$4,500,000* Borough of Baldwin Allegheny County, Pennsylvania General Obligation Bonds, Series of 2017

PRELIMINARY OFFICIAL STATEMENT DATED MARCH 13, 2017 in any Official time the

in the final NEW ISSUE BOOK-ENTRY ONLY Bond Rating: S&P Global Ratings: “AA” (stable outlook) Municipal Assurance Corp. (“MAC”) insured S&P Global Ratings: “A” (positive outlook) Underlying Rating See “Rating and “Municipal Bond Insurance” herein

In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, interest on the Bonds (including, in the case of Bonds sold at an original issue discount, the difference between the initial offering price and par) is excluded from gross income for Federal income tax purposes. Bond Counsel is also of the opinion that interest on the Bonds is not a specific item of tax preference under §57 of the Internal Revenue Code of 1986, as amended (the “Code”) for purposes of Federal individual or corporate alternative minimum taxes. The Bonds, and the interest income therefrom, are free from taxation for purposes of personal income, corporate net income and personal property taxes within the Commonwealth of Pennsylvania. (See “TAX MATTERS” herein.)

The Borough has designated the Bonds as “Qualified Tax-Exempt Obligations” pursuant to §265(b)(3) of the Code (relating to the deductibility of interest expense by certain financial institutions).

$4,500,000* such Rule and which will be provided Borough of Baldwin Allegheny County, Pennsylvania General Obligation Bonds, Series of 2017 Dated: Date of Delivery Principal Due: as shown on inside cover Interest Due: May 1 and November 1 First Interest Payment: November 1, 2017

The Borough of Baldwin will issue its General Obligation Bonds, Series of 2017 (the “Bonds”) in the aggregate principal amount of $4,500,000* and in registered form in denominations of $5,000 or any integral multiple thereof. The Bonds will be registered in the name of Cede & Co., as the registered owner and nominee of The Depository Trust Company ("DTC"), New York, New York. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or any integral multiple thereof only under the book-entry only system maintained by DTC through its brokers and dealers who are, or act through, DTC Participants. The purchasers of the Bonds will not receive physical delivery of the Bonds. For so long as any purchaser is the beneficial owner of a Bond, that purchaser must maintain an account with a broker or a dealer who is, or acts through, a DTC Participant to receive payment of principal of and interest on the Bonds. See "BOOK- ENTRY ONLY SYSTEM" herein. If, under the circumstances described herein, Bonds are ever issued in certificated form, the Bonds will be subject to registration of transfer, exchange and payment as described herein.

without notice. The Bonds may not be sold nor may offers to buy be accepted prior to the The Bonds are general obligations of the Borough of Baldwin, Allegheny County, Pennsylvania (the "Borough"), payable from its tax and other general revenues. The Borough has covenanted that it will provide in its budget in each year, and will appropriate from its general revenues in each such year, the amount of the debt service on the Bonds for such year and will duly and punctually pay or cause to be paid from the sinking fund established under the Ordinance or any other of its revenues or funds the principal of every Bond and the interest thereon on the dates, at the place and in the manner stated in the Bonds, and for such budgeting, appropriation and payment the Borough irrevocably has pledged its full faith, credit and taxing power, which taxing power presently includes the power to levy ad valorem taxes on all taxable real property within the Borough presently unlimited as to rate or amount for such purpose.

Interest on each of the Bonds is payable initially on November 1, 2017, and thereafter semiannually on May 1 and November 1 of each year until the maturity date of such Bond or, if such Bond is subject to redemption prior to maturity, until the date fixed for redemption thereof, if payment of the redemption price has been duly made or provided for. The Borough has appointed U.S. Bank National Association (the “Paying Agent”), as paying agent and Sinking Fund Depository for the Bonds. So long as Cede & Co., as nominee for DTC, is the registered owner of the Bonds, payments of the principal of, redemption premium, if any, and interest on the Bonds, when due for payment, will be made directly to DTC by the Paying Agent, and DTC will in turn remit such payments to DTC Participants for subsequent disbursement to the Beneficial Owners of the Bonds. If the use of the Book-Entry Only System for the Bonds is ever discontinued, the principal on each of the Bonds will be payable, when due, upon surrender of such Bond to the Paying Agent at its designated corporate trust office located in Pittsburgh, Pennsylvania (or any successor paying agent at its designated office(s)) and interest on such Bond will be payable by check and mailed to the person(s) in whose name(s) such Bond is registered as of the Record Date with respect to the particular interest payment date (See “THE BONDS,” infra).

The Bonds are subject to redemption prior to maturity as described herein.

Proceeds of the Bonds will be used towards: (1) various capital improvement projects in the Borough; and (2) the costs of issuing the Bonds.

AUTHORITY FOR ISSUANCE: The Bonds will be issued and delivered in accordance with the Local Government Unit Debt Act of the Commonwealth of Pennsylvania, 53 Pa. C.S. Chs. 80-82 (the “Debt Act”), and pursuant to an ordinance (the “Ordinance”) enacted by the Borough Council on ______, 2017. As a condition to issuance, proceedings with respect to the issuance of the Bonds will have been approved by the Department of Community and Economic Development of the Commonwealth of Pennsylvania pursuant to the Debt Act.

INSURANCE: The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under an insurance policy to be issued concurrently with the delivery of the Bonds by MUNICIPAL ASSURANCE CORP. 2(b)(1) of the Securities and Exchange Commission, except for certain information which has been omitted in accordance with

MATURITIES, AMOUNTS, RATES AND YIELDS (As shown on inside cover)

The Bonds are offered when, as and if issued, subject to withdrawal or modification of the offer without notice, and subject to the approving legal opinion of Dinsmore & Shohl LLP, of Pittsburgh, Pennsylvania Bond Counsel, to be furnished upon delivery of the Bonds. Certain other legal matters will be passed upon for the Borough by Stanley Lederman, Esq. and Michael Lederman, Esq., of Pittsburgh, Pennsylvania, Borough Solicitor. It is expected that the Bonds will be available for delivery in New York, New York, on or about _____, 2017.

DATED: ______, 2017 This Preliminary Official Statement and the information contained herein are subject to completion, amendment or other change Official Statement is delivered in final form. Under no jurisdiction circumstances in shall which this such Preliminary offer, Official Statement solicitation constitute or an sale offer Statement would to to be be final sell for unlawful purposes or of prior the Rule 1 5c2 -1 to solicitation registration of an or offer qualification Official Statement. to under buy, the nor applicable shall securities there laws be of any any sale such of the jurisdiction. Bonds The Borough has deemed this Preliminary *Preliminary amount, subject to change. $4,500,000* Borough of Baldwin Allegheny County, Pennsylvania General Obligation Bonds, Series of 2017

Dated: Date of Delivery Principal Due: As shown below Interest Due: May 1 and November 1 First Interest Payment: November 1, 2017

MATURITY SCHEDULE

Maturity Principal Interest Date Amount Rate Yield Price (1) November 1, $ % % %

(1) Based on expected settlement date of ______, 2017. *Preliminary amount, subject to change.

ii BOROUGH OF BALDWIN Allegheny County, Pennsylvania 3344 Churchview Avenue Pittsburgh, PA 15227

BOROUGH COUNCIL

Michael Stelmasczyk ...... President John Conley ...... Vice President James Behers ...... Member Michael Ducker ...... Member Edward Moeller ...... Member Kevin Fischer ...... Member Francis Scott ...... Member

MAYOR David Depretis

BOROUGH MANAGER John M. Barrett

FINANCE OFFICER Molly Brennan

BOROUGH SOLICITOR Stanley Lederman, Esq. and Michael Lederman, Esq. Pittsburgh, Pennsylvania

BOND COUNSEL Dinsmore & Shohl LLP Pittsburgh, Pennsylvania

PAYING AGENT U.S. Bank National Association Pittsburgh, Pennsylvania

UNDERWRITER PNC Capital Markets LLC Pittsburgh, Pennsylvania

iii No dealer, broker, salesman or other person has been authorized by the Borough to give information or to make any representations, other than those contained in this Official Statement, and if given or made, such other information or representations must not be relied upon. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds in any jurisdiction in which it is unlawful to make such offer, solicitation or sale. The information set forth herein has been obtained from the Borough and from other sources which are believed to be reliable but the Borough does not guarantee the accuracy or completeness of information from sources other than the Borough. The information and expressions of opinion herein are subject to change without notice and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in any of the information set forth herein since the date hereof.

Municipal Assurance Corp. (“MAC”) makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, MAC has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding MAC supplied by MAC and presented under the heading “Bond Insurance” and “Appendix E - Specimen Municipal Bond Insurance Policy”.

TABLE OF CONTENTS INTRODUCTION ...... 1 AUTHORITY FOR ISSUANCE ...... 1 PURPOSE OF THE ISSUE ...... 1 Sources and Uses of Bond Proceeds ...... 1 THE BONDS ...... 2 Description ...... 2 Payment of Principal and Interest ...... 2 Transfer, Exchange and Registration of Bonds ...... 3 SECURITY FOR THE BONDS ...... 3 General Obligations ...... 3 Sewer Fund ...... 3 Sinking Fund ...... 4 BOOK-ENTRY-ONLY SYSTEM ...... 4 REDEMPTION OF BONDS ...... 6 Optional Redemption ...... 6 Mandatory Redemption ...... 6 Notice of Redemption ...... 7 Manner of Redemption ...... 7 BOND INSURANCE ...... 7 BOND INSURANCE RISK FACTORS ...... 9 DEBT LIMITS AND REMAINING BORROWING CAPACITY OF THE BOROUGH ...... 10 LITIGATION ...... 10 DEFAULTS AND REMEDIES ...... 11 LEGALITY FOR INVESTMENT ...... 11 NEGOTIABILITY ...... 11 MUNICIPAL BANKRUPTCY LAW ...... 11 TAX MATTERS ...... 12 State Tax Matters ...... 12 Federal Income Tax Matters ...... 12 Original Issue Discount ...... 12 Original Issue Premium ...... 12 Interest Deductions for Financial Institutions ...... 13 Continuing Compliance ...... 13 Collateral Tax Liabilities...... 13 Change in Law; Adverse Determinations ...... 14 CONTINUING DISCLOSURE UNDERTAKING ...... 14 Summary of Continuing Disclosure Undertaking Compliance ...... 16 RATING ...... 16 LEGAL OPINION ...... 17 UNDERWRITING ...... 17 RELATED PARTIES ...... 17 MISCELLANEOUS ...... 17

Demographic and Economic Information Relating to the Borough of Baldwin ...... Appendix A Summary Financial Information Relating to Borough of Baldwin Years ending December 31, 2013, 2014 and 2015 ...... Appendix B Borough of Baldwin 2016 and 2017 Budgets ...... Appendix C 2015 Municipal Annual Audit and Financial Report ...... Appendix D Specimen Municipal Bond Insurance Policy ...... Appendix E Form of Bond Counsel Opinion ...... Appendix F OFFICIAL STATEMENT $4,500,000* Borough of Baldwin Allegheny County, Pennsylvania General Obligation Bonds, Series of 2017

INTRODUCTION

This Official Statement, including the cover page hereof and Appendices hereto, is furnished by the Borough of Baldwin, Allegheny County, Pennsylvania (the "Borough") in connection with the issuance of its General Obligation Bonds, Series of 2017 (the “Bonds”) in the principal amount of $4,500,000* dated as of the original delivery date of the Bonds. The Bonds are being issued pursuant to an ordinance of the Borough enacted on _____, 2017 (the “Ordinance”), and pursuant to the Local Government Unit Debt Act of the Commonwealth of Pennsylvania, 53 Pa. C. S. Chs. 80-82 (the “Debt Act”). U.S. Bank National Association (“Paying Agent”), the designated corporate trust office of which is located in Pittsburgh, Pennsylvania, will act as the paying agent and sinking fund depository for the Bonds.

The Bonds are general obligations of the Borough, and the full faith, credit and taxing power of the Borough are pledged for the payment of the principal of and interest on the Bonds when due. The Bonds are payable from the tax and other general revenues of the Borough, including ad valorem taxes on all taxable real property in the Borough, which taxing power is presently without limitation as to rate or amount for the payment of debt approved under the Debt Act.

Neither the delivery of this Official Statement nor any sale of the Bonds made hereunder shall, under any circumstances, create any implication that thereafter there have been no changes in the affairs of the Borough since the date of this Official Statement or the earliest date as of which certain information contained herein is given.

AUTHORITY FOR ISSUANCE

The Bonds are issued in accordance with the requirements of the Debt Act and pursuant to the Ordinance. Issuance of the Bonds will be approved by the Department of Community and Economic Development of the Commonwealth pursuant to the Debt Act.

PURPOSE OF THE ISSUE

Proceeds of the Bonds will be used towards: (1) various capital improvement projects in the Borough; and (2) the costs of issuing the Bonds.

Sources and Uses of Bond Proceeds

The following is a summary of the sources and uses of the Bond proceeds

Source of Funds Bond Par Amount ...... $______Original Issue Discount/Premium ...... ______Bond Proceeds ...... $______

Use of Funds Project deposit ...... $______Costs of Issuance(1) ...... ______Total Uses of Bond Proceeds ...... $______(1) Includes, rating fee, bond insurance premium, underwriter’s discount, legal fees, paying agent fees and other miscellaneous costs.

*Preliminary amount, subject to change.

THE BONDS

Description

The Bonds will be issued in fully registered form in denominations of $5,000 and integral multiples thereof, will be in the aggregate principal amount of $4,500,000, will be dated as of the original delivery date of the Bonds, and will bear interest at the rates and mature in the amounts and on the dates set forth on the inside cover of this Official Statement. Interest on the Bonds will be payable initially on November 1, 2017, and thereafter, semiannually on May 1 and November 1 of each year until the maturity date of such Bond or, if such Bond is subject to redemption prior to maturity, until the date fixed for redemption thereof, if payment of the redemption price has been duly made or provided for.

When issued, the Bonds will be registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), New York, New York. Purchasers of the Bonds (the “Beneficial Owners”) will not receive any physical delivery of bond certificates, and beneficial ownership of the Bonds will be evidenced only by book entries. See “BOOK – ENTRY ONLY SYSTEM” herein.

Payment of Principal and Interest

So long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, payments of principal of, redemption premium, if any, and interest on the Bonds, when due, are to be made to DTC and all such payments shall be valid and effective to satisfy fully and to discharge the obligations of the Borough with respect to, and to the extent of, principal, redemption premium, if any, and interest so paid.

If the use of the Book-Entry Only System for the Bonds is discontinued for any reason, bond certificates will be issued to the Beneficial Owners of the Bonds and payment of principal and interest on the Bonds shall be made as described in the following paragraphs:

The principal of the Bonds, when due upon maturity or upon any earlier redemption, will be paid to the registered owners of the Bonds, or registered assigns, upon surrender of the Bonds to U.S. Bank National Association. (the “Paying Agent”), acting as paying agent and sinking fund depository for the Bonds, at its designated corporate trust office in Pittsburgh, Pennsylvania (or to any successor paying agent at its designated office(s)).

Interest on the Bonds will be payable to the registered owner of a Bond from the interest payment date next preceding the date of registration and authentication of the Bond, unless: (a) such Bond is registered and authenticated as of an interest payment date, in which event such Bond shall bear interest from said interest payment date, or (b) such Bond is registered and authenticated after a Record Date (hereinafter defined) and before the next succeeding interest payment date, in which event such Bond shall bear interest from such interest payment date, or (c) such Bond is registered and authenticated on or prior to the Record Date preceding November 1, 2017, in which event such Bond shall bear interest from the date of original delivery, or (d) as shown by the records of the Paying Agent, interest on such Bond shall be in default, in which event such Bond shall bear interest from the date to which interest was last paid on such Bond. Interest on each Bond will be payable by check drawn on the Paying Agent, which shall be mailed to the registered owner whose name and address shall appear, at the close of business on the fifteenth calendar day of the month (whether or not a day on which the Paying Agent is open for business) next preceding each interest payment date (the “Record Date”), on the registration books maintained by the Paying Agent, irrespective of any transfer or exchange of the Bond subsequent to such Record Date and prior to such interest payment date, unless the Borough shall be in default in payment of interest due on such interest payment date. In the event of any such default, such defaulted interest shall be payable to the person in whose name the Bond is registered at the close of business on a special record date for the payment of such defaulted interest established by notice mailed by the Paying Agent to the registered owners of such Bonds not less than fifteen (15) days preceding such special record date. Such notice shall be mailed to the persons in whose names such Bonds are registered at the close of business on the fifth (5th) day preceding the date of mailing.

