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Trump Card In The Budget Discussion

LOWER POTTSGROVE PA – Like good poker players, members of the township Board of Commissioners haven’t said much yet about their trump card in the current controversy surrounding Lower Pottsgrove’s tentative 2009 budget. That’s because what board members are holding is a sure bet: more than a million dollars in unreserved funds.

Will Lower Pottsgrove commissioners part with $33,000 more?

Will Lower Pottsgrove commissioners part with $33,000 more?

The subject was pushed during the board’s meeting Monday (Dec. 1, 2008) by none other than a former commissioner himself, Tom Troutman. Troutman advocated the restoration of full funding by the township to four non-profit organizations which, if the budget passes Dec. 18 without changes, collectively stand to lose $33,000 as a result of expense cuts.

Adverse media and public reaction to those cuts has surprised the board. The non-profit contributions could be restored, Troutman suggested, by withdrawing additional money from unreserved funds.

“Is it possible for us to find out how much (money) is left?” as a surplus, Troutman asked township Manager Rodney Hawthorne.

Yes, Hawthorne answered, the township could find that out.

“Can you let the public know?,” Troutman followed up. Sure, Hawthorne responded.

“Do you know the amount tonight?,” Troutman pressed again. “The last time I looked, before we finalized the budget,” Hawthorne said, “it was about $1.4 million.”

Unreserved funds are akin to a savings account. Because they are not held for any special purpose or committed to any specific expense, they can be used at the board’s discretion. For 2009, its discretion so far is to withdraw $320,234 and use it to balance the general fund budget, avoiding the need for a real estate tax increase.

Using a portion of unreserved funds for budget balancing has become somewhat of a tradition in Lower Pottsgrove. Between 2003 and 2008, the township’s budget summary shows, commissioners voted to appropriate more than $1.33 million in surpluses to even out the annual spending plans. Their highest appropriation within that period, $479,243, was made for 2007; their lowest, $25,000, for 2003. Over the five-year period, the transfers average $266,757 annually.

The luxury of unreserved funds allows Hawthorne and the board to proclaim, with understandable pride, that township property taxes have been raised only six times during the past 18 years. At the average transfer rate, commissioners could fend off property tax increases for another three or four years before nothing’s left.

They could, but probably wouldn’t.

One reason: bond ratings. Having a reasonably-sized surplus shows lenders the township is financially stable and well managed. Stability and good management often allow municipalities to negotiate lower interest rates when they need to borrow. Low rates ultimately save taxpayers money.

A ladder truck and a tree fram one of three buildings sustaining damage in a Pottstown fire Friday.

Pottstown's apartment fire in September.

Another reason: emergency needs. Lower Pottsgrove’s municipal neighbors have, in recent years, been hit by hurricanes (Limerick Township), flooding and major fires (Pottstown Borough), and other natural or man-made calamities. If trouble strikes here, the township’s unreserved funds allow it to respond and solve problems quickly. The more money it has in the bank, the more soundly taxpayers might sleep.

Troutman and others who feel as he does – and since Nov. 24 (2008), when the budget was officially released, that group has become increasingly vocal – think they aren’t asking for much. The $33,000 represents 10.3 percent of the unreserved amount commissioners already need to balance the budget, and slightly more than one-half of only 1 percent of the total budget.

Some board members, on the other hand, seem to have staked their ground. They argue that reducing gifts to the non-profits – the Pottstown Public Library, the Visiting Nurse Association of Pottstown and Vicinity (VNA), the township Historical Society, and the Pottstown Area Seniors Center – is a “judicious” move that safeguards taxpayers in tough economic times.

Will commissioners change their minds? Dec. 18, when they next meet, is the day the public should find out.

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