POTTSTOWN - About seven months after being awarded a state grant to analyze borough operations and finances with an eye toward making them more efficient, the state is asking whether the borough intends to act on it.
"We've committed money to your organization and we have people breathing down our necks who would like the same opportunity," Marita J. Kelley, local government policy specialist with the governor's center for local government services, told the Borough Council.Adopted by the previous Borough Council from which four members remain, and awarded by the state in January, the offer seems to have fallen between the cracks at borough hall, judging by Kelley's request."Our supervisor wants to know if you're serious about your commitment," she said. "Normally, we don't issue grants and then see little execution."Borough Council President David Garner's explanation for why the borough had not yet acted was fairly straightforward."Before last Wednesday, I didn't know anything about this," he said.What Kelley was talking about is a program of the Pennsylvania Department of Community and Economic Development that provides a financial five-year forecast to Borough Council following an extensive examination of the borough's finances and the operation or each department.Called the Early Intervention Program Five-Year Financial Plan, the cost of the service is $65,000; however, the state will cover 50 percent of the cost.Pottstown Finance Director Robert Armelin called the program "a good idea," adding as a cautionary note, "it's time and money at this point. It's not in the budget."Moments later, Armelin offered an assessment about that budget - $45.8 million for 2008 - and predicted the year would end with the borough $200,000 in the red.Council Vice President Greg Berry, who also chairs council's finance committee, said he considered having Kelley make a presentation to his committee, but decided he didn't want to waste any more time in implementing the program."After all, it's already been approved by council," he said.Kelley told council that in addition to financially strapped municipalities like Norristown, Reading and Coatesville making use of the program, those with few financial problems, like Muhlenberg and Lancaster, had also found it "very effective."Berry said the information contained in the report produced by the program "has so many different opportunities available to improve efficiency and productivity. On the management side, the information is comprehensive and on the financial side, it's invaluable."Added Berry, "In light of our current financial concerns, I think it's imperative that we move forward with this.""It seems like a pro-active message," said Mayor Sharon Valentine-Thomas. "It seems to make sense.""I thought it was a great idea nine months ago and I still do," said Councilman Stephen Toroney.He added, "But we have to get out of this mindset of applying for grants and then not using them. We were fortunate the (Department of Environmental Protection) was still able to give us that $340,000 recycling grant."Kelley, herself a former borough manager in Marysville, Perry County, said although there had been a delay in moving forward, the timing could work well for Pottstown. Because the borough would be in the process of putting together its 2009 budget, lots of pertinent information could be gathered for use in 2010."It would help with future budget preparations and when you need to make those decisions, you would have excellent information," she said.Although there was brief discussion about voting to move forward with the program at Monday night's meeting, council finally decided to put off a decision until the August meeting."If you can be patient with us, we'll have an answer for you in August," Garner said.
Pottstown Mercury - 07/15/08 - http://www.pottstownmercury.com/site/news.cfm?newsid=19851347&BRD=1674&PAG=461&dept_id=18041&rfi=6
Tuesday, July 15, 2008
Borough predicts $200,000 shortfall
Borough predicts $200,000 shortfall
POTTSTOWN - Six months into the 2008 budget, even though revenues continue to outpace expenses, finance director Robert Armelin is predicting a $200,000 shortfall come December.
Armelin, who provided the review to borough council Wednesday, said he fears the primary shortfalls will be from the real estate transfer tax and the local services tax.The shortfall in the first reflects the depressed state of the real estate market, brought about by the mortgage crisis, and the second, which taxes those who work in the borough, is a reflection of fewer jobs in Pottstown.Of the transfer tax, Armelin said the budget calls for $500,000 but "I'm not happy with the rate it's coming in and I'm forecasting it will come in no more than $400,000."As for the local services tax, the budget calls for $470,000 in revenues but it is currently only at $116,000, so Armelin said he is forecasting it will come in only at $350,000.All total, Armelin said he is forecasting that the borough will actually be $315,000 short in revenues, but he said he also expects expenses to come in $108,000 less than budgeted."There's only six months here to look at, so it's hard, but at this time, I would say we're looking at coming in $200,00 below budget," Armelin said.About 81 percent of real estate taxes have been collected at this point, which represents "a little less than half the revenues" of the general fund.In all, more than 54.5 percent of the general fund's revenues have been secured while only 48.5 percent of the budget expenses have been spent, Armelin said, noting that many bills are running a month behindAbout 51 percent of the police department's $6.9 million budget has been spent, and about 49 percent of both the code department's $581,157 budget and the public work's department's $215,167 budget.It should be noted that while the police department is funded entirely out of the general fund, both codes and public works also budget revenues from other funds.Armelin also said he is keeping an eye on the budget for the Parks and Recreation Department and for Pottstown Community Television.Currently, the Parks and Recreation Department has received 55 percent of its revenues but spent only 39 percent of its expenses - however the majority of the department's programs run through the summer, so those numbers are expected to change.Further, said Armelin, several capital projects for that department are expected to be paid for largely through department revenues, so it is a good time to get a close sense of what kind of numbers are generated over the summer.As for PCTV, Armelin said the same real estate woes which are choking off real estate transfer taxes, are also cutting into the real estate advertising revenues which make up much of the revenue portion of PCTV.To date, PCTV has collected only 37 percent of its budgeted revenue and has expended 42 percent of its budgeted