Review of Receipts, Financial Services, Tax Services, Information Technology and Insurance Reserve

2018 OPERATING BUDGET | NOVEMBER 6, 2017
2018 OPERATING BUDGET
Review of Receipts, Financial Services, Tax Services,
Information Technology and Insurance Reserve
November 6, 2017

Review of Receipts
November 6, 2017

GENERAL FUND REVENUE
Pg. 8

DETAIL ON GENERAL FUND RECEIPTS
Revenue Type 2017 Budget 2018 Budget % Change
Taxes $14,401,066 $14,475,995 2.7%
Licenses & Permits $354,500 $354,500 - %
Interest & Rents $105,000 $105,000 - %
State Aid (Pension) $871,057 $937,610 7.6%
Sale of Materials $4,500 $4,500 - %
Parking Meter Collections /
Rentals
$845,000 $975,000 15.4%
Miscellaneous $1,000 $1,000 - %
Indirect Cost Reimbursement
(Other Funds)
$1,142,334 $1,066,801 (6.6%)
TOTAL $17,724,457 $18,233,619 2.9%
Pg. 73 - 81

Review of Financial Services
November 6, 2017

FINANCIAL SERVICES

FINANCIAL SERVICES
• Reduces staffing from 4.5 to 4 FTE’s
• Reduced by 1.5 FTE’s in 2015
• Reduced by 0.5 FTE in 2017 budget
• Reduced by 0.5 FTE in 2018 budget
• In-house completion of the Cost Allocation Plan
• Annual cost savings of $10,000
• Accounting Services
• Harris Township - Revenue of $20,000
• C-Net – Revenue $3,650

Review of Tax Services
November 6, 2017

TAX SERVICES
• Primary Functions
• Collection Services for Real Estate
Taxes
• Collection Services for Local Services
Tax
• Incoming Mail Delivery Services for
all Borough Departments
• Petty Cash Reconciliation for Postage
Due Account
• No legislative or procedural
changes during 2017, none
expected for 2018
• LST may be consolidated at a
county-wide level at a future date
Pg. 101 - 106

REAL ESTATE – 2016 COLLECTION OVERVIEW
25.53%
74.47%
SCB
SCASD
SCB Real Estate Tax collected $7,292,508
SCASD Real Estate Tax collected $21,269,077
2017 YTD as of 10/20/17
with 1.9% remaining duplicate balance to collect (SCB)
$7,340,042
School District billed for its actual cost plus 20% overhead charges

RECAP OF HOMESTEAD EXCLUSION
• Rental Housing Permit Audit Work detects a percentage of residences that
require a prorated homestead exclusion
PROPERTY CODES ELIGIBLE FOR
HOMESTEAD EXCLUSION
R Residential Under 10 Acres with House
RA Residential Apartments (1 – 3 apartments)
RC Residential with Commercial
T Trailers No Land
Over 2,000 Parcels qualified for Homestead Exclusion
(as of 03/01/2017)
Parcels Residential Under 10 Acres with House
1,897 100% Homestead
159 < 100% Homestead
52 Zero tax liability due to homestead (36 R + 16T)

FACTS & FIGURES
HOMESTEAD EXCLUSION
Year
Eligible
Parcels
H/E
Qualified
Millage
Rate
Tax Before
Homestead
Tax After
Homestead
H/E Tax
Tax Relief
2017 4,543 2,056 16.400 $2,401,391 $1,567,061 $834,330
2016 4,496 2,058 16.400 $2,393,402 $1,557,876 $835,526
2015 4,500 2,100 14.400 $2,134,565 $1,385,952 $748,613
2014 4,496 2,149 11.040 $1,667,457 $1,078,866 $588,592
2013 4,490 2,171 11.040 $1,677,862 $1,083,018 $594,844
2012 4,486 2,186 11.040 $1,684,494 $1,085,403 $599,091
2011 4,488 2,211 11.040 $1,702,574 $1,096,825 $605,748

LOCAL SERVICES TAX
OVERVIEW
• Online Payment Options
• Self-employed and individuals who need to remit LST (no employer
withholding)
• Online filing usage continues to grow
• Tax Office staff review employers with filing errors
• Staff encourages employers and individuals to file electronically
• SCB Tax Office receives 3% commission of net collections

LST COLLECTIONS 2016
(LAST COMPLETEYEAR)
• Distribution per school district with SCB’s share (35.03%) shown in
purple (separate from State College Area School District shown in
green)
COMMISSION EARNED BY SCB | $68,657
3.07% 9.11%
52.79%
35.03%
LST Revenue Collected
BEASD
BASD
SCASD (less SC Borough)
SCB

CENTRE TAX AGENCY (PP. 107-111)
Personnel Expenses
• Staffing Levels = 8.0 FTE
• Annual Report will provide detailed revenue and expenditures
• As of 10/20/2017, staff members maintained:
• 6,755 Employers
• 55,839 Individual Resident Tax Returns
Pg. 107 - 111

