Medford to take steps toward future financial stability
Medford is hoping to lay down a plan for debt service and capital projects to maintain financial stability for decades to come.
At last night’s council meeting, township manager Chris Schultz unveiled a capital improvement and debt management plan that will give the township more financial structure and predictability down the road.
In the plan, Schultz proposed limiting the township’s debt service payments to $2 million per year. Each year, council will approve a capital improvement plan prior to the formation of a budget. The plan will outline the capital improvements to be made for the following year and keep the township’s debt service at a constant rate.
This is a major financial step for a township whose debt service is currently well more than $2 million per year. The township’s debt service will peak in 2015 before gradually dropping in the following years. Schultz’s model has debt service flattening out at $2 million by 2019.
The goal of the capital improvement plan is for the township to be able to make improvements to properties, roads, public works and other items while keeping spending in check.
“We want to contain cost,” Schultz said.
Included in the plan is the creation of an inventory system to keep track of everything under the township’s jurisdiction. During his presentation, Schultz used Bende Park as an example, saying the township would keep track of everything from benches and playground equipment to lighting. The age, condition, cost and status of each item will be tracked. The intention of the inventory is to set a priority system for which capital projects are chosen for a particular year.
Each year, prior to the passage of the capital improvement plan, departments within the township will file requests for capital improvements. Council is going to create guidelines dictating how projects will receive priority treatment.
“The departments will have to have a clear state of need,” Schultz said. “If there is a health or safety issue, those things will be done first.”
While Schultz recommended keeping debt service at $2 million, some council members proposed keeping it at a certain percentage of the annual municipal budget instead. This would allow the amount of debt service to be dictated by the total budget number and the amount of revenue coming into the township.
Council also discussed passing an ordinance for the new plan instead of establishing it as a policy. The concern for some members is an irresponsible council may throw the capital improvement plan out the window in the future.
“We can dictate by ordinance that council has a capital improvement program and this is what it dictates,” Councilman Jeff Beenstock said.
A proposed ordinance would likely establish a capital improvement plan and a ceiling for how much can be spent under the plan. Councilman Frank Czekay said he didn’t want an ordinance to be too specific on parameters.
If established by council, Schultz’s plan will not fully take effect until the 2016 calendar year. With debt service schedule to begin decreasing that year, his plan calls for the first capital budget to be put together and passed in the fall of 2015, leading into municipal budget discussions in early 2016.
