President Bollendorf, Vice President Stockton, Councilman Hegele, Councilwoman Anzinger, Councilwoman Benjamin, Councilman Forgeng, Councilman Rich, Mayor Guenst, Manager Hegele, Assistant Secretary DeRenzis, Finance Manager Wells, Superintendent Sine, Chief Gardner, and President Mount were present.
ABSENT – Treasurer Kalnjas was absent
CALL TO ORDER
President Bollendorf called the budget workshop to order at 6:11 PM
President Bollendorf stated he met along with Vice President Stockton, Manager Hegele, Finance Manager Wells and department heads over the last weeks to prepare the current draft of the budget. He stated that during this workshop, Council will discuss the current 2018 budget with relation to the current year numbers and review the proposed budget for 2019. He added that the 2018 budget underestimated expenses and overestimated income which is not ideal. He noted that no cuts have been made to the current 2019 draft and that they will be using the shortfalls from the 2018 budget to help budget for 2019.
President Bollendorf reviewed the Sinking Fund in which the Borough’s long term debts are paid. When reviewing the 2018 budget numbers based on the Borough’s expenses as of November 2018, he noted that the estimated Sinking fund revenue was under by $51,693.00 and while the Borough is expected to collect $15,000 to $20,000 in tax revenue before the end of the year, this number will still be off. President Bollendorf noted that in order to pay the Borough Authority Loan at the end of 2017, the Borough transferred $144,686.00 from the General Capital fund to make the payment. President Bollendorf stated that the Borough expected to get this money back; however, it will not, and he has instructed Finance Manager Wells to readjust the millage rate to increase the general fund by the same number to meet the Borough’s obligations.
President Bollendorf reviewed the Fire Protection Fund for 2019. He noted that the Fire Company’s income is determined by millage. He noted that they have been on schedule with their capital plan for the purchase of large equipment. President Mount noted that the majority of their expenses are their operating budget.
President Bollendorf reviewed the General Fund. He stated that tax income for 2018 was overestimated. Manager Hegele stated that Tax Collector Emig stated around $88,000 in taxes between Sinking, General, and Fire are due before December 31st. President Bollendorf stated he suspects previous Council was expecting Hatboro Station to be completed by now.
President Bollendorf covered other over-budgeted items that included income tax, real estate transfer tax, local fines, and permits. Mayor Guenst stated the revenue line items for the 2018 budget look like they were inflated.
Mayor Guenst asked who prepared the budget for 2018. Manager Hegele stated former councilpersons Harbaugh and Tompkins, Councilman Rich, former manager and finance manager, and herself prepared the 2018 budget last year. Mayor Guenst asked if they expected Hatboro Station to be completed by now. Councilman Rich stated yes. Mayor Guenst stated they shouldn’t have counted Hatboro Station because the expected collected revenue for 2018 is overestimated by $500,000 which is a major mistake. Mayor Guenst stated that the Borough shouldn’t borrow money to pay their debts and it is upsetting that money was not set aside for improvements, officers entering the drop program, and others. Mayor Guenst stated that she is extremely upset that the Borough Authority gave the Borough a loan for facility improvements instead of giving the Borough the money as now the Borough debt that it shouldn’t and she is disappointed that they are not helping the town like they should.
President Bollendorf reviewed the expected 2019 revenue lines. He noted that when preparing budget numbers for 2019, they underestimated revenue and overestimated expenses to avoid any budgeting errors made with the 2018 budget. He also directed staff not to budget for Hatboro Station or Jacksonville Green for 2019.
Councilman Rich mentioned that the Borough could have borrowed money from TD bank instead of the Authority Loan; however, borrowing the money from the Authority, the Borough would benefit from the interest paid years down the road. President Bollendorf asked if previous Council asked the Authority to give the Borough the money for the improvements. Council Rich said they would not give them the money. Mayor Guenst stated that Borough Council runs the town, and the Authority should have been given to the Borough for facility improvements instead of giving the loan with an interest rate. Vice President Stockton stated that he hopes they can resolve this situation because he does not want to have to raise taxes as a result of this obligation.
President Bollendorf stated that Council still has to decide how much of the DVIT credits they will use to offset insurance premiums. He noted they will be doing this at the October 22, 2018 Council meeting minutes.