If the date for payment of the principal of or interest on any Bonds shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the Commonwealth are authorized or required by law or executive order to close, then the date for payment of such principal or interest shall be the next succeeding day that is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized or required to close, and payment on such date shall have the same force and effect as if made on the nominal date established for such payment.

Transfer, Exchange and Registration of Bonds

Subject to the provisions described below under “Book-Entry Only System,” Bonds are transferable or exchangeable by the registered owners thereof upon surrender of Bonds to the Paying Agent, accompanied by a written instrument or instruments in form, with instructions, and with guaranty of signature satisfactory to the Paying Agent, duly executed by the registered owner of such Bond or his attorney-in-fact or legal representative. The Paying Agent shall enter any transfer of ownership of Bonds in the registration books and shall authenticate and deliver at the earliest practicable time in the name of the transferee or transferees a new fully registered bond or bonds of authorized denominations of the same series, maturity and interest rate for the aggregate principal amount that the registered owner is entitled to receive. The Borough and the Paying Agent may deem and treat the registered owner of any Bond as the absolute owner thereof (whether or not a Bond shall be overdue) for the purpose of receiving payment of or on account of principal and interest and for all other purposes, and the Borough and the Paying Agent shall not be affected by any notice to the contrary.

The Borough and the Paying Agent shall not be required (a) to register the transfer of or exchange any Bonds then considered for redemption during a period beginning at the close of business on the fifteenth (15th) day next preceding any date of selection of Bonds to be redeemed and ending at the close of business on the day on which the applicable notice of redemption is mailed or (b) to register the transfer of or exchange any portion of any Bond selected for redemption until after the redemption date. Bonds may be exchanged for a like aggregate principal amount of Bonds of other authorized denominations of the same series, maturity and interest rate.

SECURITY FOR THE BONDS

General Obligations

The Bonds will be general obligations of the Borough, payable from the tax and other general revenues of the Borough. The Borough has covenanted in the Ordinance, that the Borough shall do the following: (1) include the amount of the debt service for the Bonds for each fiscal year in which such sums are payable in its budget for that year, (2) appropriate those amounts from its general revenues for the payment of such debt service, and (3) duly and punctually pay or cause to be paid from its Sinking Fund, as hereinafter defined, or any other of its revenues or funds, the principal of and interest on each of the Bonds at the dates and place and in the manner stated in the Bonds, according to the true intent and meaning thereof. For such budgeting, appropriation and payment in respect to the Bonds, the Borough under the Ordinance, has pledged its full faith, credit and taxing power. Under the provisions of the Pennsylvania Borough Code, as presently enacted and construed, the Borough has the power to levy an annual ad valorem tax on all taxable real property within the Borough, presently without limitation as to rate or amount, for the purpose of paying debt service on the Bonds.

Sewer Fund

The Borough owns and operates the sewer system within the Borough. Sewer billings are collected by Legal Tax Service, a third party vendor, on behalf of the Borough and deposited into the Sewer Fund, which is held by the Borough. The Sewer Fund is an Enterprise Fund of the Borough and is available to, and expected to be applied to an allocable portion of the payment of debt service on the Bonds.

Sinking Fund

A sinking fund designated Sinking Fund-General Obligation Bonds, Series of 2017 (the "Sinking Fund"), created under the Ordinance, shall be held by U.S. Bank National Association Pittsburgh, Pennsylvania (the “Sinking Fund Depository”). The Borough shall deposit in the Sinking Fund not later than each date when interest or principal is to become due on the Bonds, a sum which together with any other available funds on deposit in the Sinking Fund shall be sufficient to pay, in full, interest and principal then due and payable on the Bonds.

The Sinking Fund shall be secured and may be invested by the Sinking Fund Depository in securities or deposits authorized by the Debt Act, upon direction of the Borough. Such deposits and securities, if any, shall be in the name of the Borough but subject to withdrawal or collection only by the Sinking Fund Depository, and such deposits and securities, together with interest thereon shall be a part of the Sinking Fund.

The Sinking Fund Depository is authorized, without further order from the Borough, to pay from the Sinking Fund the principal of and interest on the Bonds when due and payable.

BOOK-ENTRY ONLY SYSTEM

The information in this section has been obtained from materials provided by DTC for such purpose. The Borough (herein referred to as the “Issuer”) and the Underwriter do not guaranty the accuracy or completeness of such information, and such information is not to be construed as a representation of the Borough or the Underwriter.

The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or in such other name as may be requested by an authorized representative of DTC. One fully-registered certificate for the Bonds of each maturity will be issued in principal amount equal to the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds and provides asset servicing for over 2.2 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (the “Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC, in turn, is owned by a number of Direct Participants of DTC and Members of the National Securities Clearing Corporation, Fixed Income Clearing Corporation and Emerging Markets Clearing Corporation (NSCC, FICC and EMCC, also subsidiaries of DTCC), as well as by the New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National Association of Securities Dealers, Inc. Access to the DTC system is also available to others, such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (the “Indirect Participants”). DTC has Standard & Poor’s highest rating, “AA+.” The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of the Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (the “Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. 4

Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owners entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of the Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Bonds except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the security documents. For example, Beneficial Owners to Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices of Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Paying Agent and request that copies of the notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the Bonds (or all Bonds of a particular series or subseries and maturity) are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue (or maturity) to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

So long as the Bonds are held by DTC under a book-entry system, payments of the principal of and interest on the Bonds and, if applicable, any premium payable upon redemption thereof will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants' accounts upon DTC’s receipt of funds and corresponding detail information from the Issuer or the Paying Agent on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participants and not of DTC, the Paying Agent or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of the principal of and interest on Bonds and, if applicable, any premium payable upon redemption thereof to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Issuer or the Paying Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue its services as a securities depository for the Bonds at any time by giving reasonable notice to the Issuer or the Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, Bonds are required to be printed and delivered.

The Issuer may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered. 5 So long as a nominee of DTC is the registered owner of the Bonds, references herein to the Bondholders or the holders or owners of the Bonds shall mean DTC and shall not mean the Beneficial Owners of the Bonds. The Borough and the Paying Agent will recognize DTC or its nominee as the holder of all of the Bonds for all purposes, including the payment of the principal or redemption price of and interest on the Bonds, as well as the giving of notices and any consent or direction required or permitted to be given to or on behalf of the Bondholders under the Ordinance. Neither the Borough nor the Paying Agent will have any responsibility or obligation to Participants or Beneficial Owners with respect to payments or notices to Bondholders.

NEITHER THE BOROUGH NOR THE PAYING AGENT WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY DTC PARTICIPANT, INDIRECT PARTICIPANT OR BENEFICIAL OWNER OR ANY OTHER PERSON WITH RESPECT TO: (1) THE BONDS; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT; (3) THE PAYMENT BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT DUE TO ANY BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE BONDS; (4) THE DELIVERY TO ANY BENEFICIAL OWNER BY DTC OR ANY DTC PARTICIPANT OR INDIRECT PARTICIPANT OF ANY NOTICE WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE ORDINANCE TO BE GIVEN TO BONDHOLDERS; (5) THE SELECTION OF THE BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE BONDS; OR (6) ANY OTHER ACTION TAKEN BY DTC AS BONDHOLDER.

The Issuer and the Paying Agent cannot give any assurances that DTC or the Participants will distribute payments of the principal or redemption price of and interest on the Bonds paid to DTC or its nominee, as the registered owner of the Bonds, or any redemption or other notices, to the Beneficial Owners or that they will do so on a timely basis, or that DTC will serve and act in the manner described in this Official Statement.

REDEMPTION OF BONDS

Optional Redemption

The Bonds stated to mature after ______, ____ are subject to redemption prior to maturity at the option of the Borough in any order of maturities either as a whole, or in part, at any time on or after _____, ____, and if in part, by lot within a maturity, at a redemption price equal to 100% of the principal amount thereof, together with interest accrued thereon to the date fixed for redemption.

Mandatory Redemption

The Bonds stated to mature on November 1, ____, and on November 1, ____ are subject to mandatory redemption, in part, prior to maturity, by lot within a maturity, at a redemption price equal to 100% of the principal amount thereof, together with accrued interest thereon, to the dates fixed for redemption, on November 1 of the years and in the amounts set forth below:

The Bonds Stated The Bonds Stated to Mature on November 1, ____ to Mature on November 1, ____ Year Principal Amount Year Principal Amount $ $

(1) (1)

(1) At maturity.

In lieu of any such Mandatory Redemption the Paying Agent, on behalf of the Borough, may purchase from money in the Sinking Fund at a price not to exceed the principal amount plus accrued interest, or the Borough may tender to the Paying Agent, all or part of the Bonds subject to being drawn for mandatory redemption in any such year.

Notice of Redemption

Notice of any redemption shall be given by depositing a copy of the redemption notice in first class mail not less than thirty (30) days nor more than sixty (60) days prior to the date fixed for redemption addressed to each of the registered owners of Bonds to be redeemed, in whole or in part, at the addresses shown on the registration books; provided, however, that failure to give such notice by mailing, or any defect therein or in the mailing thereof, shall not affect the validity of any proceeding for redemption of other Bonds so called for redemption as to which proper notice has been given.

On the date designated for redemption, notice having been provided as aforesaid, and money for payment of the principal and accrued interest being held by the Paying Agent, interest on the Bonds or portions thereof so called for redemption shall cease to accrue and such Bonds or portions thereof shall cease to be entitled to any benefit or security under the Ordinance, and registered owners of such Bonds or portions thereof so called for redemption shall have no rights with respect to such Bonds, except to receive payment of the principal of and accrued interest on such Bonds to the date fixed for redemption.

Manner of Redemption

If a Bond is of a denomination larger than $5,000, a portion of such Bond may be redeemed. For the purposes of redemption, a Bond shall be treated as representing the number of Bonds that is obtained by dividing the principal amount thereof by $5,000, each $5,000 portion of such Bond being subject to redemption. In the case of partial redemption of a Bond, payment of the redemption price shall be made only upon surrender of such Bond in exchange for Bonds of the same series, maturity and interest rate and in authorized denominations in the aggregate principal amount equal to the unredeemed portion of the principal amount thereof.

If the redemption date for any Bonds shall be a Saturday, Sunday, legal holiday or a day on which banking institutions in the Commonwealth are authorized or required by law or executive order to close, then the date for payment of the principal, premium, if any, and interest upon such redemption shall be the next succeeding day which is not a Saturday, Sunday, legal holiday or a day on which such banking institutions are authorized or required to close, and payment on such date shall have the same force and effect as if made on the nominal date of redemption.

So long as Cede & Co., as nominee of DTC, is the registered owner of the Bonds, however, payment of the redemption price shall be made to Cede & Co. in accordance with the existing arrangements by and among the Borough, the Paying Agent and DTC and, if less than all of the Bonds of any particular maturity are to be redeemed, the amount of the interest of each DTC Participant, Indirect Participant and Beneficial Owner on such Bonds to be redeemed shall be determined by the governing arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. See “Book-Entry Only System” herein for further information regarding redemption of Bonds registered in the name of Cede & Co.

BOND INSURANCE

BOND INSURANCE POLICY

Concurrently with the issuance of the Bonds, Municipal Assurance Corp. ("MAC") will issue its Municipal Bond Insurance Policy for the Bonds (the "Policy"). The Policy guarantees the scheduled payment of principal of and interest on the Bonds when due as set forth in the form of the Policy included as an exhibit to this Official Statement.

The Policy is not covered by any insurance security or guaranty fund established under New York or Connecticut insurance law.

MUNICIPAL ASSURANCE CORP. MAC is a New York domiciled financial guaranty insurance company and an indirect subsidiary of Assured Guaranty Ltd. (“AGL”), a Bermuda-based holding company whose shares are publicly traded and are listed on the New York Stock Exchange under the symbol “AGO”. AGL, through its operating subsidiaries, provides credit enhancement products to the U.S. and global public finance, infrastructure 7 and structured finance markets. Neither AGL nor any of the shareholders or affiliates of AGL, other than MAC, is obligated to pay any debts of MAC or any claims under any insurance policy issued by MAC.

MAC is wholly owned by Municipal Assurance Holdings Inc., which, in turn, is owned 61% by Assured Guaranty Municipal Corp. and 39% by Assured Guaranty Corp.

MAC’s financial strength is rated "AA" (stable outlook) by S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC (“S&P”) and "AA+" (stable outlook) by Kroll Bond Rating Agency, Inc. (“KBRA”). Each rating of MAC should be evaluated independently. An explanation of the significance of the above ratings may be obtained from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any security, and such ratings are subject to revision or withdrawal at any time by the rating agencies, including withdrawal initiated at the request of MAC in its sole discretion. In addition, the rating agencies may at any time change MAC’s long-term rating outlooks or place such ratings on a watch list for possible downgrade in the near term. Any downward revision or withdrawal of any of the above ratings, the assignment of a negative outlook to such ratings or the placement of such ratings on a negative watch list may have an adverse effect on the market price of any security guaranteed by MAC. MAC only guarantees scheduled principal and scheduled interest payments payable by the issuer of bonds insured by MAC on the date(s) when such amounts were initially scheduled to become due and payable (subject to and in accordance with the terms of the relevant insurance policy), and does not guarantee the market price or liquidity of the securities it insures, nor does it guarantee that the ratings on such securities will not be revised or withdrawn.

Current Financial Strength Ratings

On July 8, 2016, KBRA issued a financial guaranty surveillance report in which it affirmed the insurance financial strength rating of “AA+”, with a Stable Outlook, of MAC. MAC can give no assurance as to any further ratings action that KBRA may take.

On July 27, 2016, S&P issued a credit rating report in which it affirmed MAC’s financial strength rating of “AA” (stable outlook). MAC can give no assurance as to any further ratings action that S&P may take.

For more information regarding MAC’s financial strength ratings and the risks relating thereto, see AGL’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016.

Capitalization of MAC

As of December 31, 2016, MAC’s policyholders’ surplus and contingency reserve were approximately $747 million and its unearned premium reserve was approximately $333 million, in each case, determined in accordance with statutory accounting principles.

Incorporation of Certain Documents by Reference

Portions of the following document filed by AGL with the Securities and Exchange Commission (the “SEC”) that relate to MAC are incorporated by reference into this Official Statement and shall be deemed to be a part hereof: the Annual Report on Form 10-K for the fiscal year ended December 31, 2016 (filed by AGL with the SEC on February 24, 2017).

All financial statements of MAC and all other information relating to MAC included in, or as exhibits to, documents filed by AGL with the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, excluding Current Reports or portions thereof “furnished” under Item 2.02 or Item 7.01 of Form 8-K, after the filing of the last document referred to above and before the termination of the offering of the Bonds shall be deemed incorporated by reference into this Official Statement and to be a part hereof from the respective dates of filing such documents. Copies of materials incorporated by reference are available over the internet at the SEC’s website at http://www.sec.gov, at AGL’s website at http://www.assuredguaranty.com, or will be provided upon request to Municipal Assurance Corp.: 1633 Broadway, New York, New York 10019, Attention: Communications Department (telephone (212) 974- 0100). Except for the information referred to above, no information available on or through AGL’s website shall be deemed to be part of or incorporated in this Official Statement. 8 Any information regarding MAC included herein under the caption “BOND INSURANCE – Municipal Assurance Corp.” or included in a document incorporated by reference herein (collectively, the “MAC Information”) shall be modified or superseded to the extent that any subsequently included MAC Information (either directly or through incorporation by reference) modifies or supersedes such previously included MAC Information. Any MAC Information so modified or superseded shall not constitute a part of this Official Statement, except as so modified or superseded.

Miscellaneous Matters

MAC makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, MAC has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding MAC supplied by MAC and presented under the heading “BOND INSURANCE”.

BOND INSURANCE RISK FACTORS

In the event of a default in the payment of principal or interest with respect to the Bonds when any such payment becomes due, any owner of the Bonds shall have a claim under the applicable Bond Insurance Policy (the Policy) for such payment. However, in the event of any acceleration of the due date of such principal by reason of mandatory or optional redemption or resulting from any default or otherwise, other than any advancement of maturity pursuant to a mandatory sinking fund payment, any payments to be made pursuant to the Policy will be made in such amounts and at such times as such payments would have been due had there not been any such acceleration. In addition, the Policy does not insure the payment of any redemption premium. To the extent that any payment of principal and interest by the Issuer in connection with a mandatory or optional prepayment of the Bonds is recovered by the Issuer from any owner of the Bonds as a voidable preference under applicable bankruptcy law, such payments are covered by the Policy. However, such payments will be made by the Bond Insurer at such times and in such amounts as such payments would have been due had there been no such prepayment by the Issuer, unless the Bond Insurer chooses to pay such amounts at an earlier date.

