Towamencin’s 2024 Draft Budget Carries Sewer Rate Increase, No Tax Increase

Dan Sokil | The Reporter•

The news for Towamencin’s residents will be mixed once 2024 arrives.

Township officials got a preview last week of the township’s budget for the upcoming year, and the raise in one rate needed to make it happen.

"The 2024 budget contemplates no property tax increase. It also contemplates no borrowing for next year. We are proposing an increase in the sewer rental fee, from $450 to $590,” said township Manager David Kraynik.

Last December the township’s supervisors approved a roughly $16.7 million operating budget for 2023, with a tax increase for that year and no sewer rate increase, one year after approving a sewer rate hike from $375 to $450 per year and no tax increase in 2021 for 2022, which followed a vote in 2020 for the first township tax increase since 2010. The sewer rate has been the subject of multiple years of debate tied in with the township’s sewer sale saga, and that sale is currently in litigation and pending approval from the Pennsylvania Utility Commission, as residents try to reverse the board’s 2022 decision to sell the system.

During the board’s Nov. 8 meeting, Kraynik and finance director Adam Szumski outlined the projects completed during the current year, and projected expenses and revenues in the draft 2024 budget, derived from internal talks that started in late summer, and a series of public budget workshop meetings that started in October. The presentation was accompanied with a series of charts in which the finance director broke down the percentages of expenses for each category, and from each revenue source the township takes in.

"As is typical for a municipality, police is the largest cost center, at $4.4 million in the 2024 budget — that is 34 percent of those funds’ operating expenditures,” Szumski said. That police budget includes a total of 23 uniformed officers, including the police chief and lieutenant, staffing kept level from the current year, he said.

Other expenses projected in the 2024 budget include just over $2 million for public works, parks and pool costs, $2 million for debt service, $1.9 million for general government costs, which covers administrative staff, IT, building maintenance, and tax collections, and insurance and overhead expenses have fallen slightly since the prior year, the finance director said. On the revenue side of the budget, real estate tax revenues are the township’s largest source of income and are projected to yield just over $4.9 million or roughly 39 percent of township revenues, with earned income taxes providing $3.9 million or 31 percent, interfund transfers $1.5 million or 12 percent, and roughly $450,000 from the realty transfer tax and $380,000 from the local services tax.

"That’s a slight increase in total revenue next year, just due to marginal gains in total assessed value in the township,” Szumski said; the earned income tax number "should come in a little bit over $4 million, but we always hedge against potential recession concerns.”

A color-coded bar chart drew the most discussion, depicting the township’s scheduled debt repayments from 2024 through 2035, as various borrowings are paid down over time. Debt service payments are projected to be roughly $2.7 million in 2024 and ’25, then to drop to just above $2 million in 2026, and down to roughly $1.5 million through 2031, as older borrowings are paid down — and assuming the sewer sale, which the supervisors have said could be used to pay off all of the debt — doesn’t close in the near future.

"That’ll open up the opportunity to address potential stormwater issues, or other major capital needs, operating needs, however the board may see fit when the time comes,” he said.

Staff have also made requests for capital projects to improve various assets long-term, and the list in the draft budget includes road widening and stormwater upgrades along Weikel Road, the township’s regular road paving and curb ramp replacement projects, a roof replacement for the township administration building, $100,000 in funding for design costs to accompany a township-wide sidewalk study, replacement of a sewer interceptor along the Skippack Creek, and several upgrades to Grist Mill Park partly covered by grant funding.

"The hardest part of the budget this year, as it was last year, is to weigh the many capital requests against the available funds,” he said.

Sewer rate increase

"Much of the increase in the sewer rental fee, from $450 to $590, is going to be passed into the sewer capital fund, which will continue the I-and-I program” of infiltration and inflow sewer line repairs throughout the township, Szumski told the board, and to complete a sewer line upgrade along the Skippack Creek while designing similar repairs in the Inglewood neighborhood near Allentown Road.

Based on an average assessed value of $160,000, the average resident’s tax bill will remain $626 at the current millage level, with the township’s homestead exemption kept level at $50,000, which the finance director said is one of the highest in the state and saves that average resident roughly $284 in township taxes. The total annual tax bill for that resident would be $4,477 from the North Penn School District or 77 percent of their total taxes, and $740 or 13 percent of the total from Montgomery County’s taxes, he said.

Rebecca Curlett asked if the debt chart included the completion of the sewer sale.

"That (chart) does not contemplate, at this time, any sewer sale,” Kraynik said, and board Chairman Chuck Wilson added that the current schedule of debt payments running through 2035 are based on the debt being paid off as it matures.

Resident Bruce Bailey said he’s repeatedly called for the township to cut spending, and said he didn’t see how the debt was decreasing. Szumski then explained that the debt payment schedule was last modified in 2021 when the supervisors refinanced earlier debt, and the current budget has no increase in the total debt load.

"We’re not borrowing more. We’re paying down our debt. We paid down over $2 million of obligations this year, and we will pay down $2 million more next year, and the next two years,” he said.

"This shows how that will track. It doesn’t anticipate any new borrowing at this time, and we don’t include that in the budget,” he said.

Supervisor Joyce Snyder asked for clarification, that the bar chart reflected the annual payment amounts and not the total debt balance.

"The payments are not reducing year after year, but the (outstanding) amounts are. Because we are paying down our debt,” Snyder said, and Szumski confirmed. The finance director then added that a chart of the total debt load would be included in the publicly advertised budget, and Wilson said that chart is found in the township’s monthly financial reports posted online.

Resident Cheryl Portwood asked about the increase in EMS funding, and Szumski said the contribution amount increased via adjusting the millage. Portwood then asked if the budget included added funding for police, and Szumski said there were five new staff positions requested from department heads in the budget, and the only one funded will be a new in-house fire marshal.

"The only position we’re adding this year is the fire marshal position. A lot of that cost is offset because they would be taking over stuff that’s currently contracted out,” he said.

Kraynik added that all provisions in the township’s contract with the police department are covered and funded, and Wilson clarified: "There are not any less police officers. They were looking for some additional officers; we did not fund that in this budget. But we do fund for the vacancies that come up during the year.”

James Collins asked if the parks allocation in the budget would cover maintenance or capital projects and improvements, and Szumski said the pie chart showed maintenance costs, while capital was included in the separate capital list. Collins then added that he’d also back increased police funding to keep up with population growth.

"As we do that, there will be an increased need for additional police officers, and other infrastructure: police, fire, and so forth. That’s something we should keep in mind,” Collins said.

Wilson then asked for a motion to advertise the 2024 budget, and supervisor Laura Smith made the motion, with supervisor Rich Marino seconded. All five supervisors then approved the motion to advertise unanimously, and Wilson said final approval could happen at the board’s Dec. 13 meeting.

Towamencin’s supervisors next meet at 7 p.m. on Nov. 21 and Dec. 13, both at the township administration building, 1090 Troxel Road. For more information visit www.Towamecin.org.

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