1. TOWNSHIP OF LOWER MERION Proposed 2009 Budget

2. 2 Proposed 2009 Budget Schedule 2009 Budget Distributed to BOC and Public: 2009 Budget Distributed to BOC and Public:  October 31 st (Six-year Capital Improvement Program)  November 7 th (Proposed 2009 Budget) Proposed 2009 Budget Public Hearings: Proposed 2009 Budget Public Hearings:  November 19th  December 3rd Adoption of Proposed 2009 Budget and 2009 – 2014 CIP scheduled for Dec 17th Adoption of Proposed 2009 Budget and 2009 – 2014 CIP scheduled for Dec 17th

3. 3 Summary of Proposed 2009 Budget 2008 Estimate = $2.2 million of Total Budgetary Savings 2008 Estimate = $2.2 million of Total Budgetary Savings  2008 Major Budgetary Savings Estimated for: Personnel Costs ($0.9 M) Personnel Costs ($0.9 M) Solid Waste Fund Subsidy ($0.5 M) Solid Waste Fund Subsidy ($0.5 M) Property and Liability Insurance ($0.2 M) Property and Liability Insurance ($0.2 M) Workers Compensation ($0.1 M) Workers Compensation ($0.1 M) Materials and Supplies and Electricity ($0.2 M) Materials and Supplies and Electricity ($0.2 M)

4. 4 Proposed 2009 Budget Proposed 2009 Budget gap is $3.8 M (without new revenue enhancement) Proposed 2009 Budget gap is $3.8 M (without new revenue enhancement) 2009 Proposed Budget calls for net new annual revenue of $500,000 2009 Proposed Budget calls for net new annual revenue of $500,000 2009 Budget – $3.3 M Budget Gap 2009 Budget – $3.3 M Budget Gap  Hopeful for $1.2 million of budgetary savings

5. 5 Proposed 2009 Budget Other Key Points: No Solid Waste Fee increase No Solid Waste Fee increase Includes various increases for fees/rates Includes various increases for fees/rates Likely increase for Sanitary Sewer fee in 2009 Likely increase for Sanitary Sewer fee in 2009

6. 6 Proposed 2009 Budget Revenue Enhancement Increase Township Real Estate Tax (RET) +2% Increase Township Real Estate Tax (RET) +2% Increases 2009 RET from 3.61 mills to 3.68 mills: (+0.07) Increases 2009 RET from 3.61 mills to 3.68 mills: (+0.07)  +$25 RET for “Average Single Family Detached Home” Provides $500,000 of net new RET revenue in 2009 Provides $500,000 of net new RET revenue in 2009

7. 7 Proposed 2009 Revenue Budget Highlights The Proposed 2009 GF Revenue Budget is $50.6 million The Proposed 2009 GF Revenue Budget is $50.6 million  -$300,000 or 0.6% decease from 2008 Budget  Key Revenue Increases over 2008 Budget: Real Estate Taxes (Current)*$ 600,000 Business and Mercantile Tax 250,000 *Includes +2% real estate tax increase  Key Revenue Decreases from 2008 Budget: Real Estate Transfer Tax($1,000,000) Investment Income (350,000) Local Services Tax (200,000)

8. 8 Proposed 2009 Revenue Budget Highlights Other Key Points: Other Key Points:  2009 Preliminary Real Estate Tax Assessment Base Flat Compared to 2008 Proposed 2009 Budget includes RE Tax Assessment Growth (+0.6%) Proposed 2009 Budget includes RE Tax Assessment Growth (+0.6%) Increased RE Assessment Appeals (Successful) Increased RE Assessment Appeals (Successful) Slower New Construction and Building Renovations Slower New Construction and Building Renovations  2008 RE Deed Transfer Tax (Estimated Actual) Q4 Impacted by Economic Downturn Q4 Impacted by Economic Downturn Expected to Finish $300,000 Lower than 2008 Estimate Expected to Finish $300,000 Lower than 2008 Estimate

9. 9 Township of Lower Merion Proposed 2009 Budget - Revenues Real Estate Property Taxes 54% Real Estate Transfer Taxes 7% Business Taxes 15% Licenses & Permits 9% Fines & Forfeits 3% Departmental Earnings 5% Other Revenue 7% Almost Two- Thirds of General Fund Revenues are Derived from Real Estate Related Taxes

10. 10 Proposed 2009 Expenditure Budget Highlights The Proposed 2009 GF Expenditure Budget is $53.9 million  Moderate +1.8% or $1.0 million increase over 2008 Budget  Includes Expenditure Reductions ($800,000)  Reduction of seven full-time positions  Includes Contractual Wage Increases  Workers Association  Fraternal Order of Police

11. 11 Proposed 2009 Expenditure Budget Highlights (continued)  Higher costs for health care insurance premiums for employees  Higher costs for Shade Tree maintenance  Higher debt service (+5%) resulting from 2008 Series Bond Issue ($10 M – New Money) (+10%) without debt restructure in 2008  Lower GF subsidy to Solid Waste Fund  Lower Professional Technical Services

12. 12 Township of Lower Merion Proposed 2009 Budget – Expenditures By Service Area Public Safety 38.7% General Government 14.3% Debt Service 14.1% Libraries & Recreation 13.1% Public Works 13.7% Building & Planning 6.1%