Under most circumstances, any default in the payment of principal and interest does not accelerate the obligations of the Bond Insurer without its consent. The Bond Insurer may direct, and must consent to, any remedies that the Paying Agent exercises following such a default and the Bond Insurer’s consent may be required in connection with amendments to the applicable Agreements or Indenture in those circumstances.

In the event that the Bond Insurer is unable to make any payments of principal and interest as such payments become due under the Policy, the Bonds will be payable solely from the moneys received by the Paying Agent pursuant to the applicable Agreements. In the event that the Bond Insurer becomes obligated to make payments with respect to the Bonds, no assurance is given that such event will not adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds.

The long-term ratings on the Bonds are dependent in part on the financial strength of the Bond Insurer and its claims paying ability. The Bond Insurer’s financial strength and claims paying ability are predicated upon a number of factors that could change over time. No assurance is given that the long- term ratings of the Bond Insurer and, therefore, the ratings on the Bonds insured will not be subject to downgrade, and such event could adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds. See “RATING” herein.

The obligations of the Bond Insurer under the Policy are general obligations of the Bond Insurer and, upon an event of default by the Bond Insurer, the remedies available to the Paying Agent may be limited by applicable bankruptcy law or other similar laws related to the insolvency of entities like the Bond Insurer.

Neither the Issuer nor the Underwriter has made an independent investigation into the claims paying ability of the Bond Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Bond Insurer is given. Thus, when making an investment decision, potential investors should carefully consider the ability of the Issuer to pay principal and interest on the 9

Bonds and the claims paying ability of the Bond Insurer, particularly over the life of their investment. See “BOND INSURANCE” herein for further information provided by the Bond Insurer with respect to itself and the Policy, which includes further instructions for obtaining current financial information concerning the Bond Insurer.

DEBT LIMITS AND BORROWING CAPACITY OF THE BOROUGH

Under the Debt Act, as presently enacted and construed, (i) new non-electoral debt may not be incurred if the net amount of such new non-electoral debt plus all outstanding net non-electoral debt would cause total net non-electoral debt to exceed 250% of the Borrowing Base, as defined in the Act, and (ii) new lease rental debt or new non-electoral debt may not be incurred if the net amount of such new debt plus all outstanding net non-electoral debt and net lease rental debt would cause the total net non-electoral debt plus net lease rental debt to exceed 350% of the Borrowing Base.

The current Borrowing Base of the Borough is shown herein.

Fiscal Year Ending December 31 2014 2015 2016 All Monies Received $14,166,704 $19,420,986 $16,355,528 Less: Required Deductions: a. Rental & Sinking Fund Reimbursement 0 0 0 b. Receipts Pledged to Self-Liquidating Debt or for Payments Under Leases or Guaranties -749,649 -937,849 -937,855 c. Interest Earned on Sinking Fund 0 0 0 d. Grant Payments for Equipment 0 0 0 e. Sale of Property & Non-Recurring Revenues 0 -21,408 -42,964 Net Revenues $13,417,055 $18,461,729 $15,374,709

Total Net Revenues for Three Years $47,253,493

Borrowing Base – Total Net Revenues Divided by Three $15,751,164

Applicable Debt Limitations: a. Non-electoral Debt – 250% of Borrowing Base $39,377,911 b. Non-electoral plus Lease Rental Debt – 350% of Borrowing Base $55,129,075

Calculation of Debt Limits and Remaining Borrowing Capacity

Net Remaining Borrowing Debt Limit Debt Outstanding (1) Capacity Net Nonelectoral Debt Limit: (250% of Borrowing Base) $39,377,911 $15,095,000* $24,282,911

Net Nonelectoral and Lease Rental Debt Limit: (350% of Borrowing Base) $55,129,075 $15,095,000* $40,034,075

(1) See “APPENDIX A – BONDED INDEBTEDNESS”. *Preliminary amount, subject to change.

LITIGATION

At the time of settlement, the Borough Council and the Solicitor will deliver a certificate stating that there is no litigation pending with respect to the Bonds, the Ordinance or the right of the Borough to issue the Bonds.

DEFAULTS AND REMEDIES

In the event of failure of the Borough to pay or cause to be paid the interest on or principal of the Bonds, as the same becomes due and payable, the holders of the Bonds shall be entitled to certain remedies provided by the Debt Act. Among the remedies, if the failure to pay shall continue for 30 days, holders of the Bonds shall have the right to recover the amount due by bringing an action in assumpsit. The Act provides that any judgment shall have an appropriate priority upon the funds next coming into the treasury of the Borough. The Act also provides that upon a default of at least 30 days, holders of at least 25 percent of the Bonds may appoint a trustee to represent them. The Act provides certain other remedies in the event of default, and further qualifies the remedies hereinbefore described.

LEGALITY FOR INVESTMENT

Applicable laws of the Commonwealth of Pennsylvania provide that the Bonds are legal investments for funds held by, among others, banks, savings banks, trust companies, insurance companies or associations and fiduciaries. The Bonds are authorized security for deposits of funds of the Commonwealth of Pennsylvania and any political subdivision thereof.

NEGOTIABILITY

Under the Debt Act, the Bonds have all the qualities and incidents of securities under Article 8 of the Pennsylvania Uniform Commercial Code and are negotiable instruments to the extent provided therein.

MUNICIPAL BANKRUPTCY LAW

The undertakings of the Borough should be considered with reference to Chapter IX of the Bankruptcy Act, United States Code Title 2, Section 301, et seq., as amended by Public Law 94-260, approved April 8, 1976, and as further amended on November 6, 1978 by the Bankruptcy Reform Act of 1978, effective October 1, 1979, and other bankruptcy laws affecting creditors’ rights and municipalities in general. The amendments of P.L. 94-260 replace former Chapter IX Legislation and permit a state, political subdivision, public agency or instrumentality that is insolvent or unable to meet its debts to file a petition in a court of bankruptcy for the purpose of effecting a plan to adjust its debts, such a petitioner to file with the court a list of the petitioner’s creditors; provided that a petition filed under said Chapter shall operate as a stay of the commencement or continuation of any judicial or other proceeding against the petitioner; grant priority to debts owed for service or materials actually provided within three months of the filing of the petition; direct the petitioner to file a plan for adjustment of its debts; and provide that the plan must be accepted in writing by or on behalf of the creditors holding at least two-thirds in amount and more than one-half in number of the listed claims.

Act No. 1987-47 (“Act 47”) of the Commonwealth known as the “Distressed Municipalities Act”, governs the ability of the Borough to declare bankruptcy under the Federal Bankruptcy Code. Act 47 provides that no municipality may file a municipal debt adjustment action pursuant to the Bankruptcy Code unless one of the following conditions exists: (1) filing is recommended by a plan coordinator appointment by the Pennsylvania Department of Community and Economic Development (the “Department”); (2) there is imminent jeopardy of an action by a creditor that is likely to substantially interrupt or restrict the continued ability of the municipality to provide health or safety services; (3) creditors have rejected a plan and unsuccessful negotiations have continued for 10 days; (4) a condition of financial distress is potentially soluble only by using a remedy exclusively available through the Federal Municipal Debt Readjustment Act; or (5) the governing body of a municipality determined by the Department to be financially distress has failed to adopt a plan or carry out the recommendations of such a plan coordinator. Act 47 also contains provisions and circumstances under which a municipality may be declared to be in “financial distress” making it eligible for interest free loans, grants and/or administrative assistance through the Department. The Department would have the authority to recommend a plan to increase taxes or other sources of revenues, reducing services, rescheduling obligations or merging municipalities.

The above reference to the Federal Bankruptcy Code or Act 47 is not to be construed as an indication that the Borough expects to resort to the provisions of such laws or that, if it did, any proposed plan or plans would include a dilution of the sources of payment of and security for the payment of the Bonds.

TAX MATTERS

State Tax Matters

In the opinion of Bond Counsel, the Bonds, and the interest income therefrom, are free from taxation for purposes of personal income, corporate net income and personal property taxes within the Commonwealth of Pennsylvania.

The residence of a holder of a Bond in a state other than Pennsylvania, or being subject to tax in a state other than Pennsylvania, may result in income or other tax liabilities being imposed by such other state or its political subdivisions based on the interest or other income from the Bonds.

Federal Income Tax Matters

In the opinion of Bond Counsel, based upon an analysis of existing laws, regulations, rulings and court decisions, interest on the Bonds (including, in the case of Bonds sold at an original issue discount, the difference between the initial offering price and par) is excluded from gross income for Federal income tax purposes. Bond Counsel is also of the opinion that interest on the Bonds is not a specific item of tax preference under Section 57 of the Internal Revenue Code of 1986, as amended (the “Code”) for purposes of Federal individual or corporate alternative minimum taxes.

Original Issue Discount

The Bonds that mature on _____, ____ through and including _____, ____ (collectively, the "Tax- Exempt Discount Bonds") are being offered and sold to the public at an original issue discount ("OID") from the amounts payable at their maturity. OID is the excess of the stated redemption price of a bond at maturity (par) over the price to the public at which a substantial amount of bonds of the same maturity are sold pursuant to the initial offering. Under the Code, OID on each Tax-Exempt Discount Bond will accrue over its term and the amount of accretion will be based on the yield to maturity, compounded semi- annually. The amount of OID that accrues during each semi-annual period will do so ratably within that period on a daily basis. With respect to an initial purchaser of a Tax-Exempt Discount Bond at its initial offering price, the portion of OID that accrues during the period that such purchaser owns such Bond is added to the purchaser's tax basis for purposes of determining gain or loss at the maturity, redemption, sale, or other disposition of that Tax-Exempt Discount Bond and thus, in practical effect, is treated as interest, which is excludable from gross income for federal income tax purposes.

Holders of Tax-Exempt Discount Bonds should consult their own tax advisors as to the effect of OID with respect to their federal tax liability.

Original Issue Premium

The Bonds that mature on _____, ____ through and including _____, ____ (collectively, the “Tax- Exempt Premium Bonds”) are being sold at an original issue premium (“OIP”). An amount equal to the excess of the issue price of a Tax-Exempt Premium Bond over its stated redemption price at maturity constitutes OIP on such Tax-Exempt Premium Bond. An initial purchaser of a Tax-Exempt Premium Bond must amortize any OIP over such Tax-Exempt Premium Bond’s term using constant yield principles, based on the purchaser’s yield to maturity (or, in the case of Tax-Exempt Premium Bonds callable prior to their maturity, by amortizing the OIP to the call date, based on the purchaser’s yield to the call date and giving effect to any call premium). As OIP is amortized, the amount of the amortization offsets a corresponding amount of interest for the period and the purchaser’s basis in such Tax-Exempt Premium Bond is reduced by a corresponding amount resulting in an increase in the gain (or decrease in the loss) to be recognized for federal income tax purposes upon a sale or disposition of such Tax-Exempt Premium Bond prior to its maturity. Even though the purchaser’s basis may be reduced, no federal income tax deduction is allowed. Purchasers of the Tax-Exempt Premium Bonds should consult with their tax advisors with respect to the determination and treatment of OIP for federal income tax purposes and with respect to the state and local tax consequences of owning a Tax-Exempt Premium Bond.

Interest Expense Deductions for Financial Institutions

Under Section 265 of the Code, financial institutions are denied any deduction for interest expenses that are allocable, by a formula, to tax-exempt obligations acquired after August 7, 1986. An exception, which permits a deduction for 80% of such interest expenses, is provided in respect of certain tax-exempt obligations issued by a qualified issuer that specifically designates such obligations as “qualified tax-exempt obligations” under Section 265 of the Code.

The Borough is a qualified issuer and the Borough has designated the Bonds as “qualified tax- exempt obligations” for the purposes and effect contemplated by Section 265 of the Code.

Financial institutions intending to purchase Bonds should consult their own tax advisors to determine the effect of the interest expense deduction on their federal tax liability.

Continuing Compliance

The Code imposes various terms, restrictions, conditions and requirements relating to the exclusion from gross income for Federal income tax purposes of interest on obligations such as the Bonds. The Borough has covenanted to comply with all such requirements, including non-arbitrage requirements under Section 148 of the Code, that are necessary to ensure that interest on the Bonds will not be includable in gross income for Federal income tax purposes. Failure to comply with these covenants could result in interest on the Bonds being includable in gross income for Federal income tax purposes and such inclusion could be required retroactively to the date of issuance of the Bonds. The opinion of Bond Counsel assumes compliance with the aforesaid covenants. Moreover, Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds may adversely affect the tax- exempt status of the interest on the Bonds.

Certain requirements and procedures contained or referred to in the Resolution and other relevant documents may be changed and certain actions (including, without limitation, defeasance of the Bonds) may be taken or omitted under the circumstances and subject to the terms and conditions set forth in such documents. Such changes or actions could constitute an exchange or other tax event with respect to the Bonds, which could result in gain or loss to the holder of a Bond, and a consequent tax liability.

Pursuant to its continuing disclosure obligations made pursuant to SEC Rule 15c2-12 (see “Continuing Disclosure Undertaking” herein), the Borough may be required to provide notice of such changes or actions, as Material Events under said Rule. However, holders of the Bonds should consult their own tax advisors as to the effect of such changes or actions with respect to their federal tax liability.

Collateral Tax Liabilities

Although Bond Counsel has rendered an opinion that interest on the Bonds is excludable from gross income for Federal and Pennsylvania income tax purposes, the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may result in other collateral effects on a Bondholder’s Federal, state or local tax liabilities. The nature and extent of these other tax consequences may depend upon the particular tax status of the Bondholder or the Bondholder’s other items of income or deduction. Bond Counsel expresses no opinions regarding any tax consequences other than what is set forth in its opinion; each Bondholder or potential Bondholder is urged to consult with its own tax advisors with respect to the effects of purchasing, holding or disposing of the Bonds on its tax liabilities.

For example, corporations are required to include interest on the Bonds in determining “adjusted current earnings” under Section 56(c) of the Code, which may increase the amount of any alternative minimum tax owed. Other tax consequences for certain taxpayers include, without limitation, increasing the federal tax liability of certain foreign corporations subject to the branch profits tax imposed by Section 884 of the Code, increasing the federal tax liability of certain insurance companies under Section 832 of the Code, increasing the federal tax liability of certain S corporations subject to Sections 1362 and 1375 of the Code, increasing the federal tax liability of certain individual recipients of social security or railroad retirement benefits under Section 86 of the Code, limiting the use of the Earned Income Credit under Section 32 of the Code, limiting the use of the refundable credit for coverage under a qualified health plan under Section 36B of the Code, and denying an interest expense deduction to certain financial institutions

under Section 265 of the Code (unless, and in the circumstance when, the Bonds have been designated by the issuer as “qualified tax-exempt obligations”).

Change in Law; Adverse Determinations

From time to time, certain legislative proposals may be introduced, or are pending, in the Congress of the United States or the various state legislatures, including some that carry retroactive effective dates, that, if, enacted, could alter or amend the federal and state tax matters described above or affect the market value of the Bonds. No prediction can be made whether or in what form any such proposal or proposals might be enacted into law or whether, if enacted, the same would apply to bonds issued prior to enactment. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation. Bond Counsel expresses no opinion regarding any pending or proposed federal tax legislation.

The Internal Revenue Service (the “Service”) regularly audits tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includible in the gross income of the owners thereof for federal income tax purposes. No prediction can be made whether or not the Service will commence an audit of the Bonds. If an audit is commenced, under current procedures, the Service may treat the Borough as a taxpayer and the Bondholders may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Bonds until such time as the audit is concluded, regardless of the ultimate outcome.

Payments of interest on, and proceeds of the sale, redemption or maturity of, tax-exempt obligations, such as the Bonds, are in certain cases required to be reported to the Service. Additionally, backup withholding may apply to any such payments to any Bondholder who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or to any Bondholder who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns.

THE FOREGOING IS NOT INTENDED AS AN EXHAUSTIVE LIST OF THE PROVISIONS OF FEDERAL, STATE AND LOCAL TAX LAWS WHICH MAY HAVE AN EFFECT ON INDIVIDUALS AND CORPORATIONS HOLDING THE BONDS OR RECEIVING INTEREST THEREON. PROSPECTIVE PURCHASERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS REGARDING THE EFFECT ON THEIR FEDERAL, STATE OR LOCAL TAX LIABILITY AND GENERAL FINANCIAL AFFAIRS OF HOLDING THE BONDS OR RECEIVING INTEREST THEREON.