COUNTY-WIDE RECEIPTS (AUDITED FINANCIAL STATEMENT)
EXCLUDES PRE-ACT 32 REVENUE
Year
Audited Cash
Receipts
Audited SCB
Less 2.4%
Commission
Net SCB
Commission
Adjustment
Calendar
Year
Receipts
SCB %
County-Wide
2012 $43,870,110 $3,413,092 $81,921 $3,331,171 $25,154 $3,356,325 7.65%
2013 $60,857,758 $4,468,643 $107,230 $4,361,413 $27,829 $4,389,242 7.21%
2014 $62,079,283 $4,534,199 $108,799 $4,425,400 $20,672 $4,446,072 7.16%
2015 $57,697,216 $4,237,706 $101,706 $4,136,000 $23,439 $4,159,439 7.21%
2016 $66,264,675 $5,094,751 $122,285 $4,972,466 $41,792 $5,014,258 7.57%

OPERATING EXPENDITURES
EXPENDITURES BY CATEGORY
Personnel $690,258 69.70%
Operating $188,842 19.07%
Capital $ - 0.00%
Indirect $111,213 11.23%

CAPITAL EXPENDITURES
• Minimal Capital Costs Planned
• The benefit of a capital outlay would need to exceed the costs to be
considered
• Vision on longer term operations would include an enhanced scanning
option for importing paper tax returns
• Pursuing this capability may require a renewed contract for tax collection
services

STRATEGIC OBJECTIVES
• Act 32 Tax Collection Contract
• New contract for 2017 (Five years plus two one-year extensions)
• Public Engagement
• Continued Outreach and Public Information
• Regular Open Houses
• Employers (Upon request)
• Individual Taxpayers (Four school districts with two Saturday events)
• Third Party Use Growth
• Provide convenient one-stop filing options
• Hold operating costs at an acceptable level
• Report back to Council with Annual Report (March 2018)

Review of Information Technology
November 6, 2017

INFORMATION TECHNOLOGY DIVISION
• Strategic Connection
• Expenditures
• Revenues
• Program/Project Highlights
Pg. 112 - 118

STRATEGIC PLAN
• #2 Operational Efficiency:
• Borough-wide Business Processes
• Access to Data for Improved Services
• #3 Partnerships:
• Research Private/Public Partnerships
• Local Organizations and Other PA Agencies
• #5 and #6 Infrastructure and Commercial Revitalization:
• Include Information Systems
• Environment Not Limited by Bandwidth or Access
Pg. 112 - 118

• Operating $422K (29% )
• Expected Increase for Licenses and Support
• Reduced Revenue
• License Compliance and Management
• Personnel $750K (1.5% )
• Staff Count: 8
• Benchmark: 16
• Recommended: 10
• Capital $68K (14% )
• Standardize at the Staff Level
• Extended Equipment Life Cycles
EXPENDITURES
PERSONNEL,
$749,187OPERATING, $422,837
CAPITAL,
$68,540
Pg. 112 - 118

REVENUE
• Managed Services (-15%)
• CATA, Infrastructure Services + Building Project
• Patton Twp., Full IT Services
• College Twp., VoIP Services (Phones)
• PD RMS Hosting (PSU, Patton, Ferguson)
• Other Sources for Funding
• Hosting Servers (Private Cloud) for Schlow
• Consolidated HVAC servers for Borough, COG and Schlow
• Extended Security Cameras to Schlow
• DR sites for other government agencies
Pg. 112 - 118

PROJECTS AND OPERATIONS
• Emerging Technologies
• Agile Methodology
• Smart Cities
• AI
• GIS-related Tool Sets
• Services
• Resiliency (IST Program)
• Sustainability
• Citizen Self-Services (24/7)
• Improved Collaboration/Communication
Pg. 112 - 118

Review of Insurance Reserve
November 6, 2017

INSURANCE RESERVE
• $1.4M Risk Reserve account for Workers’ and
Unemployment Compensation claims. Excess funds may
be programmed for use in the General Fund.
Pg. 125
REVENUES
- Interest Earnings $10,000
EXPENSES
- Unemployment Compensation claims
- Affordable Care Act fees
- Retiree Health Insurance
- Employee Wellness
- Insurance Claims Deductibles
$20,000
$9,100
$10,000
$20,000
$35,000
OTHER SOURCES (USES)
- Health Insurance premium refunds
- Transfer to General Fund
$200,000
($11,216)

INSURANCE RESERVE EXPENSES
Pg. 125

2018 BUDGET CALENDAR
Agenda Item Date
Budget Transmittal to Council October 16, 2017
Review of Executive Summary, Debt Management,
and Pension
October 20, 2017
Review of Receipts, Finance, Tax, Information
Technology, and Insurance Reserve
November 6, 2017
Review of Administration, Parking, and Regional Programs November 8, 2017
Review of Public Works Department and Capital
Improvements
November 13, 2017
Continued review of Public Works Department (if needed) November 14, 2017
Review of Planning and Neighborhood and
Community Services Departments
November 20, 2017
Review of Police Department November 21, 2017
Public Hearing and Council Review December 4, 2017
Council Discussion December 5, 2017
Final Wrap Up December 11, 2017
Adoption December 18, 2017

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