Charlestown Township Board of Supervisors Business Meeting Minutes of November 20, 2000

The second business meeting for November was held November 20, 2000 at the Great Valley Middle School. Irene W. Ewald, Chairman, Hugh D. Willig, Vice Chairman, Paul J. Hogan, Kevin R. Kuhn, Michael J. Rodgers, James E. McErlane, Esq., Tim O’Neil, Esq., Emory S. Todd, CPA, Surender S. Kohli, P.E., Ed Theurkauf, Planner, Linda M. Csete, Township Secretary and those on the attached list were present.

The meeting was called to order at 7:35 P.M.

Announcements

Mrs. Ewald had four announcements:

1. She attended the dedication of the Storm Library and Media Center at the Valley Forge Christian College last week with guest speaker Sen. John Ashcroft. The Library is open to the public, and those interested are invited to utilize the Center after registering with the College.
2. Mrs. Ewald, Mr. Willig and Mr. Rodgers attended the Fall Convention of the Chester County Association of Township Officials on November 16th.
3. Mrs. Ewald and Mr. Hogan were present for the inspection of Bridge 178 on November 17th along with Mr. Kohli and the County Engineer.
4. The Board of Supervisors met in Executive Session on Friday November 17th to discuss personnel matters.

Citizens’ Forum - Non-Agenda Items

Ellen Behrle, 11 Moses Way, asked the following questions.

1. Is there a date for the continuance of the Steven and Christine Myers’ request for building permit approval? Mrs. Ewald responded that the matter was continued to the December 18, 2000 meeting.
2. Has the new road contractor, Melchiorre Construction, provided its payment bond, performance bond and certificate of insurance to the Township yet? The Secretary responded that they have not been received to date. Mrs. Behrle acknowledged her understanding that the contractors’ 20 days from the date of the bid award have not yet expired in which to provide these documents, but asked what is being done in the interim period? Mr. McErlane stated that the contractor may perform work in the Township in accordance with the contract terms in the interim period. The contractor shouldn’t be paid until the documents are received.
3. As President of Charlestown Green Inc., Mrs. Behrle said she has received several calls from residents asking who will assume the legal costs of Mrs. Ewald’s defense in the complaint filed by Lance Altemose against her. Mrs. Ewald responded that she has hired separate counsel and will cover those costs herself. Mrs. Behrle asked if the charge was filed against Mrs. Ewald as an individual or against the Township. Mr. McErlane said he hasn’t seen the complaint but believes it’s against her as an individual, however, the incident claimed by Mr. Altemose occurred during the performance of her public duties. Mr. McErlane said it’s not uncommon for a government to cover legal costs if the individual is acquitted of the charges. He added that there are 2 charges on file presently, Lance Altemose’s complaint of criminal mischief against Mrs. Ewald, and the Board’s complaint of defiant trespass against Mr. Altemose.

Old Business

Approval of Minutes

Mr. Hogan moved to approve the November 6, 2000 minutes and Mr. Willig seconded. Mrs. Ewald called for discussion from the Board and then the public. There being none, she called the vote and all were in favor.

Budget & Finance - Questions and Answers

Phil Staas, 4 Hana Lane, read aloud a 3-page prepared statement entitled Opening Remarks to: A Discussion of Charlestown Township’s Fund Accounting System. This was followed by a step-by-step discussion and responses to his 4-page memorandum dated 11/10/00 listing 10 questions on existing fund accounting and 5 questions on the recent bond issue.

Mr. Willig asked Mr. Todd, CPA to clarify in general whether the Township was currently following the state format in its accounting practices. Mr. Todd responded yes.