CONTINUING DISCLOSURE UNDERTAKING

In order to provide certain continuing disclosure with respect to the Bonds in accordance with Rule 15c2-12 (“Rule 15c2-12”) promulgated under the Securities Exchange Act of 1934, as amended, by the Securities and Exchange Commission (the “Commission”), the Borough will, pursuant to a Continuing Disclosure Certificate (the “Continuing Disclosure Certificate”) to be executed by the Borough on the date of settlement of the Bonds, agree to provide, or cause to be provided:

(i) to the Municipal Securities Rulemaking Board’s (“MSRB”) Electronic Municipal Market Access (“EMMA”) system in accordance with the Rule, the Borough’s annual audited financial statements, prepared in conformity with generally accepted accounting principles consistently applied as applicable to boroughs of the Commonwealth of Pennsylvania, and operating data consisting of annual budget for the then current fiscal year (collectively, “annual financial information”); such annual financial information shall be provided no later than 270 days after the end of each fiscal year, as long as the Bond’s remain outstanding or are not defeased;

(ii) The following events with respect to the Bonds shall constitute reportable events and shall be provided to the MSRB no later than ten (10) business days after the occurrence:

1. Principal and interest payment delinquencies 2. Non-payment related defaults, if material 3. Unscheduled draws on debt service reserves reflecting financial difficulties 4. Unscheduled draws on credit enhancements reflecting financial difficulties

5. Substitution of credit or liquidity providers, or their failure to perform 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the Bonds or other material events affecting the tax-exempt status of the 2012 Bonds 7. Modifications to rights of holders of the 2017 Bonds, if material 8. 2017 Bond calls, if material, and tender offers 9. Defeasances 10. Release, substitution or sale of property securing repayment of the 2017 Bonds, if material 11. Rating changes 12. Bankruptcy, insolvency, receivership or similar event of the Borough (or any other entity that is an obligated person within the meaning of the Rule with respect to the 2017 Bonds) 13. The consummation of a merger, consolidation, or acquisition involving the Borough (or any other entity that is an obligated person within the meaning of the Rule with respect to the Bonds) or the sale of all or substantially all of the assets of the Borough or any such obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material 14. The appointment of a successor or additional trustee or the change of name of a trustee, if material; and

(ii) In a timely manner, to the MSRB, notice of its failure to make an annual financial information filing with respect to itself on or before the date specified in the Continuing Disclosure Certificate.

With respect to the filing of annual financial statements and operating data, the Borough reserves the right to modify from time to time the specific types of information provided or the format of the presentation of such information to the extent necessary or appropriate as a result of a change in legal requirements or a change in the nature of the Borough or its operations or financial reporting, but the Borough will agree that any such modification will be done in a manner consistent with the Rule.

The events listed in (B) above are those specified in the Rule, not all of which may be relevant to the Bonds. The Borough may from time to time choose to file notice of the occurrence of other events, in addition to the events listed in (B) above, but the Borough does not commit to provide notice of the occurrence of any events except those specifically listed in (B) above.

The Borough acknowledges that its undertaking pursuant to the Rule described herein is intended to be for the benefit of the holders and beneficial owners of the Bonds and shall be enforceable by the holders and beneficial owners of the Bonds, but the right of the holders and beneficial owners of the Bonds to enforce the provisions of the Borough’s continuing disclosure undertaking shall be limited to a right to obtain specific enforcement, and any failure by the Borough to comply with the provisions of the undertaking shall not be an event of default with respect to the Bonds.

The Borough’s obligations with respect to continuing disclosure described herein shall terminate upon the prior redemption or payment in full of all of the Bonds if and when the Borough is no longer an “obligated person” with respect to the Bonds, within the meaning of the Rule.

Bondholders are advised that the Disclosure Dissemination Agreement (as defined below), copies of which are available at the office of the Borough, should be read in their entirety for more complete information regarding their contents.

The MSRB has been designated by the SEC to be the central and sole repository for continuing disclosure information filed by issuers of municipal securities since July 1, 2009. Information and notices filed by municipal issuers (and other “obligated persons” with respect to municipal securities issues) are made available through the MSRB’s Electronic Municipal Market Access (EMMA) System, which may be accessed on the internet at http://www.emma.msrb.org. 15 Summary of Continuing Disclosure Undertaking Compliance

The Borough has entered into continuing disclosure undertakings for previously issued bonds that have been outstanding within the past five years (collectively, the “Prior Undertakings”). Under the Prior Undertakings, the Borough agreed to provide audited financial statements and budgets relating to the Borough. In the previous five years, the Borough has failed to comply with certain provisions of the prior undertakings, including: (a) failing to file or timely file audited financial statements; (b) failing to timely file budgets; and (c) failing to file or timely file certain notices, including notices of the aforementioned late filings and notices of enhanced and insured rating changes.

On or prior to the issuance of the Bonds, the Borough has entered into a Disclosure Dissemination Agent Agreement (“Disclosure Dissemination Agreement”) with Digital Assurance Certification, L.L.C. (“DAC” or the “Disclosure Dissemination Agent”) as its Disclosure Dissemination Agent for the purpose of assisting it with any required remedial filings and ensuring ongoing compliance with its continuing disclosure filing requirements. DAC provides its clients with automated filing of rating events, templates consolidating all outstanding filing requirements that accompany reminder notices of annual or interim mandatory filings, review of all template filings by professional accountants, as well as a time and date stamp record of each filing along with the unique ID from EMMA accompanying the copy of the actual document filed. DAC also offers its clients a series of training webinars each year qualified for 15-20 NASBA certified CPE credits, as well as model secondary market compliance policies and procedures.

The Disclosure Dissemination Agreement will provide bondholders or beneficial owners with certain enforcement rights in the event of a failure by the Borough to comply with the terms thereof; however, a default under the Disclosure Dissemination Agreement does not constitute a default with respect to the Bonds. The Disclosure Dissemination Agreement may be revised from time to time as permitted or required by applicable law, without the consent of the Bondholders, and may be terminated upon the economic defeasance of all outstanding Bonds, or other arrangement, whereby the Borough is released from any further obligation with respect to the Bonds. Covenants in the Disclosure Dissemination Agreement may also be terminated, without the consent of the Bondholders, at such time as continuing disclosure is no longer required by applicable law. The Borough will promptly notify the MSRB via EMMA of any revision or termination of the disclosure covenants. The sole remedy for a breach by the Borough of its covenants to provide financial statements, tabular information and notices of material events is an action to compel performance of such covenants. Under no circumstances may monetary damage be assessed or recovered, nor will any such breach constitute a default under the Bonds or a failure to comply with any provision of the Bonds for purpose of the Act.

The Disclosure Dissemination Agent has only the duties specifically set forth in the Disclosure Dissemination Agreement. The Disclosure Dissemination Agent’s obligation to deliver the information at the times and with the contents described in the Disclosure Dissemination Agreement is limited to the extent the Borough has provided such information to the Disclosure Dissemination Agent as required by this Disclosure Dissemination Agreement. The Disclosure Dissemination Agent has no duty with respect to the content of any disclosures or notice made pursuant to the terms of the Disclosure Dissemination Agreement. The Disclosure Dissemination Agent has no duty or obligation to review or verify any information in the Annual Report, Audited Financial Statements, notice of Notice Event or Voluntary Report, or any other information, disclosures or notices provided to it by the Borough and shall not be deemed to be acting in any fiduciary capacity for the Borough, the Holders of the Bonds or any other party. The Disclosure Dissemination Agent has no responsibility for the Borough’s failure to report to the Disclosure Dissemination Agent a Notice Event or a duty to determine the materiality thereof. The Disclosure Dissemination Agent shall have no duty to determine or liability for failing to determine whether the Borough has complied with the Disclosure Dissemination Agreement. The Disclosure Dissemination Agent may conclusively rely upon certifications of the Borough at all times.

RATING

The Bonds are expected to be assigned a rating of “AA” (stable outlook) by S&P Global Ratings, with the understanding that upon delivery of the Bonds, a policy insuring the payment when due of the principal of and interest on the Bonds will be issued by Municipal Assurance Corp. The Bonds have also received an underlying rating of “A” (positive outlook) from S&P.

An explanation of the significance of such rating may be obtained only from the rating agency furnishing the same. There is no assurance that any such rating will be in effect for any given period of time or that it will not be revised downward or withdrawn entirely by the rating agency if, in the judgment of such agency, circumstances so warrant. Any such downward revision or withdrawal of any such rating may have an adverse effect on the market price of the Bonds.

LEGAL OPINION

The Bonds are offered subject to the receipt of the approving legal opinion of Dinsmore & Shohl LLP, Bond Counsel, of Pittsburgh, Pennsylvania. Certain legal matters will be passed upon for the Borough by Stanley Lederman, Esq. and Michael Lederman, Esq., of Pittsburgh, Pennsylvania, Borough Solicitor.

UNDERWRITING

PNC Capital Markets LLC (the "Underwriter") has agreed, subject to certain conditions, to purchase the Bonds from the Borough at a purchase price of $______(consisting of the par amount of the Bonds of $______, less an Underwriter's Discount of $______and less/plus an Original Issue Discount/Premium of $______). The Underwriter's obligation is subject to certain conditions precedent, and the Underwriter will be obligated to purchase all of the Bonds if any such Bonds are purchased. The Bonds may be offered and sold to certain dealers (including dealers depositing such bonds into investment trusts) at prices lower than the public offering prices, and such public offering prices may be changed, from time to time, by the Underwriter.

RELATED PARTIES

PNC Capital Markets LLC and PNC Bank, National Association are both wholly-owned subsidiaries of the PNC Financial Service Group, Inc. PNC Capital Markets LLC is not a bank, and is a distinct legal entity from PNC Bank, National Association. PNC Bank, National Association may have other banking and financial relationships with the Borough.

MISCELLANEOUS

This Official Statement has been prepared under the direction of the Borough by PNC Capital Markets LLC, Pittsburgh, Pennsylvania, in its capacity as Underwriter to the Borough. The information set forth in this Official Statement has been obtained from the Borough and from other sources believed to be reliable. Insofar as any statement herein includes matters of opinion or estimates about future conditions, it is not intended as representation of fact, and there is no guarantee that it is, or will be, realized. Summaries or descriptions of provisions of the Bonds, the Ordinance, and all references to other materials not purporting to be quoted in full are only brief outlines of some of the provisions thereof. Reference is hereby made to the complete documents, copies of which will be furnished by the Borough or the Financial Advisor upon request. The information assembled in this Official Statement is not to be construed as a contract with holders of the Bonds.

The Borough has authorized the distribution of this Official Statement.

BOROUGH OF BALDWIN Allegheny County, Pennsylvania

By: President of Council

By: Mayor

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APPENDIX A Demographic and Economic Information Relating to the Borough of Baldwin

[ THIS PAGE INTENTIONALLY LEFT BLANK ] BOROUGH OF BALDWIN (Allegheny County, Pennsylvania)

Description The Borough of Baldwin is situated in the South Hills of Metropolitan Pittsburgh in the County of Allegheny. The population as of the 2010 census was 19,767. The area is 5.44 square miles running from the Monongahela River at the city line to South Park Township bordering Pleasant Hills, Whitehall, Brentwood, West Mifflin and Bethel Park.

Borough Government The Mayor of the Borough is elected to a four year term.

The current mayor is David Depretis.

The Borough Council is comprised of seven members, elected to four year, staggered terms.

Borough Manager The office of the Borough Manager is authorized by the Borough to handle the day to day affairs of the Borough and to manage the finances of Borough including preparation of budgets.

The current manager of the Borough of Baldwin is John M. Barrett. Mr. Barrett has extensive municipal government and non-profit management experience. Prior to serving the Borough, Mr. Barrett was Chief Administrator of the Municipality of Murrysville and was Executive Director of a Pittsburgh based non- profit organization. Mr. Barrett holds an undergraduate degree from the University of Delaware and a graduate degree from Duquesne University.

Public Safety Baldwin Borough has three volunteer fire companies, an Emergency Medical Service and a Police Force of 23 officers for law enforcement.

Borough Employees There are presently 44 fulltime employees of the Borough, including 23 police officers. The police officers are represented by the Collective Bargaining Unit of the police under a contract which expires December 31, 2020. Non-uniformed non-managerial sanitation employees are under contract which expires December 31, 2018.

Labor Relations Borough employees have never gone on strike.

Future Financing The Borough has no plans to issue additional debt over the next three years.

Transportation The Borough is bisected north and south by two major traffic arteries, Pennsylvania Route 51 and Brownsville Road. The Port Authority of Allegheny County provides bus and light rail service within the Borough and to downtown Pittsburgh. The Pittsburgh International Airport, providing national and international commercial airline service, is located approximately fifteen miles northwest. The Allegheny County Municipal Airport, located approximately three miles east, serves private aircraft and executive aircraft.

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Medical Care Health Care is provided by Jefferson Regional Medical Center, located in Jefferson Borough to the south, by St. Clair Memorial Hospital, located in the Municipality of Mt. Lebanon to the west and by the University of Pittsburgh Medical Center (which includes Presbyterian-University Hospital, Mercy Hospital, Montefiore Hospital, Children’s Hospital of Pittsburgh, Western Psychiatric Institute & Clinic, Magee- Woman’s Hospital, Ear and Eye Hospital, Shadyside Hospital and South Side Hospital), St. Francis General Hospital, and West Penn Allegheny Health Systems (which includes West Penn Hospital, the Forbes Health System and Allegheny General Hospital), all located in the City of Pittsburgh.

Utilities Gas is provided by Equitable Gas Company and Columbia Gas Company. Electricity is provided by Duquesne Light Company. Sewer service is provided by the Allegheny County Sanitary Authority and the Pleasant Hills Authority. Water is provided by Pennsylvania American Water Company.

Financial Institutions Borough residents are served by a number of commercial banks including PNC Bank, Citizens Bank, and First Niagara Bank

Higher Education Due to the close proximity of the Borough to the City of Pittsburgh, residents enjoy easy access to numerous institutions of higher education, including: Carnegie Mellon University, the University of Pittsburgh, Duquesne University, Point Park College, Robert Morris University, Carlow College, Community College of Allegheny County, Chatham College, La Roche College and the Pittsburgh Theological Seminary. In addition there are numerous business and technical schools available in the Pittsburgh region.

Communications The Greater Pittsburgh Metropolitan Area is served by numerous television stations including KDKA (CBS), WTAE (ABC), WPXI (NBC), and WQED (Educational). Cable television, offering numerous regular and premium programming channels, is provided to the area by AT&T Broadband on a subscription basis. Numerous AM and FM radio stations are received throughout the area and both the Pittsburgh Post-Gazette and Pittsburgh Tribune Review are widely circulated on a daily basis, including Sunday.

Recreation Residents of the Borough enjoy a wide variety of recreational opportunities. Professional sports teams include the Pittsburgh Steeler NFL team and the Pittsburgh Penguins NHL team. College sports events are likewise available to Borough residents. Proximity to the City of Pittsburgh offers cultural events including the Pittsburgh Public Theater, the Carnegie Museums, concert events and Heinz Hall for symphony events. Pittsburgh’s rivers and nearby state parks provide outdoor recreational activities. Locally, the Borough owns and maintains Elm Leaf Park and the Baldwin Swimming Pool. The Borough also has a staffed public library.

General and Borough Taxing Powers Borough Council adopts an annual budget (which includes various funds including the Sewer Fund), and also levies local taxes prior to the beginning of the fiscal year on January 1. Under provisions of 53 P.S. § 46302 of the Statutes of the Commonwealth of Pennsylvania, the Borough may levy the following taxes:

Annual tax on all taxable real estate may not exceed 30 mills for general borough purposes (plus an additional 5 mills with court approval). The Council of any borough may levy different rates of taxation on all real estate classified as buildings or non-farm land.

