Citizens Budget & Finance

Advisory Committee

June 14, 2010

Objectives

With You Today

Background
Our Approach
Activities to Date
Overview of Township Finances
Citizens Budget Survey
Interim Recommendations
Discussion
With You Today

Sarah Armstrong, Chairperson

Christopher Watson, Secretary
Robert Boehringer
Joe Ellis
Nicholas Kemp
Jerry Linden
Rob Murdocca
Craig Wheeland
Philip Wilson
Background

The Citizens Budget and Finance Advisory Committee

(CBFAC) was appointed in December 2009 by the Board of
Commissioners and charged via public Resolution 2010-10
dated February 22, 2010.
The volunteer Township citizen group was assembled to
assist the Commissioners address the budget and financial
issues of Radnor Township.
The Committee is strictly advisory and has been charged with
developing a report of observations, analysis, and strategic
budget recommendations by October 15, 2010. The current
CBFAC will expire December 31, 2010.
Our final report will be presented in October 2010.
Our Approach

Focus on what Radnor residents truly want from local

government.
Increase citizen participation within the townships budgeting
process.
Solicit public input through Citizens Budget Survey.
Understand programmatic demands from department heads
and the public.
Acknowledge that there are tough decisions that must be
made.
Be open minded - there are no bad ideas!
Be creative - think outside the traditional box!
Activities to Date
Held semi-monthly working sessions to review and
discuss township budget issues.
Reviewed and analyzed township documents.
Conducted interviews with township department heads
to better understand township programs and services.
Met with bond counsel and advisor to discuss the
township's current debt burden.
Met with the Township Manager to discuss his vision for
the township.
Issued interim recommendations to the Board of
Commissioner on May 20, 2010.
Township Finances
 Consolidated Township Budget
All Funds
Expenses exceed revenue
2010 2011 2012 every year from 2010
through 2012.
Revenues $36,266,851 $37,239,485 $38,406,624
Radnors Rainy Day
Expenses $40,109,736 $39,567,961 $40,548,399
Fund will be reduced by
Net ($3,842,885) ($2,328,476) ($2,141,775) $8.3 million by the end
of 2012.

Beg. Fund Balance $10,975,855 $7,132,970 $4,840,494 Immediate action is

necessary to realign
Net Change
*Includes ($3,842,885)
transfers. ($2,328,476) ($2,141,775) expenses to match
End Fund Balance $7,132,970 $4,804,494 $2,662,710 revenue expectations
going forward.
Eight separate funds create the consolidated budget
General Special Assessment
Sewer Park Improvement & Open Space
Liquid Willows
Capital Debt Service
 General Fund -
Revenues and Expenses
Transfer to Debt
Service - 11.5%
Real Estate Protection to
Taxes - 41.8%, Persons and
$10,368,212 Property -
22.3%
Insurance &
All Act 511 - Benefits - 22%
33.7%,
$8,368,545

General Government - 8.4%

Real Estate Taxes - 41.8% All Act 511 - 33.7%
Protection to Persons and Property - 22.3%
Licenses & Permits - 6.9% Fines & Costs - 2.3% Sanitation - 6.2%
Interest & Rents - .6% Grants & Gifts - 4.2% Highways - 8.9%
Departmental Earnings - 5.5% Refunds & Miscellaneous - .3% Library -3.1%
Transfers - 4.6% Parks & Recreation - 7.7%
Insurance & Benefits - 22%

2010 Budgeted Revenues - $24,796,048 2010 Budgeted Expenditures - $26,191,323

Real Estate and Act 511 Taxes (Business The General Fund supports 6 major program
Taxes) are 76% of Revenues. areas
Real Estate Taxes have held steady, and will Only some of the townships expenses may
grow with the recent 2010 11% tax rate be reduced through budgetary reductions,
increase. other contractual expenses (e.g., debt
payments, pension obligations) must be
Realty Transfer, other Act 511 taxes, and realigned through negotiations.
Licenses and Permits revenues have
decreased.
Radnor Township Debt
Principal and Interest Total
Total Principal Due $56,480,000
Total Interest Due $33,578,254
Total Payment of P&I due through 12/31/2037 $90,058,254

Annual payment of principal and interest due:

2010 - $4,520,552
2011 - $4,782,285
2012 - $4,775,310
The township issues general obligation bonds for the purpose of funding
capital projects and purchasing capital assets such as land, buildings,
machinery and equipment, etc.
The township owns or has permanently preserved (or condemned ) more
than 550 acres of land.
Budget Survey
Citizens Budget Survey -
General Findings
The CBFAC closed on June 1, 2010; CBFAC is in the
process of further analyzing the results to be
included in the final report.
734 survey responses were received.
336 of respondents provided additional written comments.
68% of survey respondents have lived in the township over 11
years.
98% of all respondents are Radnor residents and
homeowners, and 15% are Radnor businesses owners.
78% of respondents felt that any future surpluses should be
used to restore the fund balance, followed by respondents
preferring reducing taxes and enhancing certain services .
Citizens Budget Survey -
General Findings (continued)
The comments contained many valuable observations, ideas
and suggestions, which the CFBAC will review and
investigate. Many respondents felt that there were areas to
reduce expenses or gain efficiencies.
Respondents generally divided services into essential and
non-essential (i.e. nice to haves), with strong support for the
essential services, but feeling that the nice to haves may
have to be deferred, or funded outside of taxes.
Respondents strongly prefer raising existing user fees rather
than increasing taxes.
Many respondents felt that employee benefits programs
should be reviewed.
Interim Recommendations
Interim Recommendations
The following interim recommendations were sent to the
Board of Commissioners on May 20th, 2010:
Effective immediately, retain all Township Real Estate
Transfer tax receipts in the General Fund; discontinue the
practice of transferring 25% of these receipts to the Open
Space Fund.
Evaluate refinancing the 2002 Bond Obligation for estimated
savings of $640,000; total actual savings will be subject to
market conditions and fluctuations.
Omit salary survey project for 2010, resulting in
approximately $100,000 of savings. Rely on data provided
by neighboring townships and data from professional
associations, such as the International City/County
Management Association.
Interim Recommendation (continued)

Execute a revised professional services agreement with

the Township Solicitor; the agreement should be
structured on a fixed (not-to-exceed) monthly payment
for all services performed in representing Radnor
Township in general legal matters. Define categories
that would be considered general legal matters, which
would be covered by this monthly payment. Establish a
protocol for engagement of services for non-general
legal matters, which should require prior approval, in
writing, by the Board of Commissioners.
Interim Recommendation (continued)

Implement an immediate moratorium on further

Township indebtedness.
Implement an immediate moratorium on
acquisition of any additional Open Space.

The above recommendations are submitted in

order to address the immediately pressing
financial issues in 2010. These
recommendations will be further expanded on in
our final report.
Discussion
Contact

Citizensfinance@radnor.org