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EXHIBIT 1

EMPLOYMENT AGREEMENT BY AND BETWEEN



TOWNSIDP OF RADNOR, PENNSYLVANIA AND

DA V1D A. BASHORE, TOWNSHIP MANAGER

THIS AGREEMENT, made and entered into this I" day of January, 2001, A.D., by and between the Board of Commissioners (the "Board") of the Township of Radnor, a Home Rule Municipality in Delaware County in the Commonwealth of Pennsylvania (the "Employer"), and David A.

Bashore, social security number S (the "Employee"), both of whom understand as follows:

WI TNE SSETB:

WHEREAS, David A. Bashore has been employed by Radnor Township since November 4, 1987, first as Director of Finance, then as Assistant Township Manager and Acting Manager; and

WHEREAS, on November 13, 2000, the Board appointed the Employee as the Manager of Radnor Township, in accordance with the Home Rule Charter and the Administrative Code; and

WHEREAS, it is the desire of the Board to provide certain compensation and benefits, establish certain conditions of employment, and set working conditions of the Employee; and

WHEREAS, it is the desire of the Board to retain the services of the Employee and to provide inducement for him to remain in such employment, to make possible full work productivity by assuring the Employee's morale and peace of mind with respect to future job security, to act as a deterrent against malfeasance or dishonesty for personal gain on the part of the Employee, and to provide a just means for terminating the Employee's services at such time as he may be unable to fully discharge his duties or when the Employer may otherwise desire to lawfully terminate his employment; and

WHEREAS, the Employee desires to continue employment with Radnor Township as its Township Manager.

NOW, THEREFORE, in consideration of the mutual covenants contained herein, the parties hereto agree as follows:

Section 1. Term

A. The Employee agrees to remain in the exclusive employ of the Employer for an

indefinite term, but no less than two years, and agrees to not become employed by any other employer during said tenn.

B. Nothing in this Agreement shall prevent, limit, or otherwise interfere with the right of the

Board to terminate the services of the Employee at any time, subject on1y to the provisions set forth in Section 4·, paragraphs A and B, of this Agreement.

C. Nothing in this Agreement shall prevent, limit, or otherwise interfere with the right of the

Employee to resign at any time from his position as Manager with the Employer, subject only to the provisions set forth in Section 4, paragraph C, of this Agreement.

Exhibit 1

D. The term "employed" shall not be construed to include occasional teaching, writing,

consulting, or volunteering performed on the Employee's rune off; provided, however, that such outside activities shall not intrude upon the Employee's ability to devote his full time and attention to the Employer's affairs. Further, the Employee agrees not to accept any outside activity that may create a conflict of interest, or the appearance thereof, between the outside activity and the interests of the Employer.

Section 2. Duties and Code of Ethics

A. The Employer hereby agrees to employ David A. Bashore as Township Manager to

perform the functions and duties specified in the Radnor Township Home Rule Charter and the Administrative Code, and to perform other legally permissible and proper duties and functions as the Board shall from time to time assign.

B. Inasmuch as the Employee is an active member of and participant in the International

City/County Management Association (ICMA), the Code of Ethics promulgated by lCMA is incorporated herein and attached hereto, and by this reference is made a part of this Agreement. That said Code of Ethics, in addition to provisions of the Charter and the Code, shall furnish principles to govern the Employee's conduct and actions as the Township Manager.

Section 3. Residency

The Employee intends and hereby agrees to relocate from his current place of residence in East Fallowfield, Chester County, Pennsylvania, to a residence located in Radnor Township no later than December 31,2001, subject to other conditions listed in Section 14 of this Agreement and provided that such relocation date may be extended only upon prior written authorization by the Board. The Employee further agrees to maintain residency in the Township for as long as this Agreement remains in effect.

Section 4. Termination and Severance

A. If the Employee is terminated by the Board during the term of this Agreement and during

such time that the Employee is willing and able to perform his duties under this Agreement, the

Employer agrees (1) to pay the Employee a lump sum cash payment equal to six months' aggregate salary being paid to the Employee at the time of such termination and (2) to extend health benefits to him and his eligible dependents, as provided in Section 12, paragraph A, for a period not to exceed the earlier of (a) 18 months or (b) the Employee's attainment of other employment that provides similar health

benefits.

B. Notwithstanding paragraph A, if the Employee is terminated because of his conviction of

an illegal act involving a felony. theft, bribery, or other personal gain to him, or any other misdemeanor that would significant diminish his character. the Township's reputation, and otherwise impair his ability to effectively carry out his duties, or because of It recommendation that his employment be terminated as a result of one or more violations of the Township's or the ICMA's Code of Ethics, the Employer shall have no obligation to pay the aggregate severance pay and benefits designated in paragraph A.

C. If the Employer at any time during the term of this Agreement reduces the salary or other

financial benefits of the Employee in a greater percentage than an applicable across-the-board reduction . for certain other or all civilian employees of the Employer, or if the Employer refuses, following written notice, to comply with any other provision benefitting the Employee herein, or if the Employee resigns following a suggestion, whether formal or informal, by the Board that he resign for reasons other than

Exhibit 1

having been convicted of an illegal or unethical act as described in paragraph B, the Employee may, at his option, be deemed to be terminated as of the date of such reduction or such refusal to comply, within the meaning and context of the severance pay provisions designated in Section 4, paragraph A, herein.

D. If the Employee voluntarily resigns his position with the Employer during the term of

this Agreement, the Employee shall give the Employer at least two months' written notice, unless both parties otherwise agree. It is understood that if the Employee so voluntarily resigns his position, he will be eligible to receive the same severance payments and benefits as are accorded to other civilian employees who voluntarily resign their employment with the Employer.

E. If the Employee is permanently disabled or is otherwise unable to perform his essential

job duties because of sickness, accident, injury, or mental incapacity for a period of 90 days beyond any accrued sick leave or unpaid leave under the Family and Medical Leave Act of 1993 (p.1. 103-3; 29 C.F.R. Part 825), as amended, the Employer shall have the option to terminate this Agreement subject to the severance pay and benefits designated in paragraph A of this section; provided, however, that should such disability is determined by a physician of the Township's choice or other independent party to be directly related to the Employee's job, health benefits shall be provided to him and his eligible dependents until the earlier of (1) the Employee's attainment of other employment that provides similar health benefits or (2) the Employee's attainment of age 65.

Section 5. Compensation

A. The Employer agrees to pay the Employee for his services rendered pursuant to this

Agreement an annual base salary of$105,000, effective as of January 1, 2001, payable in equal

installments at the same time as other employees of the Employer are paid. .

B. In addition, the Employer agrees to increase said base salary, lump sums, andlor other

benefits of the Employee in such amounts and to such extent as the Board may determine that it is desirable to do so on the basis of an annual performance evaluation and salary review of said Employee, in accordance with Section 6 herein, made at the same time and in the same manner as similar consideration is given to other employees generally.

C. The Employer also agrees to pay the Employee longevity pay and other special pay

adjustments at the same rate and at the same time as similar consideration is given to other civilian employees generally. -.

Section 6. Performance Evaluation and Goals and Objectives

A. The Board shall review and evaluate the performance of the Employee at least once

annually by December 31. Said performance reviews and evaluations shall be in accordance with specific criteria developed jointly by the Employer.and the Employee and shall be kept confidential by parties to the extent permitted by law. Said criteria may be added to or deleted from as the Board may from time to time determine appropriate, in consultation with the Employee. Further, the President of the Board shall provide the Employee with an initial six-month review and subsequent annual evaluations by the Board and provide an adequate opportunity for the Employee to discuss his evaluation with the Board in a timely manner.

B. In accordance with the annual rev:iew and evaluation, the Board and the Employee shall

jointly define job performance goals and objectives which they determine necessary for the proper operation of the Township and in the attainment of the Board's policy objectives. The Board shall

Exhibit 1

Section 11. Vehicle

The Employee's duties require that he shall have the exclusive and unrestrictive use ofa motor vehicle at all times during his employment as Township Manager. As such, the Employer agrees to lease or purchase for the Employee a sports utility vehicle for business and personal family use and to pay the cost of insurance, gasoline for business use, and maintenance and repairs thereon.

Section 12. Health, Life, and Long-Term Disability Insurance

A. The Employer agrees to provide hospitalization, surgical, major medical, dental, vision,

and prescription drug coverage to the Employee and his eligible dependents equal to that which is provided to all other employees of the Employer under the Township's Employee Health Benefits Plan.

B. The Employer agrees to provide the Employee with the same life insurance coverage that

was in effect on the day before this Agreement became effective and to pay all the premiums thereon.

C. The Employer agrees to provide the Employee with the same long-term disability

insurance coverage as that provided to other civilian employees of the Employer and to pay all the premiums thereon.

Section 13. Retirement and Pension Benefits

A. The Employee shall be a participant in the Civilian Pension Plan of the Employer as a

condition of his employment as Township Manager. As such, the Employee shall contribute the same percentage of his eligible pay as is required of other civilian employees of the Employer. The Employee shall be eligible for all pension benefits payable under said Plan to all other civilian employees of the Employer, in accordance with the civilian pension plan ordinance, as in place as of the effective date of this Agreement and as may be amended from time to time.

B. The Employer agrees to execute all necessary agreements provided by the ICMA-

Retirement Corporation (ICMA-RC) for the Employer's and the Employees' and other Township employees' participation in the ICMA-RC's sponsored 457(m) deferred compensation and Roth IRA plans. Further, the Employer agrees to contribute to the Employee's accounts each year the maximum amount permitted by law.

Section 14. Relocation and Housing Expenses

A. Both parties hereto acknowledge that the cost of housing in Radnor Township is

substantially higher than where the Employee currently resides in East Fallowfield, Chester County, Pennsylvania. The Employee understands that by relocating to Radnor Township he will be incurring significantly higher housing costs than he currently does as a trade off for the overall quality oflife enjoyed in the Township. The Employer understands that, notwithstanding the previous statement, the Employee and his family should not have to bear unreasonable and prohibitive personal expense to move to and reside in the Township.

B. In acknowledgment oftbe foregoing and because the Employee desires to move to and

reside in the Township and because the Board desires to provide an incentive to the Employee to move to and reside in the Township, both parties agree as follows:

Exhibit 1

further establish a relative priority among those various goals and objectives in writing, and they shall generally be attainable within the time limitations as specified in the annual operating and capital budgets and appropriations provided therefor.

Section 7. Dues and Subscriptions

A. The Employer agrees to budget and to pay for the professional dues and subscriptions of

the Employee required for his continuation and full participation in national, regional, state, and local associations and organizations necessary and desirable for his continued professional participation, growth, and advancement, and for the good of the Employer. The Employee shan report annually to the Board on each professional and civic membership that he has incurred at the Employer's expense. '

B. It is generally understood by the parties hereto that such associations and organizations

shall include, but not necessarily be limited to, lCMA, Association for Pennsylvania Municipal Management (APMM), Southeastern Pennsylvania Municipal Managers Association (SEPMMA), and Government Finance Officers Association (GFOA).

C. The Employer recognizes the desirability of representation in and before local civic and

service organizations (such as the Wayne Business Association, Main Line Chamber of Commerce, Optimists, Rotary, etc.), and the Employee is hereby authorized to become a member of such civic clubs or organizations, at his discretion, for which the Employer shall pay membership dues.

Section 8. Professional Development

A. The Employer hereby agrees to budget and to pay the travel and subsistence expenses of

the Employee for professional and official travel, meetings, and occasions sufficient to continue the professional development of the Employee and to adequately pursue necessary official and either functions for the Township, including but not limited to the annual national conference of either the leMA or the GFOA, the annual statewide conference of the APMM or GFOA-PA, and/or such other national, regional, state, and local governmental groups and committees thereof on which the Employee serves as a member.

B. The Employer also agrees to budget and to pay for travel and subsistence expenses of the

Employee for short courses, institutes, and seminars that are necessary for his professional development and for the good of the Township.

Section 9. Vacation, Personal, and Sick Leave and Holidays

The Employee shall accrue and have credited the same amount of vacation leave, sick

leave, persona] leave, and holidays-each year as is accrued and credited to other civilian employees of the Employer. Further, the Employee shall be permitted to carry over from one year to the next any unused leave described in this paragraph.

Section 10. Hours of Work

The Board recognizes that the Employee must devote a great deal of time outside the nonnaI office hours (Monday through Friday. 8:30 a.m. to 5:00 p.m.) to conduct business of the Employer, and to that end the Employee shall be allowed to occasionally take compensatory time off as he shall deem appropriate during normal office hours.

Exhibit 1

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{For example, lithe Employee sells the Residence after six years of

employment and, at the time of said sale, a total of$75,000 of the original loan amount is still unforgiven, the Employee would owe the Township 50% of any net capital gains on said sale ($75,000 + $150,000). If the net capital gain were, say, $25,000, the Employee would owe the Township a payment equal to 50% of $25,000, or $12,500. In addition to any capital gains payment owed, any unforgiven loan balances on the original Residence shall be carried over to a new residence and would be further forgiven in the same manner described in 14.B.l above; that is, in increments of$12,500 per year.}

4. It is the intent of the Employer to reimburse, in part or in full, the Township

funds from which this said lump sum payment is made through proceeds derived from an annuity andlor life insurance on the Employee, the premiums on which shall be paid by the Employer at its sole discretion.

5. The Employee shall disclose to the President and the Vice President of the Board

the sale price of his current residence located at 1614 Horseshoe Trail in East Fallowfield, Pennsylvania, and the net proceeds derived therefrom.

Section 15. General Business Expenses

The Employer recognizes that certain expenses of a nonpersonal arid job-related nature (such as to promote teambuilding and civic relations) are incurred by the Employee in his official duties as Township Manager, and hereby agrees to reimburse or to pay reasonable general expenses of said nature, and the Finance Director is hereby authorized to disburse such monies upon receipt of duly executed expense or petty cash vouchers, receipts, statements, or personal affidavits.

Section 16. Bonding

The Employer shall bear the full cost of any fidelity or other bonds required of the Employee under any law, ordinance, rules and regulations, or generally accepted business practices.

Section 17. Indemnification

The Employer shall defend, save, hold harmless, and indemnify the Employee against any tort, professional liability claim or demand, or other legal action, whether groundless or otherwise, arising out of an alleged act or omission occurring in the performance of the Employee's duties as Township Manager. The Employer shall compromise and settle any such claim or suit and pay the amount of any settlement or judgment rendered thereon.

Section 18. Other Terms and Conditions of Employment

A. The Board shall fix any such other terms and conditions of employment, as it may

determine from time to time, relating to the performance of the Employee, provided such terms and conditions are not inconsistent or in conflict with this Agreement, the Home Rule Charter, or the Administrative Code.

B. All provisions of the Charter and the Code and rules and regulations of the Township

relating to employee fringe benefits and working conditions as they now exist and hereafter may be amended also shall apply to the Employee as they would to other employees of the Township, in addition to said benefits enumerated specifically for the benefit of the Employee, except as herein provided.

Exhibit 1

i. LUmp Sum PaymentslLoan.

A. The Employer agrees to provide the Employee with a lump sum loan of

$175,000, which said loan shall be used exclusively by the Employee as a down payment on the purchase of a house and lot located at 216 Spruce Tree Road in Radnor Township (the "Residence"). Said loan shall be distributed to the Employee in increments required by a purchase agreement executed between the Employee as Buyer and the Seller of said Residence.

B. A sum equal to $25,000 shall immediately be forgiven and considered to

be paid in full. No interest shall be payable to the Township on any remaining unpaid loan balances (initially, $150,000), and $12,500 of said remaining loan amount shall be forgiven by the Employer, and shall be considered to be repaid, for each year the Employee remains in the employ of the Employer after his date of hire as Manager, until after an additional 12 years of service, at which time the loan shall be considered to be repaid in full. Any additional income taxes that may be owed and payable by the Employee year to year by reason of said loan forgiveness and imputed interest rates shall be payable to

the Employee in an annual lump sum payment. .

C. In addition to said loan, the Township shall pay the closing costs

normally attributable to a buyer and seller of real property on the purchase of his new Residence and on the sale of the Employee's home located at 1614 Horseshoe Trail in East Fallowfield, PA, respectively. Furthermore, the Township shall reimburse the Employee for the cost of moving his family's personal property from East Fallowfield to the new Residence.

2. Repayment of Loan.

A. Should this Agreement be terminated pursuant to Section 4, paragraph A

or B, such that the Board is obligated to pay the Employee specified severance benefits, or if the Employee should die before the end of the 12-year period that ends on the date that is 12 years after the Employee's date of hire, the Employer shall forever forgive the Employee and his heirs of any unpaid balance on said loan and of any capital gains or portions thereof (pursuant to Section 14.B.3 below) that may result from the sale of said Residence.

B. Should this Agreement be terminated pursuant to Section 4, paragraph

C, the Employee shall be responsible for repaying any.unpaid balance on said loan in accordance with conditions agreed to by the parties at the time of the Employee's separation of employment with the Township.

3. Sale of Residence.

A. Should the Employee or his heirs sell his Residence, for whatever

reasons except on account of his death, before the end of the 12~year period that ends on the date that is 12 years after the date on which said Residence is purchased, the Employee shall owe and pay to the Township a percentage of any capital gains on such sale, net of any additional income taxes payable as a result thereof, that is equal to a fraction, the numerator of which shall be the amount of the unforgiven loan outstanding as of the date of such sale (as derived by 14.B.l above) divided by the amount of the loan ($150,000) and the denominator of which shall be the net capital gain on the sale of the Residence, as determined by the Schedule C of the Employee's federal income tax return.

Exhibit 1

Section 19. General Provisions

A. The text herein shall constitute the entire agreement between the parties hereto.

B. TIlls Agreement shall be binding upon and inure to the benefit of the heirs, beneficiaries,

or assigns at law and executors of the Employee.

C. This Agreement shall become effective on the date first written above, on which the

parties hereto first entered into this Agreement.

D. If any provision, or any portion thereof, contained in this Agreement is held to be unconstitutional, invalid, or unenforceable, the remainder of this Agreement shall be deemed severable, shall not be affected, and shall remain in full force and effect.

IN WITNESS WHEREOF, the Radnor Township Board of Commissioners has caused this Agreement to be signed and executed on its behalf by the President and the Vice President of the Board and attested by the Township Secretary, and approved as to form by the Township Solicitor, and the Employee has signed and executed this Agreement, along with a Witness thereto, bothin duplicate, the day and year first written above.

TOWNSHIP OF RADNOR

By:

APPROVED AS TO FORM:

By:

EMPLOYEE

By:.