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Taxes and levy limits by purpose include:

Purpose Maximum Levy Debt Service ...... Unlimited Parks and Recreation ...... Unlimited Library ...... Unlimited Utilities ...... 8.0 mills Street Lighting ...... 8.0 mills Special Fund for Permanent Street Improvements ...... 5.0 mills Fire Services ...... 3.0 mills Municipal Buildings, Firehouse or Lock-up ...... 2.0 mills Pension and Retirement...... 0.5 mills Ambulance and Rescue Service ...... 0.5 mills Shade Trees ...... 0.1 mills

Other Taxes

Under the Act of December 31, 1965, P.L. 1257, effective January 1, 1966, the Pennsylvania Local Tax Enabling Act, additional taxes may be levied by Boroughs (subject to division with other political subdivisions authorized to levy similar taxes on the same person, subject, business, transaction or privilege), subject to the following limitations:

Purpose Maximum Levy Per Capita ...... $10.00 Wages, salaries, and other earned income ...... 1.00% Transfer of Real Property ...... 0.50% Flat Rate Occupation Tax ...... $10.00 Emergency and Municipal Services Tax ...... $52.00 Admissions (Except Motion Picture Theaters) ...... 10.00%

Occupation (if a millage or percentage of the ...... No Limit assessed valuation is used as a base)

BOROUGH OF BALDWIN TAX RATES

Year 2013 2014 2015 2016 2017 Real Estate (Borough) (mills) 5.41 5.41 5.95 5.95 6.28 Local Services Tax $47.00 $47.00 $47.00 $47.00 $47.00 Earned Income Tax .500 .500 .500 .500 .500 Real Estate Transfer Tax .500 .500 .500 .500 .500

Source: www.newpa.com/local-government/municipal-statistics

BOROUGH OF BALDWIN COMPARATIVE REAL ESTATE PROPERTY TAX RATES (Mills on Assessed Value)

Year 2013 2014 2015 2016 2017 Baldwin Borough 5.41 5.41 5.95 5.95 6.28 Baldwin Whitehall School District 19.61 17.61 18.42 19.25 19.25 Allegheny County 4.73 4.73 4.73 4.73 4.73

Source: http://www.county.allegheny.pa.us/treasurer

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BALDWIN BOROUGH REAL PROPERTY MARKET DATA

Year Market Value 2009 $622,987,400 2010 $652,097,697 2011 $650,792,095 2012 $673,493,411 2013 $673,493,411 2014 $804,406,704 2015 $800,132,249

Source: Pennsylvania State Tax Equalization Board

COMPARISON OF REAL ESTATE ASSESSED VALUATION MILLAGE AND TAX COLLECTIONS

Year-End Assessed Total December 31 Valuation ($) Millage Collections ($) 2010 $741,836,373 6.61 $4,584,233 2011 745,178,638 6.61 4,521,608 2012 684,664,145 6.61 4,771,108 2013 844,126,617 5.41 4,855,566 2014 919,304,140 5.41 4,825,951 2015 921,829,840 5.95 4,943,974 2016 926,204,838 5.95 5,131,094

Source: Borough Officials.

BOROUGH OF BALDWIN TEN LARGEST PROPERTY TAXPAYERS 2016

Taxpayer Type of Property Current Assessed Value Leland Point Owner LP Apartments $15,850,800 OHI Asset III Trust Nursing Home 5,917,000 PKR Associates Independent Living Home 4,025,600 S2 Properties Independent Living Home 3,835,000 100 Knoedler Road LLC Independent Living Home 3,488,800 Cole Mt. Baldwin PA LLC Shopping Center 3,277,900 Pennsylvania American Water Co Utilities 3,129,300 Ornstein Properties LLC Commercial 3,100,000 Mariesten LP Apartments 3,069,800 Baldwin Towers Investors LLC Apartments 2,889,700 TOTAL $48,583,900

The total assessed valuation of these ten largest taxpayers is equal to 5.25% of the 2016 Assessed Valuation of $926,204,838. Assessed Valuation is adjusted valuation less refunds less gentrification plus additions.

Source: Borough Officials

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TAX AND REVENUE ANTICIPATION BORROWING

Year Amount 2016 $0 2015 $0 2014 $0 2013 $0 2012 $1,250,000 2011 $1,250,000 2010 $1,250,000

BONDED INDEBTEDNESS (as of _____, 2017 – Includes this issue)

Gross Debt Item Current Balance Outstanding

Direct Debt General Obligation Bonds, Series of 2017 (this issue) $4,500,000* General Obligation Refunding Bonds, Series of 2015 5,885,000 General Obligation Bonds, Series of 2015 3,525,000 General Obligation Bonds, Series A of 2012 2,530,000 General Obligation Bonds, Series B of 2012 10,995,000 General Obligation Bonds, Series of 2011(non-refunded portion) 1,185,000 Total Direct Debt $28,620,000*

Less Exclusions for Self-Liquidating Debt (13,525,000) Total Net Direct Debt $15,095,000*

Overlapping Debt(1): Baldwin-Whitehall School District Debt(2) $27,409,458 Allegheny County Debt(2) 8,416,426 Total Overlapping Debt $35,825,884

Total Net Direct and Overlapping Debt $50,920,884

(1) SOURCE: Pennsylvania Department of Community and Economic Development as of January 1, 2017. (2) The Borough’s share of this debt is determined by dividing the assessed value of the Borough by those of the County and School District and multiplying that ratio by the outstanding debt of the County and the School District respectively.

Debt Ratio Calculations (including issuance of the Bonds) Gross Outstanding Net Direct Debt Per Capita $763.64 Net Direct Debt to Market Value 1.86% Net Direct and Overlapping Debt Per Capita $2,576.05 Net Direct and Overlapping Debt to Market Value 6.33%

Population (2010 census) 19,767 2015 Borough STEB Market Value $800,132,249

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DEMOGRAPHICS AND EMPLOYMENT

The top ten employers in Allegheny County are the following governments, public institutions and corporations:

Number of Rank Name of Business Employees 1 UPMC Health System 46,500 2 Highmark Health 20,000 3 University of Pittsburgh 12,000 4 PNC Financial Services Group 10,000 5 Giant Eagle 7,000 6 BNY Mellon Corp. 6,800 7 Carnegie Mellon University 4,750 8 U.S. Steel Corporation 4,200 9 FedEx Corp. 4,000 10 Verizon Communications, Inc. 3,300

Source: Pittsburgh Business Times “Book of Lists”, Pittsburgh Regional Alliance. Updated 7.27.2016.

Trends in Labor Force, Employment and Unemployment

Annual Averages

2012 2013 2014 2015 2016(1) Allegheny County Civilian Labor Force 659,900 657,800 644,800 647,800 652,900 Employment 614,100 615,300 610,500 616,600 621,700 Unemployment 45,800 42,500 34,300 31,200 31,200 Unemployment Rate 6.9% 6.5% 5.3% 4.8% 4.8%

Pennsylvania Civilian Labor Force (000) 6,466 6,460 6,378 6,424 6,473 Employment (000) 5,954 5,962 6,009 6,094 6,155 Unemployment (000) 513 478 370 330 318 Unemployment Rate 7.9% 7.4% 5.8% 5.1% 4.9%

United States Civilian Labor Force (000) 154,075 155,389 155,922 157,130 159,451 Employment (000) 142,469 143,929 146,305 148,834 152,385 Unemployment (000) 12,506 11,406 9,616 8,296 7,066 Unemployment Rate 8.1% 7.4% 6.2% 5.3% 4.4%

(1) As of November, 2016. Source: PA Department of Labor & Industry

Population Composition – 2000 and 2010

2000-2010 2015 Population 2000 2010 % Change Estimates Baldwin Borough 19,999 19,767 -1.2% 19,819 Allegheny County 1,281,666 1,223,348 -4.6% 1,230,459 Pennsylvania 12,281,054 12,702,379 3.4% 12,802,503

Source: U.S. Census Bureau, American FactFinder. Population Estimates as of July 1, 2015.

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Per Capita Income – 2000 and 2010

2000-2010 2015 2000 2010 % Change Estimates Baldwin Borough $19,918 $24,917 2.51% $27,395 Allegheny County $22,491 $29,469 3.10% $32,848 Pennsylvania $20,880 $26,374 2.63% $29,291

Source: U.S. Census Bureau, 2011-2015 American Community Survey 5-Year Estimates.

Family and Household Income – 2015 Estimates

Household Income Median Baldwin Borough $53,660 Allegheny County $53,040 Pennsylvania $53,599

Source: U.S. Census Bureau

Housing Units – 2010

Owner Occupied Renter Occupied Number Median Value Median Rent Baldwin Borough 9,335 $104,900 $601 Allegheny County 589,201 $110,300 $676 Pennsylvania 5,567,315 $152,300 $716

Source: U.S. Census Bureau

Population, Poverty and Education – 2010

Population Poverty Level Education 25 years and Over Total Total Family Persons Families High School College Persons Households Below Below Graduate Graduate Baldwin Borough 19,767 5,536 9.5% 8.3% 38.7% 22.9% Allegheny County 1,222,473 309,681 12.6% 8.7% 20.5% 13.3% Pennsylvania 12,516,596 3,206,184 12.1% 8.3% 38.1% 9.9%

Source: U.S. Census Bureau

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Summary Financial Information Relating to Borough of Baldwin Years ending December 31, 2013, 2014 and 2015 [ THIS PAGE INTENTIONALLY LEFT BLANK ] Baldwin Borough Allegheny County, Pennsylvania General Fund - Balance Sheet

Year 2013 2014 2015 Assets: Cash and Cash Equivalents $786,181 $283,860 $487,132 Net Taxes Receivable 1,125,987 1,413,835 1,115,918 Other Receivables 95,124 95,124 13,356 Prepaid Expenses 128,943 128,943 189,553 Due from Other Funds 2,431 31,527 - Total Assets $2,138,666 $1,953,289 $1,805,959

Liabilities and Fund Balance: Accounts Payable $136,308 $124,407 $248,814 Accrued Payroll - - - Deferred Revenues 620,559 - - Other Liabilities 164,647 238,991 186,544 Due to Other Funds 642,672 475,874 424,542 Total Liabilities $1,564,186 $839,272 $859,900

Deferred Inflows of Resources: Unavailable revenues - 914,486 474,200 Total Liabilities and Deferred Inflows of Resources $1,564,186 $1,753,758 $1,334,100

Fund Balance: Reserved $128,943 $128,943 $189,553 Unreserved 445,537 70,588 282,306 Total Fund Balance $574,480 $199,531 $471,859

Total Liabilities and Fund Balance $2,138,666 $1,953,289 $1,805,959

Source: Borough of Baldwin Annual Audit Reports, audited by Maher Duesel, CPAs

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Baldwin Borough Allegheny County, Pennsylvania General Fund Statement of Revenues and Expenditures

Year 2013 2014 2015 Revenues: Taxes $8,075,259 $8,133,941 $8,781,230 Licenses and Permits 395,974 504,227 418,920 Fines and Forfeitures 109,207 85,472 85,163 Interest and Rents 8,963 7,909 19,591 Intergovernmental 449,795 451,696 482,969 Charges for Services 258,627 327,431 260,924 Miscellaneous - - 46,546 Total Revenues $9,297,825 $9,510,676 $10,095,343

Expenditures: General Government $672,283 $691,648 $817,439 Public Safety-Police 3,386,886 3,739,857 3,625,837 Public Safety-Fire 391,900 344,802 350,048 Public Safety-Other 260,783 290,584 293,750 Public Works-Sanitation 1,454,526 1,446,051 1,377,690 Public Works-Highway 1,396,994 1,198,138 1,587,563 Library 180,000 180,000 180,000 Culture and Recreation 347,680 362,364 110,168 Capital Outlay 118,915 216,476 235,453 Debt Service 459,742 416,013 143,377 Insurance & Benefits 1,256,710 1,323,392 1,293,483 Total $9,926,419 $10,209,325 $10,014,808

Excess/(Deficiency) (628,594) (698,649) 80,535

Other Financing Sources (Uses) Refund of prior year expenditures 77,162 79,839 83,608 Refund of prior year revenue (44,217) (71,040) (74,565) Asset Disposition - - 1,200 Proceeds from capital lease 105,893 156,570 235,453 TRAN Proceeds - - - Judgments and Damages - - - Operating Transfer In - 300,000 81,597 Operating Transfer Out (178,450) (141,669) (135,500) Total Financing Sources (Uses) (39,612) 323,700 191,793

Net change in fund balance (668,206) (374,949) 272,328

Fund Balance Beginning of Year 1,242,686 574,480 199,531 End of Year $574,480 $199,531 $471,859

Source: Borough of Baldwin Annual Audit Reports, audited by Maher Duesel, CPAs

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Baldwin Borough Allegheny County, Pennsylvania Sewer Fund Statement of Revenues and Expenditures

Year 2013 2014 2015 Revenues: User Charges $4,534,404 $4,098,639 $4,660,671 Tap in Fees 272,448 8,202 6,010 Service Charges 11,220 10,580 - Miscellaneous 24,901 12,882 228,811 Total Revenues $4,842,973 $4,130,303 $4,895,492

Expenditures: Administration $784,611 $863,568 $817,631 Engineering 348,816 622,212 153,789 Maintenance 131,001 171,058 191,266 Capital Plan - - - Vernon Avenue sewer repair 185,999 - - Corrective action plan/Streets Run Project - - - Sewer Repair – five year project 4,144 - - Depreciation 308,542 339,810 366,301 Insurance & Benefits 40,690 69,185 135,209 Sanitation: ALCOSAN 1,319,049 1,547,689 1,674,921 Sanitation: Pleasant Hills 686,153 783,319 616,813 Total $3,809,005 $4,396,841 $3,955,930

Net Operating Income (Loss) 1,033,968 (266,538) 939,562

Non-operating Revenues (Expenses): Bond costs - - (99,474) Shared contracted intergovernmental services - - 100,000 Interest Income - - 3,109 Interest Expense (676,780) (692,664) (688,664) Total non-operating revenues (expenses) (676,780) (692,664) (685,029)

Income (Loss) before Transfers 357,188 (959,202) 254,533

Other Financing Sources (Uses) Operating Transfer In - - - Operating Transfer Out - - (16,456) Total Financing Sources (Uses) - - (16,456)

Net change in fund balance 357,188 (959,202) 238,077

Fund Balance Beginning of Year $2,550,261 $2,907,449 $1,948,247 End of Year $2,907,449 $1,948,247 $2,186,324

Source: Borough of Baldwin Annual Audit Reports, audited by Maher Duesel, CPAs

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[ THIS PAGE INTENTIONALLY LEFT BLANK ] APPENDIX C

Borough of Baldwin 2016 and 2017 Budgets [ THIS PAGE INTENTIONALLY LEFT BLANK ]

Table of Contents

OFFICIALS ………………………………………………………………………………………………..…………… 3

FUND LISTING ……………………………………………………..………………………………………….…… 4

MANAGER’S BUDGET MESSAGE …………………………………………………………………………… 5

GENERAL FUND REVENUES BUDGET …………………………………………………………….…… 10

GENERAL FUND EXPENDITURES BUDGET …………………………………………………………… 24

GENERAL FUND CAPITAL BUDGET ……………………………………………………………………… 51

SEWER FUND BUDGET ………………………………………………………………………..……………… 55

POOL FUND BUDGET ………………………………………………………………………………….……… 61

HIGHWAY AID FUND BUDGET …………………………………………………………….……………… 64

ASSET FORFEITURE FUND BUDGET ……………………………………………………………………. 66

Officials

Council Mayor David Depretis Michael Stelmasczyk, President

John Conley, Vice President

James Behers

Michael Ducker

Kevin Fischer

Edward Moeller

Frank Scott

Staff

Borough Manager Tax Collector Gail Dobson Mikush John M. Barrett

Finance Officer Code Enforcement Anthony Asciolla Molly Brennan

Police Chief Engineers Lennon, Smith, Souleret Engineering Inc. Michael Scott

Public Works Superintendent Solicitors Stanley & Michael Lederman Mark Stephenson

General Fund 001 – General Fund

The primary operating fund for the Borough which reflects the revenues and expenditures of all Borough operations that are not required by law or policy to be recorded elsewhere.

Special Revenue Funds Funds that are established to account for revenues that are legally restricted to be spent on specific expenses.

035 – Highway Aid Fund

Revenues for this fund come from the State of Pennsylvania Liquid Fuel Tax and are restricted to be used for the maintenance, repair, and construction of roads, streets, and bridges within Baldwin.

070- Asset Forfeiture Fund

Revenues for this fund come from the sale of assets confiscated by the Drug Enforcement Administration (DEA) and are restricted to be used for police department equipment and technology.

Proprietary Funds Funds that account for the operations of the Borough providing a good or service, which is paid for by charges to customers who use the good or service.

008- Sewer Fund

The sewer fund is used to account for all revenues and expenditures associated with operating the Borough’s sanitary sewer system. The fund’s main revenue comes from sewer billing and it pays for sewage treatment and pipe maintenance and repair.

031- Pool Fund

The pool fund is used to account for all revenues and expenditures associated with operating the Borough’s swimming pool.

2016 Budget Message

Dear Members of Borough Council and Mayor Depretis;

On behalf of the Borough Administration, I am pleased to submit the 2016 Budget to the members of Borough Council, the Mayor, and the residents of Baldwin Borough. The Borough Administration continually strives to improve the budget document, with the purpose and intent to publish a budget that serves as a policy statement, an operational guide, a financial plan, as well as a communications tool. The recommended budget complies with all local and state laws, and is supported by the recently adopted Financial Policies and Procedures Manual.

