Council Adopts Budget: Spending down 3rd year in a row

UPDATE for 05/08/2015:  2015 USER FRIENDLY BUDGET NOW AVAILABLE.

2015 User Friendly Budget – Microsoft Excel version

2015 User Friendly Budget – PDF version (recommended)

The 2015 User Friendly Budget will also be available on our Finance page along with other Budget documents at:

https://boroughofpalmyra.com/departments/finance

ORIGINAL POST: 04/20/2015

At the conclusion of the Saturday, March 7th Budget Work Session, Borough Council Introduced the 2015 Municipal and Sewer Utility Budgets.  The state approved the Budgets as introduced on Friday, April 17th and the Public Hearing and Final Adoption of the 2015 Budgets were held Monday evening, April 20th at 6:30 PM.  The Budgets were adopted with six aye votes and zero nay votes.

Municipal Budget

The 2015 Budget slightly increases the Local (Municipal) Tax Rate to $1.178 per $100 of assessed valuation, up 1.26¢ over last year, or approximately 1.1%.

For a home assessed at the 2015 Borough average of $147,865 the increase amounts to $15.99 per year ($4.00 per quarter / $1.33 per month) over last year’s average home assessment. The percentage increase is slightly less than 1% (just .93% in fact) and well under state-mandated caps.

The total Local Purpose Taxes to be paid by the average homeowner this year are $1,741.47. By way of comparison, that’s less than a 4.5% increase over the local purpose taxes paid by property owners in 2012.

Also, spending is down for the 3rd year in a row with 2015 General Appropriations of $7,059,005.02. Total General Appropriations – the Budget — is up slightly however, to $7,660,802.27, an increase of just $7,637.92 over last year. This is due to a decrease in the amount of surplus utilized (posted as revenue) and an increase in the Reserve for Uncollected Taxes* that the Borough is required to maintain.

The Borough utilized $665,000 in Fund Balance (surplus) this year (also down from previous years) while still maintaining $938,293 in Fund Balance for use in future years.

The amount to be raised by taxation for municipal purposes is $5,638,564.50, which is up less than 1% over last year.

This Budget maintains or expands existing services and includes provisions for hiring 1 to 3 additional personnel and a 1.5 – 2% increase for all current staff.

Budget Year:	2012	2013	2014	2015
Subtotal General Appropriations (Spending):	7,727,122.54	7,153,131.78	7,078,784.55	7,059,005.02
Reserve for Uncollected Taxes:	584,427.18	584,461.36	574,379.80	601,797.25
Total General Appropriations (Budget):	8,311,549.72	7,737,593.14	7,653,164.35	7,660,802.27

Sewer Utility Budget

The Sewer Utility Budget in 2015 saw an increase in spending substantially due to increases in debt service associated with the $3.4 million Sludge Thickening and Odor Control Improvement Project at the Sewer Plant scheduled for completion in May 2015. Borough Council was able to hold the line this year and not increase sewer fees however, due to increasing the amount of surplus utilized to $312,226, up from $150,000 utilized in 2014. The Borough still maintains approx. $504,900 in Sewer Surplus to offset potential fee increases in future years.

2015 Total Sewer Utility Appropriations are $1,799,226 up from $1,623,720 in 2014, an increase of $175,506. Total appropriations for debt service and state fees associated with the Sludge Thickening and Odor Control Improvement Project are $209,344 however.

The Sewer Utility Budget maintains or expands existing services and includes a 2% increase for all staff.

 

To see the complete 2015 Municipal Budget Data Sheet please click HERE.

Coming soon; the User Friendly Budget.

* Question: If spending is down why did the Local Tax Rate go up?

   Answer:  This comes in two parts. 

First, the Borough collects taxes to satisfy its own obligations of course, but it also serves as the “collection agency” for the taxes due our School District and Burlington County — and the Borough is obligated to pay the School District and County in full whether we’re able to collect those taxes or not.  And there are a certain number of property owners each year who simply don’t or aren’t able to pay their property taxes on time.

Since municipal budgeting is based on the availability of cash to meet its obligations (including those taxes owed the School District and County as noted above) the Borough is required by state statute to include in its Budget a Reserve for Uncollected Taxes.  This “Reserve” adds funds to the Budget to compensate for those property owners who don’t or aren’t able to pay their taxes.  The Reserve becomes part of the Borough’s Total Budget, which is then collected from property owners who do pay their taxes on time.  Therefore, when the School District or County raise taxes the Borough must increase the Reserve for Uncollected Taxes in order to compensate for the difference.

The 2015-2016 Palmyra School District Budget saw an increase significant enough to require an increase in the Reserve for Uncollected Taxes, thereby requiring an increase in the Municipal Budget.

Second reason; Fund Balance, also known as Surplus.  Fund  Balance is posted on the revenue side of the Budget and the Borough uses it to offset the tax levy and to maintain a stable Local Tax Rate (Municipal property taxes authorized by Borough Council).  The Borough utilized $665,000 in the 2015 Budget, down from $715,000 used in 2014.  Using less Fund Balance this year maintains a stronger surplus position with more funds available to balance future Budgets and to equalize prospective Local Property Tax increases.