2006 Upper Saucon Township Budget Message
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In accordance with the requirements of the Second Class Township Code and on behalf of the Board of Supervisors, I am pleased to present the 2006 Annual Operating Budget for the year beginning January 1, 2006 and ending December 31, 2006. The Upper Saucon Township budget provides an overview of the fiscal and operational status of the Township and a spending plan that includes adequate funding to maintain the Township’s high level of service while allocating funds to reflect the Board’s priorities and community needs.

The budget is comprised of a series of 16 different funds used to account for revenues and expenditures of the Township. The budget for year 2006 represents a comprehensive spending plan for all funds totaling $17,619,250; a 23% increase from the year 2005 budget of $14,339,100. This increase in the 2006 budget is primarily due to an unusual number of large capital projects, some for which the funds have been accumulating over the past years, as well as expenses for consultants that will be reimbursed by developers for large development projects in the Stabler Industrial Park.

The Budget reflects a year round process by the Board of Supervisors and Staff in managing all aspect of Upper Saucon Township. Those efforts in 2006 include, but are not limited to, the following initiatives:

1. Updating and revising the Township’s land use ordinances
2. Performing a Storm Water Management Study
3. Hiring an additional Police Officer, Highway Department Employee and Sewer Collection Department Employee
4. Completing the ordinance codification project
5. Continuing the Human Resource Project
6. Continued support of the Southern Lehigh Public Library with debt service contributions, operation expense contributions and in-kind services.
7. Funding the Fire Department Reserve Account for equipment replacement
8. Continuing the replacement of Township mobile equipment including 2 police cars, 2 highway department dump trucks and a sewer collection / water dump truck
9. Continue the aggressive funding of highway maintenance items including micro surfacing, oil and chip, and resurfacing projects
10. Reconstruction and paving of Taylor Drive
11. Funding of water system projects to improve all aspects of the water system
12. Fund the sewer collection projects to reduce infiltration and inflow into our sewer lines
13. Fund projects at the sewer treatment facility to update and improve the Treatment Plant
14. Construction of a one million gallon water storage tank

The projects above will be accomplished as budgeted throughout the various Funds of the Township. A more detailed description of each Fund and a summary of each Fund are included as follows:

2006 BUDGET SUMMARY – ALL FUNDS

GENERAL FUND (01)
The General Fund supports the core services of the Township, ranging from planning and zoning, police, administration, public works, recreation, community services, and debt service. Since 1999, this fund has been supported by a 4.2 Mill tax levy, .5% Earned Income Tax, Amusement Tax, State Funding and numerous fees and charges for services.

The 2005 year ending projected fund balance is $1,874,412. The 2006 Budget was balanced by appropriating $1,026,550 of this available fund balance towards 2006 projects and expenditures. This appropriated fund balance, together with the 2006 budgeted revenues of $7,528,400 and 2006 budgeted expenditures of $8,554,950 will reduce the Township’s fund balance to $847,862 as of December 31, 2006.

General Fund Revenues
As in most years, General Fund accumulated surplus and revenues for the year 2006 are projected at levels sufficient to fund the operating budget without dipping into capital reserve funds. Using the projected 2005 fund balance of $1,874,412 and the 2006 budgeted revenues of $7,528,400, the available funds towards 2006 projects and expenditures is $9,402,812.

Balancing the budget without using reserves and keeping a sufficient fund balance was particularly challenging this year due to two factors:

• The Township’s retirement contribution continued to increase as a result of large retirement plan investment losses experienced during the past several years.
• The need for additional personnel to maintain the high level of service that the residents of Upper Saucon Township deserve and are accustomed.

Fortunately, a strong, diverse, and growing revenue base combined with more efficient
Operations, two additional revenue enhancements (as noted below) and a healthy accumulated fund balance allowed the Township to respond to these challenges with no budgeted reductions in service levels.

• A pension contribution of 3% of an employee’s gross wages has been instituted in 2006 for all members of the Upper Saucon Township Pension Plans.
• An Emergency and Municipal Services Tax of $47 was enacted by the Township on all persons working in Upper Saucon Township.

General Fund Expenses
The budgeted General Fund expenses for year 2006 totals $8,554,950; a 25% increase over the year 2005 budgeted expenses of $6,870,950. This large increase is misleading and is again attributable to the factors we recognized prior. When, excluding the expenses for projects that were budgeted in 2005 and again in 2006, excluding the additional reimbursable expenses due to the development at Stabler Industrial Park and excluding the one time capital projects; a truer picture of the General Fund expenses can be realized. A chart depicting this comparison is provided.

2006 Increase $624,554
10.0%

General Fund budgeted expenditures in 2006 are similar to those in 2005 with some noteworthy exceptions as follows:

Administration – Included in the budgeted items for 2006 include the codification of ordinances ($13,000), a CD recorder for the meeting room and the 2nd phase of the Human Resource Project ($10,000).

Buildings – The replacement of 2 exterior doors totaling $ 3,500, additional floor care in the buildings totaling $2,185, and meeting room repairs of $3,500.