Exhibit 1

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FISCAL YEAR 2004 BUDGET RADNOR TOWNSIDP

Moving Forward to New Heights/

GENERAL FUND
REVENUES
BEGINNING BALANCES
100 3000 Beginning Balance $4,106,436 $3,565,277 86.8% $1,667,580 40.6%
1 101 3000 Petty Cash $1,250 $1,250 100.0% $1,250 100.0%
TOTAL BEGINNING BALANCES 40.6%
REAL ESTATE TAXES
1 300 3001 Current Year $6,800,000 $6,780,127 99.7% $7,405,200 108.9%
1 300 3020 Prior Year $25,000 $37,157 148.6% $35,000 140.0%
1 300 3030 Delinquent $55,000 $98,818 179.7% $75,000 136.4%
1 300 3040 Interim $22,500 $39,292 174.6% $25,000 111.1%
TOTAL REAL ESTATE TAXES 100.8% $7 109.2%
LOCAL ENABLING TAXES
1 310 3011 Realty Transfer Tax $1,150,000 178.5% $1,750,000 152.2%
1 310 3021 Mercantile Tax $910,000 112.0% $925,000 101.6%
I 310 3031 Occupational Privilege Tax $240,000 103.4% $230,000 95.8%
310 3041 Amusement Tax $60,000 325.5% $60,000 100.0%
310 3051 Business Privilege Tax $1,800,000 134.1% $2,000,000 111.1%
TOTAL LOCAL ENABLING TAXES 142.5% 119.4%
LICENSES AND PERMITS
1 320 3012 Beverage Licenses $7,350 $7,950 108.2% $7,950 108.2%
320 3022 Building Permits and Licenses $500,000 $1,189,811 238.0% $770,000 154.0%
1 320 3032 Street Opening Permits $10,000 $18,360 183.6% $10,000 100.0%
1 320 3042 Subdivision, Design & Zoning Fees $25,000 $42,099 168.4% $30,000 120.0%
1 320 3052 Public Works and Engineering Fees $50,000 $60,351 120.7% $50,000 ]00.0%·
1 320 3062 Rental Housing Permits $60,000 $58,830 98.1% $60,000 ]00.0%
1 320 3072 Health Permits $38,000 $46,142 121.4% $38,000 100.0%
1 320 3082 Fire Prevention Permits $5,000 $2,635 52.7% $2,500 50.0%
1 320 3092 Plumbing Permits and Licenses $28,000 $32,950 117.7% $28,000 100.0% .
320 3102 Electrical Permits and Licenses $45,000 $99,125 220.3% $50,000 111.1%
320 3112 Sewage Enforcement Fees $10,000 $4,100 41.0% $10,000 100.0%
320 3122 Cable TV Franchise Fees $200,000 $270,343 135.2% $230,000 115.0%
320 3132 Certificate of Occupancy Fee $35,000 $49,325 140.9% $35,000 100.0%
TOT AI. LICENSES AND PERMITS ... :~ ..

FISCAL YEAR 2004 BUDGET RADNOR TOWNSHIP

Moving Forward to New Heightsl

--------------------- -_ ._-----------------

, ,

AC(,Ol;NT BUDGET FUND & 2003 2003 '1..2003 2004 'X. 2003

NnIBER ACCOUNT GROUP BUDGET ACTUAL BUDCE')' m;DGET BUDGET

153.7% 128.2%

$80,000 $220,000

106.7% Ii 110.0%

;1 ~II

I- Ii

11 1 350 3015 102.5% 00.0% Ii

1 350 3025 85.1% $25,000 89.3%!!

I'

1 350 3035 318.7% $75,000 100.0%!1

1 350 3043 129.2% $550,000 115.8%11

I 1 350 3045 100.0% $36,720 100.0% I

!I 1 350 3054 836.0% $5,000 100.0% I

~I 1 350 3122 100.2% $47,000 100.0% I

!Li. I

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- - ---- --- -'I

$125,000 $209,678 167.7% $150,000 120.0% Ii

$11,000 $18,847 171.3% $11,000 100.0% II

$10,000 $22,400 224.0% $10,000 J 00.0% Ii

$175,000 $116419 66.5% $175,000 100.0% I

$165,000 ($311,428 188.7% $200,000 121.2% I

$5,000 $3,710 74.2O/~ $5,000 100.0% I

II W Ity s f) 1"I1'V~ ?' II

'I _ TOTALDEPARTMENTALEARNINGS $491,000 $682,482 139.0% I $551,000 Jl2.2O/~!

r-- .. -- -'I

II II

'I MISCELLANEOUS Ii

III 370 3017 Insurance Refunds $15,000 100.0% i

I 1 370 3027 Sale of Property & Equipment $5,000 100.0% !

11 370 3037 Miscellaneous $25,000 100.0% I

!i ! ~~~ ~~:~ ~:~~:!:::i:ticiPation Notes ~~ ~:~~:!

ii 1 370 3067 Sale of Recycled Materials $10,000 100.0%:1

1'1 Exhibit 3 II

li~============lT~O~TAL~~Nn~S~C~E~L~LANE~~O~U~S~==~l==~~~==~~~==~~~aQ~'~~·-~~~3~W~O.~Oo~Yo)

I DEPARTMENTAL EARNINGS
I I 360 3016 Parking Meters
I. I 360 3026 Parking Meters - Church
:1
II 1 360 3036 Alarm System Fees
1 360 3046 Police Extra Duty
I 360 3056 Recreation Fees
1 360 3066 Refuse Collection Fees $15,000 $13,858 92.4%
$5,000 $3,155 63.1%
$25,000 $28,376 113.5% 1
$0 $),800 0.0%
$0 $0 0.0%
$10,000 $2,949 29.5%
$55,000 $50,138 91.2% r-. FISCAL YEAR 2004 BUDGET RADNOR TOWNSHIP

Moving Forward to New Heights!

TRANSFER FROM OTHER F1JNDS
1 390 3029 Sewer Fund $200,000 $200,000 100.0% $200,000 100.0%
1 390 3039 Liquid Fuels Fund $150,000 $150,000 100.0% $150,000 100.0%
1 390 3109 Capital Improvement Fund (Loan Payments) $0 $0 0.0% $80,517 0.0%
1 390 3139 General Reserve Fund $600,000 $600,000 0.0% $2,000,000 0.0% i
1 390 3239 Willows Fund $10,000 $10,000 100.0% $12,000 120.0%
TOTAL TRANSFERS $960,000 $960,000 100.0% $2,442,517 254.4% I
TOTAL GENERAL F1JND REVENUES $18,894,000 $21,674,476 114.7% $19,793,000 104.8% i
Taxable Assessed Value in 2000 Dollars ($000) $2,930,000 $2,930,000 100.0% $3,014,000 102.9%
Value of 1 Mill in 2000 Dollars ($000) $2,930 $2,930 100.0% $3,014 102.9%
Tax Rate (Mills) 2.35 $2.35 100.0% 2.56 108.9%
Increase in Tax Rate (Mills) 0.00 $0.00 100.0% 0.21 0.0%
Average Residential Assessment $275,000 $275,000 100.0% $280,000 101.8%
GENERAL FUND
EXPENDITURES
ADMINISTRATION
SALARlES AND WAGES .- 6~ POe?
1 400 4010 Regular $415,892 $4=75,B951" 114.4% $430,536 103.5%
1 400 4030 Longevity $9,563 $8,725 91.2% $10,304 107.8%
MA TERlALS AND SUPPLIES __ 3~ OPt?
1 400 4240 Office Supplies $30,000 $1Q,020 233.4% $30,000 100.0%
GENERAL EXPENSES
1 400 4310 Advertising and Printing $7,500 $14,169 188.9% $7,500 100.0%
1 400 4340 Professional Development $6,100 $21,089 345.7% $6,100 100.0%
1 400 4360 Contractual Services $50,000 $23,567 47.1% $50,000 100.0%
1 400 4390 Miscellaneous $7,000 $11,389 162.7% $7,000 100.0%
TOTAL ADMINISTRATION $526,055 $541,440 102.9%

Exhibit 3
FINANCE age 8 of 38 FISCAL YEAR 2004 BUDGET RADNOR TOWNSHIP

Moving Forward to New Heights!

--------------------------

ACCOl1X!' BUDGET l<'IIND & 2003 2003 '1.,2003 2004 {~,{, 2003

NUMBER ACCOUNT GHOUl' BUDGET ACTUAL BUDGET BUDGET BlJDGEl'

------- ----------

1 I 1 401 4340 Professional Development

11 401 4360 Contractual Services I 1 401 4370 Professional Services (Audit)

!I MAINTENANCE AND REPAIRS

!I 1 401 4410 Office Equipment $4,000 $4,000 100.0%

1F======================9?======~~~==~F=======91

I I ,/05;175 I

TOTAL FINANCE $406,159 ~71,rn 116.0% $424,121 104.4%!1

1~==================================~~=====================9F=============~i

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I 401 4010 Regular

I 401 4030 Longevity

MATERIALS AND SUPPLIES

$7,050 $22,068 $40,000

$309,664 $12,377

iI

li 1 401 4240 Office Supplies

,

$11,000

GENERAL EXPENSE

TREASURER'S OFFICE

:1

'I

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I' SALARIES AND WAGES

II 1 402 4010 Regular

I

I

$26,000

EMPLOYEE BENEFITS

1 402 4110 Social Security Payroll Taxes

$1,989

Ii

II MATERIALS AND SUPPLIES

i 1 402 4240 Office Supplies

'[I 402 4250 Operating Supplies

I GENERAL EXPENSE

'! 1 402 4320 Bond Premium

~i

:j MAINTENANCE AND REPAIRS

Ii 1 402 4410 Office Equipment

$5,000 $0

$3,200

$500

$36,689 100.0%

TOTAL TREASURER

$36,689

.-if (/1 to t?

~ 112.9%

$12,377 100.0%

$7,462

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$1,488 37,2%

$26,000 100.0%

$1,989 100.0%

$6,999 140.0%

$0 0.0%

$3,141 98.2%

$748 149.5%

$38,876 106.0%

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100.0% !

1

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$26,000

$1,989

$5,000 SO

$3,200

$500

r"~-"·~'~'=--=~~O=--MMUNI==-"'"-~ =~=-'D'--=E=VE=L=O=PME=N=T==fl?=========·=lJ6F=ge~E=~;==;h~C;=~'i7i~==. ~:====jll

FISCAL YEAR 2004 BUDGET RADNOR TOWNSIDP

Moving Forward to New Heights!

~--------------

Ii ACCOUNT BUDGET FUND & 2003 2003 %) 2003 2004 'y" 2003

,NUMBER ACCOllNT GROlJP BUDGET ACTUAL BUDGET BUDGET BUDGET

t

-------------- ~ - -- - ~ --

11:1 TOTALCOMMUNITYDEVELOPMENT $608,445 $656,213 107.9% $624,029 102.6%11 llr-------------------------------~~-----------------~~-------------11

I' GENERAL HEALTH SERVICES i

I I

MATERIALS AND SUPPLIES I

I 1 420 4250 Operating Supplies $1,700 $1,665 97.9% $1,700 100.0%

~ I

GENERAL EXPENSE I'

i 1 420 4360 Contractual Services $1,000 $0 0.0% $1,000 100.0% I

100.0% I

SALARlES AND WAGES

h ,! I 416 4010 Regular

:i 1 416 4030 Longevity I

I

I

MATERIALS AND SUPPLIES 1 416 4240 Office Supplies

1 416 4250 Operating Supplies

I GENERAL EXPENSE

111 416 4310 Advertising and Printing

1 416 4340 Professional Development 1 416 4360 Contractual Services

MAINTENANCE AND REP A1RS I 1 416 4410 Office Equipment

11 VEmCLE OPERATING EXPENSE

• 1 416 4510 Gasoline-Oil-Lubricants

1 416 4520 Tires-Batteries-Accessories 1 416 4530 Repair Parts

1 416 4540 Contracted Maintenance & Repair

TOTAL HEALTH SERVICES

$484,207 $13,488

$5,000 $4,850

$11,250 $10,250 $70,000

$4,000

$2,400 $500 $1,500 $1,000

- '11,- 0r;l0 $5:ffi,Go ' 109.5%

$13,438 99.6%

$3,406 68.1 %

$3,574 73.7%

$19,130 170.0%

$9,359 91.3%

$67,053 95.8%

$1,753

43.8%

$498,185 $15,094

$5,000 $4,850

$11,250 $10,250 $70,000

$4,000

$2,400 $500 $1,500 $1,000

102.9% ;

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Ii

.1

100.0% :

100.0% I

I, 100.0% !

100.0% I 100.0%

100.0% 100.0% 100.0% 100.0%

TOTAL COMMUNITY DEVELOPMENT I

$2,700

$2,203 $1,515 $3,032 $1,600

91.8% 303.0% 202.2% 160.0%

$t,665 61.7% $2,700

$611,145

{,IO;tJ7O'

,..$6S7,!i18- 107.6% $626,729

102.5% I

POLICE

SALARIES AND WAGES

I I

Exhibit 3 III

Paqe 10 of 38

FISCAL YEAR 2004 BUDGET RADNOR TOWNSIDP

Moving Forward to New Heights]

.---------~~~-=--------.----------

_-\CCOL~NT nCDGET FUND <'\: 2003 2003 %,2003 2004 'X, 2003

NlJ:\IBER ACCOUNT onoue BCDGET ACTUAL nlJDGET 13l1DGET nUDGET

---

1 410 4010 Regular

1 410 4020 Overtime

1 410 4030 Longevity 1 410 4040 Extra Duty 1 410 4050 Court Time

MATERIALS AND SUPPLIES 1 410 4230 Uniforms

1 410 4240 Office Supplies

1 410 4250 Operating Supplies 1 410 4270 Training Supplies

GENERAL EXPENSE 1 410 4330 Rentals

1 410 4340 Professional Development 1 410 4360 Contractual Services

MAINTENANCE AND REPAIRS 1 410 4410 Office Equipment

1 410 4460 Parking Meters

1 410 4470 Communication Equipment

100.7% I 125.0% i 112.2%11

88.6%1 1 75.0% !

ENGINEERING
;1 SALARlES AND WAGES
, 1 429 4010 Regular
1 429 4030 Longevity
MATERIALS AND SUPPLIES
1 429 4240 Office Supplies
GENERAL EXPENSE
1 429 4340 Professional Development 11 i

I

!

$246,534 $219,814 89.2% $198,360 80.5% I
$5,298 $5,298 100.0% $5,823 109.9%
!I
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$2,000 $2,892 144.6% $2,000 100.0% Ii
. Ii
Exhibit 3 Ii
$2,145 $3,224 150.3~ ge 1~.18¥ 3800.0% I FISCAL YEAR 2004 BUDGET RADNOR TOWNSIDP

Moving Forward to New Heights!

-~~~
03 2003 '!Il, 2003 2004 'Yo 2003
DGET ACTUAL BUDGET BUDGET BLJDGET
I
I _.--_. .
I
1 429 4360 Contractual Services $1,600 $1,958 122.3% $1,600 100.0% I
I !
I i
!.
! TOTAL ENGINEERING $257,577 $233,186 90.5% I $209,928 81.5% i
.j I
.~-- i
T-
II PUBLIC WORKS
MUNICIPAL BUILDlNGS I
$168'3950~05.4% i
I' SALARIES AND WAGES !
il 1 403 4010 $179,419 I
Regular 106.5%!1
., 106.8% !
iI 1 403 4030 Longevity $10,321 $10,321 100.0% $11,021
B C;. s=
Ii ~A-r;,-t> 1
V· ,
MATERIALS AND SUPPLIES I
1 403 4210 Utilities $105,000 108.4% $105,000 100.0% I
1 403 4220 Communications $60,000 '1b4,920 108.2% $60,000 100.0%\1
i 1 403 4250 Operating Supplies $12,000 $17,134 142.8% $12,000 100.0% ,
11
ii I
GENERAL EXPENSE I
!, I 403 4360 Contractual Services $14,000 $31,358 224.0% $14,000
, 100.0% I
MAINTENANCE AND REP AIRS i
I 1 403 4410 Office Equipment $4,000 $25,183 629.6% $4,000 100.0% I
I 403 4420 Buildings and Fixtures $10,000 $12,118 121.2% $10,000 100.0% I
I 1 403 4480 Land Improvements $5,000 $0 0.0% $5,000 100.0%'1
I 103 00lc II
I! TOTAL MUNICIPAL BUILDINGS $388,716 $452,394 116.4% $400,440
I • 0 II
I -~,
.,
II
i STREETS AND IDGHW AYS
! GENERAL SERVICES Ii
j, ~
:\ I
, SALARIES AND WAGES i
, 103.4% I
1 430 4010 Regular $420,867 ~44,558 105.6% $435,130
1 430 4030 Longevity $31 ,892 O,t.$41 ,190 129.2% $44,210 138.6%
MATERlALS AND SUPPLIES
I, 1 430 4230 Uniforms $2,500 $4,030 161.2% $2,500 100.0%
il 1 430 4240 Office Supplies $3,500 $4,079 116.5% $3,500 100.0%
'. 1 430 4250 Operating Supplies $22,000 $32,319 146.9% $22,000 100.0% I
u
"
I
I GENERAL EXPENSE Exhibit 3 I
1 430 4330 Church Parking Rentals $7,000 $22,770 325.jo/'<E ge ~,~ 381.00.0% I FISCAL YEAR 2004 BUDGET RADNOR TOWNSIDP

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1 430 4340 Professional Development $6,000 $3541 59.0% $6,000 100.0%
1 430 4360 Contractual Services $9,000 ~ 549.2% $9,000 100.0%
MAINTENANCE AND REPAIRS Why -»:
1 430 4430 Machinery & Equipment $28,000 $32,026 114.4% $28,000 100.0%
1 430 4470 Communication Equipment $5,000 $4,131 82.6% $5,000 100.0%
VEHICLE OPERATING EXPENSE
1 430 4510 Gasoline-Oil- Lubricants $23,500 $23,574 100.3% $23,500 100.0%
1 430 4520 Tires-Batteries- Accessories $15,000 $19,914 132.8% $15,000 100.0%
1 430 4530 Repair Parts $15,000 $19,867 132.4% $15,000 100.0%
1 430 4540 Contracted Maintenance and Repair $7,500 $19,873 265.0% $7,500 100.0%
EQUIPMENT REPLACEMENT
1 430 4750 Other Equipment $3,500 $0 0.0% $3,500 100.0%
TOTAL GENERAL SERVICES $600,259 $721,295 120.2% $626,840 104.4%
CLEANING STREETS & GUTTERS
SALARIES AND WAGES
1 431 4010 Regular $20,854 $25,032 120.0% $25,000 119.9%
1 431 4020 Overtime $8,000 $14,431 180.4% $8,000 100.0%
GENERAL EXPENSE
1431 4360 Contractual Services -- Disposal $21,000 $20,488 97.6% $21,000 100.0%
TOTAL CLEANING STREETS & GUTTERS $49,854 $59,950 120.3% $54,000 108.3%
SNOW AND ICE REMOVAL
SALARIES AND WAGES
432 4010 Regular $29,456 $8,100 27.5% $30,782 104.5%
432 4020 Overtime $30,000 $50,867 169.6% $30,000 100.0%
MATERIALS AND SUPPLIES
1 432 4250 Operating Supplies $85,000 $139,921 164.6% $85,000 100.0%
EQUIPMENf
432 4750 Other Equipment $5,000 $0 0.0% E~mt 3100.0%
13 of 38 FISCAL YEAR 2004 BUDGET RADNOR TOWNSIDP