President Bollendorf discussed the expenses for each department in the Borough. He stated that the some of the expenses are estimates such as health insurance are based on projections given by DVIT and can change once final numbers are received. President Bollendorf stated that employee wages include raises, some contractual, some not. Manager Hegele stated that the DVIT health insurance premiums can decrease in the budget as DVIT stated the increase for insurance premiums will only be 4.63% as opposed to the 15% included in the budget.
Mayor Guenst asked if the Borough has received the 2017 Audit. Manager Hegele stated that the Borough has not yet received the audit and only has the 2016 Audit as reference.
Finance Manager Wells noted that utility line items have been estimated based on averages over the last few years. She added there is a buffer included with these expense lines, so they can be reduced slightly if needed.
President Bollendorf reviewed the legal services for 2018. He noted that the Borough is over for both general legal and special legal expense lines for 2018. President Bollendorf noted that Wawa was grossly under budgeted for 2018 and that the Borough has spent along $80,000 so far for Wawa alone. He stated that Solicitor Kilkenny estimated that the Borough will have to pay at least $70,000 to pursue the appeal and that Council will be voting whether or not to fight the appeal on Monday, October 22. Manager Hegele noted that this $70,000 estimate also includes possible Zoning Hearing Board legal fees.
President Bollendorf reviewed the Police expense items for 2018. Chief Gardner stated that the Police Part Time Clerks are over budget for 2018 due to needed staff coverage. Chief Gardner stated that Overtime was budgeted low for 2018 and is way over budget for this year due to lack of coverage. He added that some of the overtime is reimbursable so the cost is recovered. Chief Gardner stated that he budgeted overtime using an equation and it is hard to predict. He stated they should budget higher for 2019 overtime to be safe. President Bollendorf reviewed the contractual police expenses such as longevity, OIC pay, education, etc. Chief Gardner stated he would like to lower the parking enforcement budget as the department is doing well with parking enforcement in 2018 while being under budget for hours worked. Chief Gardner stated the building maintenance line item for the Police Station is still a wild card as the building is still new and they are still working to create accurate estimates.
President Bollendorf discussed line item 410.850, “One Time Expenses”, which covers any officers heading into the DROP Program. He noted that the Borough has an obligation for 2019 in the amount of $210,000. He noted that the Borough should have been saving money for this in the past; however, nothing has been saved to cover these costs. President Bollendorf noted that previous Council was notified in 2016 that three officers would soon be entering the DROP Program and yet nothing was budgeted. Chief Gardner stated that the Borough’s financial statements include the accrued liability time; however, nothing was every saved or budgeted which is a problem. President Bollendorf stated he does not want to blame anyone specifically; however, this money should have been saved over the years for situations like this. He added that he is confident that Council can fix this problem going forward and make sure money is saved for future years to plan ahead. Mayor Guenst agreed that not saving the money in the past was extremely irresponsible.
President Bollendorf and Superintendent Sine reviewed the Public Works expenses for 2018 and 2019. President Bollendorf stated Public Works wages include a contractual raise. Councilwoman Benjamin asked if the main street custodian would be full time. President Bollendorf stated he would like to see the position worked a few hours a week until the Borough can make it a full time position. Superintendent Sine stated he would like an education line item included for Public Works. Mayor Guenst asked how much money he thought was appropriate. Superintendent Sine stated he would be comfortable with $2,000.
President Bollendorf reviewed the maintenance costs for the Second Alarmers facility. Manager Hegele stated that contractually, the Borough will handle exterior maintenance of the facility and Second Alarmers is required to handle the interior maintenance.
President Bollendorf stated the Little League was in attendance to ask for support. Mr. Ben Barber from Hatboro Little League stated they have some projects that will require assistance, they include non-skid tiles, rubber matting, foul ball netting, and canopies for the stands. President Bollendorf asked if the Little League was comfortable with $10,000. Mr. Barber stated yes.
President Bollendorf stated Council will be making many improvements to Borough parks including a sand volleyball court for Memorial Park and work in Eaton Park. President Bollendorf stated he would like to perform an engineering study on Miller Meadow to help with obtaining the Montgomery County Grant. Manager Hegele stated she can obtain a rough estimate to be referenced when budgeting for parks.
