The DPMT believes that our elected Supervisors owe it to the taxpayers of Middletown Township to minimize unbudgeted expenses and do everything possible to achieve cost-savings, while not jeopardizing the current services provided by the Township.  Supervisors must take a more active role in restructuring a sustainable cost model in the Township, and should be paying close and careful attention to ALL financial matters, instead of claiming ignorance and opting to take the easy (and politically expedient) way out.

Taxes

The current majority on the Middletown Township Board of Supervisors promised during the 2009 campaign that they would ‘hold the line’ on taxes.  The budgeting process for 2011 makes it appear as if this promise was fulfilled, but a closer look at the numbers reveals the truth.

There are eight funds with associated millage rates that make up the township real estate taxes.  The 2010 budget included a total millage rate of 17.57.  The 2011 budget also reflects a millage rate of 17.57, but the breakdown of the funds tells a bigger story:
 

Three of the funds were increased in 2011 – street lighting fund, fire hydrant fund, and the general fund (the largest of the funds).  These increases were due primarily to rising costs, and they were off-set by a one-time decrease in the debt service fund.  In 2012, the debt service fund will need to be increased to previous levels and the increases in the street lighting fund, fire hydrant fund, and the general fund presumably will stand and not be decreased. 

By appearing to be ‘holding the line’ on taxes in 2011, the current Board of Supervisors has already RAISED taxes in 2012.

Furthermore, the contingency fund that boards have been drawing down for years has been depleted so the hundreds of thousands of dollars per year that this source has provided will also need to be replaced in the township budget. 

Spending

The current majority on the board of supervisors promised during the 2009 campaign that they would ‘control spending at every level of government.’  Here are some examples of how spending has been ‘controlled’ in 2010

1. Middletown Township spent an unbudgeted $10,000 to increase township insurance coverage to a level that only 25% of townships carry
2. Middletown Township voted to spend an unbudgeted $15,000 to once again study a pipe problem in the Maple Point section of Langhorne.
3. Middletown Township awarded a no bid contract to a new health insurance broker.  (Note:  the Township is not obligated to bid service contracts, however with a platform of “controlling spending” it seems like it would have been a prudent idea).
4. Middletown Township fired a township manager, costing well over $100,000 in severance pay and continued benefits.
5. Middletown Township appointed a labor attorney with questionable labor qualifications and then appointed a second labor counsel for labor negotiations with unions representing township employees.
6. Middletown Township lost a $200,000 grant because of inaction.  In late 2009, a previous board announced the award of a $200,000 grant from the Redevelopment Authority to build a sidewalk from the SEPTA Woodbourne Station to the Oxford Valley Mall.  When the new board and new township engineer arrived in 2010, no action was taken on this project for months.  It was first discussed at a meeting in the spring, and then, tabled from meeting to meeting with approval not happening until the June 21, 2010 meeting.  Unfortunately, this did not leave adequate time for the project to be completed and the board voted to cancel the project and return the $200K grant in December 2010.
7. Middletown Township’s contract with the largest union representing Township employees expired at the end of 2010.  Instead of negotiating this contract throughout 2010, the Board of Supervisors opted ignore this priority throughout the year and then quickly vote to ‘extend’ the contract for one more year in December 2010, depriving Township taxpayers the opportunity to realize any negotiated savings in 2011.

Investment Fund

During the 2011 budgeting process, the Board of Supervisors felt that there were 2 options to cover the forecasted revenue shortfall:  increase taxes, or declare an economic state of emergency in Middletown Township and tap into the principal of the Township Investment Fund.  The 3^rd option should have been to consider cost-cutting measures, but this did not seem to be on the table.  The excuse for not considering cost-cutting measures was that the Board of Supervisors did not know about the financial state of Township earlier in the year.  Because of this lack of diligence in understanding the Township finances, the Supervisors voted to approve a budget that hastily included a $1 million withdrawal of principal from the Township Investment Fund. 

If the Supervisors had been paying close attention to the financial state of the Township (something they promised to do), they should have identified these potential issues and been working to resolve them long-before matters got to the ‘state of emergency’ point.  Withdrawing principal from the investment fund:

1. Sets a dangerous precedent that allows future boards to also withdraw money at whim;
2. Reduces the income the fund generates for the Township (further aggravating the financial problem);
3. Puts the Township’s bond rating at risk, potentially making the cost of borrowing money higher in the future;

The $1M withdrawal from the Investment Fund shows an alarming lack of attention by the Supervisors on the financial issues in Middletown Township, and just kicks the Township financial problem further down the road, allowing them to snowball into much bigger issues.