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Budget » 2009 Approved Budget

Budget Message

In accordance with Article XVII of the First Class Township Code, I am pleased to submit the 2009 Proposed Budget. As presented, the Proposed Budget allows Salisbury Township to continue to deliver quality services to its residents and businesses without the need to increase taxes.

The 2009 Proposed Operating Budget details an $11,200,800 spending Plan for all Funds. This represents a 4.2% decrease over projected 2008. The following is a summary each Fund:

TOTAL 2009 PROPOSED BUDGET

  Projected 2008 EXPENDITURES Proposed 2009 EXPENDITURES $ % CHANGE 2009 REVENUES REQUIRED 2009 FUND BALANCE*
General Fund $ 6,531,747 $ 6,645,400 $ 113,653 $ 6,407,500 (99,400)**
Fire Protection Fund $ 1,077,000 $ 804,500 $ (272,500) $ 108,500 (696,000)
Library Tax Fund $ 81,564 $ 81,600 $ 36 $ 74,500 (7,100)
Water Fund $ 1,348,900 $ 1,234,300 $ (114,600) $ 1,410,000 175,700
Sewer Fund $ 1,439,100 $ 1,700,600 $ 261,500 $ 1,470,000 (230,600)
Debt Service Fund $ 571,600 $ 168,000 $ (403,600) $ – (168,000)
Highway Fund $ 617,000 $ 567,000 $ (50,000) $ 333,000 (234,000)
           
TOTAL $11,666,911 $11,200,800 $(466,111) $9,803,500 $(1,252,300)
      -4.16%    

*    Fund Balances will be made up by operational reserves
* *This does not include $177,400 of Interfund Transfers that will be also used to balance the GF Budget.

The total for all Funds including the Capital Budget is $14,685,400.

TAX RATE

The 2009 Proposed Budget HOLDS the Township’s property tax rate at 2008 levels. The proposed Tax Levies are broken down as follows:

Real Estate Tax

3.09 Mills – General Fund
0.24 Mills – Fire Fund
0.18 Mills – Library Fund (Referendum)

3.51 Total Mills for the 2009 Fiscal Year

This Levy equates to an annual tax of $787.29 for a taxpayer with a property valued at $224,300, the median housing value in Salisbury Township

Earned Income Tax – 0.5%
Local Service Tax (LST) – $52-(Township $47-Salisbury School District Shares $5-Formerly EMST)
Realty Transfer Tax – 1.0%
Mechanical Services Tax – $100

Average Assessment Value-$77,376
The same property owner pays $272 to the Township, $2,242 to the Salisbury School District and $793 to Lehigh County.

(01)   GENERAL FUND BUDGET

The Township expects to realize $6,407,500 in Revenues. This represents an 8% decrease from 2008 projections. Expenditures are proposed at $6,644,700. This represents a 5% increase from 2008 projections. The predominant source of revenue comes from Taxes. Earned Income Tax brings in approximately 1, 67 millions and represents 42% of the Tax Revenue or 26% of Total Revenue. Real Estate brings in approximately 1, 32 millions and represents 33% of the Tax Revenue or 21% of Total Revenue. Other Taxes such as the Realty Transfer Tax($500,000), Local Service Tax($450,000), combined, represent 24% of the Tax Revenue or 15% of the Total Fund Revenue. Combined Taxes represent 62% of Total Revenue. The remainder of the Revenue stream is made up of License & Permits(1%), Fines & Forfeits(1%), Interest & Rents(4%), State Shared Revenues(6%), and Charges for Services(Refuse)(26%).

