Last night I voted in favor of establishing a 7 million dollar line of credit. (PASSED 5-0) But AGAINST hiring various civil, mechanical and structural engineers to move forward a 5 million dollar gym expansion project. (PASSED 4-1) I was the lone dissenting vote.

With the first issue, the majority of new debt is envisioned to expand the community center. ($5.5 million) This is my primary concern. While I initially supported a relatively affordable and much needed expansion of the library, one that would have been in large part funded with grants and aggressive fundraising campaign by the library (skin in the game), the conversation very quickly escalated. It ended up a 5.5 million dollar gym expansion funded primarily with debt. I have concerns with both the cost and pace at which the project expanded once debt was identified as a funding component. I am uncomfortable with the price tag. In the two links above you see how the conversation rapidly changed from summer to November during the budget process.

I still voted in favor of establishing the line of credit after it was agreed the debt would be in that form as opposed to a bond. A line of credit means we will vote individually on each and every “withdrawal”. Only paying interest on what we actually use. Establishing the line of credit in and of itself doesn’t mean we have to spend 7 million dollars. It’s my hope the township does not. Had this been a bond I would have voted no since that would have obligated us to spend that entire amount. Since we were only establishing a line of credit I voted in favor. It was a prudent move locking in historically low interest rates. 

For example, another component of the debt is 1.7 million for a new aerial firetruck for the Lower Macungie Fire Department. I support this. It’s something I think is appropriate to use the line of credit for. The 3rd component is for farmland preservation. As an advocate for preservation I want to make it clear I did not ask for that component to be included. I believe we should pay for preservation initiatives with cash reserves as the opportunities present themselves. And debt only if absolutely necessary. The township has a responsible fund balance policy that requires we keep a rainy day fund. Anything above and beyond that set % is unencumbered money. Essentially, savings. When the township wants to make a major discretionary purchase we should save the money instead of borrow the money.

The biggest goal I have moving forward is to avoid our debt service payments from increasing. Right now with our 2009 and 2012 debt our payments (both retire in 2019) we pay approximately 500,000 a year. If we end up borrowing the full 7 million dollars those debt payments will increase to 732,000 a year beginning in 2018. This is in large part why I oppose funding the gym expansion with debt. I will make this an issue during the upcoming election since I am currently in the minority. The gym expansion would have been a excellent candidate for a referendum item.

I feel very strongly that we should not be increasing our yearly debt payments. 

The second vote tonight related to formally beginning the process for the expansion. Again, I voted NO. And was disappointed I was the lone dissenting vote.

The gym expansion is similar to but also in some ways different from the Quarry park turf park proposal which was defeated a few years ago. (I voted NO on that) The gym expansion (and certainly library expansion) is probably more of an immediate need and certainly more justified. The concept has been talked about for years. However, that doesn’t change the fact it’s being funded with debt and I believe that debt funded led to the project to rapidly expand in scope. On the gym side of things there is no skin in the game from any other entities.  And most importantly no mandate from voters. An item of this scale should have been a referendum item. Or a centerpiece of a campaign. Where voters could voice an opinion.

It’s been brought up that I support and have voted for major expenditures for preservation initiatives. This is true. The difference in my opinion is that I ran on that platform. I won convincingly (with a strong mandate) on those issues. I very clearly campaigned on it. Not a single person on the board campaigned on spending 5 million dollars for a gym expansion. In fact one Commissioner campaigned on and won a race on his opposition to the turf fields. So I find it a bit hypocritical that he support this project.

I also worry that reducing our cash reserves (the 7 million capital plan calls for using 2 million of reserves above and beyond the amount required by the fund balance policy) is actually weakening our position to pursue preservation. As evidenced by the golf course preservation, the township needs the ability to react quickly to opportunities as they arise. And as they say in the private sector, cash is King. Savings is always preferable to debt. Offers the most flexibility and also best bang for buck.

