Projections of $12.89 million in revenue will be exceeded by $13.45 in expenses. The $566,455 deficit would be offset by carrying over $1.4 million from 2013 and transferring $899,000 to the capital reserve fund.
The 2014 capital reserve fund is projected to total $5.1 million, but would decrease to about $2.8 million after capital expenses.
Township Manager Jon Hammer cautioned the commissioners at the workshop meeting that the township cannot keep drawing down its capital reserve fund to balance the budget.
"That number continues to drop year after year after year," said President Commissioner Tori Morgan. "What is a comfortable level to be at and be stable at?"
Hammer recommended the township keep a minimum of $2.8 million in the capital reserve fund, about 20 percent of the general fund, because rating agencies are comfortable with that amount.
"Here's the tricky part of this: We're going to have capital expenditures in 2015 and 2016 and 2017. We need to keep that balance of $2.7 million-$3 million, otherwise when we do go out to finance things they're going to look at what our reserve is and if it's too low we're going to get hurt a little bit," Hammer said.
Commissioner David Bond said, "We as a governing body need to decide that it's over. That's the money we don't touch anymore."
Hammer said the township can no longer continue to take cash for capital expenditures.
"A new fire truck can cost $800,000. A ladder truck can cost $1 million," Hammer said.
"I think we've reached the point where we are going to have to start to borrow to fund out capital expenditures. Which is not a bad thing," Hammer said.
South Whitehall Township will have no debt at the end of 2013, he said, "which is an enviable position to be in."
Hammer said the township could consider levying a fire tax as other municipalities do to fund the cost of their fire companies' operations and equipment. Hammer said a fire tax of .1777 mills would raise about $400,000 a year for the township's fire fund.
Hammer said the early retirement packages accepted by 14 township employees over the last two years have saved the township $1.5 million and what would have been more than 2 mills in taxes.
The meeting was one of three workshops scheduled for the 2014 budget. The next workshops will be held at the administration building:
- Oct. 23; 6 p.m. to 8 p.m. State highway aid fund and departmental overviews will be presented.
- Nov. 13; 6 p.m. to 8 p.m. Refuse and recycling fund and contribution requests will be presented.
The 2014 budget could be adopted at the commissioners' Dec. 4 meeting.