Financial Advisory Committee Makes Preliminary Recommendations in West Chester

The West Chester Financial Advisory Committee presented a preliminary report to borough council last month in order to provide guidance as council moves forward into budget season.  There’s a lot of data to process, and in order to make it coherent I am going to have to use some bullet points.

• Debt service is huge.  According to the report, the committee says that the borough’s debt service through 2040 totals $35 million.  So, what is debt service?  Debt service is the amount of money an entity has to pay over time in interest and on the principal payment.  It’s like a mortgage.  Now, according to the committee, the borough has some of this debt classified as “self-liquidating.”  Great, but what does that mean?  Basically the idea is that some of this debt will pay itself off.  How does debt pay itself off?  Good question.  For example, the parking garages are listed as “self-liquidating.”  Basically, revenue generated by the parking garages will be used to pay for the garages’ debt.  There’s a canceling out effect.  However, the advisory committee suggests that these debts should no longer be listed as “self-liquidating,” and instead should be considered as a “general obligation.”  (This is the longest bullet point ever by the way.) In simple terms, the committee suggests that the borough needs to stop building stuff unless it’s an absolutely necessary function of the borough.  For example, the committee says that infrastructure maintenance is underfunded.
• The committee also suggests that the borough ask hard questions of itself when it comes to public works.  Questions like “how much” and “how often.”  For example, something like tree trimming.  (That’s my example not theirs.)  The borough needs to ask how much does tree trimming cost to provide, and how often is it necessary.  The reasons to ask these questions is not to determine whether or not there should be tree trimming, but whether or not someone besides borough employees could provide the service and for cheaper.
• They talked about renegotiating labor contracts in the borough’s favor, but that’s a whole different issue entirely and would be a longer bullet point than the first one.
• For revenue generation the committee suggested changing the way the borough enforces parking.  That could include garage optimization, increased parking fees, more parking meters, automated parking meters and strategic increases to enforcement.  They also recommended asking tax-exempt entities in the borough, like the university, for money.  They also recommended instituting a storm water fee that would charge residents a monthly amount to offset the costs of storm water maintenance. 
• The group will make their final recommendations in October in conjunction with the 2012 preliminary budget.

To see the full report please see the attached PDF.