GENERAL FUND REVENUES

REVENUES GENERAL FUND
RE TAXES $ 1,325,000
EARNED INCOME TAXES $ 1,670,000
OTHER TAXES $ 950,000
LICENSES & PERMITS $ 88,300
FINES FORFEITS $ 50,000
INTEREST & RENTS $ 265,300
STATE SHARED REVENUES $ 372,800
CHARGES FOR SERVICES $ 1,678,100
MISC REVENUE $ 8,000
TOTAL REVENUES $ 6,407,500

The proposed 2009 Salisbury Township Real Estate Tax is based on an estimated valuation of $441,708,250. As you will note from the chart below, revenue from the Real Estate Tax is expected to be at or -1% of the 2008 levels, despite the fact that assessments over the past 13 years have increased by approx. 13%. The reason is attributable to the reduction/changes of the millage rate over the years from 4.18 mills to 3.51 mills. The net effect has been a loss in $163,000-$284,000 in annual revenue or $2,840,000 over a 10 year period.

REAL ESTATE TAX ASSESSMENT HISTORY

The Township has also 159 parcels that are Tax Exempt from which it does not receive payment. The total Tax Exempt valuation is $105,769,500, which translates to approximately 19% or $371,251 of lost revenue from tax exempt properties.

The Earned Income Tax on the other hand has steadily increased over the 5 year period equating to 11% increase or an additional $241,049 in more EIT revenue.  Economic indexes have precipitated a more conservative posture in our estimates for 2009 with levies expected to be $180,000 lower than the previous year.

Mills   YEAR PARCELS ASSESSMENTS BILLINGS COLLECTIONS
3.510 Estimated 2009 5692 $441,708,250 $1,550,396 $1,488,380
3.510 Projected 2008 5702 $441,199,300 $1,548,611 $1,486,000
3.760   2007 5697 $438,855,900 $1,650,098 $1,592,865
3.760   2006 5674 $429,405,250 $1,614,564 $1,558,963
3.880   2005 5649 $422,756,850 $1,640,296 $1,557,857
3.980   2004 5651 $420,216,200 $1,672,412 $1,611,542
3.980   2003 5638 $420,890,550 $1,675,147 $1,595,341
4.180   2002 5640 $418,544,500 $1,749,562 $1,683,533
4.180   2001 5637 $413,546,600 $1,728,627 $1,652,892
4.180   2000 5656 $408,011,000 $1,705,488 $1,638,149
4.180   1999 5669 $408,387,100 $1,707,060 $1,613,933
4.180   1998 5670 $406,643,300 $1,699,771 $1,600,307
4.000   1997 5667 $402,138,600 $1,608,554 $1,524,376
4.000   1996 5650 $395,997,100 $1,581,044 $1,493,746
4.000   1995 5630 $392,510,050 $1,570,040 $1,500,066

HISTORY

EARNED INCOME TAX

 Collections YEAR
 $1,670,000 2009
$1,850,000 2008
$1,823,256 2007
$1,586,591 2006
$1,603,176 2005
$1,529,872 2004
$1,608,951 2003
$1,519,023 2002
$1,558,611 2001
$1,567,212 2000
$1,310,080 1999
$1,324,069 1998
$1,435,080 1997
$1,562,794 1996
$1,500,680 1995

According to the 2000 Census Bureau the average household income in Salisbury Township is $59,935 which translates into an average annual earned income tax payment of $300 per household.

The Real Estate Transfer Tax is levied at 1% of the value of all real estate that transfers within Salisbury Township. Revenue from this tax is also driven by economic indexes and for conservative budgeting we have budgeted $100,000 less than the previous year.       

Act 2 of 2007 renamed the previous Emergency and Municipal Service Tax(EMST) to the Local Service Tax (LST). This Tax($47 ST-$5-SSD=$52) is levied on all persons working within the Township.  Act 2 of 2007 also allowed an upfront exemption from the payment of the Tax for those earning $12,000 or less resulting in the Tax being collected $1 per week and remitted to the Township quarterly. The net effect has been that for the first year cycle, the collection will be less than previous years, but this should not impact on the total collection, only on its distribution. This will be rectified in the future.