The 2016 balanced budget consists of $25,236,062 in expenditures within the General Fund Operating and Capital, Sewer, Highway Aid, Swimming Pool, and Asset Forfeiture Funds. The General Fund supports the core services of the Borough, which continues to be the largest of the various funds coordinated by the Borough Administration. The focal point of the Managers Budget Message will be the 2016 General Fund, although reference will be made to all Funds supported by the Borough.

As in years past, the most significant sources of revenue to the General Fund are Real Estate Taxes and Earned Income Taxes. These taxes alone make up over 60% of General Fund revenue.

Like many other communities in Southwestern Pennsylvania, Baldwin’s revenue growth is limited by the relatively static population and property values, so we must find new and innovative ways to provide services without increasing rates of taxation. Combine the slow growth rate of real estate and earned income taxes with the rapidly increasing costs required to maintain the Borough’s aging infrastructure, and the budgetary process becomes a much more difficult task.

The Borough’s largest sources of revenue grow at rates far below the growth rate of major expenses paid out of the General Fund. In 2016, the Borough has estimated Real Estate Tax revenue will remain flat (0% growth) and the Earned Income Tax revenue will increase by 3%. By contrast, the Borough’s employee health insurance premiums will increase by 26% in 2016, and our Pension Minimum Municipal Obligation (MMO) payments have increased over 31% in the past five years.

In response to expenditures continually outpace revenue growth, the Borough Administration has made substantial strides in creatively increasing revenues through non-traditional sources. For example, in 2015 the Borough introduced a Procurement Card, which is similar to ‘cash reward’ types of credit cards in that it provides the Borough with ‘cash back’ for purchases made through the card. However, unlike traditional credit cards, the procurement card is not used by the Borough for travel expenditures or day to day purchases. Rather, the card is used exclusively for purchases which Borough Council has previously authorized, that are of a high volume, and where the vendors accepts card. This includes payments to our solid waste collection and hauling vendor (Waste Management) and the purchase of rock salt through the SHACOG approved vendor, which together make up 6% of all expenditures. The result of this usage has brought revenue back to the Borough which had not existed previously. Furthermore, use of the procurement card enables the Borough to retain our cash for longer periods of time, thus earning slightly more interest than we typically would. The Borough has also been more aggressive with short-term investments, investing in short-term CDs and interest bearing money market accounts to infuse additional revenues into the General Fund and Sewer Fund.

The 2016 Real Estate Tax Millage rate will remain at 5.95 mills. To Baldwin residents, this means that for every $100,000 of assessed value of real estate owned, a payment of $595 is owed to the Borough. The total real estate tax liability to residents also includes a tax levy from the Baldwin-Whitehall School District and the County of Allegheny. The table below illustrates the proportion of property taxes levied by each local taxing body.

School District Borough County

County 16%

Borough 21% School District 63%

Ultimately, the 2016 budget reflects a responsible and prudent spending plan that does not require additional tax revenues, or additional debt. The budget is a result of a comprehensive and transparent process which was open to the public and led by the Borough’s Finance Committee and guided by Borough Council. The process forced the Borough to prioritize the needs of the community, to produce a strategy to continue to provide services at a high level, and to appropriately plan for the operation and maintenance of our assets and infrastructure. The result is a fiscally responsible document that appropriately allocates resources for core services, and invests prudently in infrastructure.

In developing the 2016 Budget, the Borough Administration and Borough Council were mindful of our established financial goals and financial policies.

Financial Goals and Basic Financial Policies:

 Ensure the financial integrity of the Borough.

 Manage the financial assets in a sound and prudent manner.

 Improve financial information for decision-makers at all levels including: o Borough Council, as they contemplate actions that may affect the Borough on a long- term basis. o Borough Manager, as he/she implements policy on a day-to-day basis.

 Maintain and further develop programs that ensure the long-term ability to pay all costs necessary to provide the level and quality of services required by citizens.

 Maintain an atmosphere of openness and transparency, being fully accountable to the public for the Borough’s fiscal activities.

 The Borough will continue to use its tax dollars wisely and prudently. Recognizing that expenditures continue to grow much faster than revenues, the administration must perpetually seek to reduce operating costs through efficiencies and innovation.

 Any increase in the rates of taxation will be considered only after all other efforts to reduce costs or increase revenues have been explored.

 It is the Borough’s policy to minimize borrowing. Borrowing for capital expenditures will only occur when sufficient current funds are unavailable for essential purchases. Any borrowing for capital projects will be fully repaid prior to the useful life of the capital item being realized.

 Fees are charged for specialized services and our fee schedules are reviewed annually to assure that they adequately cover the total costs for providing those services.

 State, federal, and private grants are actively sought to assist with current or proposed projects or programs. Baldwin has been very effective in securing many grants and other funds to offset necessary expenses.

Sincerely,

John M. Barrett Borough Manager

Real Estate Property Taxes

Summary Real Estate Property Taxes 2014 2015 2015 2016 % of Total % Inc/Dec 001-301.**** Actual Budget Estimate Budget Budget Total Real Estate Taxes $ 4,825,951 $ 5,266,100 $ 5,282,790 $ 5,268,000 0% 50%

Description About half of all General Fund revenue is generated by real estate taxes, also known as property taxes. The tax is assessed on all commercial, industrial, residential, and other non-exempt properties within the Borough.

The tax is calculated using the millage rate, set each year by Borough Council, and a property’s assessed value, set by Allegheny County. In 2016, Baldwin’s millage rate is 5.95, which means that a property with an assessed value of $100,000 would have a Borough real estate tax bill of $595 (100,000 x .00595).

Real estate taxes are billed and collected by the Borough’s elected Tax Collector, Gail Dobson-Mikush. Taxes are due by June 1st each year. If a property owner pays prior to March 31st, they receive a 2% discount. If a property owner pays after June 1st, they receive a 10% late penalty.

If property taxes have not been paid within one year of the due date, the delinquent account is sent to the Borough’s third party delinquent tax collector, Jordan Tax Services. Jordan will work with property owners to set up payment plans in order to avoid escalating to other collection methods, such as lawsuits and sheriff sales.

Each January the Allegheny County Office of Property Assessments sends the Borough a list of the certified assessed values of each parcel and its tax exempt status. The Baldwin Tax Collector uses this data in combination with the Borough’s millage rate to create the year’s tax bills. The latest taxable assessed value for the Borough was certified in January 2015 at $19,829,840 with 8,161 taxable parcels.

Allegheny County and Baldwin Whitehall School District also collect property taxes based on millage rates they set each year. In 2015, the County’s millage rate was 4.73 and the School District’s was 18.42. The property taxes collected by these agencies are separate from those set and collected by the Borough.

Budget Detail Real Estate Property Taxes 2014 2015 2015 2016 % of Total % Inc/Dec 001-301.**** Actual Budget Estimate Budget Budget

1000 Current Year Levy $ 4,582,011 $ 5,003,600 $ 4,997,790 $ 5,003,000 0% 47% 2000 Prior Year's Levy 56,869 77,500 70,000 70,000 0% 1% 5000 Delinquent 187,071 185,000 215,000 195,000 -9% 2% Total Real Estate Taxes $ 4,825,951 $ 5,266,100 $ 5,282,790 $ 5,268,000 0% 50%

Local Taxes

Summary Local Enabling Act Taxes (Act 511) 2014 2015 2015 2016 % of Total % Inc/Dec 001-310.**** Actual Budget Estimate Budget Budget Total Local Tax Enabling Act Taxes $ 2,668,002 $ 2,688,195 $ 2,725,000 $ 2,795,000 3% 26%

Description Pennsylvania state law enables local governments to levy a few other types of taxes to supplement revenue from property taxes. Baldwin collects three of these local taxes – the real estate transfer tax, the earned income tax, and the local services tax.

Real estate transfer tax is .5% of the sale price of any home sold within the Borough, and is paid at closing to the County Recorder of Deeds. The amount of revenue collected from the tax varies year to year, as the price and number of homes sold fluctuates. The School District also collects a .5% real estate transfer tax.

Earned Income Tax (EIT) is a .5% tax on earned income and compensation (W-2 income from salaries or wages) and other forms of earned income as defined by the Local Tax Enabling Act. State Act 32 designated Tax Collection Districts (TCDs) as an area outlined and designated by statute for the purpose of collecting income taxes for the political subdivisions within its borders. A Tax Collection Committee is the committee established to govern each Tax Collection District for the purpose of collecting EIT. Baldwin Borough is one of 63 municipalities and school districts in the Allegheny Southwest Tax Collection Committee.

Although the rate has not increased in recent years, EIT revenue is growing annually. This means either the number of Baldwin residents who are employed is growing annually and/or residents are getting paid higher wages for their work. Upward trends in EIT revenue not only contribute to the Borough’s financial stability, but provides a strong economic indicator that the quality of life for residents is improving as aggregate income rises. The School District also collects a .5% earned income tax.

Originally called the Emergency and Municipal Services Tax, the Local Services Tax is a $47 tax per employee working within the municipality who receives an annual income greater than $12,000. The School District also collects a $5 local service tax per person. Estimated revenue in 2016 assumes approximately 2,872 people work within the Borough of Baldwin and make over $12,000 a year.

Budget Detail Local Enabling Act Taxes (Act 511) 2014 2015 2015 2016 % of Total % Inc/Dec 001-310.**** Actual Budget Estimate Budget Budget

1000 Real Estate Transfer Tax $ 177,249 $ 178,000 $ 185,000 $ 185,000 0% 2% 2000 Earned Income Tax 2,367,662 2,395,195 2,400,000 2,475,000 3% 23% 5000 Local Services Tax 123,092 115,000 140,000 135,000 -4% 1% Total Local Tax Enabling Act Taxes $ 2,668,002 $ 2,688,195 $ 2,725,000 $ 2,795,000 3% 26%

Licenses

Summary Licenses 2014 2015 2015 2016 % of Total % Inc/Dec 001-3**.**** Actual Budget Estimate Budget Budget Total Licenses $ 584,838 $ 477,890 $ 569,340 $ 567,240 0% 5%

Description Baldwin requires the issuance of licenses and permits in order to conduct certain activities within the Borough. Generally, these are a means to assure that all municipal regulations and ordinances are upheld and to protect public welfare. Fees charged for permits and licenses are intended to totally cover the cost of inspection, enforcement, and administration.

The following operations require fees for the appropriate license or permit:

 Junk yards  Mechanical gambling devices  Cable Television Franchises  Dog or cat ownership The main revenue source within this category is Cable Television Franchise Fees. The Borough grants non-inclusive Cable Franchise agreements to cable service vendors (currently Comcast Cable Communications and Verizon) and permits the cable providers to operate within the public right-of- ways. The Cable Television Franchise agreements are made in coordination with neighboring communities through the South Hills Area Council of Government (SHACOG).

Budget Detail Business License and Permits 2014 2015 2015 2016 % of Total % Inc/Dec 001-321.**** Actual Budget Estimate Budget Budget

3200 Junk Yard $ 240 $ 240 $ 240 $ 240 0% 0% 7200 Mechanical Devices 79,652 79,650 152,100 150,000 -1% 1% 8000 Cable TV Franchise 503,987 397,000 416,000 416,000 0% 4% Total Business License and Permits $ 583,878 $ 476,890 $ 568,340 $ 566,240 0% 5%

Health 2014 2015 2015 2016 % of Total % Inc/Dec 001-365.**** Actual Budget Estimate Budget Budget

5000 Animal Control & Shelter Fees 960 1,000 1,000 1,000 0% 0% Total Health $ 960 $ 1,000 $ 1,000 $ 1,000 0% 0%

Public Safety

Summary Public Safety 2014 2015 2015 2016 % of Total % Inc/Dec 001-3**.**** Actual Budget Estimate Budget Budget Total Public Safety $ 401,414 $ 329,750 $ 326,970 $ 264,500 -19% 2%

Description Public Safety revenue is generated from fines collected from violators of ordinances and statutes, reimbursements for special police details, and fees for building permits.

Depending on the charge, the location of the offense, and employer of the citation/arresting officer, those who are found guilty of breaking the law are fined through the local magistrate, the County court of common pleas, or the state. Regardless of which level of government catches and prosecutes the offense, if the crime occurred in Baldwin, a portion of the fine is provided to the municipality. The amount of fines collected for violations varies from year to year, as the crime rate and enforcement fluctuates.

Baldwin Police Officers are available to work special details, such as traffic control and crowd control, as overtime to their normal patrols. The organization or company requesting the special police service is responsible for reimbursing the Borough for the officer’s costs to work the detail.

Borough property owners who install personal security alarms and would like the police notified during an alarm event are responsible for paying a small fee. If officers respond to more than three false alarms at the same property, the alarm owner will also be charged a false alarm fee.

Besides police activity, the Borough works to enforce the public safety of the built environment. When occupants of a property change, the residence is required to receive an occupancy permit by passing the inspection completed by the Borough code enforcement officer. Annually, commercial properties are required to have fire safety inspections in order to reduce potential fire hazards and ensure safety standards are followed (detection and evacuation). Building permits are required for any changes or additions to the non-natural elements of a property (i.e. pool, porch, new construction, etc.).

Budget Detail Fines 2014 2015 2015 2016 % of Total % Inc/Dec 001-331.**** Actual Budget Estimate Budget Budget

1101 Vehicle Code Violations $ 23,526 $ 19,750 $ 14,030 $ 15,000 7% 0% 1103 County DUI Fines 26,344 34,500 32,000 5,000 -84% 0% 1200 Violations of Ordinances 30,469 30,000 25,000 25,000 0% 0% 1300 State Police Fines 5,133 7,000 4,500 5,000 11% 0% Total Fines $ 85,472 $ 91,250 $ 75,530 $ 50,000 -34% 0%

Public Safety 2014 2015 2015 2016 % of Total % Inc/Dec 001-362.**** Actual Budget Estimate Budget Budget

1000 Special Police Services Reimbursements $ 149,297 $ 100,000 $ 98,000 $ 65,000 -34% 1% 1100 Police Reports, Fingerprinting Fees 5,374 5,000 8,000 5,500 -31% 0% 1300 Security Alarm Monitoring 21,538 15,000 15,000 15,000 0% 0% 4100 Building Permits 60,112 40,000 55,000 50,000 -9% 0% 4110 Occupancy & Fire Permits 71,142 70,000 65,000 70,000 8% 1% Total Public Safety $ 307,462 $ 230,000 $ 241,000 $ 205,500 -15% 2%

Highways and Streets 2014 2015 2015 2016 % of Total % Inc/Dec 001-363.**** Actual Budget Estimate Budget Budget

1000 Curb/Street Opening Permits 8,480 8,500 10,440 9,000 -14% 0% Total Highways and Streets $ 8,480 $ 8,500 $ 10,440 $ 9,000 -14% 0%

Interest & Rent

Summary Interest, Rents, and Royalties 2014 2015 2015 2016 % of Total % Inc/Dec 001-34*.**** Actual Budget Estimate Budget Budget Total Interest, Rents, and Royalties $ 8,508 $ 10,850 $ 16,354 $ 15,900 -3% 0%

Description The Borough makes short term investments of cash on hand through the year and receives rebates for use of a procurement card. These investment earnings are small, but are growing after a new investment strategy was implemented during 2015.

Rental revenue is a small percentage of General Fund revenue. The Borough rents out portions of the municipal building, the Leland Center, and pavilions in Baldwin parks for special activities and events. In the next five years, renovations to Elm Leaf and Colewood Park will create addition pavilion/grove areas available for rent.

An advertising company has contracted with Allegheny Port Authority to place ads in bus shelters through the County. As part of the contract, Lamar Advertising contributes a portion of ad revenue to the municipality where the bus shelters are located.

Budget Detail Interest, Rents, and Royalties 2014 2015 2015 2016 % of Total % Inc/Dec 001-34*.**** Actual Budget Estimate Budget Budget

340.0000 Interest on Real State Taxes $ 64 $ 100 $ 112 $ 100 -11% 0% 341.0000 Earnings from Temp Investments 544 650 82 100 22% 0% 341.0002 Huntington P-Card Rebate - - 4,710 6,000 27% 0% 341.1000 Interest from Money Market - - 3,000 3,000 0% 0% 342.2000 Rent of Buildings 7,300 6,000 4,300 2,500 -42% 0% 342.5000 Park Grove Rentals 600 800 750 800 7% 0% 342.5500 Rent from Ads on Public Property - 3,300 3,400 3,400 0% 0% Total Interest, Rents, and Royalties $ 8,508 $ 10,850 $ 16,354 $ 15,900 -3% 0%

Intergovernmental

Summary Intergovernmental 2014 2015 2015 2016 % of Total % Inc/Dec 001-354.**** Actual Budget Estimate Budget Budget Total Intergovernmental $ 1,022,309 $ 1,017,500 $ 1,028,022 $ 1,059,048 3% 10%

Description As a municipality, Baldwin has three levels of government above us – Allegheny County, the State of Pennsylvania, and the United States Federal Government. All three collect and provide revenue to local governments in exchange for and in support of municipal services.

