Plum planning to draw down reserves, not increase property tax in 2023

Plum is not increasing real estate taxes, but would draw down its reserves by about 42% under the proposed budget for 2023.

The entire proposed budget for all borough funds is about $23 million, Finance Director Michael Whitico said. That’s an increase of $3.42 million — or about 17.5% — over this year.

The borough’s property tax rate would remain at 4.78 mills. It was last increased by 1 mill in 2017, Whitico said. A mill generates about $1.6 million in tax revenue in Plum.

The borough would use $2.9 million from its fund balance, which Whitico says has about $6.9 million.

Borough Manager Michael Thomas said he is not concerned about budgeting to use that much from the fund balance. Going by state guidelines, he said the borough is well over the $700,000 to $1.15 million that is recommended.

“These were taxes that were already collected from the residents,” he said. “We’ve got fund balance dedicated for specific things, for emergency purposes, if we need it. We have plenty of fund balance to take care of any emergencies or catastrophes that happen.”

Thomas said the budget is a worst-case scenario, and the actual amount spent from the fund balance could be less.

Stormwater fee could rise

While there is no proposed increase in property taxes, the borough is considering increasing the stormwater management fee, which has been $5 per month per household since its start.

Thomas said council will discuss increasing the fee at its Dec. 5 work session. While council will vote on the budget when it meets Dec. 14, the earliest the fee could be increased would be in January, he said.

The borough is expecting 5% increases in health care and workers compensation costs, 4% in fuel costs and 3% in insurance.

Positions added

New positions that would be added include an administrative assistant, janitors, engineer, information technology support staff, and a public works director and laborer.

In the police department, three retirements and two new hires are expected, Whitico said.

The borough’s general fund has a nearly $500,000 deficit, spending $15.4 million on revenues of $14.9 million.

About 80% of the borough’s revenue comes from real estate and income taxes and sanitation fees.

General fund revenues are expected to increase by $835,000, or 6%, over this year’s budget.

Real estate tax revenue is forecast to increase by 10.5%, to $5.11 million, because of new housing in the borough and additional real estate taxes being allocated to the general fund, Whitico said.

More than 74% of spending is for three departments: public safety and police, 37%; public works, 22%; and sanitation, 15%.

Spending in the general fund is increasing by $1.23 million, or 8.7%.

Public safety is the borough’s largest department, Whitico said. Spending there is about $5.8 million, mostly unchanged from this year.

In public works, the administration budget increased by $200,000, or 38%, mainly because of the creation of a director expected to be hired March 1 and an engineer to be hired April 1. The road crew department increased by 13%, or $164,000, because of a new laborer starting July 1 and a $30,000 increase in health insurance.

Public works maintenance increased by 22.5%, or $104,000, mainly because of the increase in fuel costs and vehicle and equipment parts.

The budget for winter maintenance products increased by $75,000, mainly for salt; road salt is expected to cost $356,000.

The recreation department, which includes maintenance of all borough parks, increased by 13%, or $60,000, mainly because of additional public works staff being allocated to it.

Sanitation costs are increasing about 9%, or $183,000, because of a contract increase.

The administration budget increased by $1.47 million, or 15.4%. That includes a $114,000 increase in salaries for a new administrative assistant and a human resources hire this year.

The information technologies department increased by 27%, or $65,000, mainly because of hiring a support person.

The borough began moving into its new building this month. Its budget increased by $187,000, or 44%, because of increasing janitorial staff from one part-time to two full-time workers and a $50,000 increase expected in utilities.