The 2008 Budget is respectfully submitted to the Board of Commissioners and the residents of Salisbury Township.  The document includes the $14,413,300 budget plan for the 2008 fiscal year, from January 1, 2008 to December 31, 2008.  The funds are detailed in the budget document: General Fund $8,314,600 Fire Protection Fund 1,103,000 Library Tax Fund 81,600 Water Fund 1,672,200 Sewer Fund 2,053,300 Debt Service Fund 571,600 Highway fund (Liquid Fuels) 617,000 The budget document is submitted in compliance with the First Class Township Code and the Commonwealth of Pennsylvania. Tax Rates The 2008 Budget reduces the Township’s property rate tax and the distribution of the effective rates of taxes will change as follows: *The PA State Legislature and Governor Rendell signed a new Emergency and Municipal Service Tax (EMST) that allows municipalities to implement an EMST up to $52.00 per individual who works in your community. In 2008 the EMST was changed to the Local Services Tax (LST). The School District will receive $5.00 of the $52.00. In 2006 the property tax was reduced by 0.12 mills to offset a portion of this new EMST. An exemption is allowed if you earn less than $12,000. You must request a refund from Berkheimer if you qualify. Only the residents of Salisbury that work in Salisbury and commuters who work in Salisbury will be subject to this additional $52 charge. However, if you live in Salisbury and work in another community you may be subject to a higher fee depending on that municipality’s levy level of the LST. This fee will be deducted from your pay by your employer at a rate of $1.00 per week. The Township has received $398,500, for the year 2007. The General Fund Budget The 2008 General Fund Budget is $8,314,600. The expenditures will be financed by $8,314,600 in anticipated revenues from the rates of taxation, service fees, grants and prior year reserves. The presentation of the Budget document is structured and designed to present a clear financial picture of the “operational” activity demands and the “capital and debt service” activity demands. The 2008 General Fund will rely on $1,681,600 of prior year funds to support the following: Storm Water Project: Gilmore Street $ 150,000 Storm Water Project: Filbert Street $ 150,000 Storm Water Project: Maumee Avenue $ 150,000 Storm Water Project: Barnsdale Road $ 240,000 DPW Capital Equipment $ 100,000 Park Equipment/Improvements $ 30,000 Western Salisbury Fire Co. Pumper Truck $ 315,000 Eastern Salisbury Fire Co. Rescue Truck $ 350,000 Computer Equip/Software Conversion $ 30,000 Refuse Fees collected and reserved $ 46,600 Municipal Building Maintenance $ 20,000 Capital Reserves (emergency needs) $ 100,000 TOTAL $1,681,600 General Fund Operating Budget: When excluding the use of $1,938,700 of prior-year funds to support the previously noted 1,681,600 non-recurring expenditures and the $257,100 to balance the budget, the 2008 General Fund Operating Budget is 3.1% greater than 2007. When including the use of prior-year funds, the 2008 General Fund Total Budget is 12.2% greater than 2007. The 2008 General Fund operating and recurring financial capital expenditures can be financed without a tax increase. The General Fund Budget breakdown is as follows: General Government $2,163,900 Public Safety 1,414,600 Public Works/Recreation 1,414,200 Sanitation 1,229,400 Transfers/Other 105,900 Capital Equipment/Expend. 1,415,000 Debt Service 571,600 Basic Financial Policies and Assumptions: The basic premise in preparing the 2008 Budget is to not have to increase the rate of taxation. It is the Township’s policy to estimate the anticipated revenues from a conservative position. The Township relies on sound financial and historical data to estimate revenue and expenditure projections and estimates. The assessed value of taxable real estate is $442,116,500, an increase of 5% since 2003. The amount budgeted for Real Estate Tax is based on current assessed value at a 90% collection rate. The assessed value for tax exempt real estate is $104,294,100 for which the Township does not