Unfunded mandates and tough decisions: Budget time in the Borough of Oxford11/15/2023 09:58AM ● By Betsy Brewer Brantner
Oxford Borough officials will be grappling with a perfect storm of financial challenges that includes rising costs, lingering impacts from the pandemic, and unfunded mandates from the state and federal government in the weeks and months ahead.
Throw in tough decisions about the services the borough offers and you have a well-attended Oxford Borough Council meeting that took place in early November.
If people weren’t waiting for the other shoe to drop after the pandemic, perhaps they should have been. You can’t blame everything on the pandemic, but some of the repercussions from the pandemic are certainly still being felt. Businesses came and went during the pandemic, which meant households were impacted. Supply-chain problems pushed the cost of everything skyward. First responders died while trying to provide life-giving service to their communities.
All this is to paint the picture of a municipality, any municipality in the country, and the tough decisions that must now be made. The dust has settled and now it is time for municipalities to analyze their financial situations so they can be prepared for emergencies or unavoidable expenses like the unfunded mandates coming from the Department of Environmental Protection.
At the Nov. 6 council meeting, borough officials informed the public of their Draft Strategic Management Plan (STMP) recommendations.
These recommendations were discussed, and will continue to be discussed along with the proposed borough budget for 2024 on Monday, Nov. 20, Monday, Dec., 4 and Monday, Dec. 18. All meetings will begin at 7 p.m. at the Borough Hall at 1 Octoraro Alley. Those meetings have been advertised and posted on a notice sent to all borough residents. There is also information posted on the borough’s website.
But all that notification to residents doesn’t make tough decisions any easier.
A large group of people were present at the Nov. 6 meeting, and it is hoped that they continue to attend meetings to work together to solve the budget problems facing this small community.
Council recently sent a notice of the recommendations to Oxford Borough residents, informing the public where they can review a draft of the recommendations.
Borough Manager Pauline Garcia-Allen sat in the hot seat as she was grilled about the STMP Plan.
In the spring of 2023, the borough applied for and received a $52,000 grant through the PA Department of Community and Economic Development’s Strategic Management Planning Program (STMP). STMP supports the costs to complete an independent financial and operational review of the municipality. It was a proactive effort by borough staff and borough council. The borough officials could see the writing on the wall. The assessment was needed to help ensure the sustainability of borough services.
Oxford Borough’s draft Strategic Management Plan (STMP) outlines short- and long-term financial, operational and economic development strategies that the municipality can consider implementing to strengthen financial capacity and improve services. The most important takeaway from the baseline assessment showed that failure to enact these recommendations could lead to a tax increase as soon as 2024 or 2025. So, in a nutshell, making tough decisions impacts everyone in and out of the community.
As the hub for the surrounding townships, the borough is often responsible for pulling the weight for those surrounding townships.
Council member Bill Fitzpatrick said, “We are pulling the weight for the other municipalities. When we have First Fridays in the borough, it is the borough that has been paying for the extra police coverage.”
In other words the borough and continued financial health of the borough, and the businesses, and agencies such as the Oxford Library, Oxford Area Recreation Authority, and Oxford Historic Association, etc is now caught between a rock and a hard place.
The draft plan recommendations were unpopular at the meeting. They include the following:
- Implementation of a storm-sewer fee to pay for unfunded federal and state regulatory requirements of the MS4 program, and that fee is now being challenged in a court case;
- Implementation of an Ambulatory/EMS fee to offset the cost to provide ambulatory services in the borough and that fee comes at a time when the Jennersville Regional Hospital was shut down without warning;
- Hiring additional part-time staff to improve codes enforcement and administrative services;
- Increased focus on economic development and pursuit of a competitive and fair tax structure;
- Investment into capital assets (roads and other physical infrastructure, facilities, vehicles and equipment needed to provide services);
- Changes to or restructuring of police services.
Input is necessary from all those impacted by these recommendations, which means everyone in the borough and the surrounding townships. All of these tough decisions should not, and cannot, be made without the input of many, hence the multiple meetings set up to involve everyone who could be impacted.
