In our efforts to publish information that helps municipal decision makers make more informed decisions and lead their communities more effectively, we are going to drill down on communities and issues. These snapshots we hope can help everyone. Here is our first.
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The City of York had 40,454 residents according the 2010 US Census, down 2.1% from 2000. While the City may have declined, the population of York County grew 13.9% over the last decade to 434,972. The State of Pennsylvania grew at a rate of 3.5% during the same time period.
We wanted to take a closer look at the challenges that the communities in our commonwealth are facing not to point fingers, but to understand the issues that our municipal leaders are facing.
The issues that the City itself stated were its biggest challenges are listed below. They represent 25% of the total City budget of $97,684,735. We all know that insurance costs keep rising and municipalities are not exempt from this. With rates that can go up 15%-20%/year, this is an ever growing expense. Servicing debt and making contributions for their pension plans are issues as well. We look at this in more detail below. Keep reading.
Fiscal Year 2011 Budget Challenges % of Total Budget
Minimum Pension Contribution $ 6,575,288 6.7%
Contractual Salary Increases $ 569,819 0.6%
Risk Management-Insurance $ 8,750,500 9.0%
Capital Projects $ 2,020,824 2.1%
Outside Sources $ (1,251,618) -1.3%
Sewer Debt Service & Treatment $ 7,921,221 8.1%
Outside Sources $ (2,727,939) -2.8%
Total $ 24,586,034 25.2%
The City budget for fiscal year 2011 is shown below.
Expenses by Type Fiscal Yea 2011 % of Total Budget
Payroll $ 21,723,185 22.2%
Fringe Benefits $ 15,404,765 15.8%
Professional Services $ 2,147,640 2.2%
Special Items $ 28,834,873 29.5%
Contractual Services $ 13,687,266 14.0%
Supplies/Materials $ 2,078,191 2.1%
Capital Equipment $ 1,539,201 1.6%
Capital Construction $ 8,153,169 8.3%
CDBG & Home $ 4,116,445 4.2%
Total $ 97,684,735 100.0%
Now here is where the drill down gets interesting. If we look at the tables below, we can see that the unfunded liabilities in terms of pension commitments have skyrocketed since 2002 and in particular 2005. The City has over $6.5 million budgeted as a pension contribution. In 2002, the City was basically funding 100% of its commitment. Fast forward to 2009, that percentage has dropped to 9.5%. Owing over $57 million in pensions is going to eat up the cities budget in years to come.
Unfunded Pension Costs
1/1/2002 $ 4,811,042
1/1/2003 $ 8,674,960
1/1/2005 $41,637,768
1/1/2007 $45,733,820
1/1/2009 $57,262,882
So with insurance rising at 15%-20%/year, pension commitments growing exponentially and a shrinking population, the writing is on the wall.
In future articles, we will be exploring options that cities and their leaders can deploy.