expenses, Armelin said.Since this department is also the subject of a planned capital project, and has contributed significantly to the general fund in the past, it also bears close watching, Armelin said, adding that he has held off making any more transfers from PCTV to the general fund.Also of note is the Pottstown Municipal Airport, often described as a money-loser in the past. Currently, it's revenues are at 61 percent of its budget, while expenses are only at 23 percent, according to Armelin's analysis.The largest capital budget projects in the borough's plans will occur at the airport.Last December, council adopted a $45.8 million budget that raised the tax rate by 9.43 percent. For a property assessed at $75,000, near the borough average, it meant a $52 annual increase from $552 to $604. The borough's millage stands at 8.04846 mills.The only way to reduce the potential shortfall at year's end, Armelin said, is to reduce borough expenses now."We don't have much control over our revenues, but we do have over our expenditures," Armelin said.Now is the time to control those costs, he said, because so many expenses are logged in the summer "and by the time we get to November, it's too late."Council Vice President Greg Berry, who heads up council's finance committee and frequently comments on the need to cut expenses, said Armelin's analysis is "extremely helpful because now everyone knows where we're at. It's much better than finding out at the end of the year and everyone panics trying to figure out how we're going to deal with it."As a result of Armelin's calculations, Berry said council "needs to take a more serious look at cutting expenses."Council President David Garner called the budget "a slippery animal that is hard to forecast" and thanked Armelin for his work.Armelin did have one pice of good news for council."Last year at this point, things were a lot worse," he said. "But we've got a better budget this year."
Pottstown Mercury - 07/15/08 - http://www.zwire.com/site/index.cfm?newsid=19851344&BRD=1674&PAG=461&dept_id=635482&rfi=8
POTTSTOWN - Six months into the 2008 budget, even though revenues continue to outpace expenses, finance director Robert Armelin is predicting a $200,000 shortfall come December.
Armelin, who provided the review to borough council Wednesday, said he fears the primary shortfalls will be from the real estate transfer tax and the local services tax.The shortfall in the first reflects the depressed state of the real estate market, brought about by the mortgage crisis, and the second, which taxes those who work in the borough, is a reflection of fewer jobs in Pottstown.Of the transfer tax, Armelin said the budget calls for $500,000 but "I'm not happy with the rate it's coming in and I'm forecasting it will come in no more than $400,000."As for the local services tax, the budget calls for $470,000 in revenues but it is currently only at $116,000, so Armelin said he is forecasting it will come in only at $350,000.All total, Armelin said he is forecasting that the borough will actually be $315,000 short in revenues, but he said he also expects expenses to come in $108,000 less than budgeted."There's only six months here to look at, so it's hard, but at this time, I would say we're looking at coming in $200,00 below budget," Armelin said.About 81 percent of real estate taxes have been collected at this point, which represents "a little less than half the revenues" of the general fund.In all, more than 54.5 percent of the general fund's revenues have been secured while only 48.5 percent of the budget expenses have been spent, Armelin said, noting that many bills are running a month behindAbout 51 percent of the police department's $6.9 million budget has been spent, and about 49 percent of both the code department's $581,157 budget and the public work's department's $215,167 budget.It should be noted that while the police department is funded entirely out of the general fund, both codes and public works also budget revenues from other funds.Armelin also said he is keeping an eye on the budget for the Parks and Recreation Department and for Pottstown Community Television.Currently, the Parks and Recreation Department has received 55 percent of its revenues but spent only 39 percent of its expenses - however the majority of the department's programs run through the summer, so those numbers are expected to change.Further, said Armelin, several capital projects for that department are expected to be paid for largely through department revenues, so it is a good time to get a close sense of what kind of numbers are generated over the summer.As for PCTV, Armelin said the same real estate woes which are choking off real estate transfer taxes, are also cutting into the real estate advertising revenues which make up much of the revenue portion of PCTV.To date, PCTV has collected only 37 percent of its budgeted revenue and has expended 42 percent of its budgeted expenses, Armelin said.Since this department is also the subject of a planned capital project, and has contributed significantly to the general fund in the past, it also bears close watching, Armelin said, adding that he has held off making any more transfers from PCTV to the general fund.Also of note is the Pottstown Municipal Airport, often described as a money-loser in the past. Currently, it's revenues are at 61 percent of its budget, while expenses are only at 23 percent, according to Armelin's analysis.The largest capital budget projects in the borough's plans will occur at the airport.Last December, council adopted a $45.8 million budget that raised the tax rate by 9.43 percent. For a property assessed at $75,000, near the borough average, it meant a $52 annual increase from $552 to $604. The borough's millage stands at 8.04846 mills.The only way to reduce the potential shortfall at year's end, Armelin said, is to reduce borough expenses now."We don't have much control over our revenues, but we do have over our expenditures," Armelin said.Now is the time to control those costs, he said, because so many expenses are logged in the summer "and by the time we get to November, it's too late."Council Vice President Greg Berry, who heads up council's finance committee and frequently comments on the need to cut expenses, said Armelin's analysis is "extremely helpful because now everyone knows where we're at. It's much better than finding out at the end of the year and everyone panics trying to figure out how we're going to deal with it."As a result of Armelin's calculations, Berry said council "needs to take a more serious look at cutting expenses."Council President David Garner called the budget "a slippery animal that is hard to forecast" and thanked Armelin for his work.Armelin did have one pice of good news for council."Last year at this point, things were a lot worse," he said. "But we've got a better budget this year."