The amount of interest payments the township will make over the next 13 years on this loan should we take out the entire amount? 1.5 million dollars.

So let me know. What questions do you have?

HERE IS A LINK TO THE AGENDA WITH DETAIL
All township BOC meetings are available on video online.
You can also always watch all our board meetings live on Channel 66 RCN cable.

Here is your agenda preview for the Thursday Jan. 19th township meeting. The BOC meetings are the formal business meetings of the elected Board of Commissioners.

Announcements and Presentations:
Proclamation Presentation to Timmer Family:
Dennis Timmer was a long time former parks and recreation volunteer and former chairperson who sadly passed away far too early… The new trailway connecting Hamilton Blvd., Shepherd Hills Park and Harvest Fields will be dedicated the Dennis Timmer Trail in his honor.

New signage honoring longtime township Parks and Recreation volunteer Dennis Timmer.

Dave Nosal – Fire Department Year in Review
Chief Nosal will make the presentation.

HEARINGS & APPROVALS

Resolution 2017-03 – Plan Approval for Michael Kline Minor Subdivision Plan – This is the first of two approvals tonight. This is a minor subdivision on Sweetwood drive. A family would like to subdivide a large property to make additional lots for family members. There were no major planning issues.

Approval of Letter of Agreement Final Draft Regarding Shepherd Hills Golf Course Conservation Easement. This decision was made in large part last week. Information here. This is a formality where the board will authorize signatures of the final agreement. This will preserve the golf course from any future development.

Planning
Zoning and SALDO updates
We have two ordinances dealing with updates to the zoning and SALDO codes. (these are essentially the local rules and regulations relating to development.) SALDO stands for Subdivision and land development ordinance. The term “subdivision” refers to the act of dividing land and making new lot lines; “land development” is improving the land for some purpose. The updates can be put into the following general categories.

1.) Tightening controls on warehousing by making them Conditional uses (as opposed to by right uses) in all zones that we are able. And then adding a number of specific conditions that must be met. This gives us significantly more control.
2.) We significantly tightened up our sign design standards for commercial projects. This included additional regulations on LED signs.
3.) Tightened up landscaping standards for commercial projects.
4.) Required a minimum lot size of 1 acre for an on lot sewer system.
5.) Tightened up the language in our administrative review procedure. A process meant to reduce red tape for small scale, low impact projects.
6.) Increased our required recreation land contributions in liu of fees.

I support all these updates to zoning and SALDO

Managers Report
BOND
Under the Managers report we will vote on the approval of a bond as part of 2017 budget. I have major concerns with the bond issue. Both in terms of increasing our debt payments and also the amount of overall debt we are assuming related to discretionary projects. I will be voting against this.

My thoughts on the bond and budget issues were outlined in detail here on this post.

Hiring civil, structural and mechanical engineers for Community Center expansion.
As I mentioned in prior blogs I do not support this project. While I support library expansion, the problems remains that the project quickly grew beyond the initial proposed scope. While a library expansion of some sort since it is a demonstrated need – as with all bond funded projects the conversation experienced a very rapid “vision creep”. It very quickly expanded from a discussion of matching library funds (for let’s say 250,000 dollars) to secure a grant opportunity for funding a major 5 million dollar community center expansion. I was not ok with the speed this discussion morphed. We had some long term planning activities exploring full gym expansion, but never did I think it was going to become a debt serviced item in the 2017 budget. The amount of money we are considering to spend now should be put to referendum.

I wanted to highlight a letter we rec’d in our agenda packet this week. It’s from my friend Bob Rust. Bob was the attorney representing residents when together we fought the ill-advised spring creek Jaindl rezoning before I was on the board back in 2010. I first got to know Mr. Rust then. I rely on him today for advise and council.

Below is his letter. First, some background. The issue is a proposal to exempt the township from municipal ordinances on a limited basis. Here is a copy of the text. 

