Cheltenham’s 2012 Budget Still Has Hole; Final Decisions and Adoption Expected After Public Hearing Thursday Night
With less than a week left for the scheduled adoption of the budget, Cheltenham Township is still working the numbers and Wednesday night’s Finance Committee meeting was Exhibit A – or make that E for excruciating. Like any level of government these days, the township is being battered by a range of needs, requirements and challenges most of which are central to the quality of life here, yet from a fiscal standpoint in these troubled times, it’s all just a ragtag list of competing budget items. But this year, with major restructuring being considered for garbage and recycling collections, lives and livelihoods are at stake.
Here’s where things stand. With the budget balancing act apparently ongoing until the moment of formal adoption, which is scheduled for this Wednesday night, the commissioners are now scratching for between $550,000 to $700,000 in additional revenue. That’s going to require a sewage rental/fee increase of seven to nine percent, shared equally between the basic rental charge and excess use fee. Last year’s sewer increase was about 5.5 percent. No other tax or fee increases are being contemplated. However, other revenue enhancers already penciled in include: elimination of the sewer fee early payment discount ((107,000); elimination of the refuse fee early payment discount ($40,000); outsourcing for past due property tax collections ($168,000); and a burglar alarm fee increase ($24,000).
If there is a headline issue in the 2012 budget plan, it is the possible move to automated garbage and recycling collections, for an annual savings of $460,000. But that savings comes at the price of laying off nine employees in the Department of Public Works, as well as a sizable capital investment. The automation option involves reducing the crews on the collection trucks from the current three to a single driver operating new high tech “one-armed bandits,” like those in Abington. The new vehicles would pick up standard-sized refuse containers weighing about 36 pounds (a figure for the largest size, updated since the Wednesday meeting), according to Kraynik. The capital investment involved for the purchase of five trucks and refuse/recycling carts is projected at $2.5 million and assumes a useful life of 10 to 15 years.
There could be some negative spill-over effects, including the potential for less grass cutting due to a staff stretched thin and a further strained relationship with the union, Teamsters Local 115. In terms of dollars and cents, significant increases in gasoline, maintenance and repair costs are possible, as well as additional snow removal costs, but “at the end day of the day, it’s a financial winner if we go to automation,” said Kraynik.
In a straw vote at their December 7 meeting, the Finance Committee approved going to full automation by a bare majority. However, only a week later, it seemed that the enthusiasm for automation had melted away in the face of concerns raised by township employees and residents Wednesday night. Additional options which could reemerge are automation only for recycling, at least in 2012, resulting in one layoff and a capital cost of $1.2 million and a longer phase-in based on the pace of retirements in the public works department over the next few years. If full automation is rejected for this year, which is far from assured, the township would need to come up with an additional $270,000, a figure included in the range of possible increases in sewer rental/fees (above). An automated system, if approved, would not be up and running in 2012 until about September.
The Wednesday meeting put some real faces on the dry budget numbers for the seven commissioners.
Pete LaRue, a staffer in Public Works and a lifelong township resident from Cheltenham Village, argued that automation was not a sensible approach, especially from the standpoint of the cuts in staff which would compound existing problems for grass cutting, snow removal and leaf raking. He claimed that the department is currently understaffed and gave an example of the last two weekends, when, he said, some 32 men racked up 10 hours of overtime clearing leaves. “Does it make sense to lay off 9 men? What’s going to happen during the next storm?”
“I have a wife and 4 kids to support,” he continued. “When I was hired here, they told me that this is a job you can retire at . . . I could’ve gone somewhere else and made more money, but I wanted to be close to my town and be close to my kids. My kids go to school here, we live here, we work here, we play here. I don’t want that taken away from me.”
Susan Mellus of Elkins Park said, “From what I see, these guys work very very hard. I lived in Philadelphia all my life. If you didn’t pay the trash guys, they didn’t pick up your trash. If it rained today, they didn’t pick up your trash And if you had any kind of weather conditions, the trash was all over the street. These guys, you know when they’re going to come; if it snows, they’re a day behind. But they work their tails off and I think it’s a disgrace to cut out decent paying jobs in order to then have some huge truck that somebody in some other country makes money on. You have to pay for repairs and now we’re down more jobs in the township.”