Since the Township tracks refuse and garbage collection through the General Fund, instead of creating a separate Enterprise Fund, the General Fund Revenues also include approximately $1,678,000 from fees assessed for the collection of Solid Waste and Recycling. Because of the renewal of the waste contract and increase in its cost the Township user fee will be adjusted accordingly. For 2009 the annual refuse fee will be $340. The 2009 Proposed Budget also maintains the collection of grass, but not figured in the increased rate. It is hoped that the grass pickup service will be absorbed/offset by an increase in recycling performance grants.   

FUND BALANCE

Maintenance of a strong fund balance has and will be an ongoing policy goal of the Board of Commissioners. The policy is important in order to be prepared for unforeseen circumstances or negative economic downturns. In addition, the Fund Balances allow the Township to balance the budget without increasing taxes/fees. The Fund Balances anticipated at the end of the 2009 budget year are outlined below:

FUND BALANCE
ESTIMATED ENDING FY 2009

General Fund $ 7,669,000
Fire Protection Fund $ 86,457
Library Tax Fund $ 105,000
Water Fund $ 2,183,994
Sewer Fund $ 3,539,446
Debt Service Fund $ 0_______
Highway Fund $ 380,492
TOTAL $13,254,428

(01)  GENERAL FUND EXPENDITURES

Total Proposed 2009 General Fund Expenditures will be $6,644,700. Table below shows a breakdown and allocation by program. This spending Plan represents an increase of 1.7% from projected 2008 levels. The breakdown by programs is depicted below.

TOTAL PROPOSED 2009 EXPENDITURES

EXPENSES GENERAL FUND % OF TOTAL
GENERAL GOVERNMENT $818,300 12%
PUBLIC SAFETY $1,585,500 24%
PUBLIC WORKS $1,305,400 20%
CULTURE & RECREATION $147,000 2%
CONTRACTUAL PAYMENTS SANITATION $1,464,700 22%
MISCELLANEOUS $3,000 0%
INSURANCE & EMPLOYEE BENEFITS $1,321,500 20%
DEBT SERVICES $0 0%
FUND BALANCE RESERVE PRIOR YEAR ($99,400)  
TOTAL OPERATING EXPENDITURES $6,645,400  

GENERAL GOVERNMENT totals $818,000 and represents 12% of the General Fund. The proposed budget calls for a $76,387 decrease from projected 2008. Noticeably legal and engineering expenses have been scaled down and projected salaries for non-uniformed administrative employees have been budgeted at 4%. Also, the Budget does account for an extra pay period (27th) that will be realized in 2009. The Budget also includes funds to upgrade the design to the Website and additional computer software and hardware for the offices.

PUBLIC SAFETY represents the largest expenditures with a $1,584,800(24%) allocation. Police Services make up the majority of the expense at $1,277,000 (19.11%). The Budget reflects a contractual 4.5% increase in wages. No anticipated increase in personnel is expected. The implementation of the 12 hr. schedule is expected to considerably decrease the Overtime account, therefore $75,000 less is budgeted from prior year. Budgeted is $47,480 for minor equipment  ranging from digital video system for the patrol vehicles(2@$3,000); Taser($2,450); Mobil Data Terminal(2@$4,000); 10 new vests($10,000); Emitters (10@795) per each patrol vehicle to activate Traffic Lights.  Fire Services is reflected in the General Fund to show the pass through allocation to the Firemen’s Fire Relief Association. For 2009, $110,000 is budgeted both as Revenue and Expense. Budgeted is also $30,000 under Acct 465.500 for volunteer fire company incentives. Code Enforcement/Planning/Zoning makes up approx. 3% of the Proposed Budget. $45,000 is budgeted for inspection services and will be recouped by building permit fees.  The Township expects to handle all in-house administrative functions by the appointment of an-in-house BCO.

PUBLIC WORKS shows an appropriation of $1,305,400(20%) of total GF Expenditures. Wages comprise approx 74% of the total department Budget. This represents a 4% increase over last year Budget. $250,000 is budgeted for Streets and Bridges, which includes $160,000 for road material.