This is a very common ordinance that many (most?) municipalities have already have in place. There was an argument made by staff and our solicitor to adopt it as a way to streamline certain municipal projects. The recent catalyst was the township having to go in front of our own zoning hearing board to exceed the allowed light standard height for new ball field lights that will be installed at Wescosville park this spring. Having to do this slowed down the process and took staff time and resources.

That being said, given the strong objection by our planning commission, outlined best by Mr. Rust’s letter below I think our recommendation to approve this was a mistake. And perhaps even a little bit shortsighted. Like many things in life “everyone else is doing it” is not always a good enough justification. Yes, this would make things alot easier for staff and the board.  I don’t believe the move would have impacted transparency directly (since there is still always very public process) but the main problem is it creates a perception issue.

My goal is to hold this township to higher standards. There isn’t anything more I would add then what was outlined by Rust below. He is correct. This was a needed reminder. I will not be supporting the exemption ordinance Thursday. 

Related: Mr. Rust is currently on our planning commission. He was a few years ago on the zoning hearing board but was unceremoniously not re-appointed by the Eichenberg/Conrad board. I believe till this day it had less to do with Rust’s qualifications or performance and more to do with the fact he opposed the township during the Jaindl issue. When I got on the board it was a priority for me to find a position for Rust. We did that last year by putting him on the Planning Commission. This reconfirms the reasons I felt it was so important. We need to fill volunteer positions with moral compasses like Bob.

I wrote about my current thoughts on the Shepherd Hills Golf Course here. This still represents my thinking.

But the conversation really started when the township considered adopting an official map. Which we did spring last year. At it’s most basic – this is a transparency tool that lets the community know where the township has interest in preservation. Here is a link to a good FAQ the morning call did. After the area loss the Indian Creek Golf course to development we felt it was important to put all the courses on the official map as preservation targets.

Remember though, simply putting the properties on the map does not mean they are preserved it’s just letting landowners know the township has an interest. It can’t stop development but it can ensure a conversation. You can view a larger version of the official map here on the township website.

Adopted Lower Mac Official Map

And this is exactly what happened with Shepherd Hills. We started that conversation a few months ago. Every property owner identified by the official map was contacted. I personally reached out to some of what I felt were the most important targets. Shepherd Hills included.

With all these conversations, the most important factor was establishing a fair market price. I believe that when you want to preserve land you pay fair market value. Otherwise it represents a government taking which is both unfair and in the case of downzoning not permanent. We must respect private property rights. You do that by entering the market. Here is an overview on why I think preservation makes sense. And why I believe it’s definitely worth the cost. Certainly in a township like Lower Macungie where open space is becoming more sparse.

In this case to establish the correct fair market value we needed to know exactly what could actually be built. The developer first proposed a sketch plan that included 148 units. It was deemed by the township that this wasn’t possible without waivers and/or variances. Of which the township would certainly not grant them. Turns out a more accurate “by right” (meaning could be built with no waivers/variances) number was closer to 115 units. Depending on an interpretation of the zoning code the number could even be as low as 82. Meaning without question 82 homes could be built with no way for the township to stop it if a formal plan was submitted.

Here is an example of how this process works. We look at the zoning rules and vet plans for compliance. Here was a very straightforward example where one unit was removed. The actual letter is very long and contains many sections like this where units were deemed not viable. This is just one section of an engineer review letter. Again, they look at the plan and apply the zoning code to find the actual number of units that could be built.

The other step in determining cost was to conduct an appraisal. This determined the value of each unit to be 6400.00. 

So end of the day, the math is pretty simple.  Number of homes that could be built x appraised price = X

Right now, X = 620,000 which corresponds to conceding 96 units. So basically the narrative is we both threw out the 148 number as unrealistic, they then believed they could build 115, we felt they that number is actually closer to 82. So roughly splitting the difference (acknowledging it would be a contentious land development probably involving litigation) we arrive at the current number. Which I think is very fair. Again, this would permanently put this question to rest.