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.--------
OENT lWDGET FllND s: 2003 2003 'X) 2003 2004 % 2003
I NUMBER ACCOVNT GROUP BUDGET ACTCAL BUDGET BUDGKI' BUDGET
I TOTAL SNOW AND ICE REMOVAL $149,456 $198,887 133.1% $150,782 100.9%11

TRAFFIC SIGNALS AND SIGNS !
!I i
:1 i
SALARIES AND WAGES I'
.! 104.5%li
i 1 433 4010 Regular $136,970 $1.27,180 92.9% $143,134
i 1 433 4020 Overtime $2,500 $8,434 337.4% $2,500 100.0% I
I 100.0% I
I MATERIALS AND SUPPLIES
1 433 4211 Traffic Signal Lighting $37,000 $24,478 66.2% $37,000
[I 1 433 4250 Operating Supplies $22,000 $28,361 128.9% $22,000 100.0%11
I
I MAINTENANCE AND REPAIRS
I 1 433 4450 Traffic Signals $30,000 $50,521 168.4% $30,000 100.0% I
I
TOTAL TRAFFIC SIGNALS AND SIGNS $228,470 $238,975 104.6% $234,634 102.7% 1
I -
I
, I
it Ii
I STREET LIGHTING
i
I II
J MATERIALS AND SUPPLIES
I 1 434 4212 Street Lighting -- Electricity $190,000 $155,603 81.9% $]90,000 'I
I 100.0%11
Ii
, MAINTENANCE AND REPAIRS I
1 434 4420 Buildings and Fixtures $40,000 $36,628 91.6% $40,000 100.0% I
i
TOTAL STREET LIGHTING $230,000 $192,231 83.6% $230,000 100.00/1

I CURBS AND SIDEWALKS II
I Ii
'I SALARIES AND WAGES 104.5%11
jl 1 434 4010 Regular $27,106 $31,345 115.6% $28,326
II
MATERIALS AND SUPPLIES 'I
I 100.0%\1
1 434 4250 Operating Supplies $8,000 $4,363 54.5% $8,000
II TOTAL CURBS AND SIDEWALKS $35,106 $35,708. 101.7% $36,326 103.5%11
,I
.1 ·-1'
!i.-- --
,I
II LEAF COLLECTION Exhibit 3
II Pc ge 14 of 38 FISCAL YEAR 2004 BUDGET RADNOR TOWNSlllP

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SALARIES AND WAGES
435 4010 Regular $93,716 $139,217 148.6% $97,933 104.5%
1 435 4020 Overtime $10,000 $14,146 141.5% $10,000 100.0%
TOTAL LEAF COLLECTION $103,716 $153,363 147.9% $107,933 104.1%
DRAINAGE
SALARIES AND WAGES I
1 436 4010 Regular $53,037 $62,674 118.2% $55,424 104.5% :
436 4020 Overtime $0 $0 0.0% $0 0.0%
MATERIALS AND SUPPLIES
436 4250 Operating Supplies $10,000 $2,700 27.0% $10,000 100.0%
TOTAL DRAINAGE $63,037 $65,374 103.7% $65,424 103.8%
REP AIRS-TOOLS AND MACHINERY Ir (J It ?(f; /;
SALARIES AND WAGES
437 4010 Regular $226,407 100.8% $232,680 102.8%
437 4020 Overtime $1,500 649.9% . $1,500 100.0%
MATERIALS AND SUPPLIES
437 4250 Operating Supplies $10,000 $19,503 195.0% $10,000 100.0%
TOTAL REP AIRS-TOOLS & MAClUNERY $237,907 $257,475 108.2% $244,180 102.6%
ROAD MAINTENANCE AND REPAIR
SALARIES AND WAGES
1 438 4010 Regular $39,702 $52,286 131.7% $41,489 104.5%
1 438 4020 Overtime $0 $246 0.0% SO 0.0%
MATERIALS AND SUPPLIES
438 4250 Operating Supplies $13,000 $10,045 77.3% $13,000 100.0%
GENERAL EXPENSE
438 4330 Rentals $1,000 $0 0.0% E$4f;tlimit JOO.O%
438 4360 Contractual Services $1,000 $0 e M,u:oti 3800.0% FISCAL YEAR 2004 BUDGET RADNOR TOWNSHIP

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TOTAL ROAD MAINTENANCE & REP $54,702 $62,577 114.4% $56,489 103.3%
TOTAL STREETS AND IDGHW AYS $1,752,507 $1,985,836 113.3% $l,806,607 103.1%
SOLID WASTE COLLECTION
SALARIES AND WAGES
1 424 4010 Regular $1,522,767 $1,554,933 102.1% $1,582,942 104.0%
424 4020 Overtime $15,000 $29,222 194.8% $15,000 100.0%
1 424 4030 Longevity $39,065 $37,115 95.0% $40,479 103.6%
MATERIALS AND SUPPLIES
424 4250 Operating Supplies $9,500 $13,183 138.8% $9,500 100.0%
GENERAL EXPENSE
1 424 4350 Disposal Fees $75,000 $24,246 32.3% $75,000 100.0%
VEHICLE OPERATING EXPENSE
424 4510 Gasoline-Oil-Lubricants $36,000 $65,389 181.6% $36,000 100.0%
424 4520 Tires-Batteries-Accessories $17,000 $17,012 100.1% $17,000 100.0%
424 4530 Repair Parts $22,000 $17,445 79.3% $22,000 100.0%
424 4540 Contracted Maintenance and Repair $22,000 $19,944 90.7% $22,000 100.0%
EQUIPMENT REPLACEMENT
1 424 4830 Radios $0 $0 0.0% $0 0.0%
TOTAL SOLID WASTE COLLECTION $1,758,332 $1,778,488 101.1% $1,819,921 103.5%
TOTAL PUBLIC WORKS $3,899,555 $4,216,718 108.1% $4,026,968 1033%
RECREATION
GENERAL SERVlCES
SALARIES AND WAGES - -2/, aa e»
450 4010 Regular $174,283 $195,993' 111.9% $180,413 103.5%
450 4030 Longevity $1,923 $1,923 100.0% fi;lmbitlJl8.2% :
age 16 of 38 ........ - ..

FISCAL YEAR 2004 BUDGET RADNOR TOWNSHIP

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----------------- ._-----
ACCOUNT BUDGET FUND S: 2003 2003 % 2003 2004 '1..2003
NUMBER ACCOUNT GROUP BCDGET ACT t:.-\. L BlJDGET BlJDGET BUDGET
------------------ I
MATERIALS AND SuPPLIES -1-/'1,«7 I
1 450 4240 Office Supplies $18,000 $3,:46 ' 19.4% $18,000 100.0% I
i II
1 GENERAL EXPENSE
I 1 450 4340 Professional Development $3,400 $2,424 71.3% $3,400 100.0%ji
I'
i
VEHICLE OPERATING EXPENSE i
1 450 4510 Gasoline-Oil-Lubricants $7,500 $7,451 99.3% $7,500 100.0%1
!I 1 450 4520 Tires- Batteries-Accessories $3,000 $998 33.3% $3,000 100.0%
P 1 450 4530 Repair Parts $3,500 $6,269 ]79.1% $3,500 100.0% .
i 1 450 4540 Contracted Maintenance and Repair $2,000 $2,916 145.8% $2,000 100.0% !
i
TOTAL GENERAL SERVICES $213,606 $220,538 103.2% $220,086 103.0%
I
I I
I
it PARKS AND PLAYGROUNDS
jl
i
I SALARIES AND WAGES
1 451 4010 Regular $747,154 $750,399 100.4% $793,973 106.3%
1 451 4020 Overtime $5,000 $20,722 414.4% $5,000 100.0%
1 451 4030 Longevity $17,556 $15,435 87.9% $17,692 100.8%
r_ Why::50 ~Jh? i
i' MATERIALS AND SUPPLIES I,
@46,76Y 246.1% I
1 451 4210 Utilities $19,000 $19,000 100.0%1
1 451 4220 Communications $500 ---n-72 54.4% $500 100.0% I
1 451 4250 Operating Supplies $58,800 -$34,62~r 58.9% $58,800 100.0%
r:r:tf
GENERAL SERVICES
1 451 4340 Professional Development $1,000 $0 0.0% $1,000 100.0%
:1 1 451 4360 Contractual Services $50,000 $52,689 105.4% $50,000 100.0%!j
11
Ii
I il
I MAINTENANCE AND REPAIRS 100.0% I
1 451 4420 Buildings and Fixtures $12,000 $11,394 94.9% $12,000
I ,
1 451 4430 Machinery and Equipment $22,000 $26,816 121.9% $22,000 100.0%
100.0,,.11
I EQUIPMENT REPLACEMENT
I 1 451 4630 Machinery and Equipment $4,000 $2,024 50.6% $4,000
I
I
TOTAL PARKS AND PLAYGROUNDS $937,010 $961,142 102.6% $983,965 105.0% I
Exhibit 3
, P ~I e 17 of 38 .I
Ii 9

FISCAL YEAR 2004 BUDGET RADNOR TOWNSHIP

Moving Forward to New Heights!

-.--~--~~
ODGET FUND & 2003 2003 'Xl Z003 2004 %2003
INllMBER _~ •• -n GROllI' __ BUDGE~_ .-\CTliAL BU~GET l~tJDGET BODGEl"
i
i SHADE TREES i
,
MATERIALS AND SUPPLIES I
1
1 453 4250 Operating Supplies $25,000 $36,064 144.3% $25,000 100.0%i:
I!
I
I I
:j TOTAL SHADE TREES $25,000 $36,064 144.3% $25,000 100.0% I
'1 1
Il j
RECREATION PROGRAMS 1
SALARIES AND WAGES I
II 1 454 4010 Regular $91,000 $88,602 97.4% $91,000 100.0% I
!1 MATERIALS AND SUPPLIES I
!
I 1 454 4260 Recreation Supplies $56,900 $62,747 110.3% $56,900 100.0% I
GENERAL EXPENSE
1 454 4330 Rentals $67,000 UJ.679 65.2% $67,000 100.0%
! 1 454 4360 Contractual Services $43,024 C$92,0~ 213.9% '-0243,024 100.0% :
C7" JtLV"::>1J). 'l "7 J
L
11 I V l·O~.O~l
II TOTAL RECREATION PROGRAMS $257,924 $287,037 111.3% $257,924
,
TOTAL RECREATION D~PARTMENT $1,433,540 $1,504,781 105.0% $1,486,975 103.74
Ii I 111.636,330 I
TOTAL ALL DEPARTMENTS $12,122,933 104.2% $11,863,556 102.0% I
I
i
NON-DEPARTMENTAL I
FIRE PROTECTION
1
GENERAL EXPENSE 100.7% J
I 1 413 4330 Hydrant Rental $136,000 ~~2 100.8% $137,000
I 1 413 4380 Fire Department Contributions I'f!'d-m-- !
Radnor -- Fire $77,064 $1.1064 100.0% $80,147 104.0% I
Radnor -- Advanced Life Support $25,000 V$75528J 302.2% $35,000 140.0%
Bryn Mawr $37,440 $37,440 100.0% $38,938 104.0%
Broomall $4.264 H,2M 100.0% ~ 104.0%
,
ii Total, Contributions $143,768 $194,326 135.2% E~flfSYt 3110.3%
'i
II Pa ge 18 of 38 FISCAL YEAR 2004 BUDGET RADNOR TOWNSIDP

Moving Forward to New Heights!

TOTAL FIRE PROTECTION

$279,768

$331,358 118.4%

I

$295,520 105.6% :

LmRARY

$587,000 $583,588

$587,000 $583,588

99.4% $724,945 123.5%

99.4% $724,945 123.5%

GENERAL EXPENSE 1 440 4380 ConUibution

TOTAL LlBRARY

SPECIAL SERVICES

GENERAL EXPENSE

1 464 4380 Contributions to Agencies Wayne Senior Center

Senior Center Building Support Surrey Services for Seniors Wayne Art Center

United Way

Total, Contributions

1 464 4381 Contribution to Radnor Studio 21, Inc.

TOTALSPECL\LSERVlCES

$73,632 $23,920 $37,856 $13,000

$500 $148,908 $56,160

$205,068

$149,933 $56,160

100.0% 100.0% 100.0% 100.0% 305.0% 100.7% 100.0%

$76,577 $24,877 $39,370 $13,520

~ $154,844 $63,911

104.0% 104.0% 104.0% 104.0% 100.0% 104.0% i 113.8%

$206,093 100.5% $218,755 106.7%

PERSONNEL EXPENSE

EMPWYEE BENEFITS

1 470 4110 Social Security Payroll Taxes 1 470 4130 Retired Employee Pensions

1 470 4170 SickPayBonus

TOTAL PERSONNEL EXPENSE

$657,471 $881 $19,000

$677,352

J

$729,381/

$961 $17,760/

$748,102

110.9% 109.0% 93.5%

110.4%

$677,852 $881 $19,000

$697,733

103.1% 100.0% 100.0%

103.0%

INSURANCE

GENERAL EXPENSE

1 471 4321 Workers' Compensation

1 471 4322 Liability, Property and Casualty 1 471 4323 Unemployment

1 471 4324 Life and Disability Insurance

I

$375,000 $385,138/ 102.7% $300,000 80.0%

$220,000 $245,283/ 111.5% $270,000 122.7%

$5,000 ~. $4 348 87.00.Yo E~qent 3100•0%

$225,000 $ , 3 153 eJt1'tY,I~f38 88.9%

:1 Wfo." ';:>0 j:,r-d, '7

6\t.\', ~·7 . if' ,_

J_1lpj

FISCAL YEAR 2004 BUDGET RADNOR TOWNSIDP

Moving Forward to New Heights!

------_ .. -.- . ---------------~~-----.--

ACCOUNT BUDGET FUND & 2003 2003 '1.,2003 2004 'Yo,2003

NOi\IBER ACCOUNT GROUP BCDGET ACTlJ.\L BUDGET BUDGET BL:DGET

- - - - - -

I I

, I

1 TOTAL INSURANCE $825,000 $980,052 ] 18.8% $775,000 93.9% I

i I

I OTHER EXPENSES

I REFUNDS Ii

ij 1 473 4910 PriorYears $15,000 $5,603 37.4% $10,000 66.7%1:

iF!====-================================~~======================~~============~1

il '1 II 1 487 4970 Services Charges -- Paying Agent

I

I TOTAL DEBT SERVICE

II'~--------~~----~~--~I TRANSFERS TO OTHER FUNDS

~ +3~DO~

II TRANSFERS ( - I'

Health Insurance Fund $2,000,000 ~ 152.5%

Civilian Pension Fund $576,000 $576,962 100.2%

Police Pension Fund $179,000 $283,652 158.5%

Educational Service Agency Fund $65,000· $63,000 96.9%

General Reserve Fund (Reserved) $100,000 $0 0.0%

General Reserve Fund (Unreserved) $0 $0

DEBT SERVICE

INTEREST ON DEBT
1 483 4930 Series of 1992 General Obligation Bonds
! 1 483 4930 Series of 1996 General Obligation Bonds
!
i 1 483 4930 Series A of2002 General Obligation Bonds
I 1 483 4930 Series of 2004 General Obligation Bonds
Total, Interest on Debt
1 482 4940 Tax and Revenue Anticipation Notes
PRINCIPAL ON DEBT
:' I 486 4960 Series of 1992 General Obligation Bonds
i 1 486 4960 Series of 1996 General Obligation Bonds
! 1 486 4960 Series of 2002 General Obligation Bonds
1 486 4960 Series of2004 General Obligation Bonds
Total, Principal on Debt
1 489 4950 Tax and Revenue Anticipation Notes BANK CHARGES ON DEBT

1 490 5009
1 490 5011
I 490 5007
1 490 5018
1 490 5021
-: 1 490 5021 $6,825 $6,825 100.0% $0 0.0%
$129,128 $129,128 100.0% $126,709 98.1% I
$726,350 $691,025 95.1% $709,040 97.6% i
lQ lQ 0.0% sn O.O%i
$862,303 $826,978 95.9% $835,748 96.9% I
$0 $0 0.0% $0 0.0%
$130,000 $130,000 100.0% $0 0.0%,
$56,250 $56,250 100.0% $60,000 106.7%!i
$692,431 $692,431 100.0% $824,746 119.1%'1
iQ lQ 0.0% sn 0.0%1
I
$878,681 $878,681 100.0% $884,746 100.7% !
I
$0 $0 0.0% $0 0.0%1
$7,500 $4,915 65.5% $7,000 93.3% I
$1,748,484 $1,710,574 97.8% $1,727,494 98.8% I
i $2,000,000 100.0%

$771,000 133.9% I

$199,000 111.2% I

$60,000 92.3% II

$~Y8it ~50.0~ II O.Oi3 ~ge 20 ~~ 38 O.01o.i

FISCAL YEAR 2004 BUDGET RADNOR TOWNSlllP

Moving Forward to New Heights!

---- -
ACCOUNT BUDGET FUND & 2003 2003 'X, 2003 2004 'X. 2003
l\Ui\IBER ACCOlJNT GROUP BUDGET ACTVAL BUDGET BCDGET BLiDGET
---- - I
'lttJo3/6/r
TOTAL TRANSFERS $2,920,000 ~3,614 136.1% $3,480,000 119.2% I
,
!
:1 TOTAL NONDEPARTMENTAL I $7,257,672 $8,538,983 117.7% $7,929,447 Ii
,; 109.3%,1
lJ 'I
r-
TOTAL GENERAL FUND $18,894,000 $20,661,916 109.4% $19,793,000 104.8%
FUND BALANCE (BUDGETARY BASIS) $0 $1,012,559 Va I
il I
,
, Ii
I
I EXECUTIVE SUMMARY ,
, I
GENERAL FUND REVENUES 1
Beginning Balance $4,107,936 $3,566,527 86.8% $1,668,830 40.6%1
Real Estate Taxes $6,902,500 $6,955,394 100.8% $7,540,200 109.2% I
I Local Enabling Taxes $4,160,000 $5,927,790 142.5% $4,965,000 119.4% I
I
, Licenses and Permits $1,013,350 $1,882,021 185.7% $1,321,450 130.4% ,
I
I Fines and Costs $275,000 $371,707 135.2% $300,000 109.1%li
I Interest and Rents $245,495 $258,949 105.5% $193,283 78.7%1'
Grants and Gifts $683,720 $1,019,469 149.1% $755,720 110.5%1'
Departmental Earnings $491,000 $682,482 139.0% $551,000 112.2%11
Miscellaneous $55,000 $50,138 91.2% $55,000 100,0%r
I Transfers from Other Funds $960,000 $260,000 100.0% $2,442,517 254,4% !
I
! 104.8%11
i
Total General Fnnd Revenues $18,894,000 $21,674,477 114.7% $19,792,999
GENERAL FUND EXPENDITURES il
:1 ' Departmental= 102.9%11
il Administration $526,055 $624,858 118.8% $541,440
!,
il Finance $406,159 $471,175 116.0% $424,121 104.4% I
I
I Treasurer $36,689 $38,876 106.0% $36,689 100.0%
Community Development $611,145 $657,878 107.6% $626,729 102.5% I
Police $4,465,610 $4,375,460 98.0% $4,510,706 101.0% 'i
Engineering $257,577 $233,186 90.5% $209,928 81.5% i
Public Works $3,899,555 $4,216,718 108.1% $4.026,968 i
103.3% !
Parks and Recreation ~1.433.540 SL~04.781 105.0% 1 $1,486,975 103.7% I
:j Subtotal, Departmental $11,636,330 $12,122,933 104.2% 102.0% I
I $11,863,556
i I
I Nondepartmental= Exhibit 3
Fa e 21 of 38 9

FISCAL YEAR 2004 BUDGET RADNOR TOWNSHIP

Moving Forward to New Heights!