During the council meeting, both the Oxford Area Recreation Authority and the Oxford Library requested more money from the borough. The funds for the park and the library are needed—and many council members supported the additional funding. The problem is finding that funding and ensuring it will continue to be a revenue stream that the organizations can depend on.
The funding request submitted by the Oxford Area Recreation Authority (OARA) was to increase funding from $1.00 per capita (currently totaling $5,845) to $1.50 per capita in 2024 (totaling $8,767.50) and then increasing the per capita contribution by $0.25 through 2028. By 2028, the level of funding would be $2.50 per capita, or a total of $14,612. This request was ultimately tabled.
The borough’s solicitor, Stacey Fuller, reviewed the agreement with OARA after the meeting and she had the following response:
“The Cooperation Agreement dated May 1, 2003 between Elk and East Nottingham Townships and the Borough created the Oxford Area Recreation Authority. Lower Oxford Township joined in July 2003 and West Nottingham Township joined in 2011. Under the terms of the 2003 Agreement, each municipality is to contribute to an upkeep, maintenance and insurance fund the amount of $1.00 per capita annually by February 1 of each year. The municipalities are prohibited from reducing that amount of contribution but may increase the rate by each municipality individually, as it so chooses, on its own volition or at the request of the Authority. It may also be increased by the Authority, with the unanimous approval of all of the member municipalities, every 5 years beginning in 2009.
“At the Council meeting on Monday, Council discussed the request of OARA for a 50-cent increase in 2024 and an additional 25-cent increase each of the following years through 2028. I advised that if the agreement were to be amended to increase the contribution by the member municipalities, it would require an amendment to the Cooperation Agreement as, pursuant to Section 5.3 of the agreement, such an increase requires unanimous approval of all of the member municipalities. However, if OARA is not seeking such an increase from all of the municipalities then, as Mr. Reynolds advised and I agree, the Borough could elect to pay an increased amount to OARA beyond the amount required by the Agreement and that such decision does not require an amendment to the Agreement nor the consent and approval of the Townships.”
Regarding these funding requests for the park and the library, council member Amanda Birdwell said, “The increase requested from the Oxford Library and OARA was not on the budget for this year. It doesn’t mean it isn’t important. We don’t have the money.”
Concerns were voiced by many, including by Mayor Phil Harris, who grilled Garcia-Allen and council regarding the STMP program.
Garcia-Allen emphasized that, “These are draft recommendations” only and are not proposals that council is set to vote on.
Council member Peggy Ann Russell urged the mayor and everyone to attend upcoming budget meetings.
Many good ideas and recommendations came from those in attendance.
In an interview after the meeting, Garcia-Allen said, “Council and I saw the warning signs coming and this is why the analysis was done. We need to make strategic decisions so we can fund the library and OARA and all the other organizations we support. We want to fund more and hopefully, through this analysis, we can provide for the future. The analysis will give council the tools they need to make budget decisions.”
After a lengthy and often times very contentious discussion, it was clear that not everyone was on the same page.
Key findings of the baseline assessment include (but are not limited to) the following:
- Oxford’s small tax base has put pressure on the operating budget and real estate tax millage rate, which is the third-highest in Chester County. The community is characterized by relatively low income levels, high poverty rates, and low homeownership rates;
- Workforce expenses have been increasing at a faster rate than revenues and are by far the biggest General Fund expense driver;
- Despite growth in expenses exceeding that of revenues, the borough has historically maintained operating surpluses. However, these surpluses are the result of utilizing non-recurring pandemic recovery funding, deferring maintenance, and minimizing discretionary spending;
- Growing deficits are projected into the future, prior to accounting for deferred capital improvement needs and other unfunded mandates;
- The borough has significant deferred capital maintenance needs that will be a burden on future budgets;
- Strengthening the borough’s fiscal position and addressing other key challenges will require a combination of revenue enhancements, strategic investments, and expense reductions. The borough has been fortunate to secure numerous grants which has offset, or funded, some of the needs.
The next council meeting is scheduled for Nov. 20 and the budget will once again be discussed.