Responses to Mr. Staas’s questions were as follows:

Existing Fund Accounting

1. Mr. Todd said he’s performed the Township’s annual audit for several years and that the format hasn’t varied during this time with a General Fund and Liquid Fuel Tax Fund shown on the books. It’s not necessary to separate the various other funds that see little or no activity year after year. These include the Phoenixville Pike Improvement Fund, Open Space Fund, Municipal Office Fund and Stormwater Management Fund. The Township’s various funds are unlike funds another township may have, such as a sewer fund, where operating expenses and incoming revenues are constantly incurred and are specific to that operation. Charlestown currently has four separate investment accounts in the general fund that have little or no activity each year. For example, the Phoenixville Pike Improvement Fund has been in place for seventeen years and has had almost no activity at all during this period. He stated that separating these accounts from the General Fund doesn’t accomplish any purpose and would generate more accounting and auditing work. He said the Township has good controls over its finances and that the moneys in the various accounts are accounted for correctly. He said that the word Fund could be removed from these account names if it’s abetting the public’s confusion. Mr. Kuhn asked if these four funds should be separated into a Capital Improvement Fund and removed from the General Fund in order to reduce the General Fund balance. Mr. Todd agreed that this could be done and may present a more realistic picture to the public. Mr. Willig asked if separating these funds as Mr. Kuhn suggests would help preserve the current Board’s intentions for these funds in the future. Mr. Todd said no, any Board has the ability to transfer moneys out of a Capital Reserve Fund via a majority vote. Mr. O’Neil said that creating a separate Capital Reserve Fund would equal trouble. He said that the term fund and account has no difference between them for auditing purposes. If the Township wishes to change the names of these accounts to eliminate confusion with the term fund it can be done although it’s of no importance either way. Mr. O’Neil said the creation of the Capital Reserve Fund came out of World War II so that governments could set aside funds for specific projects rather than issuing bonds for that purpose. He said capital reserve funds are restricted to being utilized for their specified purpose within a time frame, usually 5 years or less. The current accounting structure at Charlestown allows the Board more leeway. Mr. Kuhn asked for clarification on the point of whether to separate the four funds from the General Fund into a Capital Reserve Fund, as Mr. Todd said it was OK to form a separate fund and Mr. O’Neil disagreed. Mr. O’Neil stated that there is no place on the State Auditing forms for a Capital Reserve Fund if not listed as part of the General Fund. Mr. Todd agreed that he’s comfortable with the accounting system as it now stands and that the only problem is one of perception. Mr. O’Neil said that a little public relations would take care of the perception problem. Mr. O’Neil said that the state publications Mr. Staas is referencing are written to provide guidance to elected auditors and other public officials who may be inexperienced with accounting practices. Most townships replace the elected auditors with an appointed auditor each year, leaving the elected Board of Auditors with only function, that of setting the Supervisors’ salaries.
2. Not discussed.
3. Not discussed.
4. Mr. O’Neil responded no, the bond issue proceeds should not be transferred from the General Fund or to a new fund established to manage the debt. They belong in the bond proceeds account in the General Fund.
5. Mr. O’Neil responded no, the proceeds of the bond issue are not to be transferred to the Sinking Fund. According to Ordinance #90-00, the First Union Bank has been established as the depository for the monthly interest and annual principal payment on the bond issue. These payments are made from General Fund Revenues. The sinking fund doesn’t hold funds; the payments simply pass through the sinking fund depository (First Union Bank) on the day of payment to the New Garden Authority that issued the bond.
6. Mr. O’Neil responded yes, the state does require that the Township establish a sinking fund by ordinance, and this has been done. Mrs. Ewald added that this appears on page 5, section 11 of Ordinance #90-00.
7. Mr. O’Neil responded no, the Township should not establish a Capital Reserve Fund for future asset acquisitions rather than collect money for this purpose in the Open Space Fund.
8. Not discussed.
9. Not discussed.
10. Not discussed.