Fire Protection $279,768 $331,358 118.4% $295,520 105.6% I
Library $587,000 $583,588 99.4% $724,945 123.5%
Agency Contributions $205,068 $206,093 100.5% $218,755 ]06.7%
Personnel Expenses $677,352 $748,102 110.4% $697,733 103.0%
Insurance $825,000 $980,052 118.8% $775,000 93.9%
Other $15,000 $5,603 37.4% $10,000 66.7%
Debt Service $1,748,484 $1,710,574 97.8% $1,727,494 98.8%
Transfers to Other Funds $2,920,000 $3,973,614 136.1% $3.480,000 119.2%
Subtotal. Nondepartmental $7,257,670 $8538,981 117.7% $7,929.445 109.3%
Total General Fund Expenditures $18,894,000 $20,661,916 109.4% $19,793,000 104.8% Exhibit 3 Page 22 of 38·

FISCAL YEAR 2004 BUDGET RADNOR TOWNSlllP

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SEWER FUND
REVENUES
SEWER DEPARTMENT
2 100 3000 Beginning Balance $949,350 $656,309 69.1% $594,582 62.6%
2 340 3014 Interest Earnings $47,650 $56,067 117.7% $41,418 86.9%
2 360 3106 Sewer Rent -- Current Year $2,950,000 $2,868,116 97.2% $3,000,000 101.7%
2 360 3116 Sewer Rent .- Prior Years $75,000 $61,955 82.6% $75,000 100.0%
2 360 3126 Connection Fees $15,000 $5,400 36.0% $15,000 100.0%
2 360 3136 Charges -- Marple, Haverford,
and Newtown Townships $20,000 $1,766 8.8% $20,000 100.0%
2 370 3037 Misce1Janeous $15,000 $9,422 62.8% $15,000 ]00.0%
2 370 3097 Tax and Revenue Anticipation Notes $0 $0 0.0% $0 0.0%
TOTAL FUND REVENUES $4,072,000 $3,659,034 89.9% $3,761,000 92.4%
SEWER RENT PER 1,000 GALLONS $3.19 $3.19 100.0% $3.19 100.0%
INCREASE/(DECREASE) IN SEWER $0.00 $0.00 0.0% $0.00 0.0%
AVERAGE RESIDENTIAL SEWER RENT $358 $358 100.0% $358 100.0%
AVERAGE ADDITIONAL/(LESS) RENT $0 $0 $0
SEWER FUND
EXPENDITURES
OPERATING '7
.-
SALARIES AND WAGES
2 421 4010 Regular $310,987 $290,289 93.3%
2 421 4020 Overtime $15,000 $15,000 100.0%
2 421 4030 Longevity $9,942 $10,292 103.5% I
MATERIALS AND SUPPLIES
2 421 4210 Utilities $20,000 $20,670 $15,000 75.0% I
2 421 4250 Operating Supplies $25,000 $38,607 154.4% $30,000 120.0%
GENERAL EXPENSE
2 421 4330 Rentals -- Lower Merion, Haverford,
Newtown, and Tredyffrin Townships $50,000 $66,103 132.2% $50,000 100.0%
2 421 4360 Contractual Services $35,000 ~ 162.0% $40,000 114.3%
WhY:7l) ?
MAINTENANCE AND REPAIRS
2 421 4430 Machinery and Equipment $5,000 $14,965 299.3% $5,000 100.0%!
2 421 4490 Sanitary Sewers, Miscellaneous $368,445 :;1;;"~(?42.8~ ge ~1~05·1%~ FISCAL YEAR 2004 BUDGET RADNOR TOWNSHIP

MOl'ing Forward to Nf!W Heights!

----,---

IACCOliNT BUDGET FUND &: 2003 2003 'X, 2004 'X, 2003

NUMBER ACCOUNT GROEPS BUDGET ACTUAL BUDGET BlJDGET BUDGET

I TOTAL OPERATING I $881,374 " !fl.~{t'f(80.2% $882,069 100.1% i

,ifL=========================~================~~========~li

ADMINISTRA nON lr r >» II

cf., '7;y "'Olftt)1t . I

139.5% $186,383 108.0%

$45 0.0% $1,000 0.0%

$2,615 148.9% $1,931 110.0%

~

OJ{~3,958 ' 132.9% $15,000

VEHICLE OPERATING EXPENSE 2 421 4510 Gasoline, Oil and Lubricants

2 421 4520 Tires, Batteries and Accessories .I

:1 2 421 4530 Repair Parts

r 2 421 4540 Contracted Maintenance and Repair

CAPITAL OUTLAY

2 421 4830 Machinery and Equipment

SALARIES AND WAGES

2 423 4010 Regular

, 2 423 4020 Overtime !I

i 2 423 4030 Longevity

!

i

MATERIALS AND SUPPLIES

2 423 4240 Office Supplies

GENERAL EXPENSE

ii 2 423 4310 Advertising and Printing

r 2 423 4340 Professional Development 2 423 4360 Contractual Services

2 423 4370 Professional Services (Audit) 2 423 4410 Maintenance and Repairs

! 142.9% I

r -t- Z-b//'Of> J

$1,000 I $2,209 220.9% $2,500 250.0% !

$2,500 $2,706 108.2% $1,000 40.0% I

"" "'", "n~

$15,000 , 176.0% $15,000 100.0%

$11,400 $10,300) 90.4% $11,400 100.0%

$1,200 / $3;/88 A 315.7% $1,000 83.3% i

$7,000 $1,000 $2,500 $1,500

$30,000

$0

0.0%

$172,505 $1,000 $1,756

$10,500

$7,846 112.1%

$213 21.3%

$1,378 55.1%

$8,740 582,6%

$5,000 71.4%

$750 75.0%

$2,500 100.0%

$1,000 66.7%

0.0%

$30,000

PERSONNEL EXPENSES

EMPLOYEE BENEFITS

2 470 4110 Social Security Payroll Taxes 2 470 4170 Sick Pay Bonus

I

"

TOTAL PERSONNEL EXPENSES

$37.357 $1,800

$39,157

$38,477 $1,800

INSURANCE

$46,366 118.4%

$40,277

GENERAL EXPENSE

Exhibit 3 Ps ge 24 of 38

FISCAL YEAR 2004 BUDGET RADNOR TOWNSIDP

Moving Forward to New Heights!

----------------1'··-------
ACCOliNT Bl'DGET FUND & 2003 2003 'X. 2004 'X. 2003
Nll:\IBER ACCOllNT GROUPS BllDGET ACTUAL BllDGET BUDGET BUDGET
, , ,
il 2 471 4322 Liability, Property and Casualty $30,000 $82,296 274.3% $35,000 116.7%
I 2 471 4323 Unemployment $0 $0 0.0% $0 0.0%
2 471 4324 Life and Disability $35,000 $12,684 36.2% $35,000 100.0%
TOTAL INSURANCE $110,000 $122,235 111.1% $120,000 109.1%
I, i
OTHER EXPENSE I
REFUNDS I
2 473 4910 Prior Years $2,500 $347 0.0% $2,500 0.0% 1
. I
INTEREST ON DEBT
i 2 483 4930 Series A of2002 General Obligation Bonds $23,060 $23,059 100.0% $22,916 99.4%
,
2 483 4930 Series of 2004 General Obligation Bonds lQ lQ 0.0% _$Q 0.0%
2 483 4930 Total, Interest on Debt $23,060 $23,059 100.0% $22,916 99.4%
2 482 4940 Tax and Revenue Anticipation Notes $0 $0 0.0% $0 0.0%
PRINCIPAL ON DEBT
2 486 4960 Series A of2002 General Obligation Bonds $5,728 $5,728 100.0% $15,211 265.6% I
i: 2 486 4960 Series of2004 General Obligation Bonds lQ lQ 0.0% £!! !!J!% I
Ii 2 486 4960 Total, Principal on Debt $5,728 $5,728 100.0% $15,211 265.6%
I 2 489 4950 Tax and Revenue Anticipation Notes $0 $0 0.0% $0 0.0%
AUTHORITY RENTALS 1
2 489 4990 . RHM Sewer Authority $1,775,250 $1,307,180 73.6% $1,497,732 84.4%
:1 TRANSFERS TO OTHER FUNDS
11 2 490 5001 General Fund $200,000 $200,000 100.0% $200,000 100.0% II
il 2 490 5021 General Reserve Fund $0 $150,000 0.0% $0 0.0% I
2 490 5011 Civilian Pension Fund $50,000 $50,000 100.0% $50,000 100.0%
2 490 5090 Health Insurance Fund $250,000 $400,OQO 160.0% $250,000 100.0%
2 491 4999 Unappropriated Reserve/12/31 Fund Balance $518,070 $0 0.0% $445,081 85.9%
I TOTAL OTHER EXPENSE $2,824,608 $2,165,103 76.7% $2,483,440 87.9%
!I II
It
'j 11
II TOTAL FUND EXPENDITURES $4,072,000 $3,343,314 82.1% $3,761,000 92.4%1\
FUND BALANCE $0 $315,720 $0 I
L I
II I Exhibit 3 I
LIQUID FUELS FUND I
h REVENUES P~ge 25 of 38 2 471 4321 Workers Compensation

$45000

$27255

606Yo

$50000 1111 Yo

FISCAL YEAR 2004 BUDGET RADNOR TOWNSHIP

Moving Forward to New Heights/

1------1 --
ACCOUNT BUDGET FUND &. 2003 2003 %, 2004 % 2003
NlI:\IBER ACCOUNT GROUPS BUDGET ACTUAL BUDGET BUDGET BUDGET
LIQUID FUELS
3 100 3000 Beginning Balance $88,503 $83,055 93.8% $88,503 100.0%
! 3 340 3014 Interest Earnings $10,876 $5,399 49.6% $5,306 48.8%
I:
3 350 3055 Liquid Fuels Allocation $473,622 $481,261 101.6% $489,191 103.3%
TOTAL FUND REVENUES $573,000 $569,715 99.4% $583,000 101.7%.1
,
I
! LIQUID FUELS FUND I
i EXPENDITURES
GENERAL EXPENSE
3 439 4850 Road Resurfacing $350,000 $350,000 100.0% $350,000 100.0%
TRANSFERS TO OTIffiR FUNDS I
I 3 490 5011 General Fund $150,000 $150,000 100.0% $150,000 100.0% I
il 3 491 4999 Unappropriated Reserve/12/31 Fund Balance $73,000 $0 0.0% $83,000
Ii 113.7% I
TOTAL FUND EXPENDITURES $573,000 $500,000 87.3% $583,000 ]01.7% I
FUND BALANCE $0 $69,716 $0 I
- I
i! .. - -'-'ii
II CAPITAL IMPROVEMENT FUND 1
REVENUES I
CAPITAL IMPROVEMENTS
575.0%11
5 100 3000 Beginning Balance $253,747 $877,657 345.9% $1,459,058
5 340 3014 Interest Earnings $219,814 $52,095 23.7% $193,424 88.0% I
11 5 370 3027 Sale of Property & Equipment $0 $0 0.0% $20,000 0.0%1
i' 5 370 3077 Contributions and Grants $0 $0 0.0% $0 0.0% !
I 5 390 3219 Transfer from General Reserve Fund $1,500,000 $0 0.0% $0 i
0.0% i
I 5 393 3109 1998 Radnor Fire Company Loan ($1,000,000 $81,745 101.6% $80,517 100.1% I
! $80,439
I
5 393 3109 2004 Radnor Library Loan ($500,000) $0 $0 0.0% $0 0.0% i
I
5 393 3109 2004 Wayne Art Center Loan ($1,000,000) $0 $0 0.0% $0 0.0% I
:1 5 393 3109 Proceeds -- General Obligation BondslLoan $13,800,000 $2,040,704 0.0% $16,360,000 0.0%
i., - 'I
I
TOTAL FUND REVENUES $15,854,000 $3,052,202 19.3% $18,113,000 114.2% I
i
~ Exhibit 3 i
I
CAPITAL IMPROVEMENT FUND II
EXPENDITURES ~ge 26 of 38 FISCAL YEAR 2004 BUDGET RADNOR TOWNSlllP

Moving Forward to New Heightsl

-----------T2~-~-------~~~--

ACCOL:NT BUDGET fUND & 2U03 2003 %, 2004 'Y., 20[H

NUi\IBER ACCOL,NT GROepS BUDGET AC1TAL BlJDGET BUDGET BUDGET

5 400 4830 5 403 4820 5 410 4830 5 413 4830 5 416 4360

;

! 5 421 4830

I' 5 421 4840 5 430 4830

I, 5 433 4760 5 439 4850

5 450 4880 5 450 4880

;! 5 450 4880 :! 5 486 4960 II 5 490 5006

5 490 5006 5 491 4999 5 491 4999

CAPITAL IMPROVEMENT PROmCTS General Government Vehicles and Equipment Township Buildings and Grounds

Police Vehicles and Equipment

Fire Protection

Gateways Enhancement Strategy Sanitary Sewer Maintenance Water Quality & Management

Public Works Vehicles and Equipment Traffic Signal Modernization

Road and Bridge Construction

Recreational Facilities, Parks and Open Space Recreational Facilities, Willows

Recreational Facilities, Other

Payback Series of 2003 Bank Loan

Transfer to Special Assessment Fund Transfer to General Fund (Loan Payments) Unspecified Reductions

Unappropriated Reserve/12/31 Fund Balance

$52,756 $4,582,500

$211,120 $32,500 $50,000 $22,000

$940,000 $523,000 $157,600 $715,000 $175,000

$94,000

$152,500 $0 $0 $0

($250,000) $8,396,024

$14,867 $232,854 $0 $286,029 $145,840 $5,599 $909,829 $122,739

$4,585 $56,145 $73,049 $13,450

$366,684 $0 $0 $0 $0 $0

28.2% 5.1% 0.0% 880.1% 291.7% 0.0%

96.8% 23.5% 2.9% 7.9% 41.7%

14.3%

240.4% 0.0% 0.0% 0.0% 0.0% 0.0%

$89,256 $5,555,000 $233,320 $460,000 $50,000 $52,000 $780,000

$520,000 $205,000 $525,000

$70,000 $74,000 $290,000 $2,100,000 $0 $80,517 ($750,000) S7,778,907

169.2% 121.2%

110.5%1

1415.4%

100.0%1 0.0%1 83.0% 99.4%

130.1% 73.4% 40.0% 78.7%

190.2% 0.0% 0.0% 0.0% 0.0%

92.6%

TOTAL FUND EXPENDITURES

FUND BALANCE

$15,854,000

$2,231,670

$0

$820,532

14.1%

$18,113,000

$0

114.2%._

n

ij

1\

II

6 100 3000

6 340 3014 6 383 3018

-. ,'.-' .

SPECIAL ASSESSMENT FUND REVENUES

SPECIAL ASSESSMENTS Beginning Balance

Interest Earnings

Sanitary Sewer Assessments:

South Spring Mill Road (21 Homes: 1989) Knox-Newtown Roads (53 Homes:1991) Parkes Run Lane (43 Homes:1995) Brown's Lane (3 HomeS:1998)

St. Davids Avenue (21 Homes:1997) Brooke Road (40 Homes: 1998)

Glen Mary Lane (1999)

Atlee Road (2000)

Boxwood Road (13 Homes:2000) Lesley Road (40 Homes:2001) Maplewood Avenue (3 Homes: 2001) Belrose Lane (27 Homes:2001)

$693,762 $17,239

$1,500 $25,000 $35,000

$2,000 $15,000 $50,000 $15,000 $20,000

$7,500 $75,000 $3,000 $75,000

$632,044 $20,186

$0 $0 $48,639 $968 $5,688 $26,829

$5,635 $64,251 $52,757 $50,420

$2,953 $73,383

0.0%

0.0% $0 0.0%

139.0% $35,000 100.0% ,I

48.4% $2,000 ]00.0% I

37.9% $5,000 33.3% I

53.7% S35,000 70.0%

37.6% $15,000 100.0% ,I

321.3% $30,000 150.00/011

703.4% S25,000 333.3% Ii

0.0% $50,000 66.7% III

0.0% ~mbit 13.3% 'I

0.00/<t age$~qjJf 3S6.7%

91.1% 117.1%

$901,922 $21,579

I 130.0%'1 125.2% i

so

0.0%

FISCAL YEAR 2004 BUDGET RADNOR TOWNSHIP

Moving Forward to New Heightsl

I~------------~--'-'--
i ACCOUNT BLJD(~ET FliND & 2003 2003 IX. 2004 %.2003
!l'illi\'lBER ACCOt:NT GROUI'S BUDGET ACTUAL BUDGET IHiDGET BUDGET
Chew Lane (5 Homes: 2002) $20,000 $54,763 0.0% $5,000 25.0%
Quaker Lane (17 Homes: 2003) $]0,000 $0 0.0% $40,000 400.0%
Hillside Circle (11 Homes: 2004) $10,000 $0 0.0% $25,000 250.0%
! Radnor Way (7 Homes: 2005) $0 $0 0.0% $0 0.0%
!I Hotborpe Lane (II Homes: 2006) $0 $0 0.0% $0 0.0%
Academy/Sulgrave Lane (16 Homes: 2006) $0 $0 0.0% $0 0.0%
I Vetterlein Lane (5 Homes: 2006) ~ .$Q 0.0% .$I! 0.0%
I Total, Sanitary Sewer Assessments $364,000 $386,286 0.0% $319,500 87.8%
6 384 3148 Curb and Sidewalk Assessments $0 $0 0.0% $0 0.0%
6 370 3037 Miscellaneous $15,000 $75,161 501.1 % $15,000 100.0%
6 390 3059 Transfer from Capital Improvement Fund $0 $0 0.0% $0 0.0%
!I 6 390 3219 Transfer from General Reserve Fund $0 $0 0.0% $0 0.0%:
:1
I
i
TOTAL FUND REVENUES $1,090,000 $1,113,676 102.2% $1,258,000 115.4%
SPECIAL ASSESSMENT FUND
I EXPENDITURES
I
!, I