Police Protection – This budget includes expenditures attributed to the new 5 year police agreement signed late in 2005. The budget also includes the hiring of a new police officer early in 2006. $52,000.00 has been budgeted for the purchase of two new vehicles, $2,500 for a utility trailer and $6,500.00 for computer server to replace the current 6 year old server. $2,500 has been included in the budget to fund the startup cost of the Police Bike Unit. The ongoing program to purchase video equipment for each police car required $14,500 to be budgeted from the Capital Reserve Account. Of this amount we have receive a grant for $10,000. Also $28,000.00 has been budgeted in the Capital Reserve Fund to complete the purchase of software and computers through Lehigh County for the use of laptops on patrol.

Fire and Ambulance - $150,000 has been budgeted to fund an equipment replacement program for the Upper Saucon Township Volunteer Fire Company. The budget also includes $12,000 for repainting of the truck floor and two Stryker litters for the Ambulance Corps.

Planning & Zoning – Under Contracted Services an additional $400,000 has been budgeted for inspection costs associated with the building of the Promenade Shops at Saucon Valley, the Olympus Headquarters and the DNB office building. $140,000 has been budgeted for updates to SALDO and zoning ordinances. $100,000 has been budgeted for a Storm Water Study and $10,000 for a Global Positioning Device.

Highways – These budgeted expenses include the hiring of a new Highway department employee early in 2006. Expenses budgeted in the Highway Department include $1,000 for flagman training, $1,100 for a service agreement on the compost site loader, and $15,000 towards our tire replacement program.

Expenditures on roadwork will be coordinated through the General Fund and Liquid Fuels Fund. Road projects budgeted for consideration in 2006 include:

East Hopewell Road Drainage Improvements $3,000
Micro Surfacing Herman Street $2,420
Micro Surfacing Fairmont Street $5,025
Micro Surfacing Treeline Drive $5,794
Micro Surfacing Cherry Lane $6,266
Micro Surfacing Apple Lane $6,320
Micro Surfacing Orchard Drive $6,371
Micro Surfacing Oliver Street $6,779
Micro Surfacing West Hopewell $10,424
Micro Surfacing Hampton and Abbott Streets $14,036
Micro Surfacing Chestnut Drive $14,625
Chestnut Hill Roadway Restoration $20,000
Chestnut Hill Road Wall Repair $25,000
Oil & Chip Chestnut Hill Road $26,944
Oil & Chip Apple Butter Hill Road $27,300
Oil & Chip Glenn Road $34,483
Overlay Woodchuck Lane $2,513
Overlay Jared Drive $8,257
Overlay Briar $8,407
Overlay Spring Drive $14,360
Overlay BelAir Drive $16,694
Overlay Blue Grass Trail $22,258
Overlay Winding Road $23,514
Taylor Drive Reconstruction $640,000

Equipment purchases budgeted for the Highway Department include:

Paint Hopper for Line Striper $209
Light Reel Cords for Shop $360
Safety Vest for employees $450
Blowers (2) $480
Weedwackers (2) $610
Tarps for trucks #18 and #35 $650
Forks for front end loader $1,000
Chain Saws (3) $1,055
Work Area Signs $1,268
Misc. Tools for shop $1,500
Covered Storage Bin for materials $1,850
Snow plow attachment for paths at park $2,150
Plow edges $3,500
Tire chains $3,500

STREET LIGHTING FUND (02)
This fund is used to pay for the costs of operating streetlights in certain areas of the Township. Properties served by the streetlights are assessed a street lighting tax. This tax is based on $.20 per front foot of improved property and $.05 per front foot of unimproved property.

FIRE HYDRANT FUND (03)
This fund is used to pay for the costs of installing, operating and repairing fire hydrants in the Township and to insure adequate water pressure and flow for their use. Monies in this fund are derived from a Fire Hydrant Tax of .5 mil, which is assessed on each property that is within 780 feet of a fire hydrant.

WATER FUND (06)
The Township’s principal water supply is from the Colonial Crest Supply Well and from the purchase of water from the City of Bethlehem which after declining over the last few years has now begun to remain more constant. Due to a water rate increase by the City, the projected cost of the water purchased by the Township for 2006 will be $130,000.00. In 2006 the Water Department will begin a water meter replacement program and $60,000 has been budgeted for this program. The Township has also budgeted $70,000 for the engineering work associated with the proposed water line along North Main Street and Passer Road.

SANITARY SEWER FUND (08)
An increase in the sewer rate for 2006 is not projected. The $80,000 allocated as revenue from the Sewer Treatment Capital Reserve Fund for 2005 was not made and is not budgeted for 2006. The budgeted expenses for the Sewer Fund include the hiring of a new Sewer Collection department employee early in 2006. In 2006 the Township will begin a Grease Control Program to eliminate grease in the sewer collection system and educate residents as to the proper way to dispose of kitchen grease. This program ($4,000) should begin to alleviate the growing grease problems at the Waste Water Treatment Plant. Additional items budgeted for the Waste Water Treatment Plant include an increase in electric use due to the new UV disinfection system, $12,000 for pump repairs, $20,000 for upgrading the electrical system, and $5,000 for an equipment alarm. Additional items budgeted for the sewer collection system includes slip lining and manhole repairs.

