East Cocalico contemplates tax increaseBudget is balanced; reserves low

By on December 21, 2011

By: ALICE HUMMER Review Correspondent, Staff Writer

With no tax increase in four years, and road maintenance projects deferred last year, East Cocalico supervisors discussed whether a small tax increase would be a smart, financial move.

While all three supervisors, Doug Mackley, Alan Fry and Noelle Fortna, agreed that they prefer avoiding a tax increase, each contributed different ideas to help the proposed 2012 budget.

"Having less than ten thousand in reserve on a $5 million budget is not great," chairman Mackley said. "I don’t like a tax increase anymore than anyone else. I recommend we consider going from 1.625 mills to 1.70 mills."

Each mill of tax generates about $744,000, according to East Cocalico Township Manager Mark Hiester.

Mackley further explained some revenue reductions anticipated in 2012:

? Earned income tax collection projects a ten percent shortfall.

? East Cocalico’s recycling grant, often in the $100,000 range, projects a 40 percent shortfall.

? East Cocalico borrows from the general fund the first four months of the year to stay afloat since collection of new tax monies occurs after that time.

? The reserve fund is not being replenished, and it is not up to what the state recommends.

? The state also recommends having a cushion of 10 to 15 percent more in each budget category and we don’t have that.

Supervisor Fry suggested postponing the $220,000 Stoney Pointe recreation project until 2013. East Cocalico won a grant for $110,000 for this project.

"We’ve only had four new homes go up this year," Hiester noted.

Supervisors concurred that monies for this project in the 2012 budget could be removed and the project postponed till 2013.

Fortna suggested reducing the budget line for salaries for elected officials. Although $13,500 was budgeted, only a little over $8,000 was spent. Supervisors concurred and reduced that line item to $10,000.

"I think our employees are great," Fortna said, "but, if it means raising taxes, I don’t think we should give raises."

Mackley explained that when data on township employee pay throughout the state was examined in 2010, "three of our people were barely at the average, and the rest were below average. We have good people working here and it’s hard to replace people."

"We’re only proposing two percent raises," Fry said. "This is not a lot when inflation is 3.6 percent; so it’s not even keeping up with inflation. The raises add $13,000 to the budget; this is not a lot," Fry concluded.

Fortna suggested that supervisors look at the 1975 Reading Road building fund.

"We could return, based on proportion, monies to each municipality," Fortna said.

Customarily, at this time of year, that fund is overfunded.

Supervisors agreed to distribute proportionately, a total of $253,000. The property, purchased jointly by East Cocalico, West Cocalico, Denver and Adamstown, was intended for a community recreation center until funding and the economy spiraled downward.

"Let’s run the numbers the way we have them now," Mackley suggested, "and see where we are."

Supervisors continue budget discussions Dec. 8 when their revisions can be reviewed and discussed.

While a tax increase is a possibility, it is too early to tell if that would be a financially prudent route to take.

Supervisors passed two amendments. One dealt with the worker, retiree and employer recovery act of 2008 and the small business jobs and credit act of 2010. The other dealt with the heroes earnings assistance and relief tax act of 2008.

A service contract for HVAC for $2,375 was awarded to Vertex.

Supervisors adjoined into executive session for personnel reasons.

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