RECREATION shows an appropriation of $83,200, an increase of 8% from 2008 levels. Budgeted for next year are funds to treat the geese problem at Laubach Park and additional park equipment in the Capital Budget for Lindberg, Laubach and Dodson Park($11,000). 

SANITATION shows an increase in expenditures of approx. $229,000 due to a new contract awarded for 2009. Included is the once a week grass pickup($51,672). The new refuse and recycling rate per household will be adjusted accordingly and it is expected to increase to $340.00 per year.

INSURANCE & BENEFITSSalisbury Townshipparticipates in the Lehigh Valley Insurance Cooperative which has provided overall stability in our health rates. Group Health Insurance, underwritten by Capital Blue Cross, is expected to increase by 7%. Other Insurance, commercial, property, police professional, crime, public officials, and Workers Compensation, overall, will be maintained at 2008 levels. Pension Costs, however, have dramatically increased over the years.  See Table Below:

MINIMUM MUNICIPAL OBLIGATION

YEAR 2005 2006 2007 2008 2009 Increase
Police  $ 56,491  $ 88,418  $ 97,960  $108,413  $129,610 $ 73,119
Non Uniformed  $125,711  $136,816  $222,726  $235,472  $232,498 $106,787
Total  $182,202  $225,234  $320,686  $343,885  $362,108 $179,906
             
State Aid $169,753 $182,223 $189,177 $184,807 $170,000 $    247
             
Township $12,449 $43,011 $131,509 $159,078 $192,108 $179,659

While State Aid has remained leveled over the 5 year period, the Pension Costs have risen dramatically. Over the period, the cost of the Pension Plans combined has increased by $179,659, while the subsidy from State Aid has only increased by $247. Therefore, most of the cost ($192,108) has been shouldered by the Township.

CAPITAL BUDGET

It has been the policy to transfer most of the year end surpluses into the Prior Year Unreserved Fund Balance to be used for future Capital needs. Starting in 2009 we will explore developing policies for the use of Prior Year Reserves and categorize them by Uses.  The development of a Capital Plan and the accompanied Capital Budget will give you a clearer picture on its uses. For 2009 the following Capital Budget has been proposed:

CAPITAL BUDGET SOURCE OF FUNDING
    GENERAL FUND WATER FUND SEWER FUND HIGHWAY FUND DEV CONTR GRANTS LOAN TOTAL
FUND BALANCE BEGINNING $8,507,000              
                   
DESCRIPTION COST                
                   
Police Renovations $1,600,000             $1,600,000  
Barnsdale Road Storm Water $ 300,000 $300,000              
Filbert St. Storm Water $ 150,000 $150,000              
Lindeberg Park Tennis Ct Recon. $ 120,000 $120,000              
Leaf Vac Equip $ 20,000 $20,000              
PW Director Vehicle $ 36,000 $12,000 $12,000 $12,000          
Park/Playground Equip $ 11,500         $11,500      
ESFD Rescue Truck $ 525,700 $375,700           $150,000  
ESFD Generator $ 88,000 $88,000              
ESFD Station Maintenance $ 13,500 $13,500              
Filbert Street Water Line $ 75,000   $75,000            
Patricia Drive Pump Station Elim. $ 310,000     $310,000          
Lincoln & Flexer Road Reconst. $ 310,000       $310,000        
Street Microsurfacing $ 90,000       $90,000        
                   
TOTAL $3,649,700 $1,079,200 $ 87,000 $ 322,000 $ 400,000 $11,500 $ $1,750,000 $3,649,700
                   
ENDING BALANCE   $7,427,800              

NOTE-The Proposed General Fund Budget intends to utilize only $98,700 from prior year surpluses to balance the Budget.   