Below was the original sketch plan. You can see how the thin fairways precluded the highest number. But how some of the larger wider ones made fitting units much easier. 

This was the sketch plan that was reviewed.

The calculation also contained other considerations which we felt represented public value. They include at this point:

1.) If the golf course ever ceases to operate as a course, the township would get first right of refusal to acquire as a gift for no additional considerations. If the township declines ownership can then be conveyed to a formed Shepherd Hills Homeowner association or deeded to adjacent properties. This means that in effect if the course is ever not a course the township will have purchased the course for the above price.

2.) Development right acquisition monies would be put in escrow and debited as improvements are made to the course.

3.) The course will provide the township with an easement for a new public playground. This will replace the playground lost when the school district decided to sell Lower Macungie Elementary School. This playground will be located somewhere west of Krocks Rd. in or near Shepherd Hills.

4.) Various trail connection easements would be granted.

5.) A 10% permanent discount for township residents will be offered for golfing. Also acknowledging the public private partnership the course will be renamed Shepherd Hills Golf Club at Lower Macungie.

Please let me know any questions you have. You can reach me at:
Ronbeitler@gmail.com or 6107622684

Happy Veterans Day. I have two reminders about how you can support our troops locally. But first I wanted to share something I saw this AM since it’s relevant.

The photo below has a story. Damon Knauss is an old friend. A local raised in Ancient Oaks and graduate of EHS. Please take a moment to read and appreciate this.

The story of this photo is a reminder of what our troops sometimes face on a daily basis during deployment. It’s from a very human perspective. An important reminder since it’s so easy to forget.

“These are the kids that kept me safe. Most every day for 4 months I had to walk through Kabul taking the same route to train our Afghan counterparts. This is a big “no no” in the military because the enemy can target you. However, that is the constraint of operating in a city. Everyday when I walked out that gate and saw these kids selling scarfs and trinkets I knew I was just a little safer. When they were not there, I knew something was not right and I was extra vigilant. I bought a lot of scarfs and trinkets from them, gave them clothes and socks that they desperately needed, and traded English words for Dari in little conversations as we walked together, but it is the little things that you think about later that make the difference. Several of these scarf sellers of Kabul were killed when the Taliban strapped a bomb on a young mentally retarded boy and sent him to the gate of our base to pose as a scarf seller. These young scarf sellers being fiercely territorial challenged him for being in their business area. As the young children argued, the child suicide bomber became nervous and detonated and killed the scarf sellers. Young children like these in Kabul saved the lives of an entire patrol. Service makes you see the world in a different way. I am proud of all those I served with, the people of Afghanistan who worked with us to make their country better, and most importantly those who made the ultimate sacrifice who will never be forgotten.” – Damon Knauss

This is a story of the very human perspective about what our veterans go through on a daily basis when on deployment. It is so easy to forget. Here are ways you can support our veterans locally this month.

Reminder 1.) Lower Macungie Township Troop Support Program. Now till Nov. 30th. Drop off point at the Lower Macungie Community Center.

Reminder 2.) Don’t forget the Lower Macungie Township Historical Society Veterans program. Sunday at 2pm. Also the community center.

41% (and rising) of Pennsylvanians live in a municipality that is financially distressed. We have a problem in this Commonwealth with a boom/bust cycle of distress that’s well documented. It’s a pattern. Cyclical.

The 5 stages of municipal distress go something like this:
1. Low taxes with Greenfield Growth
2. Gradually rising tax rates and increasing demand for services.
3. Plateau of tax base with reductions in non-core services.
4. Insufficient taxes or tax base with reductions in core services.
5. Loss of tax base and distress

Lower Mac as most are is in the cycle. We are not in distress. Far from it. But we are in the cycle. The boom cycle. Stage one. Knocking on the door of stage two. (The prior board initiated the first property tax hike in over a decade. One that the current board in part rolled back at least for residential tax payers). Stage one for Lower Mac is livin high on the hog on a wave of greenfield growth. Developers pay for infrastructure improvements and the one time tax receipts roll in. Times are good. But it can’t last. Because land is a finite resource.

