The financial planning and municipal budget shall be in the
form and detail as Council shall direct and, at a minimum, shall contain
the following:
A. An operating
plan of revenue and expenditures for the next two fiscal years which
shall contain, as a minimum, the amounts to be appropriated for each
activity, stated as personal services, contractual services, material,
supplies, equipment and such additional classes as Council may prescribe.
The first year of the plan shall be in detail and shall constitute
the operating budget. The second year of the plan shall be advisory
for the purpose of long-range planning and may be stated in general
categories only.
B. A capital
plan for the next five or more fiscal years and shall contain, as
a minimum, all proposed capital improvements identified by project,
the year of acquisition or construction, proposed funding and the
impact upon the operating expenses, debt structure and borrowing limitations
of the Township. The first year of the plan shall be in detail and
shall constitute the capital budget. The remaining years of the plan,
except where capital expenditures are approved, shall be advisory
for the purpose of long-range planning and may be stated in general
categories only. The capital budget may be financed from appropriations
of current revenues or moneys borrowed as authorized by the First
Class Township Code or general law. All appropriations for the capital
budget shall lapse at the end of the fiscal year, but sufficient amounts
to complete projects in progress may be appropriated in the budget
for the following year.
C. The financial
plan and budget required herein shall include an explanation in terms
of programs, projects and services to be provided and the funding
thereof.
D. The budget
shall be presented and published in a simplified, plain language format,
identified and labeled so as to be clear and understandable.
The budget as recommended by the Township Manager and adopted
by Council shall be balanced.
Advertising and public hearings: After the Township Manager’s
recommended budget message is given to Council and after the completion
of changes directed by Council, if any, Council shall cause to be
published in one or more newspapers of general circulation within
the Township:
A. The proposed
budgets or the times and places where copies of the proposed budgets
shall be available for inspection.
B. Notice of
a public meeting, with the date, time and place specified, at which
said budgets will be considered by Council, which meeting shall constitute
the first reading of the budgets and shall take place during the month
of November prior to the fiscal year within which such budgets shall
apply. At such public meeting, the public shall be afforded the opportunity
to comment.
Council shall establish a classification of accounts or funds
to be used in any financial plan, budget and report consistent with
all applicable laws and sound financial administration.
The Finance Officer, together with the Township Manager, shall
have the authority to invest, redeem and reinvest funds available
but not immediately required for Township operations, within the limits
of programs previously approved by Council. Such investment shall
be limited to authorized investments for Township funds as set forth
in the applicable provisions of the First Class Township Code [53
P.S. § 56705.1(d)]. It shall be the responsibility of the Finance
Officer, together with the Township Manager, to maximize investment
revenues consistent with applicable laws and minimum investment risks.
All contracts of the Township and the procedures for entering into such contracts shall be in accordance with Article
XVIII, Contracts, of the First Class Township Code.
The accounts of the Township shall be audited annually by an
independent auditor who shall be a certified public accountant registered
in Pennsylvania or a firm of certified public accountants so registered.
The independent auditor shall be appointed annually by resolution
before the end of May of each fiscal year. Said auditor shall make
an independent examination of all the accounts and related accounting
records of the Township for the fiscal year then closing. Such independent
auditor shall have and possess all the powers and perform all the
duties provided for elected auditors under the First Class Township
Code. The compensation of such appointed independent auditor shall
be fixed by Council from time to time.
The following financial policies shall be followed in the administration
of the fiscal affairs of the Township, to the extent that they are
not inconsistent with the applicable provisions of the Optional Plans
Law, the First Class Township Code or general law:
A. Financial
policies which will help Township officials view financial management
from an overall, long-range vantage point to make effective financial
decisions.
B. Operating
budget policies.
(1) The Township
shall pay all current expenditures with current revenues.
(2) The budget
should provide for adequate maintenance of capital plant and equipment
and for orderly replacement.
(3) The Township
shall update expenditure projections annually for the next five years.
Projections will include operating costs of future capital improvements
that are included in the capital budget.
C. Revenue policies.
(1) The Township
Manager shall project revenues for the next five years and will update
this projection annually. Each existing and potential revenue source
will be reexamined annually.
(2) The Township
Manager, by action of Council, shall establish all user charges and
fees at a level that supports the costs of providing the service.
The Township shall annually recalculate the full costs of activities
supported by user fees to assess the impact of inflation and other
cost increases.
D. Improvements
and budget policies.
(1) The Township
Manager shall develop a five-year plan for capital improvements and
submit same to Council and shall update it annually on the basis of
the Township’s comprehensive and functional plans.
(2) Council
shall enact an annual capital budget on the basis of the Multi-Year
Capital Improvement Plan. Future capital expenditures necessitated
by changes in population, real estate development or the economic
base shall be calculated and included in capital budget projects.
E. Debt policies.
(1) The Township
should confine long-term borrowing to capital improvements or projects
that cannot be financed from current revenues.
(2) The Township
should endeavor to keep the average maturity of general obligations
at or below 10 years.
(3) The Township
should not use long-term debt for current operations.
F. Reserve policies.
(1) The Township
should establish an emergency reserve to pay for needs caused by unforeseen
emergencies. This fund will be estimated on the basis of the Township’s
contingency plan, but it should not be maintained at less than 3%
of the general operating fund.
(2) The Township
should establish an equipment reserve fund and will appropriate funds
to it annually to provide for timely replacement of equipment. The
amount of $50,000 should be added annually to this fund commencing
at such time as the Township’s revenues permit, until there
is an unencumbered reserve of no less than $200,000. The amount in
the reserve should be maintained at a minimum of $200,000.