Warminster is Drowning in Debt


Francis Klingenberg, Assisting Managing Editor

Warminster Township is heading for bankruptcy as a $2.4 million deficit threatens to wipe the General Fund and plunge Warminster into Act 47, with the township looking to sell the Warminster Municipal Authority’s (WMA) water and sewer systems and raise taxes.
Gregg Schuster, Warminster Township Manager, said that due to rising expenditures and a flattening revenue, “It is imperative that we deal with current deficits as soon as possible or risk the Township being forced to enter Act 47.”
Act 47 is a way for Pennsylvania to help financially distressed townships and cities in the state, and it attempts to “turn around their finances and operations,” according to harrisburgpa.gov.
According to an Aug. 15 meeting of the Board of Supervisors, it’s very much possible that Warminster will enter Act 47, meaning that township has to cede control to the state – which can sell assets without any consideration to local government.
Warminster resident John Lachuiew remarked, “Warminster needs to get rid of these supervisors and managers in this township.”
Other residents think that these supervisors have put Warminster in this position,
Resident Tony Sadowski said, “Stop electing these ghouls, people. They do not have our backs.”
Schuster added that some areas of expenditure growth were the rising pension costs, rising police department wages, and debt.
The highest expenditure listed on the 2019 budget was the police department, totaling in at $8.1 million.
In the 2019 budget, salaries for many government workers have been raised, with many of the salaries in the Police Department being raised due to a prior agreement.
While these salaries raised, less money was spent elsewhere. About $74,000 less was spent on public works. $100,000 less was spent on fire services.
Revenues are also eroding away, and others are flattening, according to Schuster.
Schuster said, “There is no doubt that we face a challenge over the next couple of years.”
Warminster’s Board of Supervisors has had a majority of Republicans on the board since 2011, and has struggled with multiple deficits throughout their control.
In fact, the Board of Supervisors has gone on to spend more money.
The Warminster Police Department bought five police cruisers and updated police software in 2019, while other parts of the township saw a new dump truck, and nearly four miles of roadwork.
In 2017, the township approved a $7 million loan to buy Shenandoah Woods, an abandoned Navy community.
This was in the face of a near $300,000 deficit in 2017, which increased to a $1.4 million-dollar deficit in 2018.
There has been no action to fight these deficits and expenditures until the Aug. 15 meeting, where the Board of Supervisors voted 3-0 to sell the water and sewer systems.
Warminster could net up to $90 million from the sale of the WMA.
$30 to $45 million of the proceeds would go to paying off pensions and benefits, while $45 million would be set aside for future use.
However, preliminary offers from North Wales Water Authority reach $36 million for the water system, Aqua America, and the Bucks County Water and Sewer Authorities reach $50 million for the sewer system.
Together, this combines to around $86 million. Negotiations have only just begun and could change in either direction.
This still does nothing to counter the deficit.
The Board of Supervisors were asked many questions by the citizens, and gave vague responses.
Schuster gave a few cost saving measures.
The township can forgo “an additional budgeted payment to the pension fund in 2019,”Schuster explained. This can help prevent the funds being depleted this year.
However, Schuster pointed out, “Without decisive action taken for 2020 to either increase revenues or drastically decrease expenditures, the Township will exhaust its resources.”
According to the Aug. 15 meeting, in 2025, if the sale goes through, the average taxpayer will have to pay an extra $133 in fees per year.
Taxpayers could even see an increase in what they pay in 2022, with a projected increase of $76.
The meeting showed that the general fund would stabilize because of these operations, but it still may need to increase the mill rate.
This means higher property taxes, which means more money out of the residents’ pockets.