I SPECIAL ASSESSMENT PROJECTS
I
I 6 421 4860 Sanitary Sewers $525,000 $47,990 9.1% $780,000 148.6%
6 439 4870 Curbs and Sidewalks $0 $0 0.0% $0 0.0%
!I GENERAL EXPENSES :ej~
6 423 4370 Professional Services (Audit) $1,345 104.1% $1,345 100.0%
r INTEREST ON DEBT
I
6 483 4930 Series of 2002 General Obligation Bonds $68,093 $68,093 100.0% $67,637 99.3%
6 483 4930 Series of 2004 General Obligation Bonds ~ .$Q 0.0% ~ 0.0% i
Total, Interest on Debt $68,093 $68,093 100.0% $67,637 99.3% I
I PRINCIPAL ON DEBT I
I
6 486 4960 Series of 2002 General Obligation Bonds $18,213 $18,213 100.0% $40,989 225.1% ,
6 486 4960 Series of 2004 General Obligation Bonds ~ ~ 0.0% .$I! 0.0%
Total, Principal on Debt $18,213 $18,213 100.0% $40,989 225.1%
TRANSFERS TO OTHER FUNDS II
6 491 4999 Unappropriated Reserve/12/3J Fund Balance $477,350 $0 0.0% $368,028 77.1%1
I.
!, TOTAL FUND EXPENDITURES
I' $1,090,000 $135,695 12.4% $1,258,000 115.4%
i
FUND BALANCE $0 $977,981 $0
Exhibit 3
Fa e 28 of 38 9

FISCAL YEAR 2004 BUDGET RADNOR TOWNSIllP

Moving Forward to New Heightsl

1---------- ---------1 -----

IACCOUNT BCDGET FliND & 2003 2003 % 2004 %,2003

NUMBER ACCOUNT GIWllPS Bl DGET ACTlIAL BUDGET Bt:DGET BCDGET

I

HEALTH INSURANCE FUND

REVENUES

INSURANCE

9 100 3000 Beginning Balance 9 340 3014 Interest Earnings

9 370 3017 Reinsurance Refunds

i 9 370 3087 Employee Premium Payments ii 9 390 30!9 Transfer from General Fund

i! 9 390 3219 Transfer from General Reserve Fund I 9 390 3029 Transfer from Sewer Fund

+ '3 (), Pi? CJ
$5,610 $52,293 932.1% $20,854 37].7%
$1,390 $5,743 413.1% $1,146 82.4%
$5,000 $0 0.0% $5,000 100.0%
$35,000 \.'1 $64,897 185.4% $50,000 142.9%
$2,000.000 1\<,,, rvvo: 152.5% $2,000,000 100.0%!
...,.. ,
$0 $0 0.0% $0 0.0%
$250,000 $400,000 160.0% $250,000 100.0%
:>16()Z,'I~
$2,297,000 ..$J,592,~33 . 155.5% $2,327,000 101.3%
I TOTAL FUND REVENUES

i I 1

'I I, I

I GROUP HEALTH CLAIMS

2 470 4150 Prescription Drug Claims

9 470 4151 Medical Claims

9 470 4152 Administrative Fees

I 9 470 4153 Reinsurance Premiums

1 9 491 4999 Unappropriated Reserve/I213! Fund Balance

HEALTH INSURANCE FUND

EXPENDITURES

$450,000 $642,723 142.8% $450,000 100.0%
$1,400,000 $2,592,830 185.2% $1,500,000 107.1%
$110,000 $104~~95.3% $115,500 105.0%
$204,153 $257, 26.3% $225,000 110.2%
$132,848 $0 0.0% $36,500 27.5%
d;' :J __Ji
$2,297,000 $3,598Jrl 156.6% $2,327,000 101.3% I
0/7/D
$0 ~W $0
.....,
'1
i
$36,818 $14,294 38.8% $36,818 100.0% I
$182 $2 1.3% 5182 99.9% ,
$0 0.0% $0 0.0%
$65,000 $63,000 96.9% 560,000 92.3%
I
$102,000 $77,297 75.8% $97,000 95.1%.1
r
__ J
pI Exhibit :r-- - II
9 e 29 of 38 I! TOTAL FUND EXPENDITURES

FUND BALANCE

EDUCATIONAL SERVICE AGENCY FUND REVENUES

EDUCATIONAL SERVICE AGENCY 18 100 3000 Beginning Balance

iits 340 3014 Interest Earnings

,; 18 370 3079 Contributions from School District 18 390 3019 Transfer from General Fund

TOTAL FUND REVENUES

lr';::- . o_ - --_.

!i EDUCATIONAL SERVICE AGENCY FUND

FISCAL YEAR 2004 BUDGET RADNOR TOWNSIDP

Moving Forward to New Heights!

SALARIES AND WAGES rk~
18 410 4010 Regular ~$5~53 103.1%
'f·il. 7.5
MATERIALS AND SUPPLIES 7
us 410 4230 Uniforms 200.0%

EMPLOYEE BENEFITS
18 470 411O Social Security $3,867 $5,200 134.5% $3,988 103.1%
TRANSFERS TO OTHER FUNDS
. 18 491 4999 Unappropriated Reserve/I 2/3 I Fund Balance $45,080 $0 0.0% $35,874 79.6%
TOTALFUNDEXPENDnITffiES $102,000 $75,036 73.6% $97,000 95.1%
FUND BALANCE $0 $2,260 $0
GENERAL RESERVE FUND
REVENUES
GENERAL RESERVE FUND
21 100 3000 Beginning Balance $3,173,260 $2,454,200 77.3% $2,009,164 63.3%
121 340 3014 Interest Earnings $75,740 $28,559 37.7% $39,836 52.6%
i21 390 3019 Transfer from General Fund (Reserved) $100,000 $0 0.0% $450,000 0.0%
I
21 390 3019 Transfer from Genera! Fund (Unreserved) $0 $0 0.0% $0 0.0%
21 390 3029 Transfer from Sewer Fund (Unreserved) $0 $150,000 0.0% $0 0.0%
TOTAL FUND REVENUES $3,349,000 $2,632,758 78.6% $2,499,000 74.6%
GENERAL RESERVE FUND
EXPENDITURES
GENERAL RESERVE FUND
476 4171 Payments, Human Resource Contingencies $0 $27 0.0% $0 0.0%
477 4871 Payments, Other $0 $2,518 0.0% $0 0.0%
490 5001 Transfer to General Fund $600,000 $600,000 0.0% $2,000,000 0.0%
490 5009 Transfer to Capital Improvement Fund $1,500,000 $0 0.0% $0 0.0%
491 4999 Unappropriated Reserve/I 2/3 I Fund Balance $1,249,000 $0 0.0% $499,000 40.0%
TOTAL FUND EXPENDITURES $3,349,000 $602,545 18 FISCAL YEAR 2004 BUDGET RADNOR TOWNSmP

Moving Forward to New Heights/

FUND BALANCE $0 $2,030,213 $0
PARK IMPROVEMENTS & OPEN SPACE FUND
REVENUES
22 100 3000 Beginning Balance $4,350,898 $4,358,520 100.2% $4,409,826 101.4%
22 310 3011 Realty Transfer Taxes $383,333 $679,866 177.4% $583,333 152.2%
!22 340 3014 Interest Earnings $71,770 $47,864 66.7% $54,840 76.4%
22 340 3024 Rental and Sales - Property and Equipment $500,000 $20,300 0:0% $1,000,000 0.0%
22 370 3077 Contributions $0 $0 O.O~ $0 0.0%
22 393 3109 Proceeds from Bond IssuelLoan $0 $0 0.0% $0 0.0%
TOTAL FUND REVENUES $5,306,000 $5,106,550 96.2% $6,048,000 114.0%
PARK IMPROVEMENTS & OPEN SPACE FUND
EXPENDITIJRES
GENERAL EXPENSES
22 473 4370 Professional Services (Audit) $1,550 90.3% $1,550 100.0%
PAYMENTS
22 473 4900 Payments -- Park Improvements $100,000 $0 0.0% $50,000 50.0%
22 473 4901 Payments - Land Acquisition $750,000 $22,832 3.0% $1,500;000 200.0%
1
INTEREST ON DEBT I
I
22 483 4930 Series of 1996 Electoral Open Space GOB $219,019 100.0% $211,181 96.4% '
1 Series A of2002 General Obligation Bonds $63,374 0.0% $63,146 99.6%
122 483 4930 Series AA of2002 General Obligation Bonds $98,312 0.0% $81,]43 0.0%1
22 483 4930 Series of2004 General Obligation Bonds $0 0.0% ~ !i.Q%
Total, Interest on Debt $380,705 98.7% $355,470 93.4%
PRINCIPAL ON DEBT
486 4960· Series of 1996 Electoral Open Space GOB $90,625 100.0% $100,000 110.3%
Series A of 2002 General Obligation Bonds $9,107 134 $22,951 252.0%'
486 4960 Series AA of 2002 General Obligation Bonds $125,000 $140,000 0.0%
486 4960 Series of2004 General Obligation Bonds iQ ~ !l.Jl%.
Total, Principal on Debt $224,732 101.4% $262,951 117.0%
TRANSFER TO OTHER FUNDS
491 4999 Unappropriated Reservel12131 Fund Balance $3,849,013 $0 FISCAL YEAR 2004 BUDGET RADNOR TOWNSmp

Moving Forward to New Heights!

~-------.~-------~-

iACCOllNT BlJDGET FliND & I 2003 2003 %. 2004 %.2003

! NUMBER '\CCO(lNT GROl':PS BUDGET ACTUAL IH!DGET BUDGET Bl!))GET

TOTAL FUND EXPENDITURES

FUND BALANCE

$5,306,000

$627,988

$0 $4,478,563

11.8% $6,048,000 114.0%

$0

100 3000 310 3014 340 3024

! 23 340 3034 1123 370 3077 Ii

[

.1 .1

1123 452 4010

THE WILLOWS FUND REVENUES

Beginning Balance Interest Earnings

Rentals -- Property and Equipment Willows Events

Grants & Gifts

TOTAL FUND REVENUES

THE WILLOWS FUND EXPENDITURES

SALARIES AND WAGES Regular

MATERIALS AND SUPPLIES

23 452 4210 Utilities

: 23 452 4220 Communications i123 452 4250 Operating Supplies II

I GENERAL EXPENSES

23 452 4370 Professional Services (Audit)

23 452 4410 il' ~3 452 4420 1.23 452 4430 I

I

23 470 4110

:123 483 4930 1123 483 4930

II

MAINTENANCE AND REPAIRS Office Equipment

Buildings and Fixtures Machinery and Equipment

EMPLOYEE BENEFITS Social Security Payroll Taxes

INTEREST ON DEBT

Series A of 2002 General Obligation Bonds Series of 2004 General Obligation Bonds Total, Interest on Debt

PRINCIPAL ON DEBT

$52,611 $2,189 $7,200 $145,000 $0

$207,000

$61,100

$23,000 $3,000 $7,500

$4,200

$200 $10,000 $500

$4,674

$15,451 ~ $15,451

$101,838 $3,094 $6,000 $136,720 $0

$247,652

193.6% 141.3% 83.3% 94.3% 0.0%

119.6%

$57,453 94.0%

$27,129 118.0%

$2,637 87.9%

$5,155 68.7%

~l)

~ 90.5%

$500 $5,175 $1,462

$4,537

$15,451 $0 $15,451

$15,338 99.3% i

.$.I! .!!..!l.% 1

$15,338 99.3% !

Exhibit 3 Ii

F age 32 of 38 I

249.8% 51.8% 292.3%

97.1%

100.0%

0.0% 100.0%

$106,] 15 $2,685 $7,200 $150,000 $0

$266,000

$62,192

$30,000 $2,500 $7,500

$4,200

$500 $10,000 $1,000

$4,758

II

Ii 201.7%

122.6% 100.0% 103.4%

0.0% I

128.5% I

I

101.8%

Ii

130.4%j·1 83.3% 'I 100.0%1'

100.0%

250.0% 100.0%11 200.0% I!

II

101.8% I

FISCAL YEAR 2004 BUDGET RADNOR TOWNSIDP

Moving Forward to New Heights/

--------- --- -----~----~-
ACCOUNT BUDGET FlIND &. I 2003 2003 'x, 2004 'Vo.2003
NlJi\IBER ACCOCNT GROL1I'S BUDGET ACTUAL Bl/DGET BUDGET Bl'DGET
23 486 4960 Series A of2002 General Obligation Bonds $4,521 $4,521 100.0% $11,103 245.6%
23 486 4960 Series of2004 General Obligation Bonds ~ .$.Q 0.0% £Q 0.0%
, Total, Principal on Debt $4,521 $4,521 100.0% $11,103 245.6%
;
:1
,I
Ii TRANSFER TO OTHER FUNDS
il23 490 500 I General Fund $10,000 $10,000 100.0% . $12,000 120.0%
23 491 4999 Unappropriated Reserve/I 2131 Fund Balance $62,854 $0 0.0% $104,908 166.9%
TOTAL FUND EXPENDITURES $207,000 $137,819 66.6% $266,000 128.5%
I
I FUND BALANCE $0 $109,833 $0 I
1 1
I I
i
EXECUTfVESU~Y,ALLFUNDS I
\
i
1 GENERAL FUND (01)
Revenues $18,894,000 $21,674,476 114.7% $19,793,000 104.8%
Expenditures $18,894,000 $20,661,916 109.4% $19,793,000 104.8%
SEWER FUND (02) I
Revenues $4,072,000 $3,659,034 89.9% $3,761,000 92.4%1
Expenditures $4,072,000 $3,343,314 82.1% $3,761,000 92.4% I
!
I
LIQUID FUELS FUND (03)
Revenues $573,000 $569,715 99.4% $583,000 101.7%
Expenditures $573,000 $500,000 87.3% $583,000 101.7%
CAPITAL IMPROVEMENT FUND (05) I·
Revenues $15,854,000 $3,052,202 19.3% $18,113,000 114.20/1
! Expenditures s 15,854,000 $2,231,670 14.1% $18,113,000 11.4.2%,1
'.
I
1
SPECIAL ASSESSMENT FUND (06) I
1]5.4% I
Revenues $1,090,000 $1,113,676 102.2% $1,258,000
Expenditures $1,090,000 $135,695 12.4% $1,258,000 115.4%
INSURANCE FUND (09)
'j Revenues $2,297,000 $3,572,933 155.5% $2,327,000 101.3%1
'I
il Expenditures $2,297,000 $3,598,223 156.6% $2,327,000 101.3%
I
EDUCATIONAL SERVICE AGENCY FUND (18) . $97,000 ".1%\
Revenues $102,000 $77,297 75.8%
Expenditures $102,000 $75,036 73.6% $97~00 95.1 % 1
Ex ibit 3 I
I GENERAL RESERVE FUND (21) F age 33 of 38 I
;, FISCAL YEAR 2004 BUDGET RADNOR TOWNSHIP

Moving Forward to New Heightsl

1---- I -----

ACCOUNT BeOGET FliNn & 20()3 2003 '1., 2004 % 2003

NUMBER A(,COLJNTGROlJl'S BUDGET ACTUAL BUDGET BliDGET BlJl>GET

Revenues $3,349,000 $2,632,758 78.6% $2,499,000 74.6%
Expenditures $3,349,000 $602,545 18.0% $2,499,000 74.6%
PARK IMPROVEMENT & OPEN SPACE FUND (22)
Revenues $5,306,000 $5,106,550 96.2% $6,048,000 114.0%
Expenditures $5,306,000 $627,988 1].8% $6,048,000 114.0%
THE WILLOWS FUND (23)
Revenues $207,000 $247,652 119.6% $266,000 128.5%
Expenditures $207,000 $137,819 66.6% $266,000 128.5%
GROSS TOTAL, ALL FUNDS
Revenues $51,744,000 $41,706,293 80.6% S54,745,@ 105.8%
Expenditures $51,744,000 $31,914,206 61.7% $54,745, 03 105.8%
INTERFUND TRANSFERS
Revenues ($4,980,000) ($960,000) 19.3% ($3,692,000) 74.1%
Expenditures ($4,980,000) ($960,000) 19.3% ($3,692,000) 74.1%
NET TOTAL, ALL FUNDS
Revenues $46,764,000 $40,746,293 87.1% $51,053'r:{fj 109.2%
Expenditures $46,764,000 $30,954,206 66.2% $51,053, 03 ]09.2%
J Exhibit 3 Page 34 of 38

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EXHIBIT 4

MCGLADREY&PULLEN,LLP

Certified Public Accountant.

RSM

international

Board of Commissioners Township of Radnor Wayne, Pennsylvania

Ladies and Gentlemen:

In planning and performing our audit of the general purpose financial statements of the Township of Radnor (the "Township") for the year ended December 31, 2000, we considered the Township's internal control to determine our auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on internal control However, we noted certain matters involving internal control and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of internal control that, in our judgment, could adversely affect the Company's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements.

Because of inherent limitation of internal control, errors or fraud may nevertheless occur and not be detected. Also, projection of any evaluation of the internal control to future periods is subject to the risk that internal control may become inadequate because of changes in conditions or that the degree of

compliance may deteriorate. Reportable conditions are listed on pages 3 to 6. .

During our audit, we became aware of several other matters that are .opportunities for further strengthening internal controls and operating efficiency. We offer these comments as part of our comprehensive service to the Township. Management letter comments are listed on pages 7 to 11. This letter does not affect our report dated April 4, 2001 on the general purpose financial statements of the Township.

We sincerely appreciate the courtesy and cooperation of the Township's management and employees extended to us during the audit.

This letter is intended solely for the information and use of management and the Board of Commissioners of the Township and is not intended to be and should not be used by others.

Blue Bell, Pennsylvania April 4, 2001

;rJc.~&. P~,LLP Exhibit 4 Page 1 of 41

-1 ~

RJU)NORTO~Sf.UP

page(s)

REPORTABLE CONDITIONS

• Cash Collections and Billings

o Pre-numbered Receipts

o Sewer Fund

o Real Estate Taxes

o Business Privilege and Mercantile Taxes

o Special Assessments

o Permits

o Recreation

• Cash Management

5

o Segregation of Duties

• Budgetary Control

6

o Budgetary Control - Payroll

MANAGEMENT LETTER COMMENTS

• Cash Management

7

o Log of Investments

o Number of Accounts

• Budgetary Accounting

8

• Interfund Balances

8

• Procurement - Purchase Orders

8

• Accounting and Procedures Manuals

9

• Computer System

10

• GA.-SB No. 34, New Financial Reporting Model

11

Exhibit 4 Page 2 of 41

-2-

... ",." -.-

RADNOR TOWNSHIP REPORTABLECONDtnONS DECEMBER 31, 2000

CASH COLLECTIONS AND BILLINGS

Pre~ Numbered Receipts

Currently, various departments within the Township are collecting cash and issuing receipts.

However, receipt numbers are not accounted for. To, increase controls over cash collections, we recommend that cash deposits be reconciled to receipts issued and that all receipts be accounted for.

Sewer Fund

Certain errors were noted in the computer system and subsequently, certain customer payments were not posted accurately to the correct customer accounts. As a result, second billings were sent to many customers who had already paid their bills and many customers made duplicate payments. Current controls did not detect the problem. To establish control over sewer revenues, receivables and receipts, we recommend the following:

III Implement action to correct the deficiencies in the computer runs. Controls should be in place to assure that individual receivable records are posted correctly.

