Borough Advisory Committee Releases Report

The West Chester Borough Council asked a group of experts to assess the financial health of the borough last May.  In a report released this week, the ad-hoc advisory committee assessed West Chester's financial future and made recommendations about how to proceed in the future.

In the report, the financial advisory committee recommends that the borough can count on generating $16 million in revenue annually.

According to the report:

While the borough has and does collect more revenue than $16 million, it comes by way of fines, fees and other variable sources. The committee would recommend budgeting operating expenses to sustainable operating income and using the variable dollars for capital expenses and to reimburse the capital reserve fund.

Basically, the committee recommends that the borough budget for $16 million in revenue and use extra money generated by fines and fees to pay for special projects or as savings.

In normal, everyday human terms, the borough should consider "variable income" like fines and fees the same way most of us use a bonus or a tax return.  The borough should pay for something it wouldn't have otherwise, or it should stick it in savings.

The report also says:

We find a distressing trend. First, the Borough’s operating expenses are exceeding revenue with revenue trending downward while the operating expense is trending upward. This pattern should be static or preferably trending in the opposite direction.

Also:

Expenses for many of the Borough’s individual departments are expanding. This trend has continued in the 2012 Budget and should be reversed unless such departments contribute to increased revenue and/or economic development initiatives.

That's pretty basic.  Expenses are outpacing revenue, and the trend goes across all departments.  It goes without saying (but I'll say it anyway) the borough cannot maintain current levels of service under this economic model.

In the committee's words:

A comparison of the Borough’s spending and employment levels versus several neighboring municipalities demonstrates our extremely high cost of government.

Even more doom and gloom:

The borough spends more money on services and is more highly staffed than our neighboring municipalities. Not only are we the most expensive municipality compared, but we are more expensive by significant margins. If the Borough cut its expenses by 33%, it would continue to be one of the two most expensive municipalities per capita.

The bad news continues:

The same is true for the taxes paid by each citizen; even a reduction of 33% would continue to be the second highest tax per capita. Since 70% of our Borough expenditures are personnel related, we would need to identify over 33% in personnel cost reductions just to avoid being the most expensive municipality. We would need over 50% in reductions to simply get down to the 'middle of the pack' in this comparison.

The report goes on to list a number of recommendations for the borough to cut costs including: an across the board hiring freeze, staff reductions and outsourcing of borough services.

The full report is included with this story, and can be found in PDF form in the picture box.