13. 13 Township of Lower Merion 2009 Proposed Budget – Expenditures By Major Expense Personnel Costs 63% All Other Expenses = 20%: Utilities Professional Services Materials and Supplies Equipment Fund Rental Rate Fire Company Contributions General Fund Subsidy to Solid Waste Fund 3% Debt Service 14%

14. 14 Key Areas of Expenditure Cost Containment Controlling Personnel Costs Controlling Personnel Costs  Increased service delivery expectations  Eleven full-time positions less than in 2002  Fair market based labor agreements Controlling Healthcare Costs Controlling Healthcare Costs  Employee contributions for health care  Self funded prescription and dental benefits  Negotiated cost saving measures in our prescription drug benefits  New hires at lower cost health care plans  Incentives for attendance and opt-out health care  Employee safety and wellness programs

15. 15 Key Areas of Expenditure Cost Containment (continued) Debt Service Costs Debt Service Costs  Refinancing of Debt Portfolio  Township’s Triple A Bond Rating Reduced Costs for Risk Management Programs Reduced Costs for Risk Management Programs  Member of regional municipal risk-sharing trust  Excellent claims experience; safety programs  Performance dividends ($500,000 since 2003)  Stable and declining insurance premiums

16. 16 Key Areas of Expenditure Cost Containment (continued) Electricity Costs for Traffic and Street Lights Electricity Costs for Traffic and Street Lights Reorganization Within Township Departments Reorganization Within Township Departments Utilizing Cooperative Purchasing Programs Utilizing Cooperative Purchasing Programs Police Equipment Purchases With Drug Forfeiture Funds Police Equipment Purchases With Drug Forfeiture Funds Contracting Services From the Private Sector Contracting Services From the Private Sector Reducing Consulting Costs Through Use of Staff (in- house) Reducing Consulting Costs Through Use of Staff (in- house)

17. 17 Township 5-Year Forecast (Nov 2008)

18. 18 Township 5-Year Forecast Key Points: Key Points:  Moderate revenue growth (+2% compounded annually)  Higher expenditure growth (+5% compounded annually) +3.5% (07 Actual), +2.9% (08 Estimate) and +3.5% (07 Actual), +2.9% (08 Estimate) and +3.7% (09 Forecast) +3.7% (09 Forecast)  Expenditure Cost Drivers: Employee health care (+8%) Employee health care (+8%) Debt service for CIP (+8%) Debt service for CIP (+8%) Solid Waste Fund subsidy (+16%) Solid Waste Fund subsidy (+16%)  Expenditure growth net of cost drivers (+3.5%)

19. 19 Revenue Outlook Beyond 2008 Downside Developments RE Deed Transfer Tax Local Services Tax Investment Income Business Taxes RE Assessment Growth Pressure Points Optimistic View (2009) Housing Market Stock Market Economic Conditions State Mandates Compounded Annual Revenue Growth (+2%)

20. 20 Expenditure Outlook Beyond 2008 Upside Developments Workforce Efficiencies Cost Containment Expenditure Reductions Good Workers’ Compensation Experience Stable Insurance Premiums Reduced Electricity Use Pressure Points Employee Wage Costs Healthcare Insurance Costs Retiree Healthcare Insurance Costs Capital Improvement Program Solid Waste Fund Subsidy Compounded Annual Expenditure Growth (+5%)

21. 21 2009 – 2014 Capital Improvement Plan (CIP ) 2009 Proposed Capital Budget provides for $27.1 million of funding 2009 Proposed Capital Budget provides for $27.1 million of funding Township funds CIP with 20-year GO Bonds Township funds CIP with 20-year GO Bonds  $10 million bond issues projected (2009 – 2012 )

22. 22 2009 Capital Improvement Plan (CIP ) Top 10 CIP Projects Represent 70% or $17.1 million of Total 2009 Capital Budget Top 10 CIP Projects Represent 70% or $17.1 million of Total 2009 Capital Budget Major projects scheduled in 2009: Major projects scheduled in 2009:  Ludington Library Renovations  Montgomery Avenue Closed Loop Traffic Signal System  Five-Points Intersection Improvements  Ardmore Transit Center  Anderson Avenue Underpass Improvements

23. 23 2009 Proposed Budget Key Points of Public Discussion on Proposed 2009 Budget: Key Points of Public Discussion on Proposed 2009 Budget:  Amended 2009 Tax Levy and Appropriations Ordinance Advertisement Includes RET increase in the range of 0% - 2% Includes RET increase in the range of 0% - 2% With or without an across-the-board increase of the Solid Waste Fee With or without an across-the-board increase of the Solid Waste Fee  Funding to Outside Agencies Board discussed amending contribution to Eldernet (from $10,000 to $20,000) Board discussed amending contribution to Eldernet (from $10,000 to $20,000)  Action will be taken at Finance Committee next week Corrected budget typo in funding to outside agencies: Corrected budget typo in funding to outside agencies:  Lower Merion Conservancy (from $10,000 to $20,000)  EMS Corps of LM and Narberth (from $20,000 to $10,000)

24. 24 End of Presentation