(03) FIRE PROTECTION FUND

Revenue/Expenditures

Total revenue is expected to be $108,500 generated by the .24 mills Fire Tax and Interest Income. It will be necessary to utilize $99,500 of prior year funds to balance the budget. On the Expense side $177,300 is budgeted that reflects payment of incentives to the respective Volunteer Fire Companies(ESFD & WSFD) and debt service for the fire apparatus. The Non-Operating Expenditures include the purchase of a rescue truck(ESFD) and Generator(ESFD) via a transfer from the GF. A Loan of $150,000 is shown for the payment of the Rescue Truck. Overall, the Fire Budget relies heavily from subsidies from the General Fund Balances Reserves.

PROPOSED 2009 FIRE BUDGET

 

REVENUES FIRE FUND
RE TAXES $ 97,500
EARNED INCOME TAXES $ –
OTHER TAXES $ –
LICENSES & PERMITS $ –
FINES FORFEITS $ –
INTEREST & RENTS $ 11,000
STATE SHARED REVENUES $ –
CHARGES FOR SERVICES $ –
MISC REVENUE $ –
   
TOTAL OPERATING REVENUES $ 108,500
   
INTERFUND TRANSFERS $ 516,100
FUND BALANCE RESERVES $ 29,900
LOAN PROCEEDS $ 150,000
TOTAL TRANSFERS & FUND BALANCE $ 696,000
   
TOTAL REVENUES $ 804,500
   
EXPENSES FIRE FUND
   
GENERAL GOVERNMENT $ –
PUBLIC SAFETY $ 138,700
PUBLIC WORKS $ –
CULTURE & RECREATION $ –
CONTRACTUAL PAYMENTS $ –
MISCELLANEOUS $ –
INSURANCE & EMPLOYEE BENEFITS $ –
DEBT SERVICES $ 38,600
   
TOTAL OPERATING EXPENDITURES $ 177,300
  $ –
TRANSFERS $ 627,200
CAPITAL CONSTR $ –
TOTAL EXPENDITURES $ 804,500

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
1999 Fire Truck $7,000 $700
2005 Fire Truck $9,200 $2,400
2007 Fire Truck $5,800 $1,900
2008 Fire Truck $8,700 $2,900
TOTAL $30,700 $7,900

(04) LIBRARY TAX FUND

 

Revenue/Expenditures

Revenues generated by the .18 mill tax are projected to be $71,500, plus interest of $3,000. 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.

(06) WATER FUND

 

Revenue

The Township does not anticipate a water rate increase for the year 2008. Anticipated revenue for the year 2009 from property owners paying on meter water($1,335,000) and Interest Earned($75,000) is expected to bring in approx. $1,410,200.  An average consumption for a family consists of 100,000 gals/yr.  Total yearly bill-$492(Gross)

Expenditures

Total expenditures of the Water Fund are expected to be $1,271,800 including $750,000 for the purchase of water from the Allentown Authority, $4,900 from Bethlehem Authority and $9,000 from SW Twp Authority. Wages allocation is expected to run $195,000 and Insurance and Employee Benefits are expected to be $104,800. Capital Expenditures include Filbert Street Water Line($75,000) and the allocation of $12,000 for the vehicle for the PW Director. A Transfer of $88,700 to the General Fund will be done to distribute the cost of administrative expenses.

PROPOSED 2009 WATER FUND BUDGET

REVENUES WATER FUND
RE TAXES $ –
EARNED INCOME TAXES $ –
OTHER TAXES $ –
LICENSES & PERMITS $ –
FINES FORFEITS $ –
INTEREST & RENTS $ 75,000
STATE SHARED REVENUES  
CHARGES FOR SERVICES $ 1,335,000
MISC REVENUE ___________
   
TOTAL OPERATING REVENUES

$1,410,000

   
INTERFUND TRANSFERS $ –
FUND BALANCE RESERVES $ –
LOAN PROCEEDS $ –
TOTAL TRANSFERS & FUND BALANCE $ –
   
TOTAL REVENUES $1,410,000
   
EXPENSES WATER
  FUND
GENERAL GOVERNMENT $ –
PUBLIC SAFETY $ –
PUBLIC WORKS $ 312,600
CULTURE & RECREATION $ –
CONTRACTUAL PAYMENTS $ 763,900
MISCELLANEOUS $ 1,800
INSURANCE & EMPLOYEE BENEFITS $ 104,800
DEBT SERVICES $ 51,200
   
