At the November 10, 2021, Newtown Board of Supervisors (BOS) meeting, supervisors approved the "hanging" (i.e., advertising to the public) of the 2022 Preliminary Budget, which is a revision of the Manager's recommended budget.
The main difference between the Preliminary Budget and the recommended budget is the elimination of a new 1.5 Mill real estate tax dedicated to the Fire Protection Fund. Instead, the Preliminary Budget allocates $350,000 from the General Fund to the Fire Fund. This will result in a lower General Fund reserve; i.e., $1,284,055 (8.6% of expenditures).
Historically, Newtown has strived to maintain a reserve of at least 10% of expenditures. The Government Finance Officers Association (GFOA) recommends that local governments maintain a fund balance equal to two months of expenditures, equivalent to approximately 17% of General Fund operating expenditures. In 2020, Newtown Twp's reserve was $2.8 million (23% of expenditures). In 2021, the reserve is estimated to be $3.0 million (also 23% of expenditures).
View the video of the discussion leading up to the vote...
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As explained to the supervisors before they voted, only certain changes can be made to this budget before it is finally approved. Most of the limitations have to do with increased spending. There is no limit, however to the CUTS that can be made in order to get the reserve fund up to a reasonable level to cover emergencies. I think this is imperative because in the past the township has taken funds away from road paving in anticipation of loss of revenue to cover expenses like salary raises and new trucks, etc. [Read “2020 Road Program Falls Victim to COVID-19” https://bit.ly/2020roadprogcut]