Bond Issue Questions

1. Mr. O’Neil responded no, the Township should not outline a long-range financial plan for land and property acquisition. Property acquisition is a matter of negotiation that is permitted under the 2nd class township code to be conducted in executive session.
2. On the question of whether a pro forma financial plan to maintain the buildings and property acquired in the 55-acre purchase exists, Mr. O’Neil answered that maintenance expenses are budgeted out of revenues obtained through the Board’s taxing powers.
3. In response to the question that the Fiscal Management Handbook requires that amounts in a sinking fund be deducted from the gross nonelectoral debt, Mr. O’Neil said this is not correct, adding that the Fiscal Management handbook does not follow generally accepted accounting principles, and in fact states the opposite in this instance.
4. In response to the question on how the borrowing base in the debt statement was calculated, Mr. O’Neil stated that, as in question #3 above, the Fiscal Management Handbook doesn’t follow generally accepted accounting principles and that its guidelines in making this calculation don’t include specifics that apply to Charlestown.

Mr. Hogan asked what would happen if the Township sold the 55 acre Pyle property before paying off the bond issue. Would it then have to be repaid in full? Mr. O’Neil said that the proceeds of the sale of the Pyle Farm could be used for a new acquisition if done within six months. However, the money must be used to fund public projects, it cannot be used for what is deemed private use.

5. Not discussed.

In summary, Mr. O’Neil said that the tone of Mr. Staas’ memorandum dated 11/10/00 is that the Township is not handling its finances correctly. He said this is not true. The Township is highly regarded, receiving a AAA Bond Rating from Standard & Poors. In conjunction with the bond issue, the Township’s finances was reviewed favorably by Standard and Poors and the Pennsylvania Department of Community & Economic Development and Mr. O’Neil said no improvements to the accounting system are necessary. He reiterated that he recommends against segregating any accounts into a Capital Reserve Fund and that the public’s concerns basically reduce to a Public Relations issue.

Sue Staas, 4 Hana Lane, said she doesn’t understand the different accounts as shown in the Township Budget. She is only aware of them because she attends township meetings and knows the Board members personally. She said the Budget should be made easy to read. Mrs. Ewald suggested she review the monthly Treasurer’s Report, which ends with a summary sheet listing the balance of each fund.

Mrs. Behrle asked for more information on the $2.1 million bond issue, which provided net proceeds to the Township of $2,079,900.00. She said the meeting was posted on the website only 1 day before the meeting, and stated her disappointment that the Board acted so quickly and quietly after the four most recently elected members ran for election promising to better inform their constituents. Mr. Kuhn responded that the Board has met almost every Monday this year and has discussed the matter in public many times before making the final arrangements to approve the bond issue. He explained that the additional funds would have to be expended within three years or paid back. Mr. O’Neil stated that advertising was done in accordance with the Local Government Debt Act three days prior to enactment of the ordinance incurring the debt. Mr. Kuhn said that the public as well as the Board was aware when they bought the Pyle farm that arranging financing was a detail to be worked out. Mrs. Behrle said the actions taken by the Board give the illusion of the quick manner in which the purchase of the first 20 acres of the Pyle property was undertaken in 1996. Since then, methods of purchasing open space have been discussed, including imposing an earned income tax. Mrs. Ewald said the 20-acre parcel was purchased with available money from the Open Space Fund with no borrowing or tax increase necessary. This second purchase of 55 acres will likewise not cause a tax increase as shown in the preliminary 2001 budget.

Russell Hanscom, Valley Hill Road, asked for details on the bond pool itself, which were provided by Mr. O’Neil.

Ordinance to Reduce Speed Limit at Bridge 178

Mrs. Ewald asked that the Roadmaster provide a recommendation for a posted speed limit across the newly rehabilitated Bridge 178 over Pickering Road. She also suggested posting one lane bridge@ signs approaching the bridge in both directions. Mr. Hogan moved to authorize advertising of an ordinance to post a 10 MPH speed limit and to post one lane bridge signs approaching Bridge 178 pending the Roadmaster’s recommendation. Mrs. Ewald seconded. She called for discussion from the Board and the public. There being none, she called the vote and all were in favor.

