2011 Township Budget Had $1.2M Surplus

Finance director Shannon Drosnock said Montgomery Township's 2011 budget ended with increased revenues and below budgeted expenditures

's 2011 budget ended with a $1.27 million surplus and actual revenues exceeding the original budget by 6.34 percent.

Expenses were 1.3 percent above 2010 and 4.35 percent below the original budget for 2011.

That $1.27 million surplus will fund the township's open space acquistion, the 14-year road program and the 10-year equipment replacement program.

"(The 2011 budget) ended with $3.799 million in the unreserved General Fund balance, an increase of $1.27 million," said finance director Shannon Drosnock at a recent supervisors meeting.

"The budget for 2012 assumed we would have a starting fund balance of $2.6 million in the General Fund. In order to be in accordance with that, we are asking the board to consider approving a transfer of $1.2 million of the General Fund fund balance into the Capital Reserves Fund," said Drosnock. "This is the normal course of how we have done things in the past. It's not out of the ordinary."

Drosnock recommended $537,000 of the $1.27 million be allocated to the 14-year road program for one year of funding.

She added the 2012 budget called for the 10-year equipment replacement program be funded through the transfer by $402,400.

"The remaining $260,000 we were proposing to move into open space designation for the township open space purchasing and land acquisitions," Drosnock said.

Township revenues, she said, remained strong throughout each of the four quarters of 2011, resulting in actual revenues exceeding budgeted revenues by 6.34 percent, and exceeding prior year revenues by 8.3 percent.

Drosnock said this was a result of current year revenues exceeding prior year revenues and the budget in each of the three major revenue categories: taxes; permits and licneses; and grants, interest and fines.

Additionally, total expenses reported 1.3 percent above 2010 and 4.35 percent below the original budget for 2011.

The unadjusted fund balance for the General Fund at the end of the fourth quarter 2011 was $3.799 million, an increase of $928,000 over the end balance for fiscal year 2010.

"The three most significant revenue streams contributing to the increase over the prior year are the mercantile tax returns of 11 percent above the prior year; the implementation of the local services tax, dedicated to funding public safety expenses; and the additional funds from the Commonwealth for the state pension aid program, dedicated to funding pension expenses," Drosnock said.

She said the fourth quarter was a strong quarter, and the largest quarter to contribute to an increase in cash balances over 2010.

General fund cash balance was $2.156 million in January 2010 and $2.52 million in January 2011. In December 201, the ending balance was $2.87 million versus $3.79 million in 2011.

Actual tax revenues in 2011 came in at $9,446,197, as oppose to $8,952,926 in 2010. This is a 5.5 percent increase from 2010.

"Mercantile tax returns and real estate transfer tax returns were a big contributor to that line item," Drosnock said.

Permits and licenses revenue came in at $1,183,139 in 2011 versus $1,046,813 in 2010, for a 13 percent increase.

Drosnock said that increase is attributed to the increase in permits for new and existing properties.

Other sources of revenue, such as the Commonwealth contribution to the pension system, was $1,033,309 versus $773,402 in 2010. This was an increase of 33.6 percent.

"That is a one-time increase for the Commonwealth contribution," Drosnock said.

That contribution was $610,000.

"The normal contribution is $358,000," she said.

Total revenues for 2011 equaled $11.6 million, an 8.3 percent increase from 2010.

The 2011 General Fund transferred $100,000 of the Earned Income Tax revenue to the park and recreation fund, Drosnock said.

"That is our normal process," she said. "In 2010, we had omitted that transfer, so the gross Earned Income Tax receipts for the current year are above the prior year. In the General Fund, we will not see that because of the allocated transfer."

Mercantile taxes were signficantly ahead of 2010 by $200,600.

Total Local Enabling Tax revenue was $7.9 million for 2011.

For 2011 expenses, administration and finance spent less in 2011, but police, code enforcement and public works increased their expenses from 2010.

Administration expenses for 2011 were $1,039,570, a 2.8 percent decrease from 2010.

Finance department expenses for 2011 were $738,026, a 6.7 percent decrease from 2010.

Drosnock said the police department expenses increased 1.3 percent in 2011, totaling $5,437,638.

Code enforcement expenses increased 9.3 percent to $820,333. Drosnock said that was directly related to the township seeing an increase in inspection fees, which were a direct result of increased permit revenues.

Public Works increased expenses in 2011 by 3.7 percent, totaling $1,956,426.

Total expenditures in 2011 were $9.9 million, a 1.3 percent increase over 2010.

Supervisors this month also approved a budget amendment for 2011.

The capital projects fund and park development fund each increased by $23,750 to cover the cost for installing dugout covers for the softball fields at Rose Twig Park.

"They were approved at the end of 2010; the expense occurred over 2010 into 2011," Drosnock said. "We are asking for an amendment because the budget did not rollover into the 2011 year properly in the system. It's a housekeeping matter. The dollars were already approved by the board."

At the end of the budget presentation, Supervisor Mike Fox said it was nice to see the real estate transfer tax increase year over year.

"It was $759,000 for the year, which was $195,000 over what we earned in 2010," he said.

He also lauded the increase in mercantile tax in the township.

"Both are hopefully indications that some of the economic problems we've experienced here are starting to wane a little bit," Fox said.


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