Pottstown Mercury - 07/15/08 - http://www.zwire.com/site/index.cfm?newsid=19851344&BRD=1674&PAG=461&dept_id=635482&rfi=8
Saturday, July 5, 2008
Borough has pattern of dropping the ball...
The following editorial sums up why bringing fiscal responsibility and accountability to Pottstown is long overdue.
Among government entities needing guidance in getting their finances in order, the borough of Pottstown is high on the list.
This is the town that has consistently sent out water bills that don't match usage and shutoff notices to ratepayers who are not behind on their bills.This is the town that once lost a check for several thousand dollars and once forgot to bill an industrial sewer user for more than a year.This is the town whose finance committee chairman believed it necessary to embark on a fiscal responsibility initiative to address goals considered part of day-to-day business in most enterprises.Now, this is the town that forgot it approved a state program to help in financial planning. Just last week, the Borough Council heard a report from Finance Director Robert Armelin predicting a $200,000 shortfall in the current budget by December.Granted, this imbalance is occurring because of declining home sales and high unemployment — factors of the faltering economy over which the borough has no control — but the impact nonetheless creates a a financial challenge for the borough. And, more prudent financial planners would have been prepared.On the same night that council learned of the pending shortfall, a state local government expert came to council puzzled. She wanted to know why a state grant awarded to help the borough analyze and improve its operations and finances has never been implemented."We've committed money to your organization and we have people breathing down our necks who would like the same opportunity," said Marita J. Kelley, local government policy specialist with the governor's center for local government services,."Our supervisor wants to know if you're serious about your commitment," she said. "Normally, we don't issue grants and then see little execution."The grant to which she was referring was approved by the previous council, of which four members remain, and awarded by the state in January. Current Borough Council President David Garner, who was elected last November, said this was the first he learned of the grant.That statement then begs the q uestion as to why the borough administration did not follow through with the grant and why the local share of the funding was not even written into this year's budget. The program of the Pennsylvania Department of Community and Economic Development would provide a financial five-year-forecast for the borough following an extensive analysis of the borough's finances and the operation of each department.Called the Early Intervention Program Five-Year Financial Plan, the cost of the service is $65,000, with the state picking up half the tab.Armelin called the program "a good idea," but noted it was not included in the current year's budget even though council had approved it. Council Vice President Greg Berry, who also chairs council's finance committee, said the information contained in the report produced by the program "has so many different opportunities available to improve efficiency and productivity. On the management side, the information is comprehensive and on the financial side, it's invaluable.""I thought it was a great idea nine months ago and I still do," said Councilman Stephen Toroney.Kelley said by embarking on the plan now, council could benefit for the future beginning with next year's budget. Council members said they will have an answer next month as to whether they want to proceed.The wisdom of participating in this plan is obvious. The program can quickly pay for itself by discovering financial efficiencies.But of greater concern than delay in implementing it is the reason for the delay — the repeating cycle of failing to follow through on positive steps to improve Pottstown's fiscal management.Pottstown needs help. When someone is willing to give it, let's not have a memory lapse. This pattern of ignoring, losing and forgetting is robbing the borough of a productive future.
Pottstown Mercury - 07/15/08 - http://www.pottstownmercury.com/site/news.cfm?newsid=19851021&BRD=1674&PAG=461&dept_id=635485&rfi=6
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