20 Aug 2014
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Lower Merion Considers New Policy for Equipment Fund

The Board of Commissioners’ committees also received updates on the township’s response to Hurricane Irene.

Lower Merion Considers New Policy for Equipment Fund

The Finance Committee for the Lower Merion Township Board of Commissioners listened to and discussed the township manager’s preliminary recommendation for funding equipment differently Wednesday night.

The initial request for Township Manager Doug Cleland's proposal came from Lower Merion Township Commissioner Jenny Brown, who is running for Montgomery County Commissioner.

Most of the pieces of equipment in the equipment fund have 10 to 40 years of “useful life” before they need to be replaced, Cleland said. Fire trucks are not part of the equipment fund, he said.

The equipment fund is viewed as three separate subfunds which represent the equipment utilized by the three funding sources: the general fund, the sanitary sewer fund and the solid waste fund, Cleland said. 

Starting in 2010, to save money, the township began filling the equipment fund at only half the pace of its equipment’s depreciation, rather than matching it in full, Cleland said. Officials also tapped the fund for $280,000 in purchases that would normally come from the township’s general fund.

“If the funding scheme of the past few years is continued annually in the future, there is forecasted to become a year when the equipment fund’s accumulated reserves, or available fund balance, for general fund-related replacements will approach zero or possibly fall into the negative,” Cleland said.

Cleland said his preliminary recommendation proposes that the Board of Commissioners have a policy that the equipment fund will be funded in an ongoing manner to provide for the expected annual operating, maintenance and repair costs of all its equipment; and to ensure that the actual and forecasted annual contributions from each of the funding sources is sufficient to provide the needed funding for all of the forecasted equipment replacements.

As part of the policy, the township manager would provide a financial forecast of recommended annual funding contributions from each of the funding sources, Cleland said. This would be done each year before the adoption of the annual operating budget, Cleland said.

Commissioners differed over whether the policy would allow the board enough flexibility in deciding how much money should be put in the equipment fund and how the township would pay for the equipment. There was also disagreement over whether such a policy is necessary.

Commissioner Brian McGuire called it “a very well-worded policy.”

“It is good policy to be able to maintain the equipment fund…I would very much support having a clear policy on this,” McGuire said.

Commissioner Lewis Gould, Jr., credited Brown for asking Cleland to provide the information about the equipment fund, but questioned the need for the policy.

“For me, I don’t think we need a policy, and if we do, I’m not sure it’s one I would support,” Gould said.

Gould said the commissioners need to consider the taxpayers in terms of what taxpayers think of having their tax money saved up in the equipment fund.

“We’re talking about a very significant sum of money,” Gould said, noting that the 2011 equipment fund has a fund balance of $10 million. 

“This isn’t found money,” Gould said.  “This is money we have taken from our taxpayers on a regular basis.”

Brown was pleased just to have a discussion about the equipment fund.

“Regardless of what we end up with, I’m very, very happy we’re having this discussion,” Brown said.

Brown said “it’s exactly what we need to do” whether the commissioners decided they need to save up taxpayers’ money to pay for the equipment, borrow money for it or “pay as we go.”

Brown asked Cleland if his projection this spring that it would be possible for the township to have no tax increase next year would still be possible.

“My conclusion about the zero percent tax increase has not changed,” Cleland said.

Although the commissioners at the Finance Committee meeting discussed Cleland’s preliminary policy at length, they did not vote on whether to recommend it to the full board. 

Board of Commissioners Vice President Paul McElhaney, who is the chairman of the Finance Committee, made a motion to table further discussion until another meeting because the public had not had the opportunity to comment and he wanted to move the meeting along in the hopes that the board’s committee meetings would end by 10 p.m. 

In other matters, the Board of Commissioners’ Public Works Committee and Police Committee received reports about the township’s response to Hurricane Irene.

“We were prepared for it,” said township Director of Public Works Donald Cannon said during the Public Works Committee meeting.

The township workers and PECO, which had called in crews from as far away as Illinois and Kentucky, responded to 200 locations with trees and wires down, Cannon said. 

Some downed wires were tangled in fallen trees, Cleland said.

“We were fortunate there weren’t any injuries in the township with electricity,” Cleland said.

During the height of the storm, there were 500,000 people in the Philadelphia area without power, 10,000 of them in Lower Merion Township, Cannon said.

One of the issues during the storm was notification about the outages, Cannon said.

Cannon said it is important for residents to know that when they lose power, they need to call PECO and provide PECO’s automated system with their customer account number or the phone number associated their bill so that PECO can track where the outage is located.

“Without anyone calling, PECO doesn’t know there are outages even if we (the township) call them,” Cannon said.

Lower Merion Police Superintendent Michael McGrath spoke about Hurricane Irene during the board’s Police Committee meeting.

The Lower Merion Township Police Department received 521 calls during the storm, between 3 p.m. Saturday, Aug. 27 to 8 p.m. Sunday, Aug. 28, McGrath said.  The 521 calls translated to 534 dispatch incidents, McGrath said.

During a normal weekend in August, the township police department receives 161 calls and 200 dispatch incidents, McGrath said.

McGarth said he called in additional police officers and dispatchers to work during the hurricane.

“For the most part, we had sufficient resources,” McGrath said.

In terms of storm damage, “no particular community was spared,” McGrath said.

The township received eight inches of rain but there were no evacuations needed or ordered, and there were no shelters opened or needed, McGrath said.

Commissioner Brian McGuire said, “I saw guys risking their lives in high winds 50 feet up in a cherry picker.”

Commissioners praised the hurricane response of McGrath and his officers, Cannon and his staff, and the township’s volunteer firefighters.

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