The largest amount of intergovernmental revenue Baldwin receives is from County Sales Tax. When you purchase a product or service within Allegheny County, you pay 7% of the taxable purchase price in sales tax. Six of those seven percentage points goes to the State of Pennsylvania, while the other 1% is distributed to local municipalities within the County.

The Federal government reimburses the Borough for the overtime a Baldwin Police Officer spends working on a Drug Enforcement Administration (DEA) Task Force.

The State of Pennsylvania provides a few different sources of revenue. Some state revenue is for municipal services, while others are ‘pass through’ accounts, meaning they are provided to the Borough, but must be passed on to the local Volunteer Fire Relief Association (foreign fire) and public pension accounts (foreign casualty). Under the Pension Reform Act, Act 205, the Borough receives an allocation from the State of Pennsylvania for each full time employee in the pension plan, sometimes referred to as State Aid. The State generates this revenue through the foreign causality insurance premium tax. The State Aid for public pensions makes up about 20-25% of the Borough’s mandatory municipal obligation contribution (MMO) to the pensions.

PennDOT provides Baldwin funds for our employees to maintain state roads during winter storm events, such as plowing and salting. Under Act 101, the State provides funding to Baldwin based on the amount of recycling we collected during the previous year. Baldwin also receive state funding for specific police activity, such as the PA Impaired Driving Grant, the Buckle-Up Grant, and the Aggressive Driving Grant.

Budget Detail Intergovernmental Revenue 2014 2015 2015 2016 % of Total % Inc/Dec 001-350.**** Actual Budget Estimate Budget Budget

0100 County Sales Tax (Act 77) 566,414 565,000 570,000 570,000 0% 5% Total Intergovernmental Revenue $ 566,414 $ 565,000 $ 570,000 $ 570,000 0% 5% 18

Federal Revenue 2014 2015 2015 2016 % of Total % Inc/Dec 001-351.**** Actual Budget Estimate Budget Budget

0100 Reimbursements for DEA Task Force OT 22,354 22,350 22,000 17,548 -20% 0% Total Federal Revenue $ 22,354 $ 22,350 $ 22,000 $ 17,548 -20% 0%

State Capital and Operating Revenue 2014 2015 2015 2016 % of Total % Inc/Dec 001-354.**** Actual Budget Estimate Budget Budget

0000 State Grants for Police Work $ 26,486 $ 20,000 $ 20,114 $ 10,000 -50% 0% 0300 Winter Maintenance of State Roads 9,069 15,878 12,000 10,000 -17% 0% 1103 PA Impaired Driving Grant - - - 45,000 - 0% 1500 Act 101 Recycling 16,007 12,500 10,455 12,500 20% 0% Total State Capital and Operating Revenue $ 51,562 $ 48,378 $ 42,569 $ 77,500 82% 1%

State Shared Revenue and Entitlements 2014 2015 2015 2016 % of Total % Inc/Dec 001-355.**** Actual Budget Estimate Budget Budget

0100 Public Utility Realty Tax (PURTA) $ 10,032 $ 11,072 $ 10,300 $ 10,000 -3% 0% 0400 Alcoholic Beverage Licenses 6,500 1,200 5,000 5,000 0% 0% 0700 Foreign Fire Insurance Prem. Tax 101,778 110,000 103,947 105,000 1% 1% 0800 State Aid for Pensions 259,470 259,500 266,617 267,000 0% 3% 0900 Act 13 Impact Fees 4,200 - 7,590 7,000 -8% 0% Total State Shared Revenue and Entitlements $ 381,980 $ 381,772 $ 393,454 $ 394,000 0% 4%

Charges for Services

Summary Charges for Services 2014 2015 2015 2016 % of Total % Inc/Dec 001-36*.**** Actual Budget Estimate Budget Budget Total Charges for Services $ 9,928 $ 7,525 $ 9,688 $ 7,000 -28% 0%

Description When municipal services are provided that only benefit a particular resident or property owner, the cost of that service is charged directly to that individual or company rather than being provided by the general tax payer dollar. This includes services such as, zoning hearing appeals, grading permits, subdivision approvals, land development rights, and recreation program attendance.

Budget Detail Charges for Services 2014 2015 2015 2016 % of Total % Inc/Dec 001-361.**** Actual Budget Estimate Budget Budget

3000 Sub-division & Land Development $ 1,000 $ 1,350 $ 1,000 $ 1,000 0% 0% 3400 Zoning Hearing Fees 3,500 4,000 3,000 3,500 17% 0% 3500 Grading Permit Fees 4,260 1,000 78 500 - 0% Total Charges for Services $ 8,760 $ 6,350 $ 4,078 $ 5,000 23% 0%

Culture & Recreation 2014 2015 2015 2016 % of Total % Inc/Dec 001-367.**** Actual Budget Estimate Budget Budget

2000 Recreation Program Fees $ 1,168 $ 1,175 $ 5,610 $ 2,000 -64% 0% Total Culture & Recreation $ 1,168 $ 1,175 $ 5,610 $ 2,000 -64% 0%

Misc.

Summary Misc Revenue 2014 2015 2015 2016 % of Total % Inc/Dec 001-380.**** Actual Budget Estimate Budget Budget Total Misc Revenue $ 13,792 $ 16,500 $ 39,708 $ 6,000 -85% 0%

Description Sometimes the Borough receives revenue that we did not know about during the budget making process. This could be a new one time grant, payment of an insurance claim for an unexpected issue, or a refund of expenditures made in the previous year.

Budget Detail Misc Revenue 2014 2015 2015 2016 % of Total % Inc/Dec 001-380.**** Actual Budget Estimate Budget Budget

0000 Misc Revenue Receipts $ 4,917 $ 1,500 $ 20,208 $ - -100% 0% 0300 Misc Reimbursements 5,450 5,000 500 1,000 100% 0% 0400 Misc Insurance Receipts 3,425 10,000 19,000 5,000 -74% 0% Total Misc Revenue $ 13,792 $ 16,500 $ 39,708 $ 6,000 -85% 0%

Interfund Loans & Transfers

Summary Interfund Operating Transfers 2014 2015 2015 2016 % of Total % Inc/Dec 001-392.**** Actual Budget Estimate Budget Budget Total Inferfund Operating Transfers $ 470,000 $ - $ 626,621 $ 590,887 -6% 6%

Description Revenue from interfund loans or transfers is revenue whose original source was recognized in the previous fund, but is now being transferred to the General Fund to pay for the capital or operating expenditures it was intended for.

The transfer from the Sewer Fund is an interfund loan, meaning the amount will be returned to Sewer Fund by the end of the 2016 fiscal year, and there is a matching expenditure in this budget to account for repayment. This interfund loan is taken at the beginning of the fiscal and calendar year, when property taxes have not been collected and General Fund cash is lacking. Although all the other sources of revenue will cover all expected General Fund expenditures, the General Fund will experience a cash negative position in the month prior to when the majority of property taxes are collected. Once property tax revenue is received, the loan is repaid. Some communities (including Baldwin in the past) use Tax Anticipation Notes (TAN), short term bank loans for this purpose. By using an interfund loan instead, the Borough is saving the interest a TAN would charge.

The Highway Aid Fund is funded by State funds intended to pay for road repairs and maintenance, highway supplies (rock salt), and street lights. At the end of 2015, the Borough’s salt storage facilities are mostly full and the cost of rock salt dropped from last season, while the amount of state funding increased. Therefore, a portion of the state funds will be available to contribute towards the Borough’s 2016 road repaving program, an expenditure recognized in the General Fund.

Budget Detail Interfund Operating Transfers 2014 2015 2015 2016 % of Total % Inc/Dec 001-392.**** Actual Budget Estimate Budget Budget

0800 Transfer from Sewer Fund $ 470,000 $ - $ 570,000 $ 500,000 -12% 5% 3500 Transfer from Highway Aid Fund - - - 90,887 - 1% 1800 Transfer from Capital Improvement Fund - - 56,621 - -100% 0% Total Inferfund Operating Transfers $ 470,000 $ - $ 626,621 $ 590,887 -6% 6%

2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUE $ 10,071,959 $ 9,881,485 $ 10,713,712 $ 10,575,575 -1%

General Government

Summary General Government 2014 2015 2015 2016 % of Total % Inc/Dec 001-400.**** Actual Budget Estimate Budget Budget Total General Government $ 47,335 $ 47,675 $ 43,084 $ 46,584 8% 0%

Description General Government expenditures cover the costs related to Baldwin’s elected officials. The Borough is governed by seven (7) elected Councilmembers and a Mayor. The Mayor is elected for a 4-year term; council members are elected for 4-year overlapping terms. There are no term limits in Baldwin and all positions are at large. Borough Council takes action by adopting local laws (ordinances), resolutions, and motions at public meetings held once a month. Baldwin Council is responsible for the adoption of the annual budget and the appointment of the Borough Manager.

The expenditures for elected officials include: Council Member’s stipends (amounts set by local charter), continuing education classes, organization memberships, and subscriptions to relevant local government materials. Newly elected officials are highly encouraged to complete courses offered through Local Government Academy that focus on the essential duties of municipal officials.

This category also includes the cost of the annual recognition dinner, an event held in appreciation of the elected and appointed officials who volunteer their time on the Borough’s Boards, Commissions, and Committees.

Budget Detail General Government 2014 2015 2015 2016 % of Total % Inc/Dec 001-400.**** Actual Budget Estimate Budget Budget

1050 Salaries & Wages- Elected Officials $ 26,813 $ 28,875 $ 28,875 $ 28,875 0% 0% 1920 FICA/Medicare Employer Paid 2,051 2,000 2,209 2,209 0% 0% 4200 Dues, Subscriptions, Memberships 9,206 8,000 6,500 7,000 8% 0% 4540 Recognition Dinner 3,867 1,800 3,500 3,500 0% 0% 4600 Continuing Education 5,398 7,000 2,000 5,000 150% 0% Total General Government $ 47,335 $ 47,675 $ 43,084 $ 46,584 8% 0%

Executive

Summary Executive 2014 2015 2015 2016 % of Total % Inc/Dec 001-401.**** Actual Budget Estimate Budget Budget Total Executive $ 133,790 $ 204,010 $ 205,789 $ 220,177 7% 2%

Description The executive category includes the personnel costs of executive level administrative officials and employees, such as the Mayor, the Treasurer, the Borough Manager, the Assistant Secretary, and the Finance Officer. The wages of the Mayor and Treasurer are dictated by Baldwin’s charter, the same as the elected Council members. Half of the Borough Manager’s personnel expenses are reflected in this category and fund, while the other half are found in the Sewer Fund budget. Beginning in 2015, the Borough added a new executive administrative position, Finance Officer, to improve financial management and planning and the efficiency of operations. All non-uniform employees are on a UPMC medical insurance plan. Plan premiums increased 35% between 2015 and 2016, and this increase is reflected in health insurance budget numbers.

Budget Detail Executive 2014 2015 2015 2016 % of Total % Inc/Dec 001-401.**** Actual Budget Estimate Budget Budget

1050 Salary of Mayor $ 5,225 $ 5,700 $ 5,700 $ 5,700 0% 0% 1100 Salary of Treasurer 1,650 1,800 1,800 1,800 0% 0% 1101 Salary of Borough Manager 52,271 53,978 53,978 55,597 3% 1% 1120 Salary of Assistant Secretary 43,414 43,200 43,095 44,430 3% 0% 1130 Salary of Finance Officer - 52,658 53,919 56,650 5% 1% 1920 FICA/Medicare Employer Paid 7,874 9,000 12,125 12,000 -1% 0% 1960 Health Insurance 19,055 23,574 28,172 34,000 21% 0% 2310 Vehicle Fuel - Gas 1,990 500 500 500 0% 0% 3100 Professional Services - GASB - 7,500 - 1,500 - 0% 3310 Travel 85 100 1,750 2,000 14% 0% 4510 Vehicle Maintenance & Repair 252 1,000 750 1,000 33% 0% 4600 Continuing Education 1,975 5,000 4,000 5,000 25% 0% Total Executive $ 133,790 $ 204,010 $ 205,789 $ 220,177 7% 2%

Auditing & Financial Administration

Summary Auditing Services/Financial Admin 2014 2015 2015 2016 % of Total % Inc/Dec 001-402.**** Actual Budget Estimate Budget Budget Total Auditing Services/Financial Admin $ 11,281 $ 7,000 $ 7,025 $ 8,500 21% 0%

Description Each year, the Borough hires independent auditors to review the Borough’s financial documents and procedures to provide transparency, ensure Baldwin is free of fraud, improve our credit rating, and confirm compliance with all rules of the Government Accounting Standards Board (GASB) and Generally Accepted Accounting Principles (GAAP). In addition to the audit, each year we have an independent accounting firm or auditing firm prepare the Borough’s financial statements.

Budget Detail Auditing Services/Financial Admin 2014 2015 2015 2016 % of Total % Inc/Dec 001-402.**** Actual Budget Estimate Budget Budget

3110 Accounting & Auditing Services $ 11,281 $ 7,000 $ 7,025 $ 7,000 0% 0% 4600 Financial Statement Preperation - - - 1,500 - 0% Total Auditing Services/Financial Admin $ 11,281 $ 7,000 $ 7,025 $ 8,500 21% 0%

Tax Collection

Summary Tax Collection 2014 2015 2015 2016 % of Total % Inc/Dec 001-403.**** Actual Budget Estimate Budget Budget Total Tax Collection $ 49,525 $ 57,300 $ 55,476 $ 54,776 -1% 1%

Description Tax Collection expenditures cover the costs to employ the Borough’s tax collector, maintain an operational tax collection office space, and pay Jordan Tax Services to collect delinquent taxes on behalf of the Borough. Since the tax collector is an elected official, their stipend is dictated by the Borough’s charter. Earned income taxes are collected by a third party agency appointed by the Allegheny County Southwest Tax Collection Committee, and the Borough pays a percentage commission based on amount of taxes collected. Delinquent property taxes are collected by Jordan Tax Services, another third party agency, who charge 10% commission on all collections. The Borough’s tax office is located in the municipal building at 3344 Churchview Ave, Pittsburgh, PA 15227.

Budget Detail Tax Collection 2014 2015 2015 2016 % of Total % Inc/Dec 001-403.**** Actual Budget Estimate Budget Budget

1050 Salary of Tax Collector $ 11,458 $ 12,500 $ 12,500 $ 12,500 0% 0% 1920 FICA/Medicare Employer Paid 876 875 956 956 0% 0% 2100 Office Supplies 4,248 5,000 1,500 4,000 167% 0% 2120 Computer/Copier Supplies - 1,500 3,000 2,500 -17% 0% 3101 Earned Income Tax Commission 982 2,500 900 1,000 11% 0% 3102 General Exp/Service Fees 979 2,100 1,000 1,000 0% 0% 3103 Delinquent RET Commission 25,739 25,000 28,000 28,000 0% 0% 3104 Local Services Tax Commission 3,545 3,200 3,000 3,200 7% 0% 3170 Tax Duplicate Diskette 621 625 620 620 0% 0% 3210 Telephone 1,076 1,000 1,000 1,000 0% 0% 3500 Tax Collector's Bond Premium - 3,000 3,000 - -100% 0% Total Tax Collection $ 49,525 $ 57,300 $ 55,476 $ 54,776 -1% 1%

Solicitor & Legal Services

Summary Solicitor/Legal Services 2014 2015 2015 2016 % of Total % Inc/Dec 001-404.**** Actual Budget Estimate Budget Budget Total Solicitor/Legal Services $ 99,676 $ 100,000 $ 97,000 $ 100,006 3% 1%

Description Borough code requires that Borough Council appoints a Borough Solicitor every two years. The Solicitor attends Council meetings and serves to advise Council and the Borough Manager on legal issues. When issues arise that are outside of the Solicitor’s expertise, the services of specialized lawyers are retained, such as a labor attorney or Bond counsel. When the Borough is sued, the expenditures to cover court and settlement costs are reflected in this category.