MAINTENANCE TRUST FUND (11)
This fund receives all monies contributed to the Township by Developers for the maintenance of detention ponds and other storm water facilities. The monies contributed by Developers are accounted for separately and costs associated with maintaining the detention basins/storm water facilities are paid from those accounts.

RECREATION FUND (12)
Monies in this fund are generated from contributions received from Developers and from transferred funds from the General Fund. In 2006 funds have been budgeted for the following items:

• Fencing at the large baseball field at the Park
• Park identification sign
• Master Recreation plan and Master Recreation Implementation plan
• Paving of the trails on the south side of the park
• Additional tot lot on south side of park

TRANSPORTATION FUND (13)
Monies in this fund are derived from the Transportation Impact Fees paid when building permits are issued for properties in the Transportation Planning Area of the Township. Capital expenditures have been budgeted for 2006 for intersection improvements at Route 309 and Center Valley Parkway ($265,000), as well as Route 309 and Passer Road ($295,000).

1999 BOND FUND (16)
Monies in this fund originated with the General Obligation Bond, Series of 1999. $2,511,000.00 was borrowed for the purpose of improving and expanding the Township’s water supply distribution and storage system. In 2006 funds of $1,000,000 have been budgeted for the construction of a 1-MGD water storage tank.

WATER CAPITAL RESERVE FUND (18)
Revenues in this fund are derived from fees charged for connection to the Township’s water system. Some of the Capital Projects in the Water Fund this year include the following:
1) New Utility Billing Software
2) Update of Tapping Fee Calculations
3) 10 ton Dump Truck
4) Balance of Water Storage Tank
5) Colonial Crest well modifications
6) Chestnut Hill/W Hopewell water main
7) Chestnut Hill collection and water main project

SEWER TREATMENT CAPITAL RESERVE FUND (19)
Revenues in this fund are derived from fees charged for connection to the sanitary sewer system. Some of the Capital Projects in the Sewer Fund this year include the following:
1) New Utility Billing Software
2) Update Tapping Fee Calculation
3) Chestnut Hill Rd Collection System
4) Country Club P/S including land acquisition (eng. & legal)
5) Country Club Pump Station Design
6) Green Lane Collection System
7) Oakhurst Pressure Sewers (eng. & legal)
8) Portable Flow Meters
9) Mill Creek sewer stream crossing repair
10) St. Joseph Road Collection System (eng. & legal)
11) TV Inspection Equipment
12) North Branch Interceptor Extension (eng. & legal)
13) South Branch Interceptor Relocation
14) Vera Cruz Area Phase 1 (eng only)
15) Slip and Manhole lining
16) 10 ton Dump Truck
17) Emergency Power Generator at Plant
18) Secondary Clarifier Modifications at Plant
19) Upgrade walkways at Plant

CAPITAL RESERVE FUND (30)
The monies in this fund are derived from transfers from the General Fund and interest earnings. Generally monies are held in this fund to replace equipment used by the Highway Department, the Township Offices and for other capital items that the Board of Supervisors would choose to approve.

Municipal Building - $13,000 has been budgeted to fund the update of computer equipment and fire proof filing cabinets.

Police - $28,000 has been budgeted to continue the purchase of software and computers for the operation of Police Department laptop computers. $14,500 has also been budgeted to continue the project to put video equipment in police patrol cars. Of this amount the Township has received a grant of $10,000.

Fire Protection - $30,000 has been budgeted for Equipment at the Fire Department.

Highways General Services - $248,766 has been budgeted for the purchase of a 10 Wheel Dump Truck and a 10 ton Dump Truck.

ROAD CONSTRUCTION CAPITAL RESERVE FUND (31)
This fund is used to pay for capital road improvements that are not covered by the usual allocation of monies in the General Fund or Liquid Fuels Fund. It may also serve to match funds received from the State or monies in the Transportation Fund for projects in the Transportation Capital Improvements Plan.

LIQUID FUELS FUND (35)
This fund is to be used to cover the costs of roadway maintenance and construction. Monies in this Fund are received from the State based on a formula using the Township's population and number of roadway miles. Use of the monies received in this Fund is strictly monitored by the State and can only be used for specified purposes related to highways.

POLICE PENSION FUND (60)
This fund is exactly as the name implies, a fund to provide pensions to the Township's retired police officers. Monies in this Fund can be derived from contributions from the police officers, the Township and from the State. Contributions from these sources are based on a formula provided by the State under Act 205.

In conclusion, a budget is never perfect and it is our best estimate of the many components that comprise an operating budget. If you have any questions or comments about our budget, please contact me.

Respectfully Submitted,

Thomas F Beil, Township Manager