receive payment. Revenue from refuse, sewer and water are estimated based on historical collection rates of 93% of billing, which includes accounting for discount. Earned Income Tax is based on information received from Berkheimer Associates and prior years’ historical receipts. As a result of continued internal management initiatives, substantial cost savings have been realized to date. Management’s philosophy and practice is to suggest and implement policies that will improve the efficiency and effectiveness of the operations and improve the quality of service and reduce costs. The 2008 fiscal year will continue to realize the benefits of the internal management cost savings initiatives and revenue enhancement efforts and steps taken to minimize cost. The continued concerted efforts of the Department Heads and the Township employees have played a major role in providing efficient and effective quality services. GENERAL FUND (01) Revenue: The 2008 General Fund revenue is estimated to be $8,314,600. The Earned Income Tax has become the leading source of revenue in the current year, estimated at $1,570,000, replacing Real Estate Taxes at $1,270,000. As a result of the Commonwealth’s changes to the Public Utility Tax System the Township has realized significant revenue loss of approximately $40,000 since 1998. The banking industry “interest earned” market has improved significantly and the interest earned on investments is estimated to generate over $200,000. The 2008 Real Estate Tax rate includes the 0.25 millage reduction for this year, and carries the 2006 0.12 mill reduction, the 2005 0.1 mill reduction, and the 2003 0.2 mill reduction. In total this removes an estimated $247,000 annually from the budget revenue stream and a compounded $689,900 in revenue through 2007, plus a $3,300 annual reduction of “in lieu of” monies received from Lehigh Valley Hospital. The Township’s Real Estate Tax has not experienced any significant growth over the past ten (10) years, a 5% and an 8% growth in assessed value over the past five and ten years respectively, but a reduction in actual property tax revenue of 1.5% and 2% when comparing the 2007 year to 2003 and 1998. The revenue generated from Real Estate Tax has experienced no significant growth since 1998. Any growth realized has been absorbed by the previously and current tax reductions noted above. Expenditures: The 2008 General Fund expenditures are estimated to be $8,314,600. The single largest expenditure area is Public Safety, $1,414,600. The proposed budget includes the purchase of two (2) new vehicles for the Police Department and a vehicle for the Department of Public Works. The refuse contract was renewed for three more years. The extension will expire June 30, 2008 with no additional extension options in the contract to continue the service beyond June 30, 2008. In an effort to reduce the cost of collection, the township has scaled back the service levels of the contract that are considered to be duplicated by the Township’s own in-house efforts (i.e., drop off sites and curb side pick-up performed by the Department of Public Works). The contractor no longer collects yard waste and leaves at curb side, generating a savings of $12.00 per household per year. In addition the Township held summer night time drop-off hours at the Franko Farm drop-off site. When the contract is advertised for bid in 2008, yard waste and leaves will be included as options, but will not guarantee that these options will be contracted, pending the bid price quoted for these services. As in other years, some budget expenditure line items have been decreased, increased, or were project specific throughout the budget. For the eighth consecutive year, the 2008 General Fund Budget includes funds set-aside for potential future equipment purchase and/or budgetary needs. This set-aside is anticipated to be done each year if the Township’s financial posture can support such an effort. This approach is being taken to soften the one-time, heavy hit of big ticket items such with the purchase of new fire trucks, but