Peters property owners will get their first glimpse Monday of a proposed spending plan for next year that calls for no tax increases.
A preliminary budget prepared by township manager Michael Silvestri calls for $18.6 million in spending, with revenues pegged at $16.4 million. The difference will be made up through a fund balance projected to be $8.5 million next year.
Because revenues are conservatively estimated, Mr. Silvestri expects that it will be possible that none of the fund balance will be needed to make up for the spending deficit.
"Although the budget shows a $1.5 million reduction in the balance, it is a conservative estimate and it would not be surprising to see revenues meet total expenditures in 2014," Mr. Silvestri wrote in an explanation of the proposed budget, available on the township's website, at www.peterstownship.com.
Council has conducted four public workshops to discuss the budget and plans a public hearing for 7:30 p.m. Monday in council chambers. The public is invited to provide input that could change the final product, expected to be approved by council at its Dec. 16 meeting. Although the budget may be tweaked somewhat between now and then, Mr. Silvestri said there is "no chance" that council will decide to raise taxes.
The proposed operating budget maintains the real estate tax rate at the current level of 13 mills, which was last raised in 2011. The earned income tax rate will remain steady at 0.5 percent, along with realty transfer tax of 1.0 percent and a local services tax of $47, established five years ago.
Next year's proposed budget is almost identical to this year's $18.6 million spending plan, despite planned increases in staffing and a road resurfacing program.
The increases are possible, Mr. Silvestri said, due to $400,000 in revenue hikes brought on by a different collection system for earned income taxes and real estate transfer tax. Another revenue source might be surprising to some residents.
"The Pennsylvania Unconventional Gas Drilling Impact Fee has also had a positive impact on our budget; we were able to fund the entire pavement resurfacing program through a two-year buildup of this fee and the liquid fuel fund, and no general funds were required," Mr. Silvestri said in his budget statement.
Although no drilling has been done in the township yet, the municipality received $520,000 in impact fees from drilling companies last year and this year. Another $260,000 is expected in 2014.
Tax revenues in general are expected to be stagnant next year due to "concerns about the assessed value of property increasing slower due to a combination of assessment appeals and new construction taking longer to be placed on the tax rolls," he said.
A mill generates about $331,871 for the township, and next year's assessed values are expected to increase by $4 million to $336.9 million.
Earned income among households is also anticipated to be higher next year at $145,045, with a total of 7,932 households.
This year, estimates of household income were undervalued by more than $10,000, which, when combined with a more reliable collection method rolled out in 2013, resulted in about 20 percent more in earned income revenue than anticipated.
One sticking point in annual budget calculations has been the deed transfer tax, which is traditionally governed by external market forces -- especially the ability to borrow, Mr. Silvestri said.
"Historically, this tax has generated revenues significantly higher than budgeted, contributing to the higher balances and being a major factor in the township avoiding a tax increase," Mr. Silvestri said.
Because of its sensitivity to market forces, the estimate of that particular tax revenue is always conservative and usually undervalued by hundreds of thousands of dollars. This year will be no exception, Mr. Silvestri said, with deed transfer taxes expected to exceed estimates by $318,000.
For 2014, Mr. Silvestri will maintain the conservative approach and budget for deed transfer tax revenue at about $300,000 less than 2013. In general, the local economy was stronger than expected this year, Mr. Silvestri said, including new revenue generated by the opening of a St. Clair Hospital medical center and 1,002 housing starts.
"The status of sewer taps available in the Peters Creek area has improved, which will facilitate the ability to continue development," Mr. Silvestri said.
On the downside, real estate tax assessments continue to be a concern, Mr. Silvestri said, with more than 100 active tax appeals underway now. A new countywide reassessment began in recent weeks, but the results of that aren't expected to be in effect until 2015 or 2016.
Among the specific changes for next year are the creation of four new positions, including an assistant in the engineering department and an additional member of the planning staff to address updates to this year's comprehensive plan. It's unclear whether an additional firefighter or cost increases will be needed as a result of collective bargaining with the department, expected to begin early next year.
In public works, a total capital budget of $2.2 million is expected to revamp a road resurfacing program and provide funds for the purchase of several new vehicles, including police cars and a compact track loader.
About $400,000 has been budgeted for the purchase of a new fire engine. The purchase was budgeted for 2013 but was deferred in favor of a five-year lease to begin next year.
A number of recreation requests were made for next year, but only those involving maintenance -- such as trail resurfacing and routine tennis court improvements -- will move forward. Mr. Silvestri said all other projects have been shelved until a new recreation plan can be developed with public input.
"Some new facility items under consideration for the future are replacement of the amphitheater, a spray park and sport courts," he said.
Copies of the proposed budget are available online or at the township's East McMurray Road offices.
Janice Crompton: firstname.lastname@example.org or 412-263-1159.