Rees & Union Hill Road Problems - Discussion

Mrs. Ewald said she received several e-mails from residents of Rees Road and Union Hill Road asking again for speed enforcement. Residents have witnessed cars passing school buses and other vehicles. The Board members agreed to seek enforcement action from the State Police.

Mr. Kuhn said that rocks are appearing along the Horseshoe Trail bordering Rees Road from Blackstone Lane toward Howells Road. After some discussion, he and Mr. Hogan agreed to arrange for clean up.

New Business

Charlestown Park Phase I Improvements - Open Bids

The Board opened the following four bids for the paving of trails at Charlestown Park:

Charlestown Paving	$126,100.00
Macanga Paving	179,275.00
Associated Paving	96,707.00
Delaware Valley Paving Inc.	98,000.00

Mr. Hogan will review the bids prior to the contract award.

Mrs. Behrle had two comments. First she stated that requiring the successful bidder to carry $5,000,000 in excess liability (umbrella) insurance, as stated in the bid document, is out of line with the scope of the project, and asked that this be kept in mind during the bid review process.

Second, she stated her understanding from prior public meetings that #18 of the Statement of Bidder’s Qualifications, which she referred to as a nepotism clause, was not to be included in any bids other than the annual road maintenance contract. She read item #18 in its entirety, Is Bidder, or any of the partners, officers or principals of the Bidder if the Bidder is a partnership or corporation, a close relative of any Township elected official, officer or employee? (Close relative means, mother, father, grandmother, grandfather, son, daughter, sister or brother). If yes, the Bidder is disqualified from bidding on the contract subject of this Request for Bids.

Mrs. Behrle objected to the inclusion of item #18 in the Park bid document, noting that Delaware Valley Paving Inc. was sought out by Parks & Rec Chairman Mark Connolly and invited to bid the project. She asked if it was the Board’s intention to include this item. Mr. Kuhn and Mr. Rodgers both stated that this clause was not to be included in this bid package. Mr. Rodgers said the clause was not included in the Blackberry Lane paving bid earlier this fall and similarly should not have been included in the Park bid. Mrs. Ewald asked why Mrs. Behrle believes this clause disqualifies Delaware Valley Paving, and she responded it would be due to Mr. Faggioli’s position of Roadmaster since his son David is President of Delaware Valley Paving Inc. Mrs. Ewald said that since Mr. Faggioli wouldn’t be supervising the Park work, the clause wouldn’t apply. Mrs. Behrle disagreed, stating that the clause references any employee, not just one supervising the work. Mrs. Behrle said she believes Mrs. Ewald added this clause purposely to disqualify Delaware Valley Paving. Mrs. Ewald responded that she believes the clause belongs in all township contracts to avoid any conflict of interest. Mr. Kuhn disagreed, saying that the annual road maintenance contract, bid on a time and materials basis, is different from a lump sum contract. He also stated that he had objected to the inclusion of item #18 even in the annual maintenance contract, as he believed it unnecessary since the Board can always use its discretion in disqualifying a bidder. Mr. Kuhn asked for a clarification of the Board’s position on the inclusion of #18 in Township bid documents. Mr. Hogan moved to eliminate item #18 from the Statement of Bidder’s Qualifications from all contracts except the annual maintenance contract. Mr. Rodgers seconded. Mrs. Ewald called for discussion from the Board and the public. Mr. McErlane said the clause can be removed as framed by the motion provided the Township representative related to the contractor is removed from his supervisory role on the bid job. Mr. Willig asked if the Township bears any responsibility when a company expends funds for a bid bond and is then disqualified during the bidding process. Mr. McErlane responded no. Mrs. Ewald called the vote. Four were in favor, and Mrs. Ewald was opposed on the basis of conflict of interest inherent to the bid.

Authorize Advertising: Fire Ordinance

This matter was tabled until December 4, 2000 to allow more time for the drafting of the ordinance.

