuation Taxable – or the sum value of all taxable real property in the Borough. So what is the Net Valuation Taxable and why is it important? Coming soon…
The Grand Total, inclusive of the aforementioned Reserve for Uncollected Taxes, is $8,835,240.45. This results in a 2020 Local Tax Rate of $1.29548/$100 of Assessed Valuation; an increase of $0.05235 (5.235¢) over 2019. * For a home assessed at the Borough’s 2020 average of $147,783, this will result in an increase of $79.89 – or 4.35%.
Note: The Borough’s 2020 Appropriations are $472,830 under the state’s Maximum Appropriation Cap; AND, the Borough’s Budget is $443,822 under the state’s Maximum Tax Levy Cap.
Please select the links below to see the Borough’s detailed 2020 Budget information/Budget Model calculations (since 2017):
Utility (Sewer) Operating Fund Revenues
Utility (Sewer) Operating Fund Appropriations
2020-2024 Three & Five-Year Capital Improvement Plan
NOTE: ADDITIONAL SPENDING CONTROLS HAVE BEEN IMPLEMENTED BY THE ADMINISTRATOR AND CHIEF FINANCIAL OFFICER TO REDUCE COSTS, AND THE BOROUGH MAY MAKE ADDITIONAL CUTS IF NECESSARY INCLUDING, BUT NOT LIMITED TO, ANOTHER REDUCTION IN FORCE, LAYOFFS OR FURLOUGHS.
Click here to see the Palmyra School District’s 2020-21 Tax Levy Certification.
Click here to see the School District’s 2017-18 to 2019-20 Tax Levy Certifications.
