Board of Supervisors approved Monday a preliminary $11.4 million budget with no increase in real estate taxes.
The proposed budget includes a surplus of $36,385.
Supervisors will vote on the final budget at their December 12 meeting.
Real estate tax millage remains at 1.49 mills.
One mil equals $1 for every $1,000 of taxable property value. Thus, Montgomery Township residents pay $1.49 for every $1,000 of taxable property.
The real estate tax rate was reduced from 1.61 mills in 2003 to 1.49 mills in 2006.
The Homestead Exclusion remains in the budget, at $30,000. More than 75 percent of taxpayers participate in the program, providing $308,000 in annual tax relief.
Finance Director Shannon Drosnock said township staff began discussions about the 2012 budget in August and September. Four public budget workshop meetings were held in October and the first week of November.
As a result of those meetings, revisions were recommended and incorporated in the 2012 preliminary budget.
The preliminary budget is available to view at the township building for 20 days.
Drosnock reviewed the township budget policy: Balance expenditures with current year revenues; maintain a minimum of 20 percent in the reserve fund; and transfer surplus fund balance to the capital reserve fund for potential operating deficits and future projects.
The general fund balance as of Dec. 31, 2011 is $3.52 million, or 30.57 percent.
The township has historically transferred surplus money into the capital reserve to pre-fund future projects. In 2010, $393,000 was transferred and $2.5 million remained in the general fund.
In the 2011 projected general fund balance, $2.6 million will remain, with $900,000 transferred to capital reserves.
Total general funds revenues in 2012 are projected to increase by 2.77 percent, from $11.2 million to $11.4 million.
"The 2012 preliminary budget anticipates an increase of 1.88 percent in tax revenues, for a total tax revenue of $9.2 million," said Drosnock. "It anticipates non-tax revenues of $1.8 million, which is a 6.12 percent increase."
The 2012 preliminary budget reflects a 6.64 percent decrease in interfund transfers, for transfers of $375,810.
"Those are revenues that come mainly from the capital fund to fund the equipment replacement program," she said.
Revenue components in the general fund for 2012 are split as such:
- Earned Income Tax - 33 percent
- Business Taxes - 28 percent
- Real Estate Taxes - 14 percent
- Transfer Taxes - 6 percent
- Permits - 10 percent
- Grants - 4 percent
- Other - 5 percent
"The township has pretty diversified general fund revenue sources," Drosnock said. "Business tax makes up close to a third of revenues and earned income tax is another third."
Real estate tax revenues are projected to decrease by 1.26 percent.
"It is anticipated that new construction will offset the majority of the impact of pending tax appeals," Drosnock said. "Earned income tax is budgeted with a slight increase of .8 percent, based on the current year receipts to date."
The 2012 preliminary budget also includes the same allocations for the fire protection fund and parks and recreation fund as in 2011: $260,000 and $100,000, respectively.
The real estate transfer tax has increased to 8.33 percent, based on 2011 actual collections, which are coming in higher than budgeted, Drosnock said.
Business tax revenues overall increased 3.5 percent, primarily because of the four collection periods of the newly-adopted Local Services Tax, Drosnock said.
Permit fee revenues are projected to increase by 6.78 percent, based on an estimate of fees for projected construction activity in the township in 2012.
On the general fund expenditures side, total expenditures for 2012 increased by 2.63 percent from last year, totaling $11.4 million.
personnel expenditures increased by 1.7 percent to $8.1 million.
Non-personnel expenses have increased 4.52 percent in 2012, totaling $2.57 million.
"That includes any equipment replacement funding, which is offset by revenues that come into the general fund from the capital fund," Drosnock said.
Interfund transfer expenses increased 6.97 percent to $711,450.
Half of the township expenses go to the police deparment. Here's how the rest of the expense components break down in the general fund for 2012:
- Public Works - 18 percent
- Administration - 11 percent
- Finance - 7 percent
- Building and Zoning - 7 percent
- Pension - 6 percent
As far as salaries and wages for 2012, an increase in wages for non-uniformed employees is to be determined by supervisors.
Uniformed police are budgeted with an increase in wages, per the terms of the collective bargaining agreement.
"The 2012 budget is budgeted for a total of 36 officers," Drosnock said.
Medical and insurance premiums will increase 2.78 percent.
"The Delaware Valley Health Insurance Trust is the company through which we receive medical and insurance premiums. They originally projected 10 percent. As the final numbers have come in, and including the Rate Stabilization Fund, the cost was lowered down to an increase of 2.78 percent," Drosnock said.
The largest individual departmental budget increase in 2012 is the police department operations budget, she said.
Administration non-personnel costs have increased 22.25 percent in 2012, she said.
There are five items to transfer to the capital reserves that the finance department expects supervisors to pre-fund in 2011 with 2011 surplus:
- A 14-year road replacement plan at $537,000 a year
- A 10-year equipment replacement plan at $402,400 a year
- Township building roof replacement at $20,000 a year
- Township room expansion at $10,000 a year
- HVAC equipment replacement at $10,000 a year
Under pension minimum payments, there will be an increase in police pension contributions to $476,300, up 10 percent.
There will be a decrease in non-uniform pension contributions of $207,700, down $2,200 from 2011.
Capital expenditures anticipated in 2012 include $413,080 for replacement equipment; $179,750 for new capital projects, including $50,000 park board initiatives; $1.6 million for curbs, sidewalks and road replacement; and $70,000 for traffic improvement engineering.
The fire services operating fund will have a surplus of $36,915 in 2012. The parks and recreation fund is balanced at $745,345.
Drosnock added that expenditures for the basin maintenance fund and the street light fund are balanced using current year revenues or dedicated reserves.
"Thanks, Shannon," said supervisor Joe Walsh. "You did a great job with the budget."