Joe Shearing of Glenside Avenue, an employee in the public works department and a Cheltenham resident for almost 30 years, has raised three children and educated them here. “I want you to see one of the faces that will be seriously affected by your decision,” he said. “Me. I’m 51 years old. Where am I going to go? I have a little home on Glenside Avenue, three kids, the dog, the picket fence, everything. Where am I going to go? When I can give 10, maybe 12 more years to this township and have some kind of retirement. That’s what I was also told – it’s a job for life, it’s a job you can retire on. I’ve had my problems . . . I’ve hurt my back and I did go out with workers compensation. But I honestly did not mean to get four screws in my back . . . There’s got to be other ways to save money without taking nine families out of the equation. And you know with the nine families, its unemployment and then it’s Wawa . . . I love my home on Glenside Avenue and I don’t want to lose it. I’ve worked hard for my home . . . I’m asking that you consider your decisions and just find a way to keep the men working to support their families. There has to be a better way. I’m fighting for my life right now and for the lives of eight other men that are behind me. Thanks for your time and please search your conscience. I trust you’ll find the right answer.”
Ward Two Commissioner Art Haywood responded by showing a blow-up of a chart of how Cheltenham tax rates compare with those of neighboring townships. “The commissioners on behalf of the township, in my opinion, must avoid a widening tax gap between where we are and our neighbors. Now, to avoid a widening tax gap between where we are and our neighbors requires significant change in the government, in my opinion.” Haywood called the potential savings of $460,000 annually “a significant consideration.” He termed any loss of employment “undesirable,” but countered that the 10,000 families in the township could be affected by a widening tax gap between Cheltenham and neighboring communities.
Mellus spoke again: “I feel that it’s extremely important that the things that we start cutting in this township are not jobs. Because I think that that’s a problem that we have in this country all the way down the line and we’re going to get bit in the ass later.”
Peggy Hoffner, a realtor here for 40 years, now living in Franconia Township, shared her perspective. “Buyers would rave about township services. They raved about the police department; when you call they’d be there in two minutes. When you put your trash out, they’re friendly, they talk to you, they greet you. It’s amazing, this township. The services that they have here are wonderful. This is what sells houses. Your school taxes right now are killing you. It takes me nine months to a year to sell a listing in Cheltenham . . . And the prices are dropping like a rock.
“Most people come from the city and they value the services here,” she continued. “They value the parks, they value the swim clubs . . . You start playing with that and you’re going to watch more people leave. You’re going to have a lot of empty properties and your values are going to continue to go down. That’s your front line, that’s your person for the township (refuse and recycling collectors) that almost every resident gets to meet. It’s the guy that comes along to pick up the trash. And they’re very good township representatives. They work very hard.”
Ward Five Commissioner Mike Swavola suggested the need for substantive discussions between the township and the union to come up with cost savings equivalent to the $153,000 that could be saved this year through automation in order to preserve the jobs. Kraynik responded that the discussions were ongoing, at one point saying, “I have very little faith in discussions between management and the union that will result in 152,931. I have no faith – none.”
He also emphasized the recurring budget challenges that the township will continue to face and pointed to the sizable cash infusion that will likely come from the fund balance in 2012. (A fund balance is a financial cushion based on surpluses accumulated over time used by bond rating agencies to evaluate for creditworthiness and influence ratings, which affect interest rates.) $1.7 million is earmarked for transfer from the fund balance to the operating budget for 2012, $600,000 of which is a one-time bonanza from the state pension system that arrived late this year.
But heavy use of the fund balance to plug budget holes is unsustainable, he said. Last year (2011), the budget included a $1.1 million transfer, however Kraynik told Citizens’ Call that with the unpredicted $600,000 and some other unanticipated revenues in conjunction with tight management, he is hoping that it will, in the end, be unnecessary to tap the fund balance for 2011. Cheltenham’s fund balance for 2010 was about 12 percent of the operating budget. Financial advisers say that a five percent ratio is generally considered adequate to maintain the township’s Aa bond rating, according to Kraynik.
The public hearing and final decision on the 2012 budget will occur at the regular meeting of the board scheduled for 7:30 p.m. Thursday, December 22 at Curtis Hall, 1250 W. Church Road in Wyncote.