North Wales Votes Ahead 2024 Budget with Tax Increase

Dan Sokil | The Reporter•

After several weeks of discussion and debate, a new budget — and an accompanying tax increase — has moved forward in North Wales.

Council voted unanimously last week to adopt a 2024 budget, and advertise a tax ordinance carrying a one-mill increase for that year.

"Everyone knows that expenses are increasing. We don’t have the luxury of increasing our revenues, like everyone else does,” said council President Sal Amato.

"We can’t sustain this level of services with this level of revenues. We have to do something,” he said.

Posted for public review and input in early November, the budget balances expenses and revenues at $9.4 million, with the town’s average property assessed at just over $126,000 and the current 6.0 mill tax level resulting in an annual bill of roughly $759, or roughly $63 per month, for that resident.

Increasing that level by 1 mill to 7.0 mills would raise that resident’s bill to just over $885 or $73 a month, borough Manager Christine Hart said, and while the 2022 tax increase went largely toward debt service costs to repay a $2 million borrowing for capital project costs, the proposed 2024 tax increase would largely go toward police and personnel costs.

"We have four fulltime (police) officers that are contracted. We are proposing for 2024 that we go into a probationary officer situation, with hiring a fifth officer,” she said.

"We’re not anticipating keeping the department at five, we don’t feel that will be sustained over a long period of time, but we do know we are being proactive” if an officer departs or retires during the current police contract that runs through 2026, the manager said: "For the next three to five years, we can sustain five officers easily. That’s part of the tax increase.”

Last Increase was for 2022

In late 2022 council approved a $9.7 million budget for 2023 keeping taxes level at the 6.0 mill level last changed in 2021 for ’22, and throughout the year since, staff have reported on various projects around town, including an update to the town’s zoning map, annual road repaving, grant-funded park projects, and renovations now underway to a borough-owned former church and office building on Main Street.

Talks on the town’s 2024 budget started in late October, when the manager went line-by-line through the draft budget with council, then continued with talks on Nov. 14 on approvals scheduled for the upcoming weeks.

"Council voted in 2021 for a tax increase for 2022. We sustained that in 2022 and 2023, so this will be the first in two years, of any tax increase,” Hart said. "The two years we did sustain that level were not easy years, especially being post-COVID, and having the market be in the conditions it was in.”

Cost increases due to supply chain issues and inflation account for much of the rest of the 2024 increase, the manager told council, citing heating oil and fuel oil as cost drivers, along with contracted salary increases for police and nonuniform employees.

"We’re really frugal, and we don’t spend a lot of money, but this tax increase is basically an example of what all of us are dealing with: food has increased, gasoline has increased, insurance has increased, and it has not been easy for any of us,” she said.

Of the town’s annual revenues, roughly $810,000 is projected to come from real estate taxes, another $500,000 from earned income taxes, and roughly $75,000 from transfer taxes, figures the manager said are all based on the total assessed value of all real estate in the town: "We try to be conservative, and not rely on something we don’t have in hand.”

On the expense side, just over $1 million is budgeted for police expenses, largely salaries and benefits, with another $519,000 allocated to administrative, legal and engineering costs, and $283,000 for public works from the general fund, not including the borrowing and grant-funded projects.

VMSC Funding

One new expense this year: a $15,000 allocation to the Volunteer Medical Service Corps of Lansdale, which has sought regular funding from several area municipalities to permanently fund their emergency responders in lieu of changing the town’s tax millage allocation categories to do so.

"Council would have to approve that, when the time comes, but I wanted to etch that in because we have seen the presentation, and I know that council and our borough does recognize that EMS does need funding,” she said.

One piece of good news for the town and its taxpayers: the current high interest rate environment has helped with interest earnings on reserves, with a $3 million reserve fund established in 2006 when the town sold its municipal sewer plant, then drawn down by roughly $350,000 in 2016 when the town bought the main street church and office building, now nearly restored by shifting those reserves to high-interest, short-term investments.

"The latter part of last year, and beginning of this year, have really made up some distance on the investments. We’ve been able to recover the purchase price of the church, so we are back up to $3.2 million,” Hart said, with that surplus typically available for capital improvements or equipment if so allocated by council.

Councilwoman Sarah Whelan asked if staff had considered requesting a smaller tax increase this year and another increase in a subsequent year. Hart said they had, and council determined that the cost of legal advertisement for fresh tax ordinances each year could make doing one increase, sooner, less costly than splitting.

"I think we are definitely good, unless some catastrophe happens, for I want to say at least three years” until the next increase, Hart said.

During the budget discussions, councilwoman Anji Fazio asked if the group could consider increasing the monthly stipend for council members and the town’s mayor, and when would be the best time to do so. Hart and solicitor Greg Gifford said they did not recall any such increase happening since the late 1980s or ’90s, and that any such increase would not take effect until after any council members in office at the time were reelected, or new council members elected that had not voted for the increase, and said they’d look into options and costs for doing so and report back to council.

After the line-by-line budget breakdown on Oct. 24, the manager gave an update on Nov. 14, saying the budget presentation posted on the town’s website included info on the town’s projects accomplished in 2023, those anticipated for ’24, and explanations of each subsidiary fund and their projected expenses and revenues for next year. Council voted unanimously on Nov. 14 to advertise that budget for public input and feedback, and subsequently voted on Nov. 28 to adopt the budget itself and advertise the tax ordinance for action in December.

Borough council next meets at 7 p.m. on Dec. 12 at the borough municipal building, 300 School Street. For more information or meeting agendas and materials visit www.NorthWalesBorough.org.

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