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North Huntingdon commissioners adopt new fund balance policy

Michael DiVittorio
| Wednesday, Feb. 27, 2013, 2:46 a.m.

North Huntingdon officials are getting a better handle on township finances with a new fund balance policy.

Commissioners unanimously adopted the policy at Wednesday night's meeting.

It sets a limit on the reserve fund of no more than 25 percent of the township's general fund budget.

Commissioners started the year with a budget of roughly $11.45 million, and an estimated $7 million in reserve. They would need to spend down to about $2.86 million to fit the policy.

“There's no time frame on it to when we get there,” board of commissioners president Lee Moffatt said. “The more important thing with the policy is that once we get there, or once we get close is it's going to determine the taxes we tax ... You don't just want to tax and build up your own reserve. That's not good for anybody.”

Commissioners made strides this year to spend down the reserve by allocating $2.2 million to pay off the public works building's $1.8 million mortgage and adding an additional $400,000 to road paving projects.

They reduced the township's real estate taxes by 1 mill, setting the millage at 9.23 mills. One mill generates approximately $330,000.

Township manager John Shepherd said he anticipates the reserve fund to remain around $7 million despite the mentioned spending because of another projected surplus. He said the township will not have exact figures until the 2012 audit's completed.

The policy does not have any recommendations as to how the reserve fund should be spent.

Shepherd said spending it on capital improvements, one-time expenses and additional street projects would make more economic sense, rather than putting the money into new employees because of the recurring nature of the operating costs.

Shepherd consulted with other municipalities and agencies while drafting the policy. Murrysville is the only local community imposing a reserve fund policy, and it caps the fund at 20 percent.

The Government Finance Officers Association recommends a minimum reserve of 17 percent.

“A rainy day, 25 percent of the township budget is plenty,” Moffatt said. “There might be another tax decrease next year. I wouldn't have a problem if we decreased it for five years. It'll be interesting how we spend it ... In some ways it's not fair to the taxpayer to build up such a reserve. Tax what you need to operate, that's it.”

Michael DiVittorio is a staff writer for Trib Total Media. He can be reached at 412-664-9161, ext. 1965, or mdivittorio@tribweb.com.

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