Altemose Conditional Use Application/Land Development Plan

Mrs. Ewald moved to advertise the conditional use hearing for the Altemose application for December 4, 2000. Mr. Willig seconded and Mrs. Ewald called for discussion. Mr. Willig asked if the application is complete. Mr. McErlane responded that although it appears to be incomplete, he recomm3nds proceeding with the hearing as a matter of discretion. Mrs. Ewald called the vote and all were in favor.

With regard to the Altemoses’ Land Development application, the Secretary will notify the applicant that the submission is incomplete but will be discussed as a sketch plan at the next scheduled Planning Commission meeting on December 12, 2000.

Township Budget 2001

The proposed budget for the year 2001 will be advertised for adoption at the December 18, 2000 meeting.

Employee Handbook

Mr. Kuhn moved to adopt the Employee Handbook as drafted and Mr. Willig seconded. Mrs. Ewald called for discussion from the Board and the Public. She commended the Secretary and Mrs. Campion for an excellent job in drafting the document. She called the vote and all were in favor.

Fieldstone Partners - Lot Line Change for Zeigler Subdivision Lots 2 & 3

Lee Haller Jr. of Fieldstone Partners was present to request a temporary Use & Occupancy Permit be issued to the buyers of Lot #2 of the Zeigler subdivision. He explained he discovered that a 3+ foot violation of a side yard setback occurred in the construction of the house, which wasn’t discovered until preparation of the as-built plan. He currently has a lot line change application on file to remedy the situation by exchanging a small amount of equal square footage between lots #2 and #3. He added that this would also remedy the same problem on lot #3. Mr. Kuhn asked how the building process got so far along before the mistake was discovered. Mr. Haller said that the stakes were initially set properly and the error occurred on his firm’s part after trees were removed and the house was re-staked incorrectly. Mr. Kohli explained that on larger lots such as these, a foundation as-built is typically not required since it adds unnecessary cost to the builder. Mrs. Ewald moved to direct the Zoning Officer to issue a temporary Use & Occupancy permit to Mr. & Mrs. Dickenson subject to the completion of the lot line modification, and with the understanding that the Township has already received an escrow deposit of $1,000 for this process. Mr. Kuhn seconded. She called for discussion from the Board and the Public. There being none, she called the vote and all were in favor.

Emma - Escrow Release #1

Mrs. Ewald moved to approve Escrow Release #1 for Emma Builders in the amount of $53,085.00 subject to the execution of the tri-party agreement, and Mr. Kuhn seconded. She called for discussion from the Board and the Public. There being none, she called the vote and all were in favor.

Hearings

Spring Lane Farms

The hearing was opened and continued to February 5, 2001 per the applicant’s request in a letter dated November 17, 2000.

Billboard Ordinance

Mrs. Ewald briefly explained the proposed ordinance amending the Zoning Ordinance to permit outdoor advertising of billboards as a use permitted by Conditional Use in the LI-2 Zoning District. Mr. Willig moved to approve Ordinance #91-00 permitting outdoor advertising of billboards as stated in the proposed text, and Mr. Rodgers seconded. She called for discussion from the Board and the Public. There being none, she called the vote and all were in favor.

Ordinance to Reduce Speed Limit: Buckwalter Road and to Add Stop Signs at Rees/Green Lane and Howells Roads

Mr. Hogan moved to approve Ordinance #92-00, establishing a 25 MPH speed limit on Buckwalter Road and approving a four-way stop at Rees Road, Howells Road and Green Lane. Mr. Rodgers seconded. She called for discussion from the Board and the Public. There being none, she called the vote and all were in favor.

Other Business

Dedication of Bridge #178

Mrs. Ewald will arrange for the dedication ceremony for the Township’s acceptance of Bridge #178 from the County for December 17, 2000. The County Commissioners plan to attend.

Adjournment

The meeting was adjourned at 10:05 P.M. The next meeting will be held on December 4, 2000, 7:30 P.M. at the Great Valley Middle School.