President Bollendorf asked if the Borough has received any requests for funding from the Library yet. Manager Hegele stated they have not received anything yet and that she will reach out to the new Librarian to ask him. Mayor Guenst stated she spoke with the Library and they may need to replace their roof in 2019, so they will definitely need funding. Dave Stockton stated that the Borough shouldn’t reduce funding for the Library in 2018. President Bollendorf stated that the Library is looking into a referendum; however, this wouldn’t be in effect until at least 2020 and requested that Manager Hegele schedule a meeting with the Library.
President Bollendorf stated that Second Alarmers has requested $48,000 from the Borough and that there was no one from Second Alarmers present. President Bollendorf stated the contractual amount is $25,000. Councilman Forgeng sated he is comfortable with staying with the contract because the Borough is scarce on money in 2019 according to the budget and the Borough already supplies the Borough with a free building and utilities. President Bollendorf stated that Second Alarmers pays $1 per year to have use the building. Vice President Stockton and Councilman Hegele stated that while they are not comfortable with providing Second Alarmers extra funding in 2019, they would revisit in 2020.
President Bollendorf stated that the Historical Commission requested $1,000 for a website and to cover costs of conserving objects from the recently uncovered time capsule. President Bollendorf stated that a historic town should fund this.
President Bollendorf stated that after all of the expenses, the budget currently has a $754,000 deficit. While some are onetime costs including the DROP payments and the Wawa appeal, others are not and need to be resolved. President Bollendorf stated with the insurance reduction and the onetime costs removed, the Borough is still looking at a deficit of around $250,000. President Bollendorf stated these costs will still be paid, but the Borough needs to figure out how. Mayor Guenst stated that the Borough has limited options. She stated the Borough could ask the Authority, but the Authority had to be asked 3 times prior to fund a traffic light project and only agreed to fund when a denial letter was requested. The Mayor stated that Council could ask the Authority to help the Borough since a lot of the debt is due to the loan they caused the Borough to take. Mayor Guenst stated it would be a good idea to find a more aggressive investment policy for the Authority and their $3.7 million in assets. Vice President Stockton stated that it’s worth noting that the Borough has been operating at a deficit for years and there hasn’t been a surplus to put in savings for a while. President Bollendorf added that the Borough has not yet mentioned putting any money in the Borough Capital fund in 2019 and noted that this fund was being used to pay expenses in years previous due to the deficit. Vice President Stockton stated that the Borough needs to be operating at some sort of a surplus to save money for the General Capital Fund, the accrued liabilities, and so on. President Bollendorf stated that the Borough cannot rely on litigation and selling things to operate.
Councilman Forgeng asked if Hatboro already has one of the highest tax rates. President Bollendorf said yes and that this burden cannot be on the taxpayers. Mayor Guenst agreed and stated that Council should still consider raising taxes a little anyway due to increased costs of living. Councilman Forgeng stated that little increases eventually add up and chase people out of their homes. President Bollendorf stated he will put an item on the agenda to discuss the Authority. Councilman Forgeng stated that previous Council knew about the DROP program. Mayor Guenst agreed and noted that their lack of saving was very irresponsible. President Bollendorf directed Manager Hegele to talk to the solicitor to see what the Borough’s options are.
President Bollendorf stated the Hatboro Memorial Pool did great and made roughly $25,000 for the year after all expenses. He noted that Council is looking to continue the improvements and transfer money into the Swimming Improvement fund. He added that he will be holding a pool wrap up meeting on Monday, October 29 and that Council will be asking Pool Manager Jagger to return.
President Bollendorf stated that the Finance Committee should revisit the budget after the meeting and make revisions. Manager Hegele stated Council will be approving a preliminary budget on November 5th and the final budget on December 3rd. Manager Hegele stated that she has been a part of the budgeting process for a long time and that Finance Manager Wells has done a fantastic job. Council thanked Finance Manager Wells for her hard work as well.
The October 17, 2018 Budget Workshop was adjourned at 8:09 PM
Assistant Borough Secretary
Transcribed by Assistant Borough Secretary DeRenzis