III Perform monthly reconciliations of accounts receivable per computer reports to general ledger balance. A monthly "roll-forward" of accounts receivable from one month to the next month should be prepared. A "roll-forward" would consist of:

Beginning accounts receivable + Billings

Cash receipts

+1- Credits, acljustments Ending accounts receivable

• Review, verify and explain credits and adjustments posted.

GI Provide for some level of independent review or management oversight.

Real Estate Taxes

In order to establish control over the collection of real estate taxes, we recommend the TO'WDSbip prepare monthly reconciliations of the real estate tax collections. This reconciliation would include the beginning balance, any changes to the amount to be collected and cash collections at face, discount or - -_ -_. penalties and the ending balance.

Exhibit 4 Page 3 of 41

RADNOR TOWNSHIP REPORTABLE CONDmONS DECEMBER 31, 2000

CASH COLLECTIONS AND BILLINGS

Business Privilege and Mercantile Taxes

In order to improve control over the collection of business privilege and mercantile taxes, we recommend the Township implement the following procedures:

• Improve segregation of duties. Currently, one individual is primarily responsible for all areas of tax review and collections. The responsibility for processing the returns should be

segregated from the collections and general ledger postings. .

• Substantiate deposited amount with a detail of the amounts included in the deposits. This could be done by attaching a list of the receipts included in the deposit. There should be a cash receipts journal of the business privilege and mercantile taxes received.

Amounts due for special assessments are normally billed semi-annually; however, the billings for the special assessments were not sent during 2000. AB a result, collections of outstanding amounts were substantially less than they should have been. Controls should be implemented that would prevent such an oversight in the future. In addition, a "roll-forward" schedule should be prepared that would reconcile cash collections to amounts still outstanding.

Permits

We noted the following weaknesses during our review of permits:

• The current permit computer program often skips permit numbers. In order to provide control over permit issuance and to account for the permits issued, permit numbers should be issued sequentially and a detailed record should be maintained for any unissued or voided permit numbers.

• Currently, one person is primarily responsible for processing and issuing the permits, as well as collecting the payments. The responsibility for processing and issuing the permits should be segregated from the collections and general ledger postings.

Recreation Department

To increase controls over the collection of revenue from recreation program, we recommend the instructors be required to return attendance sheets to the recreation department. This would allow for an independent reconciliation of the fees collected to course attendance.

Exhibit 4 Page 4 of 41

-4-

RADNOR TOWNSHIP REPORTABLECONDfnONS

DECEMBER 31, 2000

CASH MANAGEMENT

Segregation of Duties

One individual has significant control over and responsibility for the Township's cash and investments. This person is responsible for cash management and investing, as well as posting cash and investment transactions to the general ledger. To the extent practical, we recommend the Township consider segregating duties for initiating. evaluating and approving investment transactions from those for detail accounting, general ledger and other related functions. Also, a strong system of supervision and review of management would help to compensate for this weakness. It is important to recognize that regular and active involvement in supervisory activities is an integral and critical component of the Township's system ofintemal control procedures.

Exhibit 4 Page 5 of 41

-5-

REPORTABLE CONDmONS

DECEMBER 31, 2000 BUDGETARY CONTROL

Budgetary Contro1- Payroll

The compensation of department heads and administrative officers is set by the Township Manager, subject to the approval of the Board of Commissioners. Controls should be in place to ensure that payroll costs do not exceed budgeted amounts. If applicable, budgetary transfers should be authorized to provide the payments of compensation.

Payroll is distributed to various accounts and funds, including the General Fund and the Sewer Fund. We recommend the allocation methodology be documented in writing and approved by management.

- 6-

Exhibit 4 Page 6 of 41

RADNOR TOWNSHIP MANAGEMENT LETTER COMMENTS

DECEMBER 3], 2000 CASH MANAGEMENT

Log of Investments

The Township currently invests its excess cash with numerous financial institutions. In order to maintain control over each of these accounts, a detailed log of investments should be reconciled to the general ledger on a monthly basis. This process should be regularly reviewed by management.

GASB Statement No. 31, "Accounting and Financial Reporting for Certain Investments and for External Investments Pools, n requires governmental entities to report investments at fair value in the balance sheet. . Short-term investments may be reported at amortized cost, which typically approximates fair value. The Township should establish procedures to determine the fair value of investments and management should periodically review the fair value of investments, paying particular attention to the long-term investments. The fair value of the investments should be documented in the detail accounting record of investments.

Number of Accounts

The Township maintains a large number of cash and investment accounts. We recommend the Township review the cost of the time spent to properly account for the funds in relation to the investment management objectives of safety, liquidity and yield.

Exhibit 4 Page 7 of 41

- 7-

RADNOR TOWNSHlP MANAGEMENT LEITER COMMENTS

DECEMBER 31, 2000 A~OmrrrnGMIDnOrnDrnmSMMID~S

Accounting Manual

The Township does not have an accounting procedures manual. The manual should include detailed written procedures and instructions of the various accounting functions, such as billing, payables, general ledger, reporting, etc. Management should monitor the accounting functions to ensure that accounting procedures are properly followed. The benefits are as follows:

• Prevents or reduces misunderstandings and errors;

• Reduce inefficient or wasted efforts;

• Helps prevent duplicated or omitted procedures;

• Helps to ensure that all similar transactions are treated consistently;

• Provides for proper use of accounting principles;

• Helps to ensure that reports are produced in the form desired by management.

It will take some time and effort for management to develop manuals; however, we believe this time will be more than offset by time saved later in training and supervising accounting personnel. Also during the process of the comprehensive review of existing accounting procedures for the purpose of developing the manuals, management might discover procedures that can be eliminated or improved to make the system more efficient and effective.

Procedures Manual

To help ensure that responsibilities are .assigned and tasks are performed, we recommend an updated employee procedures manual be developed. The manual should detail each employee's responsibilities on a daily, weekly, monthly and annual basis and include required reports, filing dates, billings and procedures. Management should monitor the tasks and schedule priorities to ensure that all essential tasks and reports are completed timely. The benefits are as follows:

• Provides for cross-training among existing employees;

• Provides a learning tool for new employees;

• Provides a means to evaluate employee performance;

• Alerts management and other employees of required work in the event of absence.

Exhibit 4 Page 8 of 41

-9-

RADNOR TOWNSHIP MANAGEMENT LEITER COMMENTS

DECEMBER 31, 2000

Budgetary Accounting

Budgetary accounting is used to control expenditures and monitor revenues. Financial information should allow management to continuously monitor compliance with the budget. To further improve the Townsbip's budgetary control, we recommend:

.. Budgetary transfers be made timely;

.. Further monitoring of the budget before the purchase of goods or services are approved.

Interfund Balances

The Township's funds have significant interfund receivables and payables at December 31, 2000. We recommend the Township review the balances and develop a plan on how and when these balances will be reimbursed. We recommend the Township repay interfund transactions, to the extent practical by the end of each fiscal year.

Procurement - Purchase Orders

We noted that purchase order numbers were not accounted for. We reconunend that prenumbered purchase orders be accounted for; a log of purchase orders (issued and open) should be maintained. The record of open purchase orders can be used to account for outstanding commitments. We understand that implementation of new automated purchasing software will assist the Township in this area.

Exhibit 4 Page 9 of 41

RADNOR TOWNSHIP MANAGEMENT LEITER COMMENTS

DECEMBER 31, 2000

Computer System

Based on discussions with management and observations of use of the Township's computer system, we recommend the following matters be considered to obtain the most efficient and effective use of the system in addition to providing better security:

• Currently, the Township's software package does not integrate certain areas of operations resulting in various inefficiencies. In particular, we noted inefficiencies in the process of cash receipts. An Excel spreadsheet is prepared and reconciled to the monthly bank statement before receipts are posted to the general ledger.

• Access to all system programs should be allowed only through the use of passwords.

Currently, passwords are only required to access financial software. . Passwords will help improve the integrity of the computer files by limited access to only authorized individuals.

• The Township should maintain backup files separate from regular files and store off-site. In addition, backup files should be maintained for year-end data. This is particularly important for items such as outstanding accounts receivable at year-end.

Exhibit 4 Page 10 of 41

-10 -

RADNOR TOWNSffiP MANAGEMENT LETTER COMMENTS

DECE~ER31, 2000

GASB No. 34. New Financial Reporting Model

GASB Statement No. 34, "Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments," which the Township will be required to adopt for its year beginning January I, 2003, establishes new financial reporting requirements for state and local governments throughout the United States. When implemented, it will create new information and will restructure much of the information that governments have presented in the past. This statement will have. a significant effect on the Township's financial statements.

The new financial statement guidelines embodied in Statement 34 are the culmination of many years of study and deliberation by the GASB. For the first time, financial managers will be required to share their insights in a management's discussion and analysis (MD&A) that gives readers an analysis of the government's overall financial position and results of the government's overall financial position and results of the previous year's operations.

Financial statements will be presented under a dual perspective - a government - wide perspective (new) and a fund level perspective. For the first time, the annual report will include government wide financial statements prepared using full accrual accounting for all oj the government's activities, not just those that cover costs by charging a fee for services, as was previously required. Governments will report all capital assets, including infrastructure, in a government - wide statement of net assets and will report depreciation expense, the cost of using up capital assets, in the statements of activities. Infrastructure assets will be reported, but may not be required to be depreciated under certain . circumstances. The net assets of a government will be broken down into three categories: invested in

capital assets, net related debt; restricted and unrestricted. A statement of activities will be presented in at least the same level of detail provided in the governmental fund statements; generally, expenses and program revenues by function.

Program expenses will include all direct expenses; governments that allocate overhead and other indirect expenses to individual programs will show the allocation in a separate column. Special and extraordinary items will be reported separately from other revenues and expenses. This way, users will see if the government's conventional, recurring revenues and expenses balanced.

We recommend the Township continue to plan for the adoption of GASB No. 34. We are available to assist the Township in planning to implement GASB No. 34.

Exhibit 4 Page 11 of 41

-11-

AUG. 7.2003 11: 38AM

RSM MCGLADREY, INC. 215 6418680

To the Board of Commissioners Township of Radnor, Pennsylvania

In planning and performing our audit of the general purpose financial statements of the Township of Radnor (the "Township") for the year ended December 31, 2002, we considered the Township's internal control to determine our auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on internal control. However, we noted certain matters Involving internal control and Its operation that we consider to be reportable conditions under standards established by the American institute of CertifledPublic Accountants. Reportable conditionslnvo!ve matters coming to our attention relating to significant deficiencies in the design or operation of intemalcontrol that, in our judgment, could adversely affect the Township'S ability to record, proceSEit summarize, and report financial data consistent with the assertions of management in the financial statements.

Because of inherent limitation of Intemal control, errors or fraud may nevertheless occur and not be detected. Also, projection of any evaluation of theintemal control to future periods Is subject to the risk that internal control may become inadequate because. of ch~nses in. conditions or that the degree of cornpllance may deteriorate. Reportable conditiolis are listed on pages 2 and 3.

In addition, we have comments and suggestions for yourcom;id~reJ~on which are listed on pages 4 and 5. This letter is Int$ndedSl)lelyft'1ttheJpform8tionsllduse.ofmanageml;lhtandthe Boerd of Commissioners oOhe Township and is not intended to be and should not be used by anyone other than these specified parties.

Blue Bell, Pennsylvania March 31, 2003

Exhibit 4 Page 12 of 41

·1··

AUG. 7.2003 11: 38AM

RSM MCGLADREY, INC. 2'15 6418680 RADNOR TOWNSHIP REPORTA8LECONDITIONS DECEMBER 31, 2002

NO. 0990 P. 6

Sewer Fund

To Improve control over sewer revenues, receivables and receipts, we recommend the following:

• Perform monthly reconciliations of billings, adjustments and accounts receivable per computer reports to general ledger balances.

• Review, verify and explain credits and adjustments posted.

• Provide for some level of Independent review or management oversight.

BUdgetary Accounting

Budgetary accounting Is used to control expenditures and monitor revenues. Financial Information should allow management to continuously monitor compliance with the budget. To further improve the Township's budgetary control, we recommend:

., Budgetary transfers be made timely.

.. Further monitoring of the budget before the purchase of goods or selViees are approved.

We noted the following weaknesses during our review of permits:

III Permit numbers should be accounted forand a detailed record should be maintained for any unissued or voided permit numbers,

• The permits database reports should be printed monthly and reconciled to the general ledger.

iii Currently, one person is primarily responsible for processing and issuing the permits, as well as collecting the payments. The responsibility for processing and issuing the permits should be segregated from the collections and generalledgerpostlngs.

SegregationotDutles

One Individual hss'significanicontrol overandresponslbilityfor the Township's cash and Investments. This person is responsible forcash management and investlng,as well as posting Gash and investment transactions to the genElralledger. To the extent pr~ctical,we recommend the Township consider segregating duties for Initiating, evaluating and approving investment transactions from those for detail accounting, general ledger and other rela1ed functions. Also, a strong system of supelVision and review of management helps to compensate for this weakness. It is important to recognize that regular and active involvement in supervisory activities is an integral and critical component of the Township's system of internal control procedures.

One individual Is responsible for the preparation of checks for signatures and is also respen.sibje for the mailing of the checks . and.thepQsJingof disbursements totheg~neral ledger. To the e~~~~, we

recommend thatthesefunction$ be.$epari3~d. Page 13 of 41

·2-

AUG. 7. 2003 11: 38AM

RSM MCGLADREY, INC. 215 6418680 RADNOR TOWNSHIP REPORTABLE CONDITIONS DECEMB.ER31, 2002

NO. 0990 P. 7

Budgetary Control- Payroll

Under the Township's Code, job classifications and employee pay rates, including promotions and bonus payments, are set by management and approved by the Township Manager. Funding for all pay adjustments are approved by Boardef Commissioners in each year's budget. Controls should be in place to ensure that payroll costs are properly documented and do. not exceed budgeted amounts.

Payroll Is distributed to verious accounts and funds, including the General Fund and the Sewer Fund. We recommend the allocation methodology be documented in writing and approved by management.

Exhibit 4 Page 14 of 41

-3-

AUG. 7.200311: 38AM

RSM MCGLADREY, INC. 215 6418680 RADNOR TOWNSHIP MANAGEMENT LETTER COMMENTS DECEMBER31 f 2002

NO. 0990 P. 8

lnterfund Balances .

The Towtlshlp'~ funds have significant Inteifund receivables and payables at December 31, 2001. We recommend the Township review the balances and develop a plan on how and when these balances will be reimbursed. We recommend the Township repay interfund transactions, to the extent practical by the end of each fiscal year.

Procurement - Purchase Orders

We noted that purchase order numbers were not accounted for. We recommend that prenumbered purchase orders be accounted for; a logaf purchase orders (issued and open) should be maintained. The record of open purchase orders can be used 10 account for outstanding commitments.

Fixed Assets

The Township's detaUedre®rdsoffixedassets should be updated to agree to the fixed assets recorded in Township's finanoial statements. Township sholiid Institute procedures to reconcile the fixed assets recorded to the detail of the fixed asset records on an ongoing basis.

in order to properly safeguard the Township's fixed assets and to provide the necessary insurance information In the event of loss, we recommend the Township conduct an inventory of all fixed assets. All movable equipment should be tagged with an identification plate and assigned a number.

Computer System

Based on discussions with management and observations of use of the Township's computersystern, we notedthefollbwing matters lobe considered to obtain the most efficient and effective use of the system In addition toprovldlng better security:

• Several employees have access to make maintenance changes to the databases as they are listed as database administrators in the system. We recommend that management identify critical employees who should have maintenance change ability and have only those employees as database administrators on the system.

• The Township has a firewall setup to prevent acces~ Into the Township . server. Should the firewall be plerced.B.ccess to the server andallof its information would be accessible to an outside party. We recommend the Web serverpeisolated .on what!s called a . DMZ so that no intemettraffic travels through .the TQwnshlpnetWork.

• We recomrnendthe Township implementprocedures to evaluate the adequacy of the firewall and network security on an annual basis in order to update controls over the ITenvironmsnt.

• We recommend the IT system be periodically reviewed for improprieties and reports generated and reviewed for items such as, maintenance changes, Internet usage, unauthorized access ~t\ltJ§.tlll*lber

of password attempts, unusual time logs, etc. Page 15 of 41

-4-

AUG, 7, 2003 11: 39AM

RSM MCGLADREY, INc, 2156418680 RADNOR TOWNSHIP MANAGEMENT LETTER COMMENTS DECEMBER 31,2002

NO. 0990 P. 9

Accounting acd Procedures Manual

The Township does not haves comprehensive accounting procedures manual. The manual should include detailed written procedures and instructions ofthe various accounting functions, such as billing. payables, general ledger, reporting, etc. Management should monitor the accounting func"ons to ensure that accounting procedures are properly followed.

To help ensure that responsibilities are assigned and tasks are performed, we recommend that employee procedures be incorporated as part of the manual. The manual should detail each employee's responsibilities on a daily, . weekly, monthly andannual.basis and. include required reports, filing dates. billings and procedures. Ma.nagementshould monitor the tasks and-schedule priorities to eneure that all essential tasks and reports are completed timely,

It will take~ome till1eandeffort for management to consolidateits variolJs policies and procedures into manuals; however, we believe this time will· be more than offset by time saved later. in training and supervising accounting personnel. Also during the process ofthecomprehensive review of existing accounting procedures for the purpose of developing the manuals, management might discover procedures that can be eliminated or Improved to make the system more efficient and effective.

GASe No. 34. New Financial Reporting Model

GASSStatement No. 34, "Basic Finanefsl Stat~mants-8nd Management's Discussion and Analysis-for State and Local Govemments, " whichJhe Township will be required to adopt for Its year beginning January 1,2003. establishes new financial reporting requirements for state and local govemmentsthroughout the United States. When implemented, it will create new informaUon and will restructure much of the information that governments have presentedin the past. This statement will have a significant effect on the Township's financial statements,

Under the new reporting model,general-purpose governments must present the following basic financial

statements and required supplementary information eRSI"):

• Management's discussion and analysis ("MD &A'').

• Govemhlent~wide financlalstatements.

• Fund financial statements,

• Notes to, thefihancial~ta\l'fments;

• Requiredsupprementary iriformation,includingbudgetl3fYeomparison schedules and other data required by previous GASB pronouncements.

We recommend the Township continue Its efforts for the implementation of GASB No. 34. We are available to assist the Township in planning to implement GASS No, 34.

Exhibit 4 Page 16 of 41

·5-

McGladrey & Pullen

To the Board of Commissioners

Township of • l,sylvanla 1f"H:J'~®..At~ 1~"'--!1.~"\rf:;~ l~~:'~'::}f'~ F~::;

In p~.rning an _ annin ~~j~ of the fi~!1~J~ statemen'h1~Wn~hiP ~f R~l.rfor (the

"Town~hip·)tf- th.~ ye~,ended· rllger 31, 2003'ftt~~sidere~ !I1~nowrlShipls !ntemaV.~ntrol to determne s&r audlting.~dur~r th~~rpose of ,~ressj1!g an 0~'~.\39~on the fnanclal stat~lJ1e. nts and not to prml1tr~as~ce on in1m1i.raLcon1lQ{h~Ho~er, we.noted ceJlaifmatters involving .internal. control and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of internal control that, in our jUdgment, GOuld adversely affect the Township's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements.

