2021 Budget Address

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2021 Budget Address

Mayor Barbarann Keffer | October 7, 2020

2021 BUDGET ADDRESS

Good evening everyone. 2020 has shaped up to be quite a year. The ripple effects of the COVID pandemic will likely be felt for years to come on our friends, families and neighbors, in our personal lives, and on our local and national economies. I would like to thank everyone who has been and continues to practice social distancing and mask-wearing as we head into winter.

We are coming towards the end of the first year of my administration which is a mix of long-time and new employees and there has been a lot of good collaboration. Much of the year has been spent learning the lay of the land and, then, reacting to the global pandemic. On many fronts, we have still pushed through towards the goals of reform of our local government and reinvestment in our community. Working with long-time employees, new department heads and Council, we have managed to update and clarify policies and fee schedules and to create systems that place continuity and accountability at the forefront. I would like to thank everyone who made these policies possible and who are currently implementing them. Here are some of the 2020 advances:

1. Updated the food establishment inspection fee schedule from its 1986 levels

2. Adopted the 2015 International Property Maintenance Code, as recommended by the 2018 Comprehensive Plan. We also created a property maintenance ticketing system and a Focus Zone program; this is a two-pronged approach whereby private property and township infrastructure conditions are addressed in an organized manner. Our Public Works Department divided the Township into 16 separate sections and each month a different section becomes the focus. The ticketing system brings property owners sooner into compliance with our codes and it also frees up the district courts. Street markings, street signs, fire zones, storm drains are all among the infrastructure improvements we are looking to make on a consistent and organized basis.

3. Created an abatement fee schedule to cover the cost of our employees and resources being used to do landscaping and debris removal at abandoned or vacant properties. Previously these services were provided free-of-cost to property owners, often banks which held foreclosed mortgages.

4. Adopted a sewer lateral inspection ordinance at the point of sale which allows new property owners to know the condition of their sewer line and also, in the long run, will save taxpayers money as the sewer lines get repaired (hopefully prior to an emergency) and less rainwater seeps into our sanitary sewer system which gets metered and the cost shared among property owners. This ordinance was recommended for the township to adopt and implement in a June 2013 Sewage Facilities Plan Update by the Delaware County Planning Department.

5. The Parking Enforcement Department has been modernized to include a pay-online system. Thanks to the jumpstart with online payments begun by this department and the necessity COVID created with access to our building, many of our services, fees and applications can now be accessed and paid for online.

6. Our general street paving program has been revamped by ordinance to require utility companies to work together with the township to pave streets curb to curb after the utility work is complete. We are also focused on updating our intersections to current ADA-compliant standards with the proper handicap ramps as we pave.

7. For the first time, a fee-based, comprehensive commercial Fire Code Inspection Program has been organized throughout this year by the Fire Department and will be up and running soon. Previously, any commercial Fire Code Inspections which had been done were free of charge.

What we learned as the year progressed, is that we have an inherited structural deficit. It was this deficit spending that, in 2019, drove the previous administration to take a $5mm short-term loan in order to carry us until 2020 tax revenues began to arrive. Please be assured that my administration is doing our best to avoid a repeat of year-end borrowing, but I cannot make such a guarantee pending further review.

In the context of budgeting for 2021, it’s important to understand the challenges we are facing in 2020. As you will see in next week’s budget presentation by our Finance Director, the 2020 Budget was built around two significant structural deficiencies. First, certain revenue items were significantly inflated to imagine $4.6 million that was never achievable. Second, although not immediately obvious in last year’s presentation, the budget that was presented and approved (including these inflated revenue assumptions), nevertheless contained a $4.2mm deficit. Taken together, we are managing 2020 against an $8.8mm contemplated loss. Some of these problematic assumptions include missed revenue opportunities and excessive expenses.

Although we are preparing a budget that contemplates holding all taxes and fees to their current levels, it’s important to note that in the area of Trash and Recycling Collection, we operate the division at a sizable loss.

Trash fees levied by the township do not reflect the true cost of our sanitation and recycling services. They cover tipping fees for trash tonnage paid to the Delaware County Solid Waste Authority, the fees we pay to Waste Management for recycling and most, but not all, of the salaries for our sanitation division. Sanitation expenses also include the trash pick-ups at all of the district schools and some private and parochial schools. Additional expenses not covered by the trash fees are: the township healthcare and pension contributions, vehicle maintenance and fuels costs and the cost of new trucks and equipment. Contaminated recycling fees continue to be high. I would like to remind residents not to include pizza boxes with your recycling and, more importantly, do not to put your recycling in plastic bags.

It’s important to remember that fees, be they for parking meters, building permits, trash & rubbish, are not revenue-generators; municipalities are supposed to cover the costs of providing these fee-specific services. Cost of services include payroll, health insurance, pension costs, equipment, supplies, vehicles, maintenance, etc. The good news is that our new Finance Director is reviewing our system of internal controls, specifically in the areas of purchase authorization and the application of budgetary constraints, having made several initial findings. We have adopted a new budgeting model and philosophy that embraces the concepts of “zero-based budgeting” and “activity-based costing”, which we will hear more about next week. My administration has been able to close the gap over the last 8 months; COVID forced the cancellation and cutback of many programs and township events; that’s money we did not spend. Our department heads also worked to lower costs in each of their departments. Our municipal, mercantile and business privilege tax collections are up over budget.

At our core, our township government is in the business of delivering excellent municipal services. That’s the day-to-day expectation of what your tax dollars fund. The General Fund Budget is not much different than any in the recent past - it funds the general operations of our municipal government. Most of the previous programming is still included in the 2021 budget, most notably, funding for our Leisure Services Department which includes the Summer Stage Program and the Tot and Youth Lots.

In order to meet current labor contractual obligations with our police, fire and the two municipal unions which guarantee wage increases from 3-3.8%, we are tightening our belts across all departments to give our residents and business owners the level of quality service they expect with the goal of not raising municipal taxes.

We do have some planned new expenses reflected in the budget. By March of 2021, our sanitation division must relocate from the current space off Lansdowne Avenue which is UDSD property. The school district has begun the land development process of renovating that property to house their administrative offices which have been located in the Aronimink Elementary School for decades.

Because of the court-mandated County tax reassessment, we should expect our tax bills to look differently. We expect the County to certify the new assessment values in November. At that point we will be able to calculate the new millage rate. Please be assured that the reassessment is meant to be revenue neutral and that the current millage rate will NOT be used on your new assessment.

In many ways, a budget reflects leadership priorities: this budget reflects the opportunity to create a clear, accountable system where taxpayers, residents and businesses alike, can be confident that their money is spent in a way that corresponds to the actual costs of services and programs that serve our community. This budget provides the foundation from which we can reinvest and redevelop Upper Darby. My budget address and the preliminary budget draft will soon be sent to Council and both will be available on the township website.

Our Finance Director will give a detailed presentation. We have four more public meetings and two hearings before Thanksgiving. We look forward to questions from Council and our taxpayers. Thank you.