John Mack - Newtown Supervisor
Finances Category

Newtown Applies for DCED Grant to Assess the Township’s Financial Condition

Newtown's Financial Garden

At the January 23, 2019, Board of Supervisors meeting, a resolution was passed authorizing the Township Manager to apply for a matching $40,000 Department of Community and Economic Development (DCED Definition) grant for implementing an Early Intervention Program (EIP Definition) that will assess the township’s financial condition and identify additional sources of income. 

This is a matching grant. If the Township is awarded a grant, it must match the amount with its own funds. $40,000 is the maximum grant applied for. That anticipates a total budget of $80,000. However, the actual expense of hiring consultants for the project may be less the projected budget.

[Listen to this podcast and learn more about the EIP and the grant process: “Andrew Sheaf Talks About DCED's Early Intervention Program”]

The following are the questions and answers from the EIP grant application submitted to the DCED on March 15, 2019.

What do you plan to accomplish with this project?

Newtown Township is currently facing stresses on Township finances. The Township will need to address fire protection and emergency response needs that will require additional capital resources.

In the past, the Township has relied heavily on the EIT Definition [Earned Income Tax] to fund a large portion of its budget. That may no longer be possible as neighboring municipalities are implementing the EIT to support their own budgets. [For more on that, read “Earned Income Tax Trends”.]

Long-term budget needs must be anticipated and addressed now if the Township is to continue to be able to meet the needs of its residents. There are several critical factors, which must be addressed: what has been the practice of using reserve funds to offset other current budget needs.

By 2020, the tax millage dedicated for loan repayment for the construction of the Township Building will no longer meet mandatory increased yearly payment amounts. It is critical that changes in the budget process be changed and new sources of income must be sought.

How do you plan to accomplish it?

Step 1: Financial condition assessment: a multi-year trend analysis of historic financial data and an assessment of current budget performance will be performed by the consultant as a means to establish a realistic baseline of the township’s historic and current financial condition.

Staff will provide the consultant with current budgeting and financial challenges and assist with creating a five-year fiscal projection, estimating revenues, expenditures and fund balance levels. Staff will also share current practices with the consulting team to provide a solid understanding of what practices are currently in place.

Step 2: The consultant will make recommendations to the township regarding the following:

  1. Possible changes to the operation of the township
  2. Proposals regarding establishing a multi-year budgetary process.
  3. Identification of additional sources revenue, including possible sources of economic development within the township.
How do you plan to use the funds?

The funds will be used to engage a professional consultant with experience and expertise in preparing a multi-year financial management plans under the EIP plan guidelines and terms. The consultant will also have extensive experience advising municipalities generally on public financing matters.

The main purpose of the program is to establish short-term and long-term priorities and objectives that will strengthen the managerial and fiscal capacity of the township.

A secondary, but, as noted in the “identified problem,” an extremely important objective of the purpose of this program is to identify additional sources of revenue for the township.

Posted on 18 Mar 2019, 12:59 - Category: Finances

How's the Newtown Township Financial Garden Doing?

Budget season is upon us! The draft 2019 budget is currently being worked on by Newtown Township officials and will be presented to the Board of Supervisors (BOS) for discussion at a public meeting later this month. The public, as always, is invited to attend this meeting. Refer to the Events calendar to find out when this meeting is scheduled.

Meanwhile, two financial reports were presented to the BOS at the September 26, 2018, public meeting:

  • 2017 Audit Report
  • Newtown Township Finance Committee Report

The 2017 Audit Report

Edward Furman, a partner at Maillie, LLC, presented a summary of the 2017 audit to the Newtown Board of Supervisors at the September 26, 2018, public meeting. Furman's opinion can be summed up thusly: "As long as non-resident Earned Income Taxes are not severed, all is well in the Newtown Township financial garden."

Some Data

The following table is a summary of the 2017 Government Funds Revenue vs. Expenditures as reported in the 2017 Annual Audit. Refer to the complete audit here

 

Finance Committee Report

Jack Brod, Chair of the Newtown Township Finance Committee (NTFC), presented the Committee's first-ever report to the Newtown Board of Supervisors. The major point made by the NTFC is that the Township is "rapidly approaching [a] fiscal precipice." Some recommendations made by the Committee include the need for benchmarking, implementation of a multi-year planning and budgeting cycle, and increased public education and awareness of the Township's financial issues.

The Committee's Report

The September 20, 2018, report is based on a preliminary and limited analysis of Township budgets and financial documents by committee members. It represents the Committee's first attempt to identify:

  1. potential fiscal issues and concerns;
  2. needed benchmarking of township services, staffing, income and expenditures against other municipal governments and accepted standards; (3) possible implications of the fiscal issues we have estimated; and
  3. initial recommendations for future consideration and actions.

Download the complete report here.

Posted on 01 Oct 2018, 10:51 - Category: Finances

Volunteer to Serve on the Newtown Finance Committee

It is the mission of the Finance Committee, in cooperation with the Board of Supervisors and the Township Manager, to make recommendations to the Board of Supervisors related to matters associated with finance, budgeting, debt service, investments and long-range planning. The Committee may perform such other functions as requested by the Board of Supervisors from time to time. The Finance Committee shall meet as need be, but at least quarterly, at a time and date to be published in the public meeting notices of Township meetings.

If you are interested in serving on this committee, please send a Letter of Interest and/or resume by February 15, 2018, to Olivia Kivenko, Administrative Assistant to the Township Manager, Newtown Township Administrative Offices, 100 Municipal Drive, Newtown, PA  18940, Fax:( 215) 968-5368 or email oliviak@newtownpa.gov

Find more details about the mission, residency requirements, term, and the powers and duties of this committee here.

Posted on 27 Jan 2018, 11:23 - Category: Finances

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The opinions expressed here are solely those of John Mack and do not represent the opinions of any other person or entity.
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