Commissioners Debate Over 2012 Budget

Eight out of nine commissioners approved the first reading of the proposed 2012 budget that calls for an 8.3 percent tax increase.

Seventh Ward Commissioner James McGarrity told the Haverford-Havertown Patch after the Haverford Township Board of Commissioners adjourned their budget meeting Monday night that he did not vote in favor of the proposed budget because he wanted to look at it in more detail before siding with his fellow commissioners.

Sixth Ward Commissioner Larry Holmes presented the proposed $35,866,723 budget as a PowerPoint presentation to the board. Holmes explained that the majority of the revenue for the proposed 2012 budget would come from real estate taxes.

In 2011, real estate taxes brought in $18,625,061, but the proposed 2012 budget predicts a revenue of $20,257,693, an 8.8 percent increase. 

The real estate tax proposal would make up 56 percent of the revenue, or operating budget, for 2012, Holmes explained.

But the department earnings is the first biggest source of revenue, with an 11 percent expected increase. In 2011, the department earnings were $4,833,027, but the projected department earnings for 2012 is expected to be $5,407,799.

“Because we will be bringing into service our new recreation center located in the Haverford Reserve, we now anticipate a significant increase in the number of programs the township can offer. And of course a number of those programs are paid for by our township residents and it reflects an increase in the amount of revenues that our recreation department will be able to generate,” Holmes explained about department earnings.

The highest predicted expense for 2012 would be the Haverford Township Police Department, which would go from a budget of $12,796,917 in 2011 to a projected $13,559,768, a 6 percent increase.

But Holmes was quick to point out that the amount was still within an acceptable range.

“That’s not abnormal. That’s not abnormal for this township or any township,” he said, adding that the additional cost partially went towards the that brought the department to full complement.

One of the “cost drivers” for 2012 is the minimum municipal obligation (MMO), which Holmes explained that the township must put the minimum amount of money into the pension plans for township workers as per law.

For 2011, the MMO was $3,252,703 and in 2012 that number is predicted to climb up to $3,940,703, said Holmes.

“It is time for this board to stop kicking the can down the road,” Holmes said, saying that the board should pay the minimum requirement.

Township Manager Larry Gentile and township department leaders had meetings since July of this year to create the proposed 2012 budget, Holmes said.

Commissioners Debate Over Budget

However, during a question-and-answer session after the presentation, Second Ward Commissioner Mario Oliva asked if the township could do partial smoothing of the tax increase, which Gentile explained that partial smoothing is, “paying more than just the minimum amount. Historically we have always done that. The township has never paid the full amount.”

Oliva said that with the poor economy hurting residents, doing a partial smoothing would lower the proposed 8.3 tax increase. He suggested that the tax increase should be 4 percent and if the economy improves next year the township could raise the taxes.

“There are a lot of people out there hurting and to raise taxes at 8-point something percent when we can hold off raising their taxes … I understand it’s inevitable we have to pay this, I get it. But why do it at the worst economy ever? Why not wait a year or two and do a partial smoothing to get us across when there are more jobs out there and people are working …?” Oliva said.

First Ward Commissioner and township Vice President Steve D'Emilio and Seventh Ward Commissioner James McGarrity agreed with him. D’Emilio also suggested that the shopping center that is planned to be in the quarry could generate revenue for the township in the near future once it is built.

But Holmes said that it was unlikely that things would be getting better in another year or two, with Ninth Ward Commissioner and President Bill Wechsler siding with Holmes.

“It’s like buying on a credit card and just keep going, keep paying the minimum and you’ll never get out of the hole,” Wechsler said of partial smoothing.

The board will have a second reading of the 2012 proposed budget at its Monday, Dec. 12 meeting.

Holmes’ PowerPower presentation can be viewed as a PDF document, along with the proposed 2012 budget.