TOTAL OPERATING EXPENDITURES $1,234,300
  $ –
TRANSFERS $ 88,700
CAPITAL CONSTR $ 87,000
TOTAL EXPENDITURES $1,410,000

 

(08) SEWER FUND

Revenue

Revenues for 2009 are expected to be $1,470,000, comprised of annual sewer charges of $1,360,000 and Earned Interest of $110,000. In 2009, $55,200 will be available from the sewer maintenance reserve fund.  As in prior messages a reminder that former Act 339 reimbursement by the Commonwealth will not be realized, i.e.,  $40,000 for the debt service investments in Trout Creek Interceptor.Average yearly sewer bill-$190(Gross)

Expenditures

Total expenditures for 2009 are expected to be $1,700,600 including $748,000 for disposal costs. Other costs include Wages($191,000) and Employee Benefits($100,000) combined make up approx. 17% of the Expenses. $150,000 is budgeted for Inflow/Infiltration repairs. Debt Service is expected to be $100,200. Capital Expenses include $12,000 for the PW Director Vehicle, and $310,000 for the Patricia Drive Pumping Station project.

PROPOSED 2009 SEWER FUND

REVENUES SEWER FUND
RE TAXES $ –
EARNED INCOME TAXES $ –
OTHER TAXES $ –
LICENSES & PERMITS $ –
FINES FORFEITS $ –
INTEREST & RENTS $ 110,000
STATE SHARED REVENUES $ –
CHARGES FOR SERVICES $ 1,360,000
MISC REVENUE  
   
TOTAL OPERATING REVENUES $1,470,000
   
INTERFUND TRANSFERS $ –
FUND BALANCE RESERVES $ 641,300
LOAN PROCEEDS $ –
TOTAL TRANSFERS & FUND BALANCE $ 641,300
   
TOTAL REVENUES $2,111,300
   
EXPENSES SEWER
  FUND
GENERAL GOVERNMENT  
PUBLIC SAFETY  
PUBLIC WORKS 468,500
CULTURE & RECREATION  
CONTRACTUAL PAYMENTS 861,000
MISCELLANEOUS 2,500
INSURANCE & EMPLOYEE BENEFITS 104,500
DEBT SERVICES 264,100
   
TOTAL OPERATING EXPENDITURES $1,700,600
   
TRANSFERS 88,700
CAPITAL CONSTR 322,000
TOTAL EXPENDITURES $2,111,300

(20)  DEBT SERVICE FUND

Revenue/Expenditures

All Revenues for this fund are simply transferred from the General Fund. Total $168,000. Expenditures include:

ITEM PRINCIPAL INTEREST
2002 Bonds $150,000 $17,000

(35)  HIGHWAY AID FUND

Revenue/Expenditures

The State Liquid Fuels 2009 allocation is estimated to be $321,000. Total expenditures will be $567,000 including $112,000 for street lighting, $45,000 for road salt, cinders and de-icer, and $400,000 for the 2009 Road Program. Prior year income of $234,000 will be used to balance the Budget.

I would like to thank Ms. Cathy Bonaskiewich, Assistant Township Manager/Finance Director, for assisting me in the preparation of the Budget and the Department Heads for their contributions. I expect future Budget preparation to be a highly interactive process that takes place throughout the year. The Budget is merely a spending plan and cannot work unless it is scrutinized and reviewed periodically throughout the year. I would also like to  thank the Board of Commissioners for their dedication to the citizens of Salisbury Township and for their ongoing support and leadership. Salisbury Township continues to be a wonderful community in which to live, work and visit.

Respectfully submitted,

 

Randy Soriano

Township Manager