Why borough has lowest tax rate Council lays out 2013 budget

By on December 12, 2012

By: GARY P. KLINGER Review Correspondent, Staff Writer

"A budget is a careful plan for spending money over a given period of time," stated Ephrata Borough Council President Dale Hertzog at the opening of Monday night’s borough council meeting. "It is created from the input from various departments and outside organizations, from the borough council via committee level meetings and input provided by the community."

Hertzog kicked off the regular session of council Monday by explaining how a good budget must take into account fiscal responsibility and community need while using all resources, whether human or monetary in the most efficient manner.

"Ephrata residents can enjoy the lowest millage of any borough in Lancaster County with a rate of 2.07 along with a high level of services and programs," added Hertzog. "These are things residents can be proud of."

With that, Hertzog turned the meeting over to Director of Administration and Finance/Treasurer Gail M. Bare who presented council with a Powerpoint presentation on the budget process and its outcome for fiscal 2013.

"This is a seven-month process that actually begins in June of each year," noted Bare, who took council through a detailed timeline of what must take place when in order for a proposed budget to be presented to council and on review with the public prior to final adoption. A final draft of the budget arrives on the borough manager’s desk by the end of October in order that council may approve the approved the proposed version for public review and council discussion at the committee level.

Final passage of the budget must take place in December in order to submit the budget and tax ordinance to the PA Department of Community and Economic Development or DCED. The previous year’s budget is then submitted for audit in February before the process begins all over again in June.

Bare explained that there are five components of the general fund: police, code enforcement and engineering, public works, recreation and administration. These funds are supported through tax revenues collected in the form of real estate taxes, earned income taxes, local services taxes, and the real estate transfer tax. It is also supported with fees for services provided and transfers from the electric fund.

In the case of Ephrata Borough residents who purchase their electric through the borough, all profits generated through electric sales stay in the community for the betterment and use of the community. Not so with those purchasing power through sources like PPL where the profits benefit company stakeholders.

Thirty-one percent of general fund revenue is generated from taxes with another 21 percent collected as an administrative charge for services provided to entities outside of the borough, such as is the case with the police force which covers both Ephrata Borough and Ephrata Township. Fourteen percent of the general fund is made up from fund transfers.

In an impressive chart which showed how Ephrata’s tax rate compared to other Lancaster County boroughs, Ephrata was at the very bottom at 2.07 mills. By contrast, Columbia borough residents pay the highest tax millage at almost eight mills.

Seventy-five percent of the general fund appropriations go to personal services, from borough employee salaries, health coverage and benefits.

Bare also explained several enterprise funds within the borough. The water fund is operated by the borough for the Ephrata Area Joint Authority and services the borough, Ephrata Township, and Clay Township through supported contract services paid by EAJA.

"Currently there are 8,855 water customers, ninety percent of which are residential," said Bare.

There will not be a water rate increase in 2013.

The borough’s electric fund distributes energy to residents and businesses and maintains street lights.

Bare noted that the 2013 budget eliminated a vacant lineman position to hold costs. No rate increase is proposed for 2013. She cited 6,600 customers of which 87 percent are residential.

"The current rate structure allows us to transfer money to the General Fund ($1,392,000) and the Capital Reserve Fund ($750,000)," noted Bare.

Ninety-nine percent of all electric fund revenues are generated through the sale of energy. The other 1 percent is generated through the collection of penalties. Seventy five percent of electric fund appropriations go for services and charges. Five percent go for personal services associated with providing electric service to the borough. Seventeen percent accounts for miscellaneous and sundry costs, most of which Bare said is administrative costs.

The sewer fund provides sewer service to five local municipalities, including Ephrata Borough, Ephrata Township, Denver Borough, Akron Borough and East Cocalico Township. It is supported by customer charges and contract service charges to other municipalities for treatment costs. Bare indicated there are currently 6,625 customers, 90 percent of which are residential.

There is no sewer rate increase proposed for 2013.

Fifty percent of sewer fund revenues are generated from sales to customers. Forty-nine percent are charges for services. On the appropriations side, 46 percent is consider miscellaneous sundry expenses with twenty-eight percent for personal services and the rest split among capital outlay, materials and supplies and services & charges.

With the sanitation fund, the borough contracts with Eagle Disposal to pick up recycling and refuse and then it bills residents for the service. Bare indicated that all borough residents have recycling and about 55 percent of the residents receive refuse collection through the borough. No rate increase is included in the 2013 budget.

Revenue received from the Electric Fund and grand money is placed in the Capital Reserve Fund to fund capital projects. Bare detailed an impressive list of projects planned for 2013, including $25,000 each to the Pioneer and Lincoln Fire Companies respectively, $50,000 for new police record keeping software, $125,000 for improvements to the public works complex, $20,000 for a storm water abatement program, $110,000 to the Ephrata Public Library for 30 new parking spaces, $13,000 for playground improvements and trees in Grater Park, $80,000 for the new skate park, and $100,000 for needed upgrades to the phone system in the borough building. Of the $335,975 budgeted for the Warwick to Ephrata Rail Trail, $67,525 is grant money.

Looking ahead to 2013, Bare said she looked forward to an active year. She indicated the borough’s plans to update the Comprehensive Plan, air the Today in America video showcasing the borough, develop a strategy to address economic development and implement a power cost adjustment for electric customers. The borough will also continue to evaluate the borough’s energy portfolio strategy, revise the borough’s storm water management ordinance and bid and award the project for the Warwick to Ephrata Rail Trail.

Several outside organizations will continue to be supported through funds provided by the borough, including both the Pioneer and Lincoln Fire Companies and Fire Police, the Ephrata Public Library, the Ephrata Ambulance Association, Concerts by the Creek, Ephrata Performing Arts Center, Ephrata Recreation Center, various downtown events, the Eicher Museum and House, July 4th Fireworks and cultural arts programs.

Council voted unanimously to approve the 2013 budget which called for a total revenue of $37,835,666 and total expenditures of $38,383,299. Borough residents will not have any increases in real estate taxes, water, electric, sewer or sanitation rates.

"I think Mrs. Bare did a wonderful job presenting the budget and how it processed over seven months," commented council member Robert Good. "I hope that people of the community can appreciate the amount of work that goes into that process. I appreciate the staff that we have been working hard in this borough because in the fiscal times we have now and hold within the budget and still provide quality service to the people who live in this community is commendable."

In other borough council news, Police Chief William Harvey alerted residents that there had been 11 cars broken into, but that none were through forced entry.

"Please be especially careful at this time of year with more hours of darkness each night," warned Harvey. "Please make sure to lock your cars, secure your belongings and take the keys with you."

For additional information on Ephrata Borough, please visit their website at www.ephrataboro.org.

Gary P. Klinger welcomes your comments, questions and suggestions at klingerglobal@gmail.com. More BOROUGH, page A18

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