Because of inherent limitation of internal control, errors or fraud may nevertheless occur and not be detected. Also, projection of any evaluation of the internal control to future periods is Subject to the risk that internal control may become inadequate because of changes in conditions or that the degree of compliance may deteriorate. Reportable conditions are listed on page 2.

In addition, we have comments and suggestions on other matters for your consideration which are listed on page 3.

This report is intended solely for the infonnation and use of management and the Board of Commissioners of the Township and is not intended to be and should not be used by anyone other than these specified parties.

Blue Bell, Pennsylvania April 15,2004

- 1 -

Exhibit 4 Page 17 of 41

McGIadmy & PuJIen,lLP Is a member tim of RSM Intamatiooalan aHiIiaIJon of separate and Independent legal entities.

RADNOR TOWNSHIP MANAGEMENT LETTER COMMENTS DECEMBER 31, 2003

Interfund Balances

The Township's funds have certain interfund receivables and payables at December 31, 2003. We recommend the Township review the balances and develop a plan on how and when these balances will be reimbursed. We recommend the Township repay interfund transactions, to the extent practical, by the end of each fiscal year.

Procurement - Purchase Orders

We noted that purchase order numbers were not accounted for. We recommend that prenumbered purchase orders be accounted for; a log of purchase orders (issued and open) should be maintained. This record of open purchase orders can be used to account for outstanding commitments.

Based on discussions with management and observations of use of the Township's computer system, we noted the following matters to be considered to obtain the most efficient and effective use of the system in addition to providing be~er security:

• The Township has a firewall setup to prevent access into the Township server. Should the firewall be pierced, access to the server and all of its information would be accessible to an outside party. We recommend the web server be isolated on what is called a DMZ so that no internet traffic travels through the Township network.

• We recommend the Township implement procedures to evaluate the adequacy of the firewall and network security on an annual basis in order to update controls over the IT environment. The Township should consider having its security checked periodically by an independent source. If a flaw is found, the system should be scanned for viruses and other malicious activity.

Accounting Procedures Manual

We recommend that the Township prepare an accounting procedures manual. The manual should include a chart of accounts, adequate explanations of account content, month-end and year-end closing procedures, appropriate descriptions of all accounting procedures and routines and all matters that bear directly or indirectly on the functioning of the system of internal accounting control. Once the manual is complete, subsequent revisions should be subject to formal approval procedures. Although such a manual will take some time to develop initially, we believe this time will be more than offset by time saved later in training and supervising accounting personnel.

Exhibit 4 Page 18 of 41

-3-

McGladrey & Pullen

Certified Public Accountants

October 29, 2004

To the Board of Commissioners Township of Radnor, Pennsylvania

This letter is intended to inform the Board of Commissioriers of Township of Radnor, Pennsylvania about significant matters related to the conduct of the annual audit so that it can appropriately discharge its oversight responsibility, and that we comply with our professional responsibilities to the Board of Commissioners.

In addition to our report on your financial statements, we have provided under separate cover a letter, dated April 15, 2004, concerning the internal control conditions that we noted during our audit of the Township's financial statements for the year ended December 31,2003.

The following sumrnarizes various matters which must be communicated to you under auditing standards generally accepted in the United States of America:

The Auditors Responsibility Under Auditing Standards Generally Accepted in the United States of America

Our audit of the financial statements of Township of Radnor, Pennsylvania for the year ended December 31,2003 was conducted in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error, fraudulent financial reportlng, or misappropriation of assets. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Accordingly, the audit was designed to obtain reasonable. rather than absolute, assurance about the financial statements. We believe that our audit accomplished that objective.

Management Judgments and Accounting Estimates

Accounting estimates are an integral part of the preparation of financial statements and are based upon managernenfs current judgment. The process used by management encompasses their knowledge and experience about past and current events and certain assumptions about their future events. Management has informed us they used all the relevant facts available to them at the time to make the best judgments about accounting estimates, and we considered this infonnation in the scope of our audit. Estimates significant to the financial statements include the collectibility of local enabling taxes for current and prior years, insurance claims payable, and depreciation on fixed assets of governmental activities of the government-wide statements and enterprise fund. The Board of Commissioners may wish to monitor throughout the year the process used to compute and record these accounting estimates. Exh ibit 4

Page 19 of 41

McGladmy & PuDen,llP Is a memberfilm or RSM Internationalan affiliation of separate ood Independent legal enb1ies.

To the Board of Commissioners Township of Radnor, Pennsylvania Page 3

Statement No. 39, Determining Whether Certain Organizations Are Component Units, issued May 2002, will be effective for the Township beginning with its year ending December 31, 2004. This Statement amends Statement No. 14 to provide additional guidance to detennine whether certain organizations for which the primary govemment is not financially accountable should be reported as a component unit based on the nature and significance of their relationship with the primary govemment.

GASS Statement No. 40, Deposit and Investment Risk Disclosures, issued March 2003, will be effective for the Township beginning with its year ending December 31, 2005. This statement establishes and modifies disclosure requirements related to investment risks related to credit risk, concentration of credit risk, interest rate risk and foreign currency risk. As an element of interest rate risk, this Statement requires certain disclosures of investments that have fair values that are highly sensitive to changes in interest rates. This Statement also establishes and modifies disclosure requirements for deposit risks.

GASS Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries will be effective for the Township beginning with its year ending December 31, 2005. This Statement requires governments to report the effects of capital asset impairment in their financial statements when it occurs and requires all governments to account for insurance recoveries in the same manner.

The Township's management has not yet determined the effect, if any, Statements 39, 40 and 42 will havaon the Township's financial statements.

We did not identify any significant or unusual transactions or significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Other Information in Documents Containing Audited Financial Statements

We are not aware of any other documents that contain the audited basic financial statements. If such documents were to be published, we would have a responsibility to detennine that such financial infonnation was not materially inconsistent with the audited statements of the Township.

Disagreements with Management

We encountered no disagreements with management over the application of significant accounting principles, the basis for management's judgments on any significant matters, the scope of the audit, or significant disclosures to be included in the financial statements.

Consultations with Other Accountants

We are not aware of any consultations management had with other accountants about accounting or auditing matters.

Exhibit 4 Page 20 of 41

- - __ ---------

TOWNSHIP OF RADNOR

ADJUSTMENTS TO RECONCILE TOTAL GOVERNMENTAL FUND BALANCES TO NET ASSETS OF GOVERNMENTAL ACTIVITIES DECEMBER 31, 2003

Amounts reported for governmental activities in the statement of net assets are different because:

Expenditures relating to subsequent periods are reported as prepaid items in the statement of net assets.

$

151,058

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds:

Capital assets Accumulated depreciation

38,491,649 (12,201,144) 26,290,505

Note issuance cost is recorded as an expenditure in the fund statements but recorded as an asset and amortized over the life of the note in the statement of net assets.

8,613

Other long-term assets are n01 available to pay for current-period expenditures and, therefore, are deferred in the funds.

Net pension asset is a long-term asset and is not available to pay for currentperiod expenditures and, therefore, not reported in the funds.

1,235,113

439,019

Internal services funds are used by management to charge the cost of certain services to individual funds. The assets and liabilities of the internal services funds are included in governmental activities in the statement of net assets:

Current assets Current liabilities

199,894 (484,982)

(285,088)

Long-tenn liabilities including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds:

Compensated absences

Accrued interest payable

General obligation note payable General obligation bonds payable

Net adjustments

Total governmental fund balances

Net assets of governmental activities

(3,687,182) (123,026)

(2,050,000) (32,805,000) (38,665,208)

(10,825,9,88)

10,328,953

Ex~ibit~97,035) Page 21 of 41

5

TOWNSHIP OF RADNOR

SUMMARIZED SCHEDULE OF UNCORRECTED MISSTATEMENTS GOVERNMENTAL ACTIVITIES

DECEMBER 31,2003

Effect - Deb~ (Credit)
Description Assets Uabmtles 59lillY Revenue Expense

CARRYOVER IMPACT FROM PREVIOUS YEARS
Adjust accounts payable 49,950 (49,950)
Adjust fair value of Investments (111,643) 111,643
Adjust accounts receivable (36,639) 36,639
CURRENT YEAR MISSTATEMENTS
Known errors
Adjust loan receivable 125,000 (137,500) 12,500
Adjust accounts payable (68,312) 68,312
Adjust fair value of investments 38,975 (38,975)

Net effect (net overstatement
of current year change In net assets) 140,169 109,307 30,862
Statement of net assets effect on current
year if all adjustments had been made 163,975 (68,312) (95,663) Exhibit 4 Page 22 of 41

7

TOWNSHIP OF RADNOR

SUMMARIZED SCHEDULE OF UNCORRECTED MISSTATEMENTS GENERAL FUND

DECEMBER 31, 2003

Effect· Debit {credit}
Description Assets UabHiHes Equity ~evenue ~
CARRYOVER IMPACT FROM PREVIOUS YEARS
Adjust accounts payable 49,950 (49,950)
Adjust fair value of Inveslments 76,573 (76,573)
Adjust accounts receivable (36,639) 36,639
CURRENT YEAR MISSTATEMENTS
Known errors
Adjust accounts payable (68,312) 68.312
Adjust fair value of Inveslments (56,982) . 56.982
--
Net effect (net overstatement
of current year net change in fund balance) 111.983 36.639 75.344
Balance sheet effect on current year
if all adjustments had been made 19.591 (68,312} 48.721 Exhibit 4 Page 23 of 41

9

TOWNSHIP OF RADNOR

SUMMARIZED SCHEDULE OF UNCORRECTED MISSTATEMENTS SEWER

DECEMBER 31, 2003

Effect· Debit {Credit}
DescriptiQn Assels Uabilities fun!.l!y Revenue ~

CARRYOVER IMPACT FROM PREVIOUS YEARS
Adjust fair value of investments 13,467 (13,467)
CURRENT YEAR MISSTATEMENTS
Known errors
Adjust rair value of investments (13,278) 13,278
Net effect (neloverstatement
of current year net change In fund balance) 13,278 13,278
Balance sheel effect on current year
If aU adjustments had been made 189 {189} Exhibit 4 Page 24 of 41

11

TOWNSHIP OF RADNOR

SUMMARIZED SCHEDULE OF UNCORRECTED MISSTATEMENTS NONMAJOR GOVERNMENTAL FUNDS

DECEMBER 31, 2003

Effect - Debit (Credit~
Description Assets Uabllitles ggyj!y Revenue ~
CARRYOVER IMPACT FROM PREVIOUS YEARS
Adjust fair value of investments 1,687 (1,687)
CURRENT YEAR MISSTATEMENTS
Known errors
Adjust fair value of investments 155 ____i1.W
Net effect (net understatement
of current year net change in fund balance) (155) (155)

Balance sheet effect on current year
if all adjustments had been made 1,842 (1,842}
= Exhibit 4 Page 25 of 41

13

TOWNSHIP OF RADNOR

SUMMARIZED SCHEDULE OF UNCORRECTED MISSTATEMENTS FIDUCIARY FUNDS

DECEMBER 31,2003

Effect - Debit ~Credit}
Descrip!iQn Assets Uabilities Equity Revenue ~
CARRYOVER IMPACT FROM PREVIOUS YEARS
Adjust accounts payable 2,986 (2,986)
Adjust fair value of Investments 434 (434)
CURRENT YEAR MISSTATEMENTS
Known errors
Adjust fair value of Invesbnents (782) 782
Net effect (net understatement
of current year change in plan net assets) - (2,204) (2,204}
--
Statement of net assets effect on current
year if all adjustments had been made ~ 2,986 (2,638) Exhibit 4 Page 26 of 41

15

McGladrey & Pullen

Certified Public Accountants

To the Board of Commissioners Township of Radnor, Pennsylvania

In planning and perfonning our audit of the financial statements of Township of Radnor (the "Township") for the year ended December 31, 2004, we considered the Township's internal control to detennine our auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on internal control. However, we noted certain matters involving internal control and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified Public Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of internal control that, in our judgment, could adversely affect the Township'S ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements.

Because of inherent limitation of internal control, errors or fraud may nevertheless occur and not be detected. Also, projection of any evaluation of the internal control to future periods is subject to the risk that internal control may become inadequate because of changes in conditions or that the degree of compliance may deteriorate. Reportable conditions are listed on page 2.

In addition, we have comments and suggestions on other matters for your consideration, which are listed on pages 3 and 4.

This report is intended solely for the infonnation and use of management and the Board of Commissioners of the Township and is not intended to be and should not be used by anyone other than these specified parties.

Blue Bell, Pennsylvania April 6 , 2005

McGladrey & Pullen. LlP is a member fum of RSM Intemationalan aIIiIlaIion of sepllf6te and independent legal eni6es.

Exhibit 4 Page 27 of 41

1

RADNOR TOWNSHIP REPORTABLE CONDITIONS YEAR ENDED DECEMBER 31, 2004

Sewer Fund

We noted that the rollforward balances of the sewer accounts receivable were not properly tracked. To improve control over sewer revenues, receivables and receipts, we recommend the following:

• Perform monthly reconciliations of billings, adjustments and accounts receivable per computer

reports to general ledger balances.

• Review, verify and explain credits and adjustments posted.

• Verify water readings imported into system are accurate.

• Provide for some level of independent review or management oversight.

Budgetary Accounting

Expenditures exceeded the budget in certain funds. Budgetary accounting should be used to control expenditures and monitor revenues. Financial information should allow management to continuously monitor compliance with the budget. To further improve the Township's budgetary control, we recommend:

• Budgetary transfers be made timely.

• Further monitoring of the budget before the purchase of goods or services are approved.

• Budgetary fund balances carried forward be reconciled to actual fund balances carried forward.

Segregation of Duties

One individual is responsible for cash management and investing, as well as posting cash and investment transactions to the general ledger. To the extent practical, we recommend the Township consider segregating duties for initiating, evaluating and approving investment transactions from those for detail accounting, general ledger and other related functions. Also, a strong system of supervision and review of management helps to compensate for this weakness. It is important to recognize that regular and active involvement in supervisory activities is an integral and critical component of the Township's system of internal control procedures.

Budgetary Control- Payroll Allocations

Payroll is distributed to various accounts and funds, including the General Fund and the Sewer Fund. The methodology used to allocate amounts to the Sewer Fund is not documented. We recommend the allocation methodology be documented in writing and approved by management.

Exhibit 4 Page 28 of 41

2

RADNOR TOWNSHIP ADDITIONAL MANAGEMENT ADVICE YEAR ENDED DECEMBER 31,2004

Procurement - Purchase Orders

We noted that purchase order numbers were not accounted for. We recommend that prenumbered purchase orders be accounted for, a log of purchase orders (issued and open) should be maintained. This record of open purchase orders can be used to account for outstanding commitments.

Computer System

Based on discussions with management and observations of use of the Township's computer system, we noted the following matters to be considered to obtain the most efficient and effective use of the system in addition to providing better security:

It The Township has a firewall setup to prevent access into the Township server. Should the firewall be pierced, access to the server and all of its information would be accessible to an outside party. We recommend the web server be isolated on what is called a DMZ so that no internet traffic travels through the Township network.

It We recommend the Township implement procedures to evaluate the adequacy of the firewall and network security on an annual basis in order to update controls over the IT environment. The Township should consider having its security checked periodically by an independent source. If a flaw is found, the system should be scanned for viruses and other malicious activity.

Accounting Procedures Manual

We recommend that the Township prepare an accounting procedures manual. The manual should include a chart of accounts, adequate explanations of account content, month-end and year-end closing procedures, appropriate descriptions of all accounting procedures and routines and all matters that bear directly or indirecHy on the functioning of the system of internal accounting control. Once the manual is complete, subsequent revisions should be subject to formal approval procedures. Although such a manual will take some time to develop initially, we believe this time will be more than offset by time saved later in training and supervising accounting personnel.

1-9 Forms

During the testing of payroll, we noted that 1-9 forms were not in the files for applicable employees. We recommend the Township obtain 1-9 forms from all applicable employees and maintain them in the personnel files.

GASB Statement No. 45

GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postempioyment Benefits Other Than Pension, issued June 2004, will be effective for the Township beginning with its year ending December 31, 2008. The Statement establishes standards for the measurement, recognition, and display of other postemployment benefits (OPEB) expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required supplementary information. We recommend the Township commence p~anning for the adoption of this statement, which may include consulting with aJE3.Rf'ifijjfb4ut

the new requirements. Page 29 of 41

3

RADNOR TOWNSHIP ADDITIONAL MANAGEMENT ADVICE YEAR ENDED DECEMBER 31, 2004

f-·'· .

I Compensated Absences

The accrual for compensated absences payable (vacation, sick pay and personal time) is based on amounts which are summarized in spreadsheets. We noted that the rollforward balances of the compensated absences were not properly tracked. We recommend the Township adopt a standard system to track the vacation days, sick time and personal time outstanding. We recommend that monitoring of

\

L\ vacation, sick and personal time be automated through the Township's payroll system and that the Finance

department maintain and monitor the detailed records. I

~_.J

,/

e

Capital Assets

We noted the following related to the maintenance of capital assets:

• The schedule maintained for governmental capital assets did not rollforward property.

• Capital assets are not assigned a tag number for which to properly track the assets.

• The disposal of capital assets is not always documented,

We recommend the Township purchase and implement fixed asset accounting software to maintain the governmental capital assets and related depreciation. We recommend prenumbered tags be used as part of the Township's capital asset inventory monitoring. Additionally, we recommend proper documentation be maintained to support the disposal of capital assets.

Real Estate Tax Payments

We noted that double payments and overpayments of real estate taxes are credited to an unapplied credit account. There is no cumulative balance detail which reconciles to the general ledger balance. We recommend a running total detail be maintained and reconciled to the general ledger on a periodic basis.

District Justice Fines

During our audit procedures, we noted that certain monthly reports from the district justices were not able to be located. In order to support the amounts received, duplicate summary reports were requested and received from the district justices. We recommend a copy of each district justice report be forwarded to the cash manager and maintained as support for the amount deposited.

Day Camp Receipts

Participants in the Township'S summer day camps may take part in certain day trips and/or activities that involves fees in addition to the normal camp fee. The receipts for the additional fees and the related payments for the activity costs were not reflected in the Township's bank accounts nor in the general ledger. We understand that the receipts and related payments typicaUy would be equal. and therefore, would 'net to zero", We recommend the Township establish procedures to properly control and record these receipts and related payments.

Exhibit 4 Page 30 of 41

4

McGladrey & Pullen

Certified Public Accountants

IlicGladl'ey & Pullen. u.P

One VaJey Sql.l8l'e, S1l.250

512 Township Line Road

Blue Bel, PA 19422-2700 0215-641-8600 F 215-641~680

To the Board of Commissioners Township of Radnor, Pennsylvania

In planning and perfonning our audit of the financial statements of r ownship of Radnor (the "Township") for the year ended December 31.2005, we considered the Township's internal control to determine our auditing procedures for the purpose of expressing an opinion on the financial statements and not to provide assurance on intemal control. However, we noted certain matters involving intemal control and its operation that we consider to be reportable conditions under standards established by the American Institute of Certified . Public ·Accountants. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of internal control that, In our judgment, could adversely affect the Township's abnity to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements.