We are now tightly locked within the cycle. I wrote about this many times including this post in 2012. All the crystal clear signs are here.

In that post I wrote about 5 strategies we must employ to break the cycle. They were:

1. Requiring more bang for our taxpayer buck (ROI) on existing infrastructure. (value capture). Not accept anymore unfunded maintenance obligations associated with dumb growth.
2. Conserving farmland and green space with market mechanisms. Therefore reducing reigning in future liabilities.
3. Require complete cost benefit analysis of new greenfield projects. Don’t approve tax base drainers. Stop indirectly subsidizing bad development. 
4. Engage the community wholly in development and spending decisions.
5. Don’t issue new bonds until the townships current debts are fully paid off and limit what you bond for. Use cash. Cash is king.

I have been pretty disciplined and consistent in votes relating to above. I consider these combination of strategies as guiding principles. We’ve had some success with #1. We’re driving the convo.  Solid progress on #2. Our staff does a good job (relative to land use planning) on #4. Pertaining to #3 I voted against a major developer tax subsidy. Unfortunately it still passed, but we raised the issue and voters responded at the polls defeating a major subsidy supporter in a subsequent election.

#5 is now front and center. As the township is about to retire current debt in 2019 and since interest rates are historically low we’re hearing the siren song of bond financing for major discretionary projects and initiatives. This happens whenever debt is about to be retired and is amplified when rates are good. Everyones eyes get big.

When the sirens sing, the drunken sailors come out. 

Last night, I voted against an application for a new major bond. Since we’re retiring existing debt this is wraparound debt. My problem is it’s far too much. Way too large an amount of money. A municipality with our tax base can and should work towards breaking or drastically reducing the debt cycle with the lofty goal of operating 100% debt free. This in turn would help us break the documented boom bust municipal cycle.

For me this is personal. I am not going anywhere. My forever house is in this township. So I have no option but to think long term. I’ll be a taxpayer in this township 10 years from now. 30 years from now. (hopefully longer) We must to do a better job of playing the long game. This requires discipline.

This does not mean stop improving the community. This issue is different from the turf project. I did not believe in that project. It wasn’t a priority and not a good way to address needs from a cost benefit standpoint. On the contrary, I support the library expansion. There are just other ways to pay for an expansion. We need the new fire aerial (in large part because of proliferation of warehouses) And absent of mechanisms to make the warehouse industry pay for we have reserves for the purchase. With preservation? And as we’ve demonstrated for 2 years we can accomplish that without debt. Though I am a supporter of preservation, I did not ask for bond money for preservation. (The county is in a much different situation than we are. And they were very disciplined in the bond process) 

Lower Mac continues to live high on the hog because of greenfield growth. When new growth comes in there are short term advantages. But the problem becomes the new long term liability. The benefit of new growth is front loaded. Taxes are very low right now. The question is, is it sustainable. The goal is long term sustainably low taxes. We spend large amounts of money on discretionary items. And now another very large bond issue. I worry about what happens when we’re faced with one of the looming 10,000 lb gorillas. Any number could become issues. Police, fire, infrastructure. Already we’re facing down one in SCARP. When we finally land, and we will – we could crash hard. This isn’t speculation. It’s a fact. Underlying factor is availability of raw land. We’re running out. The only way to prevent the crash is to break certain cycles. One of those is the debt cycle.  A municipality with our tax base can and should break the paradigm and operate 100% debt free.

The “playbook” states – retiring current debt, rates low? Spending spree! There is a reason 41% of PA muni’s are in distress, the problem IS the playbook. Stop answering the siren call. Break the cycle. Don’t stop improving/making the community better. But get creative in funding.