it is not limited to such purchases. In 2008 $665,000 is budgeted for a pumper truck for Western Salisbury Fire Company and a rescue truck for Eastern Salisbury Fire Company. FIRE PROTECTION FUND (03) Revenue/Expenditures: Total revenue is expected to be $1,103,000. It will be necessary to utilize $43,600 of prior-year funds, for other (increased) expenditures. Total expenses are expected to be $1,103,000 and include the purchase of a pumper truck and a rescue truck. Debt Service for the fire trucks is now paid directly from the Fire Fund and totals $41,800. The 1993 Fire Truck Loan expired in 2004 and the 1998 Fire Truck Loan will expire in 2008. The loans for the two new trucks are scheduled to begin in 2008. Debt Service totals: ITEM PRINCIPAL INTEREST 1998 Fire Truck $3,100 $100 1999 Fire Truck $6,800 $900 2005 Fire Truck $9,100 $2,500 2007 Fire Truck $5,800 $1,900 2008 Fire Truck $8,700 $2,900 TOTAL $33,500  $8,300 LIBRARY TAX FUND (04) Revenue/Expenditures: Revenues generated by the .18 mill tax are projected to be $69,500, plus interest of $5,000. Expenditures, which are assessed by the Allentown Public Library, will total $81,600. Reserves of $7,100 will have to be used in order to meet the Township’s obligation to the Library. WATER FUND (06) Revenue: Unless the Township is given notice by its water suppliers of an increase in their sales price of water, the Township does not anticipate a water rate increase for the year 2008. Anticipated revenue for the year 2008 is $1,672,200. Expenditures: Total expenditures for the Water Fund are expected to be $1,672,200 including $750,000 for the purchase of water from the Allentown Authority. SEWER FUND (08) Revenue: Revenues for 2008 are expected to be $2,053,300. In 2008, $100,000 will be available for the sewer maintenance reserve fund. Please note that as a result of the elimination of Act 339 reimbursement by the Commonwealth, the Township will not receive $40,000 for the debt service investments in Trout Creek Interceptor. Expenditures: Total expenditures for 2008 are expected to be $2,053,300 including $650,000 for disposal costs. DEBT SERVICE FUND (20) Revenue/Expenditures: All revenue for this fund is simply transferred from the General Fund and totals $571,600. Expenditures include: ITEM PRINCIPAL INTEREST 2002 Bonds $537,200 $33,400 HIGHWAY AID FUND (35) Revenue/Expenditures: The State Liquid Fuels allocation is estimated to be $300,000. Total expenditures will be $617,000 including $112,000 for street lighting, $45,000 for road salt, cinders and de-icer, $50,000 for a dump truck, and $400,000 for the 2008 Road Program. I like to thank Mrs. Cathy Bonaskiewich, Finance Director, for her involved efforts and work in assisting me in developing the budget and all the Department Heads for their contributions. The budget has been reviewed by the Board of Commissioners and the appropriate changes and adjustments have been made as directed. I would like to thank the Board of Commissioners for their support and active involvement in this important process. Sincerely, Gabriel Khalife Township Manage SALISBURY TOWNSHIP PROPOSED 2008 BUDGET: SUMMARY   GENERAL FIRE LIBRARY WATER SEWER DEBT HIGHWAY TOTAL REVENUE 5,822,700 107,500 74,500 1,505,000 1,442,000 - 311,000 9,262,700 TRANSFERS IN 197,600 701,900 - - - 571,600 - 1,471,100 DEBT PROCEEDS - 250,000 - - - - - 250,000 PRIOR YEAR:      Reserves 2,294,300 43,600 7,100 167,200 611,300 - 306,000 3,429,500    Note Proceeds - - -     -        TOTAL 8,314,600 1,103,000 81,600 1,672,200 2,053,300 571,600 617,000 14,413,300   EXPENDITURES 5,989,100 146,200 81,600 1,165,100 1,105,300 571,600 257,000 9,315,900 TRANSFERS OUT 701,900 - - 83,800 83,800 - - 869,500 CAPITAL 952,000 915,000 - 247,500 482,500 - 360,000 2,957,000 DEBT SERVICE 571,600 41,800 - 75,800 281,700 - - 970,900 RESERVES 100,000 - - 100,000 100,000 - - 300,000    TOTAL 8,314,600 1,103,000 81,600 1,672,200 2,053,300 571,600 617,000 14,413,300 2008 REAL ESTATE 3.09 General Fund Millage TAX RATE: 0.24 Fire Fund Millage   0.18 Library Fund Millage   3.51 TOTAL MILLAGE