Not Raising Taxes, L. Merion Raises Eyebrows

Posted: December 08, 1996

LOWER MERION — For the fourth year in a row, township tax rates will remain the same. But that's not to say there's nothing new in Lower Merion's proposed 1997 budget.

* Expenditures would exceed revenues by $3.5 million next year, more than twice as much as this year's $1.2 million gap. The township dips into reserve funds when needed to balance the budget; from 1991 to 1995, it ran a surplus.

* The township spent $449,000 of its insurance trust fund on legal battles with the Barnes Foundation this year, and another $86,780 defending a pending sexual-harassment suit against its police chief. Township officials say insurance will cover the bulk. Still, they have earmarked $1 million to replenish the fund - the first new deposit since it was set up in 1986.

* At the same time, the budget calls for 17 new employees, reversing a five-year job-cutting trend that reduced the township workforce by 26 employees. The $950,000 price tag would cover, among other things, new people to coordinate recreation, economic development and information flow, and 10 police officers. A federal Cops Ahead grant would pay $250,000 toward their salaries each year for three years.

These changes have raised the eyebrows of some residents, who say they want a fuller explanation of why this is the time to add personnel, and wonder whether the gap between revenues and expenditures will continue to grow.

``Hopefully, this is not a trend,'' said Carl M. Watson, vice president of the Federation of Civic Associations, which drew up a list of questions for officials to answer at their meeting tomorrow.

Officials say these line items simply illustrate the tough choices the township will face in the future as it tries to serve residents who want both low taxes and top-notch services. The township also must deal with unforeseen challenges - most recently the lawsuits and the Blizzard of 1996, which swelled public works expenses.

Township Manager David C. Latshaw says the $3.5 million drawdown from the fund balance is not expected to happen again. The full amount may not even be needed, he said, ``if we have a good winter, if things go well with the Barnes, if we have higher [staff] attrition.''

But if things go the other way, said township spokesman Stephen Gary, the township policy of keeping fund balance at a minimum 10 percent of revenues - about $3 million - is not set in stone. The 1997 budget projects that the fund balance will dwindle from $10 million to $6.6 million by the end of the year.

``Even 5 percent could still be significant in terms of providing a cushion,'' Gary said.

Lower Merion prides itself on standing out in terms of services and fiscal prudence. It's one of the few municipalities in the area that still picks up residents' trash behind their houses, not at the curbside. And it bills itself as the only one in the nation with triple-A bond ratings from both of the leading agencies, Moody's and Standard & Poor's. Its tax burden is relatively low, at 56.5 mills, $757 for a house assessed at the township average of $13,400.

It will not be impossible to maintain all this in the next few years, Latshaw said in his budget message - but it will be harder.

Revenues, which come largely from property taxes, are stagnant. Inflation is pushing costs up. A countywide reassessment in 1998 will have unpredictable results. And a 20-year county subsidy that provides $1.5 million annually for solid-waste disposal expires at the end of 1997.

In fact, officials say, some of the new expenditures in 1997 are designed to smooth out potential problems later, such as a $500,000 transfer to the solid-waste fund to get ready for the loss of the subsidy.

Commissioners say they are comfortable with the $33.4 million budget. ``Bells aren't going off in my head saying we're doing something that's going to cause problems,'' said Commissioner Regene Silver.

Board of Commissioners President Gloria Wolek said it was past frugality that allowed the township to embark on new projects such as promoting economic development and improving recreation programs and facilities: ``Now we find ourselves in a position where we are able to be proactive.''

Watson, from the civic federation, said he believed the new hiring after a period of retrenchment must have sprung from some vision of a new role for township government. Therefore, he said, that vision needs to be more clearly articulated by the commissioners.

Silver said the commissioners had no overarching agenda but had studied the workings of each township department and decided to add positions that would affordably improve services.

Some have criticized the township for spending so much money on the battle with the Barnes, which hit the township with a lawsuit that accused it of applying zoning rules against the foundation for racist reasons because it is controlled by historically black Lincoln University.

The commissioners will hold a public hearing on the budget Wednesday at 7 p.m. in the Township Building. A vote on the budget is set for Dec. 18.

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