2017 Summary of Budgets
The General Fund is the primary operating fund for Lower Paxton Township. By law, this fund operates on a calendar year basis, and the budget for this fund is balanced. In 2017, budgeted General Fund revenues and expenditures are balanced at $23,331,356. This budget is based upon a real estate tax rate of 1.950 mills.
The State Aid Fund has been established in accordance with the PA Liquid Fuels Tax Act 655 of 1956 and exists as a sub-component of the General Fund. From this fund, the Township deposits and expends its annual allocation of state tax revenues on liquid fuels for maintenance and construction of local roads. In 2017, the State Aid Fund expects revenues and expenditures of $1,503,880.
The General Fund balance on December 31, 2017 was $8,420,649. This fund balance provides for cash flow needs, emergencies, and for significant capital projects undertaken through the General Improvement Fund. At this time, the fund balance is in accordance the minimum threshold of 25% of annual expenditures, as established by policy of the Board of Supervisors.
The General Improvement Fund is used by Lower Paxton Township to fund one-time capital projects. In 2017, General Improvement Fund expenditures for capital projects are budgeted at $4,588,750.
The Fire Equipment Capital Plan covers nine pieces of primary apparatus possessed by the Township's three volunteer fire companies. The 2017 fiscal year will begin with a Fire Equipment Capital Fund balance of approximately ($449,876).
The Length of Service Award Program (LOSAP) provides a defined benefit stipend to volunteer firefighters and/or fire police officers who meet certain criteria. The LOSAP Fund balance is expected to be $571,071 at the beginning of the 2017 fiscal year.
The Friendship Center recreation facility operates as an "enterprise" entity, a quasi-business with revenues coming primarily from user charges to fund operations, debt service, and capital facilities. The Friendship Center 2017 Operating Fund possesses revenues and expenditures of approximately $2.3 million.
The Lower Paxton Township Authority (LPTA) also operates as an "enterprise" entity, providing sanitary sewer service throughout most of the Township. The LPTA 2017 Operating Fund expects revenues of $16,083,951 against expenditures of $16,209,629. LPTA expenditures for capital projects in 2017 are expected to be $8,128,000. The LPTA is expected to possess cash-on-hand of $37.3 million at the beginning of the 2017 fiscal year.
The Police Pension Fund possessed a balance of $22,021,809 at the end of 2016, and the Non-Uniformed Employee Pension Fund possessed a balance of $15,649,660. Both plans are minimally distressed, as defined by PA Act 44 of 2009, due to a ratio of assets to liabilities falling between 70% and 90%.
Differences between General Fund revenues and expenditures in individual years can be averaged into general trends based upon national and regional economic conditions. There was "before the Great Recession" (pre-2008); the "Great Recession" (2008-2010); and "after the Great Recession" (2011-2016).
Before the "Great Recession," growth and development fueled municipal operations, influencing community financial perspectives. During this time, growth in revenues occurred at rates greater than inflation and the Township, over time, established a significant fund balance. However, in the years immediately preceding the "Great Recession," growth in municipal revenues did not keep pace with operating expenditures. The pre-recession Township increased its level of services in response to ongoing community development.
Then, there was the "Great Recession" (2008-2010), when the Township experienced 3% declines each year in revenues, as community development activity effectively ceased. During this period, the Township reduced municipal services and staff, and drew upon its fund balance for day-to-day operations. Operating departments were prohibited from making non-essential expenditures and cost cutting measures were on-going throughout municipal operations.
The "Great Recession" had a significant and adverse impact on Township finances, as development activity and associated revenues declined to levels not seen in 20 years. Moreover, Earned Income Tax revenues, the Township's single largest revenue source, fell by 22% during the "Great Recession." These reductions in revenues forced the Township to reduce expenditures across the board, draw upon its fund balance, and issue debt to fund necessary capital projects. As a result, the Township's fund balance fell below the Supervisors' threshold of 25% of annual expenditures.
After the "Great Recession" (2011-2015), the Township experienced a mild resurgence in municipal revenue growth, which has continued through the current fiscal year. Most of these fiscal years ended with balances of revenues over expenditures, allowing the Township to add to its fund balance. Such positive results were due to both improved economic conditions and maintenance of the reduced spending plan for municipal services.
General Fund Balance
It is the policy of the Board of Supervisors to maintain a General Fund balance equal to or greater than 25% of budgeted expenditures for the current fiscal year.
At the beginning of 2017, the General Fund balance was $8,420,649. According to Board policy, 25% of the $23,331,356 budgeted for expenditures is $5,832,839 and as such, an equivalent amount of the General Fund balance should be held in reserve.
Funding for Capital Improvements
To supplement the General Fund balance and supply capital to the General Improvement Fund for significant projects, the Township issued $2 million in new debt in 2012. Also in 2012, the Township received a PA Infrastructure Bank (PIB) loan in the amount of $750,000 for road maintenance and improvement projects. In 2013, the Township issued $4,000,000 in new debt with $3 million budgeted for stormwater improvements and $1 million for Friendship Center improvements.
In 2014, the Township issued General Obligation Bonds in the amount of $32 million, with $25 million allocated to the LPTA for the multi-year sanitary sewer Infiltration and Inflow (I&I) Program. The remaining $7 million was borrowed to support Township capital expenditures, including ongoing improvements to the storm sewer system budgeted at $3 million, and rehabilitation of and an addition to the Public Works building budgeted at $4 million.
In 2016, the Township issued General Obligation Bonds in the amount of $29 million, with $25 million allocated to the LPTA for the multiyear sanitary sewer I&I Program. $4 million was borrowed to support Township capital expenditures for improvements to stormwater facilities and systems.
The following list details expenditures from the General Improvement Fund for capital projects over the past seven years:
- 2016 - $3,709,868
- 2015 - $4,288,541
- 2014 - $1,901,190
- 2013 - $1,619,479
- 2012 - $2,078,509
- 2011- $1,071,041
- 2010 - $1,070,034
- 2009 - $1,273,680