Chalfont Borough residents are expected to incur no local property tax increase in 2020. This will be the third consecutive year with no increase since the last one in 2017. No municipal services are impacted.
The borough continues to invest over $4 million in principal from the sale of its water company that occurred around the turn of this century and the annual interest income has ranged from $100,000 to $200,000 a year over the past 15 years.
The interest income has been returned to the general fund to help offset or avoid local tax increases (one local tax mill is worth about $52,000 of new income to the borough).
Chalfont needs to contribute a third of the total cost attributable to a new regional police station and that estimated cost will be a little over $1 million. It is expected to be paid in 2021.
In order to raise the money, borough council decided to borrow the necessary funds at a very favorable interest rate of only 1.8 percent that is a fixed rate over the next 20 years.
Chalfont’s total annual debt as a percentage of annual costs will be about 5 percent.
Residents will be seeing a new format on their new tax bill because the total local real estate tax will be divided into a real estate tax line item and a debt service tax line item but the summation will be the same as in 2019 (in other words no total tax increase).
The debt service tax line item helps the borough to track the income over time and assures its restricted use to only earmarked expenses like the new police station to be located in Doylestown.
On the income side, borough council for the first time has forecasted some transfer tax income, earned income tax income, and some other fees related to new developments that are on the verge of being completed (i.e., Chalfont View at Main and Westview streets) and the proposed development, Chalfont Crossing, at Bristol and Butler Pike.
Council has also given its manager an objective to continue to seek state, county, or federal grant income. The borough has received over $5 million in grant monies since 2004 and one of those grants helped to renovate the old firehouse that OwowCow now occupies as a new tenant.
Chalfont maintains an unrestricted reserve fund (a combination of a so called rainy day fund plus the minimum obligation to keep on reserve set by state law) and that fund balance is expected to be at or near $700,000.
Further information about the 2020 budget can be obtained from Borough Manager Brian Shapiro.
John L. Abbott is vice pesident of Chalfont Borough Council, chairman of the steering committee and a member of the finance committee.