Because of inherent limitation of internal control, errors or fraud may nevertheless occur and not be detected. Also, projection of any evaluation of the internal control to future periods is subject to the risk that intemal control may become inadequate because of changes in conditions or that the degree of comprrance may deteriorate. Reportable conditions are listed on pages 2 and 3.

In addition, we have comments and suggestions on other matters for your consideration which are listed on pages 4 to 7.

This report is intended solely for the infonnation and use of management and the Board of Commissioners of the Township and is not intended to be and should not be used by anyone other than these specified parties.

Blue Bell. Pennsylvania June 1, 2006

McGladrey & Pullen, UP Is a member firm 01 RSM IntemalionaliIflllffifllllion 01 sepilrate in! independent legal entities.

Exhibit 4 Page 31 of 41

Radnor Township Reportable Conditions December 31, 2005

Sewer Fund

We noted that the rollforward balances of the sewer accounts receivable were not prope~y tracked. To improve control over sewer revenues, receivables and receipts, we recommend the following:

• Perform monthly reconcDlations of billings, adjiJstments and accounts receivable per computer

reports to general ledger balances.

• Review, verify and explain credits and adjustments posted.

• Verify water readings imported into Pentamatlon are accurate.

• Provide for some level of independent review or management oversight

Management Response:

Beginning in 2007, we will implement procedures that will provide us with a deeper sense of control regarding correction of the issues brought to our attention. Among these contTpls a19 the following:

1) Approval by the Director of Finance for all credits End adjustments in excess of $200 (effective immediatery);

2) Review of the monthly reconciliation of sewer bHling and collections by the Director of Finance who will assure agreement of revenues bR/ed, collected and outstanding per the sewer billing module to the general ledger.

Budgetary Accounting

Expenditures exceeded the budget in certain funds. Budgetary accounting should be used to control expenditures and monnor revenues. Financial information should allow management to continuously monitor compliance with the budget To further improve the Township's budgetary control, we recommend:

• Budgetary transfers be made timely.

• Further monitoring of the budget before the purchase of goods or services are approved.

• Budgetary fund balances carried forward be reconciled to actual fund balances carried forward.

Management Response:

Instead of making an annual budget adjustment at the end of the year, we will amend our policy for budget transfers and prepare the transfers on 8 semi-annuai basis. This will assure that the Board of Commissioners approves all budget transfers before the offlcial end of the year. We will continue the strong internal control of all department heads reviewing their own individual departmenfs monthly revenue and expense compared to budget reports for added control over budget monitoring.

2

Exhibit 4 Page 32 of 41

Radnor Township Reportable Conditions December 31, 2005

Segregation of Duties

One indMdual is responsible for cash management and investing, as well as posting cash and investment transactions to the general ledger. To the extent practical, ~ recommend the Township consider segregating duties for initiating, evaluating and approving inveslment transactions from those for detail accounting, general ledger and other related functions. Also, a strong system of supervision and review of management helps to compensate for this weakness. It is important to recognize that regular and active involvement in supervisory activities is an integral and critical component of the Township's system of internal control procedures.

Management Response:

Due to the size of our organization and staff, some duties that ideally should be segregated are performed by one individual. To mitigate these circumstances, the Director of Finance or Township Manager will approve all investment transactions before the transaction commences. Additionally, both the Director and Township Manager will continue the current practice of performing detailed reviews of all monthly reports and genera/ledger activity.

Budgetary Control- Payroll Allocations

Payroll is distributed to various accounts and funds, Including the General Fund and the Sewer Fund. The methodology used to allocate amounts to the Sewer Fund is not documented. We recommend the allocation methodology be documented in writing and approved by management.

Management Response:

In collaboration with the Township Manager, one of the 2007 deparlmental goals or the finance department will be to put a formal policy in place for expense allocations.

Exhibit 4 Page 33 of 41

3

Radnor Township Management Letter Comments Decernber31,2005

Procurement - Purchase Orders

We noted that purchase order numbers were not accounted for. We recommend that prenumbered purchase orders be accoun~ for; a log of purchase orders [ISSued and open) should be maintained. This record of open purchase orders can be used to account for outstanding commitments.

Management Response:

We believe this is an important component of proper encumbrance accounting. If is the Township's pfan in 2007, to utilize the purchase order module of Pentamation to better monitor the status of purchase orders.

Computer System

Based on discussions with management and observations of use of the Township's computer system. we noted the following matters to be considered to obtain the most efficient and effective use of the system in ~ddition to providing better security:

• The Township has a firewall setup to prevent access into the Township server. Should the firewall be pierced. access to the server and all of its information would be accessible to an outside party. We recommend the web server be isolated on what is called a DMZ so that no internet traffic travels through

the Township network. . .

• We recommend the Township implement procedures to evaluate the adequacy of the firewall and network security on an annual basis in order to update controls over the IT environment The Township should consider having its security checked periodically by an independent source. If a flaw is found, the system should be scanned for viruses and other maUcious activity.

Management Response:

Township management is comfortable with the current level of security In place. We have investigated the DMZ product recommended by McGladrey & Pullen, LLP and while the recommendation is effective, it is cost prohibitive for Radnor Township at this time.

Accounting Procedures Manual

We recommend that the Township prepare an accounting procedures manual. The manual should include a chart of accounts, adequate explanations of account content, month-end and year-end closing procedures, appropriate descriptions of all accounting procedures and routines and all matters that bear directly or Indirectly on the functioning of the system of internal accounting control. Once the manual is complete, subsequent revisions should be subject to formal approval procedures. Although such a manual will take some time to develop initially, we believe this time wJll be more than offset by time saved later in training and supervising accounting personnel.

Management Response:

We acknowledge the important internal control in having an accounting procedure manual. One of the 2007 departmental goals of the finance department will be to coordinate the writing of a manual to be comp/etecl by year encl.

Exhibit 4 Page 34 of 41

4

Radnor Township Management Letter Comments Decernber31,2005

GASB Statement No. 45

GASB Statement No. 45, Accounting and Financial Reporting by Employers for Postemploymenj Benefits other Than Pension, issued June 2004, will be effective for the Township beginning with its year ending December 31, 2008. The Statement establishes standards for the measurement, recognition, and display of other postemployment benefi1s (OPEB) expense/expenditures and related liabilities (assets), note disclosures, and, if applicable, required supplementary information. We recommend the Township commence planning for the adoption of this statement, which may include consulting with an actuary about the new requirements.

Management Response:

At this time, the Township is readying itself for the implementation of GASB statement 45 through education. We have had discussions with three consultants regarding various steps to be taken and services avaflable to us. As the implementation dme nears, we will put a plan in place with a qualff!ed consultant who Wl71 assist us in determining not only our liabnity regarding retiree health ~nefits l?ut also our plan for funding that liability.

Compensated Absences

The accrual for compensated absences payable (vacation, sick pay and personal time) is based on amounts which are summarized in spreadsheets. We noted that the rollforward balances of the compensated absences were not properly tracked. We recommend the Township adopt a standard system to track the vacation days, sick time and personal time outstanding. We recommend that monitoring of vacation, sick and personal time be automated through the Township's payroll system and that the Finance department maintain and monitor the detailed records. In certain circumstances, employees that had retired were not removed from the compensated absence totals.

Management Response:

The records for compensmed absences have since been updmed and are now monitored via Excel spreadsheets in a manner consistent with the auditors request. We do not anticipate any further issues regarding the recordkeeping of compensated absences.

Capital Assets

We noted the following related to the maintenance of capital assets:

III The schedule maintained for govemmental capital assets did not rollforward properly.

III Capital assets are not assigned a tag number for which to properly track the assets.

III The disposal of capital assets is not always documented.

We recommend the Township purchase and implement fixed asset accounting software to maintain the govemmental capital assets and related depreciation. We recommend prenumbered tags be used as part of the Township's capital asset inventory monitoring. Additionally, we recommend proper documentation be maintained to support the disposal of assets.

Management Response:

Due to the volume of fIXed assets being depreciated, the Excel spreadsheet that was used to track has proven cumbersome. One of the 2007 departmental goals of the finance department will be to utilize Pentamation for our capital asset monitoring and depreciation calculations. Exhibit 4

Page 35 of 41

5

Radnor Township Management Letter Comments December 31, 2005

Real Estate Tax Payments

We noted that double payments and overpayments of real estate laXes are credited to an unapplied credit account. There Is no cumulative balance detail Which reconciles to the general ledger balance. We recommend a running total be maintained and reconciled to the general ledger on a periodic basis.

Management Response:

The Township staff is in the process of identifying dupflC8te real estate payments and refunding any duplicate payments to the property owner.

Police Fines

We noted the Township does not maintain a running total of outstanding fines. To increase accountability and improve controls, we recommend the Township maintain a subsidiaJ)' ledger of fines that includes those fines forwarded to the courts for collection and subsequent coRections and remittance by the courts to the Township.

Management Response:

The Police Department is reviewing this issue to formulate an effective way of monitoring for the future.

Wire Transfers

We noted that not all wire transfers initiated by the cash manager are approved and signed off by the Township Manager or Finance Director. We recommend that all transfers initiated by the cash manager be approved and signed off by the Township Manager or the Finance Director.

Management Response:

Management has taken the recommendation under advisement and has since changed our policy. The Director of Finance or the Township Manager will approves all wire transfers.

Police Extra Duty Pay

We noted that invoicing for police extra duty pay was not done in a timely manner. We recommend invoices for police extra duty pay be processed in a reasonable time subsequent to the perfonnance of the duty.

Management Response:

Due to staffing shortages within the police department, extra duty billings were not always prepared on a timely basis. Efforts have been made to prepare more timely billings and likewise, receive more timely payments from individuals and entities requesting our police protection for specific events.

Exhibit 4 Page 36 of 41

6

Radnor Township Management Letter Comments December 31, 2005

Credit Card Charge SupPOrt

We noted that not all credit card invoices had proper receipt documentation to support the credit card charges. As, is our understanding of the Township's policy, all receipts for credit card charges should be forwarded to the cash manager. Employees should explain and fully document all items included in the credit card charges. We recommend all credit card charges be supported by original receipts noting valid 'Township' purpose and proper approval. An "audit trail" from the credit card inVOices to the summary of the general ledger coding should also be maintained.

Management R~nse:

This issue has been reviewed by management and as a result has strictly enforced the requirement that all credit card purchases be substantiated by a receipt which is reviewed by the Cash Manager, the Director of Finance, and the Township Manager. Addftlonally, a policy is in place requiring all cardholders to sign an agreement that the cards

are to be used for official township business only ,

Retirement/Separation Agreements

During our pension testing. one individual's approved distribution could not be located. We recommend that retirees sign an agreement upon termination (similar to the disability or settlement agreements currently in place) to detail the benefits to be received. The benefits to be received should be supported by the calculation of such amounts.

Managemfmt Response:

We believe that this was an isolated instanca and are comfortable with the controls in place for the approval of pension d{stn"butions. Under the coordination of the Human Resource Manager, all documentation of pension calculations and distriblllions will be closely monitored.

Exhibit 4 Page 37 of 41

7

McGladrey & Pullen

Certified Public Accountants

To the Board of Commissioners Township of Radnor, Pennsylvania

In planning and performing our audit of the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of Township of Radnor, Pennsylvania (the "Township") as of and for the year ended December 31, 2006, in accordance with auditing standards generally accepted in the United States of America, we considered the Township's intemal control over financial reporting (intemal control) as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Township's intemal control. Accordingly, we do not express an opinion on the effectiveness of the Township's intemal control.

A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A deficiency in design exists when a control necessary to meet the control objective is missing, or when an existing control is not properly designed so that even if the control operates as designed, the control objective is not always met. A deficiency in operation exists when a properly designed control does not operate as designed or when the person performing the control does not possess the necessary authority or qualifications to perform the control effectively.

A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Township's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Township's financial statements that is more than inconsequential will not be prevented or detected by the Township's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be prevented or detected by the Township's intemal control.

Our consideration of internal control was for the limited purpose described in the first paragraph and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control that we consider to be material weaknesses, as defined above.

A listing of control deficiencies that we determined did not constitute material weaknesses are listed on page 2.

In addition, we have observations and recommendations on other accounting, operating and administrative matters for your consideration which are listed on pages 3 and 4.

This communication is intended solely for the information and use of the Board of Commissioners, management and others within the Township and is not intended to be and should not be used by anyone other than these specified parties.

Blue Bell, Pennsylvania June 12, 2007

/I(~/ /~/ L~?

Exhibit 4 Page 38 of 41

McGladrey 8 Pullen, LLP is a member firm of RSM Intemanonalan affiliation of separate and independenllegal enUties.

TOWNSHIP OF RADNOR, PENNSYLVANIA CONTROL DEFICIENCIES

YEAR ENDED DECEMBER 31,2006

Budgetary Accounting

Expenditures exceeded the budget in certain funds. Budgetary accounting should be used to control expenditures and monitor revenues. Financial information should allow management to continuously monitor compliance with the budget. To further improve the Township's budgetary control, we recommend:

• Budgetary transfers be made timely.

• Further monitoring of the budget before the purchase of goods or services are approved.

• Budgetary fund balances carried forward be reconciled to actual fund balances carried forward.

Management Response:

Beginning in 2007, our plan is to analyze our budget versus actual figures at the end of the 3rri quarter and evaluate whether budget transfers are necessary. Those transfers that are deemed necessary will be presented to the Board of Commissioners. This practice will assure that the Board approves all budget transfers before the official end of the year. We will continue the strong intemal control of all department heads reviewing their own individual department's monthly revenue and expense compared to budget reports for added control over budget monitoring.

Segregation of Duties

One Individual is responsible for cash management and investing, as well as posting cash and investment transactions to the general ledger. To the extent practical, we recommend the Township consider segregating duties for initiating, evaluating and approving investment transactions from those for detail accounting, general ledger and other related functions. Also, a strong system of supervision and review of management helps to compensate for this weakness. It is important to recognize that regular and active involvement in supervisory activities is an integral and critical component of the Township's system of internal control procedures.

Management Response:

Due to the size of our organization and staff, some duties that ideally should be segregated are performed by one individual. To mitigate these circumstances, the Director of Finance or Township Manager will approve a/l investment transactions before the transaction commences. Additionally, both the Director and Township Manager will continue the current practice of performing detailed reviews of all monthly reports and general ledger activity.

Budgetary Control - Allocations

Certain expenditures are distributed to various accounts and funds, including the General Fund and the Sewer Fund. The methodology used to allocate amounts to the Sewer Fund is not documented. We recommend the allocation methodology be documented in writing and approved by management.

Management Response:

Beginning with the 2008 budget process and in collaboration with the Township Manager, the finance department will be to put a formal policy in place for expense allocations.

Exhibit 4 Page 39 of 41

2

TOWNSHIP OF RADNOR, PENNSYLVANIA OTHER OBSERVATIONS AND RECOMMENDATIONS YEAR ENDED DECEMBER 31, 2006

Procurement - Purchase Orders

We noted that purchase order numbers were not accounted for. We recommend that prenumbered purchase orders be accounted for; a log of purchase orders (issued and open) should be maintained. This record of open purchase orders can be used to account for outstanding commitments.

Management Response:

We believe this is an important component of proper encumbrance accounting. It is the Township's plan during 2007 (for likely implementation in 2008), to revamp the procedures for purchase order issuance to better monitor the status of purchase orders.

Accounting Procedures Manual

We recommend that the Township prepare an accounting procedures manual. The manual should include a chart of accounts, adequate explanations of account content, month-end and year-end closing procedures, appropriate descriptions of all accounting procedures and routines and all matters that bear directly or indirectly on the functioning of the system of internal accounting control. Once the manual is complete, subsequent revisions should be subject to formal approval procedures. Although such a manual will take some time to develop initially, we believe this time will be more than offset by time saved later in training and supervising accounting personnel.

Management Response:

We acknowledge the important infemal control in having an accounting procedure manual. One of the 2007 departmental goals of the finance department will be to coordinate the writing of a manual to be completed in early 2008.

Capital Assets

We noted the following related to the maintenance of capital assets:

• Capital assets are not assigned a tag number for which to properly track the assets.

• The disposal of capital assets is not always documented.

We recommend the Township purchase and implement capital asset accounting software to maintain the capital assets and related depreciation. We recommend prenumbered tags be used as part of the Township's capital asset inventory monitoring. Additionally, we recommend proper documentation be maintained to support the disposal of assets.

Management Response:

Due to the volume of fixed assets being depreCiated, the Excel spreadsheet system that had been used in previous years had proven cumbersome. For the 2006 audit, new spreadsheets were prepared and updated in accordance with GAAP. The Staff will continue to strengthen our capital asset procedures to ensure proper accounting of all capital transactions.

Exhibit 4 Page 40 of 41

3

TOWNSHIP OF RADNOR, PENNSYLVANIA OTHER OBSERVATIONS AND RECOMMENDATIONS YEAR ENDED DECEMBER 31,2006

Real Estate Tax Payments

We noted that double payments and overpayments of real estate taxes have been credited to an unapplied credit account. There is no cumulative balance detail which reconciles to the general ledger balance. We recommend a detailed listing of the unapplied credit account be compiled and appropriate disposition determined. The detail listing should be updated and reconciled to the general ledger on a periodic basis.

Management Response:

During the faf! of 2006 as a result of the Finance Department staffs efforts, a system was put in place and af! duplicate payments on our books dating back to the appointment of the current elected Treasurer were refunded. The remaining balance dates back to former elected Treasurers whose records are unavailable to us. We wif! consult with our Solicitor about the proper treatment of these monies.

Police Fines

We noted the Township does not maintain a running total of outstanding fines. To increase accountability and improve controls, we recommend the Township maintain a subsidiary ledger of fines that includes those fines forwarded to the courts for collection and subsequent collections and remittance by the courts to the Township.

Management Response:

The Police Department will continue to review this issue and fine tune its procedures to formulate an effective way of monitoring for the future.

Special Assessment Liens

We noted the Township did not secure a lien on one special assessment and was not able to collect the outstanding balance on the receivable. We recommend a review of all outstanding special assessment receivables to ensure that liens have been placed on the applicable properties.

Management Response:

This particular assessment dates back several years and due to the change in ownership and time passed, we were unable to rectify the situation. Procedures had subsequently been put in place to ensure that all properties with a special assessment are properly liened to protect the financial interests of the Township.

The Township has a system in place for issuing prenumbered permits; however, we noted there is no procedure to ensure that monies for all permits issued have been properly accounted for. We recommend the Township develop a reconciliation form to substantiate the completeness and accuracy of the permits issued (accounting for each prenumbered permit) and amounts deposited. This would include maintaining a log and support for those prenumbered permits which were not issued (l.e, voided, deleted in system, etc.).

Management Response:

The Staff will review its procedures and this issue in particular to ensure a system of tracking gaps in permff numbers is maintained.

Exhibit 4 Page 41 of 41

4

EXHIBIT 5