2015 Franconia Township Budget Presentation - Public Work Session

8/11/2019 2015 Franconia Township Budget Presentation - Public Work Session

1/18

Franconia Township

20/20A five-year vision and plan for fiscal sustainability


2/18

To put Franconia Township on a path oflong-term fiscal sustainability


3/18

Franconia Township

Franconia Township is a Second Class Township in theCommonwealth of Pennsylvania. It has a population ofapproximately 13,064 (2010 Census). Organized in 1732,Franconia has a long and proud tradition for being anoutstanding community for both residents and businesses.

Located in Montgomery County, PA, in the Indian Valley,Franconia is approximately 14 sq. miles in size. There areover 4100 households, with over 4700 taxable properties.

The current 2014 real estate millage rate is 1.5475. The2014 total assessed valuation is over $827,573,846.


4/18

Like many municipalities throughout the Commonwealth of Pennsylvania,increasing costs and flat revenue have created a structural imbalancefor Franconia Township. Operating Expenditures have outpacedOperating Revenues.

Health Care Costs have risen from $550,000 in 2008 to $815,000 in 2013(increase of 33%).

Pension Costs have risen from $273,000 in 2008 to $400,000 in 2013(increase of 32%).

Professional services have risen from $175,000 in 2008 to $240,000 in2013 (increase of 27%).

Revenues have remained relatively stagnant at an average growth of 1%.


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-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

2008 2009 2010 2011 2012 2013

Over the past five years

Revenues Expenses


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-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

10,000,000

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Projected to 2020

Revenues Expenses


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Doing Nothing Is not A Solution.

The current 2015 budget shows an operating deficit. Thebudget committee and staff will continue to work on avariety of options for the Board of Supervisors to consider.

Simply addressing this deficit through a real estate taxincrease would be short-sighted. A combination ofrevenue enhancements and reductions in expenditures,township-wide, will be analyzed over the next severalweeks.


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A multifaceted problem will take amultifaceted solution.

Municipalities throughout Pennsylvania have been faced withthe same fiscal challenges that we are currently facing.

There will need to be a combination of solutions to remedy

the fiscal imbalance, including revenue enhancements,reductions in expenditures, increased efficiencies,additional reliance on technology, and new ways ofthinking about local government.

There is no simple solution to the problem.


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Our Current Revenues

Pennsylvania Act 511, the Local Tax Enabling Act, controlsa municipalitys ability to garner new revenues. There arevery few options for municipalities to increase revenues,outside of the real estate tax millage.

Currently, the bulk of our revenues are derived from realestate taxes, earned income taxes, state allocations, and

user fees (permits, sub-division and land developmentfees, rents, etc).


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Township-wide, employee salary and benefits make up over 77% of the

overall township operating budget, up from 69% in 2008.

77%

7%

5%4%

4% 3%

Township Expenses in 2013

TotalSalaries/benefits

Admin other

Police other

Public Works other

ProfessionalServices

69%

12%

6%

6%

4% 3%

Township Expenses in 2008

TotalSalaries/benefits

Admin other

Police other

Public Worksother

ProfessionalServices

Breakdown of Expenditures


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The police comprise 59% of those salaries/benefits, up from 55% in 2008.

Salary/Benefit breakdown by department

Admin25%

Police55%

PublicWorks20%

Admin21%

Police59%

PublicWorks20%


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Our Current Expenditures

Currently, the Police Department makes up over 50% of the general fund

operating budget.

FSA10%

Adminstration19%

Police53%

Public Works15%

Professional

Services3%

2013


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Solutions

We must address our structural imbalance with a long-term plan in mind. One year band-aids will only put us inthe same situation next year.

The solution must be comprehensive, must address allaspects of township operations, and must be sustainableinto the future.


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But, how do we do this? When Approximately 22% of Franconias real estate assessed value is Tax

Exempt, which include regional assets such as churches, schools, and

non-profits.

This 22% ranks Franconia amongst the highest rate of non-profitassessments county-wide, and highest amongst our neighboringmunicipalities:

Franconia 22%Lower Salford 7%

Towamencin 14%

Hatfield Township 15%

Souderton Borough 10%

As a residential community, the burden falls on homeowners to pay formunicipal services.


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And, our overall for-profit assessment iscomparatively low.

Franconias 2013 Assessed Valuation was $826,663,806,compared to similarly sized (similar population, sq.milage, etc.) Lower Salfords Assessed Valuation of$1,059,742,520.

While Franconia enjoys wonderful amenities, excellentquality of life, and vast amounts of green space, ourtaxable assessment values lag compared to similar-sizedadjacent municipalities.


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Franconias tax rates have remained muchlower than surrounding, comparable

municipalities

1.5475

2.6065

5.73755.3875 5.2220

3.8080

2.8680 2.7270

3.4870

Total Millage


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Real Estate Tax Revenue(dollars per taxable property)

Note: Salford and Upper Salford Townships do not have police departments, buttheir per property contributions are greater than Franconia Township.Approximately 58% of PA townships with populations between 10,000 and 15,000do not have their own police departments.

209

503

705621

932

536

211 232

367 357

0100

200300400500600700800900

1,000

Tax revenue per taxable property


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Summary Like other municipalities statewide, Franconia Township is

faced with rising expenditures that are outpacingrevenues.

This structural imbalance must be addressed immediately,or the problem will only grow.

Solutions will come from a combination of new revenues,increased efficiencies, reducing expenditures, leveragingtechnologies, and new ways of thinking about how localgovernment operates.

Over the next several weeks, the township budgetcommittee and staff will work on several options that willhelp put Franconia Township on a path to long term fiscalsustainability.

Documents

2015 Franconia Township Budget Presentation - Public Work Session