MANCHESTER – Mayor Ken Palmer said this year’s municipal budget plans for the future.
“The big things to focus on this budget are that it did go up by $1.1 million from last year. There were three primary drivers for the budget going up,” he said.
He outlined those three drivers explaining, “number one our EMS (Emergency Medical Service) is now online so that is a $1,050,000 increase by way of salary and operating expenses. You will see a new line item in the budget and it is entitled ‘reserve for retiree allowance’ and that is in the amount of $250,000.”
“As we’ve talked about in our negotiations with our PBA, not this year, not next year but in the next three to six years a lot of our PBA and SOA, which are the rank and file police officers as well as our sergeants up, a large chunk of those employees will be retired. Along with them they get 183 days worth of pay in what it is called terminal pay.”
Palmer said the terminal pay was something negotiated into their contracts years ago and is basically unused sick time that they accumulated. “It is going to cost the township a significant amount of dollars when they retire.”
The mayor said the plan was for the township to start saving up for that situation now. “This year we are putting $250,000 aside and each of the coming years we hope to do the same if not more. When we are talking about the amount of money we are paying out if – I’m not mistaken – it is three to four million dollars worth of time that will be paid out. So, we have to start putting money aside to make those payments.
Mayor Palmer said another driver in increasing the budget was a land sale that occurred last year for a county park. “We received $1.4 million and we don’t have that next year so that is a hit to our general operating revenue that we can’t count on.”
The third driver was “another big and important item that has gone down is our capital fund which typically we had $500,000 in that line item. Last year it went down to $150,000 because we had some unspent reserve money for that but this year, we dropped it down $75,000,” the mayor added.
Mayor Palmer said that with the pandemic the township was falling behind. “COVID related expenses have caused us to fall behind on our schedules. We’re just not going to get to some of the paving and some of the capital improvements that we typically do. That line item actually went down to $75,000.”
Despite those issues the mayor added that overall the township was in good shape. “We ended last year with just over $7 million in our surplus, typically $2 million. We are going to use $4 million of that into our budget so our taxpayers don’t have to make it all up. That is basically our rainy day fund.”
The $4 million being taken from the surplus “will leave us $3.2 million in case of unexpected things come up so we don’t have to go back to the public for more money,” the mayor said.
Mayor Palmer said that typically over the course of time the township has used about 70 to 80% of its surplus and in 2010 93% was used. This year it will be 55%. “We are still in a good healthy position by not tapping into all our surplus.”
He noted the amount to be raised by taxation which is the portion that residents will pay on the municipal level of their tax bill is just under $22 million. It is $21.9 million which is up from last year. The mayor said this emphasized this was primarily due to the EMS and COVID related expenses.
The mayor said that as many residents may know from receiving their latest property tax bill – which was an estimated bill as the county and state budgets await being finalized – “our assessed value in town went up which resulted in our tax rate to go down.”
What this means is that the property throughout the town went up in value, so the tax burden got spread thinner than last year.
He said in 2019 the municipal tax rate was .6229 cents. This year it will be .5225 cents which he said represents a good reduction on the tax rate.
“For the average household, the average municipal tax in Manchester was $997 last year. Next year it will be $1,035 which is a $38 increase per household,” Mayor Palmer said.
“We do expect that while we are including some of the EMS revenue in the budget – about a million dollars’ worth – we expect next that will probably be doubled if the numbers hold true. So, we will have additional revenues next year which will offset some of the new line items we had this year,” the mayor concluded.