Budget Detail Solicitor/Legal Services 2014 2015 2015 2016 % of Total % Inc/Dec 001-404.**** Actual Budget Estimate Budget Budget

3102 Solicitor $ 94,093 $ 90,000 $ 92,000 $ 75,006 -18% 1% 4100 Other Legal Expenditures 5,583 10,000 5,000 25,000 400% 0% Total Solicitor/Legal Services $ 99,676 $ 100,000 $ 97,000 $ 100,006 3% 1%

Other General Government Administration

Summary General Government Administration 2014 2015 2015 2016 % of Total % Inc/Dec 001-406.**** Actual Budget Estimate Budget Budget Total General Government Administration $ 114,353 $ 142,330 $ 137,520 $ 141,600 3% 1%

Description The executive administrative employees are supported by two (2) full-time administrative assistants and a part-time intern who is completing public administration degree at a local Pittsburgh university. Half of the Accounts Payable Clerk’s salary and benefits are accounted for here in the General Fund, while the other half is accounted for in the Sewer Fund. All non-uniform employees are on a UPMC medical insurance plan. Plan premiums increased 35% between 2015 and 2016, and this increase is reflected in health insurance budget numbers.

This category also includes the costs to maintain an operational administrative office presence in the Baldwin municipal complex and Baldwin’s annual member contribution to the South Hills Area Council of Government (SHACOG). Participation in the SHACOG provides Baldwin access to multi-municipal cooperation in data collection, joint purchasing, and a credit union.

Budget Detail General Government Administration 2014 2015 2015 2016 % of Total % Inc/Dec 001-406.**** Actual Budget Estimate Budget Budget

1170 Wages of Intern $ 2,945 $ 2,000 $ 252 $ 2,500 892% 0% 1500 Salaries of Office Clerks 52,819 53,096 52,947 54,900 4% 1% 1920 FICA/Medicare Employer Paid 4,445 4,062 4,050 4,200 4% 0% 1960 Health Insurance 17,663 16,172 19,656 23,380 19% 0% 2100 Office Materials & Supplies 6,425 5,500 7,000 6,500 -7% 0% 2130 Computer/Copier Supplies 1,656 3,000 1,000 2,000 100% 0% 2150 Postage 1,081 2,000 2,500 2,000 -20% 0% 2700 Computer Hardware & Software 3,565 25,000 25,000 20,000 -20% 0% 2900 Service Copier 1,310 1,000 2,300 1,000 -57% 0% 3100 General Exp/Service Fees 341 500 450 500 11% 0% 3210 Telephone 2,883 3,200 3,200 3,200 0% 0% 3240 Wireless Phone 720 800 920 920 0% 0% 3250 Internet 2,349 1,500 1,500 1,500 0% 0% 3410 Advertising 3,198 4,500 1,500 3,000 100% 0% 3420 Printing 7,606 7,000 6,000 6,000 0% 0% 5000 SHACOG Act 77 Distribution 5,346 10,000 6,245 10,000 60% 0% 7400 Machinery & Equipment - 3,000 3,000 - -100% 0% Total General Government Administration $ 114,353 $ 142,330 $ 137,520 $ 141,600 3% 1%

Engineering Services

Summary Engineering Services 2014 2015 2015 2016 % of Total % Inc/Dec 001-408.**** Actual Budget Estimate Budget Budget Total Engineering Services $ 42,529 $ 38,000 $ 68,250 $ 83,500 22% 1%

Description The Borough contracts with a local engineering firm to provide services as Baldwin’s engineers. A representative from the engineering firm attends Council meetings, where they update officials and the public on the status of engineering related projects. The engineers complete assessments of facilities, prepare bids, and oversee construction of infrastructure. The 2016 budget contains a significant increase in expected engineering expenditures to account for the series of capital improvement projects outlined in the five year capital improvement plan that will require engineering services.

Budget Detail Engineering Services 2014 2015 2015 2016 % of Total % Inc/Dec 001-408.**** Actual Budget Estimate Budget Budget

3101 Engineer's Retainer $ 3,071 $ 3,000 $ 3,000 $ 3,000 0% 0% 3102 Engineering Expenses 39,458 35,000 65,000 80,000 23% 1% 3130 GIS - - 250 500 100% 0% Total Engineering Services $ 42,529 $ 38,000 $ 68,250 $ 83,500 22% 1%

Borough Building Facilities

Summary Borough Building Facilities 2014 2015 2015 2016 % of Total % Inc/Dec 001-409.****-000 Actual Budget Estimate Budget Budget Total Borough Building Facilities $ 126,977 $ 118,705 $ 136,870 $ 140,317 3% 1%

Description The Borough Building is located at 3344 Churchview Ave, Pittsburgh, PA 15227. Expenditures in this category includes the cost to employ custodians and facility expenses, such as utilities and building maintenance. Expenditures also cover the cost of electricity at the salt storage building and the maintenance of the salt storage building.

Budget Detail Borough Building 2014 2015 2015 2016 % of Total % Inc/Dec 001-409.****-000 Actual Budget Estimate Budget Budget

1150 Wages of Custodians $ 46,946 $ 49,000 $ 44,500 $ 43,200 -3% 0% 1860 Uniform Allowance 420 500 400 500 25% 0% 1920 FICA/Medicare Employer Paid 3,591 3,750 3,404 3,000 -12% 0% 1960 Health Insurance 5,268 4,655 5,016 6,917 38% 0% 2000 Materials & Supplies 9,131 6,000 7,500 7,000 -7% 0% 3100 Professional Services - Design - - 5,000 15,000 200% 0% 3210 Telephone 1,103 1,200 1,100 1,200 9% 0% 3600 Utilities 27,651 28,000 30,000 32,000 7% 0% 3700 Repairs & Maintenance 20,153 15,000 30,000 20,000 -33% 0% 4530 Industrial Appraisal 3,732 6,500 2,500 3,000 20% 0% 6700 Security System 2,395 - - 2,000 - 0% 7400 Machinery & Equipment - 250 250 500 100% 0% 7500 Minor Machinery & Equipment - 250 2,750 500 -82% 0% Total Borough Building $ 120,390 $ 115,105 $ 132,420 $ 134,817 2% 1%

Borough Building Salt Storage 2014 2015 2015 2016 % of Total % Inc/Dec 001-409.****-001 Actual Budget Estimate Budget Budget

2000 Supplies $ - $ 500 $ - $ 500 - 0% 3600 Utilities 2,501 2,600 4,450 4,500 1% 0% 3700 Repairs & Maintenance 4,087 500 - 500 - 0% Total Borough Building Salt Storage $ 6,587 $ 3,600 $ 4,450 $ 5,500 24% 0%

Leland Center Facilities

Summary Leland Facilities 2014 2015 2015 2016 % of Total % Inc/Dec 001-409.****-00* Actual Budget Estimate Budget Budget Total Leland Facilities $ 63,598 $ 70,085 $ 49,754 $ 38,450 -23% 0%

Description The Leland Center is located at 5230 Wolfe Dr., Pittsburgh, PA 15236. Expenditures in this category includes the cost to employ custodians and facility expenses, such as utilities and building maintenance. Expenditures also cover the cost of electricity at the salt storage building and the maintenance of the salt storage building.

Budget Detail Leland Center 2014 2015 2015 2016 % of Total % Inc/Dec 001-409.****-002 Actual Budget Estimate Budget Budget

1150 Wages of Custodians $ 19,340 $ 19,000 $ 12,520 $ 5,000 -60% 0% 1860 Uniform Allowance - 150 - 150 - 0% 1920 FICA/Medicare Employer Paid 1,480 1,635 958 500 -48% 0% 1960 Health Insurance 10,622 12,930 8,626 - -100% 0% 2000 Materials & Supplies 2,332 3,000 1,200 2,500 108% 0% 2600 Small Tools & Minor Equip - 250 - 250 - 0% 3210 Telephone 1,211 1,250 1,200 1,250 4% 0% 3600 Utilities 16,203 15,000 13,000 15,000 15% 0% 3700 Repairs & Maintenance 10,920 15,070 11,500 12,000 4% 0% Total Leland Center $ 62,107 $ 68,285 $ 49,004 $ 36,650 -25% 0%

Leland Salt Storage 2014 2015 2015 2016 % of Total % Inc/Dec 001-409.****-003 Actual Budget Estimate Budget Budget

2000 Supplies $ - $ 1,000 $ - $ 500 - 0% 3600 Utilities 234 - 500 500 0% 0% 3700 Repairs & Maintenance 1,257 800 250 800 - 0% Total Leland Building Salt Storage $ 1,492 $ 1,800 $ 750 $ 1,800 140% 0%

Police Department

Summary Police 2014 2015 2015 2016 % of Total % Inc/Dec 001-410.**** Actual Budget Estimate Budget Budget Total Police $ 3,961,656 $ 3,807,267 $ 3,620,471 $ 3,680,759 2% 35%

Description Police expenditures pay for the public safety services of the Borough. They account for the salaries and benefits of the Chief of Police, two Lieutenants, two Sergeants, the Juvenile Officer, the Narcotics Officer, 17 Full-Time Patrol Officers, 2 Part-Time Patrol Officers, and 1 Desk Clerks. Police expenditures also account for the costs to operate and maintain an office space in the Borough Building, the K-9 unit, supplies, vehicles, fuel, equipment, and continuing education. These expenditures do not account for the police pension or professional liability insurance.

The majority of the police department expenditures are dictated by the collective bargaining agreement and binding arbitration results. The Borough has estimated the impact of these expenditures, as contract negotiations have not been completed at year-end.

New in 2016

Personnel

A new line item has been added for part time police officers. The amount budgeted will cover two part time officers working 24 hours a week at $30 an hour, with no additional benefits. Previously, all overtime was recognized in a single account, making it challenging to understand what overtime work is being spent doing. Starting in 2016, police overtime has been broken down into three classifications; special services, training, and overtime. Special service overtime is fully reimbursed by the company or organization requesting the special detail. Training overtime occurs when officers who work night shifts need to come in during the day to attend firearm and other trainings.

Equipment

The last lease payment for the 2015 Ford Interceptor will be paid in 2016 and one new Ford Interceptor will be purchased.

Intoximeter FST portable breath testers and a new evidence safe will be purchased.

Further new equipment will be purchased through the Asset Forfeiture Fund. Refer to the Asset Forfeiture Budget for details.

Other

Participation in the Commission on Accreditation for Law Enforcement Agencies (CALEA) will be complete in 2016 with attendance at the National Conference in Baltimore and enrollment in a mock assessment.

Budget Detail Police 2014 2015 2015 2016 % of Total % Inc/Dec 001-410.**** Actual Budget Estimate Budget Budget

1100 Salary of Chief $ 110,441 $ 109,360 $ 110,065 $ 113,367 3% 1% 1200 Salaries of Lieutenants 192,018 189,726 185,207 190,763 3% 2% 1210 Salary of Juvenile Officer 91,614 95,267 88,309 90,958 3% 1% 1230 Salaries of Sergeants 213,094 182,525 180,030 185,431 3% 2% 1240 Salaries of Patrol Officers 1,614,406 1,646,680 1,469,688 1,559,250 6% 15% 1250 Salary of Office Manager 46,645 46,477 46,347 47,926 3% 0% 1300 Wages of Part Time Officers - - - 75,000 - 1% 1720 Holiday Pay 128,834 107,200 96,181 107,200 11% 1% 1800 Office Overtime 1,837 1,650 1,200 - -100% 0% 1801 Officer Overtime 122,161 95,000 191,000 50,000 -74% 0% 1802 Special Service Overtime - - - 55,000 - 1% 1803 Training Overtime - - - 10,000 - 0% 1810 Court & Pre-Trial Hearings 50,647 52,850 48,360 53,000 10% 1% 1811 Magistrate Hearings 59,840 62,500 84,035 70,000 -17% 1% 1820 DEA Task Force Overtime 17,306 15,500 22,000 17,548 -20% 0% 1821 Leland Hourly 123,373 90,000 68,332 - -100% 0% 1860 Uniform Allowance 42,418 23,750 21,850 23,750 9% 0% 1920 FICA/Medicare Employer Paid 43,353 48,432 41,340 44,000 6% 0% 1960 Health Insurance 710,149 658,000 630,000 624,494 -1% 6% 1980 Long Term Disability Insurance 9,000 12,000 14,400 15,000 4% 0% 2100 Office Materials & Supplies 6,595 8,000 9,000 10,183 13% 0% 2101 K-9 10,357 9,250 8,500 9,000 6% 0% 2102 Ammunition & Range Supplies 11,414 15,000 2,500 11,900 376% 0% 2130 Computer/Copier Supplies 3,043 2,200 2,400 2,500 4% 0% 2150 Postage 1,248 2,200 3,000 2,500 -17% 0% 2310 Vehicle Fuel - Gas 43,029 42,000 26,000 40,000 54% 0% 2320 Vehicle Fuel - Diesel 2,820 - 50 - -100% 0% 2700 Computer Hardware/Software 23,604 25,000 25,000 17,000 -32% 0% 2900 Computer Service/Maintenance 5,550 6,000 5,000 6,000 20% 0% 3000 Civil Service Commission 1,365 2,000 1,500 1,500 0% 0% 3110 Professional/Legal Services 43,118 25,000 52,165 30,000 -42% 0% 3210 Telephone 10,283 10,500 11,000 11,000 0% 0% 3240 Wireless Phone 9,253 10,000 5,000 8,000 60% 0% 3250 Internet 6,344 5,200 6,150 6,200 1% 0% 3270 Radio Maintenance 4,464 5,500 2,500 5,500 120% 0% 3420 Printing 1,417 2,000 500 1,500 200% 0% 3701 Tires 11,914 10,000 7,000 9,000 29% 0% 3800 Vehicle Lease & Purchase 97,933 82,000 66,301 54,234 -18% 1% 4000 Lunch Allowance 3,074 3,500 4,000 3,500 -13% 0% 4200 Subscriptions/Dues 11,433 13,500 8,000 8,000 0% 0% 4500 Contracted Services - Dog Catcher 200 2,000 - 500 - 0% 4510 Vehicle Maintenance & Repair 39,879 45,000 37,000 40,000 8% 0% 4600 Continuing Education (682) 2,000 5,000 12,000 140% 0% 4900 CALEA Certification 12,318 3,500 5,500 8,080 47% 0% 5000 DUI Grant 17,928 34,500 23,060 45,000 95% 0% 7400 Major Machinery & Equipment 6,621 4,500 6,000 4,975 -17% 0% 7500 Minor Machinery & Equipment - - - 1,000 - 0% Total Police $ 3,961,656 $ 3,807,267 $ 3,620,471 $ 3,680,759 2% 35%

Fire & Emergency Medical Services

Summary Fire & BEMS 2014 2015 2015 2016 % of Total % Inc/Dec 001-41*.**** Actual Budget Estimate Budget Budget Total Fire & BEMS $ 405,151 $ 414,500 $ 409,250 $ 400,750 -2% 4%

Description In years past, the Borough contributed $164,000 annually to the three volunteer fire stations, in addition to paying for vehicle fuel. In 2016, the Borough will no longer cover the cost of fuel separately. The Borough also pays for the upkeep of the fire hydrants within the municipality. The Borough serves as a ‘pass through’ for state funds earmarked for fire fighters. Each year the Borough receives a portion of money from the state and then passes it on to the local fire relief association. This is typically around $105,000.

In previous years, the Borough contributed $41,000 annually to the Baldwin Emergency Medical Services (BEMS), along with paying for the vehicle fuel, medical supplies, and one telephone line. In 2016, the Borough is consolidating the amounts into one cash contribution.

Budget Detail Fire 2014 2015 2015 2016 % of Total % Inc/Dec 001-411.**** Actual Budget Estimate Budget Budget

2310 Gas $ 5,142 $ 2,500 $ 2,500 $ - -100% 0% 2320 Diesel 7,509 7,500 7,500 - -100% 0% 3600 Fire Hydrants 66,293 70,000 73,000 72,000 -1% 1% 5000 Contributions to Vol. Fire Companies 164,080 164,000 164,000 173,000 5% 2% 5001 Fireman's Relief Association 101,778 110,000 105,000 105,000 0% 1% Total Fire $ 344,802 $ 354,000 $ 352,000 $ 350,000 -1% 3%

BEMS 2014 2015 2015 2016 % of Total % Inc/Dec 001-412.**** Actual Budget Estimate Budget Budget

2310 Gas $ 1,352 $ 500 $ 500 $ - -100% 0% 2320 Diesel 14,373 15,000 12,000 - -100% 0% 2400 Medical Supplies 3,000 3,000 3,000 - -100% 0% 3210 Telephone 624 1,000 750 750 0% 0% 5000 Contributions 41,000 41,000 41,000 50,000 22% 0% Total BEMS $ 60,349 $ 60,500 $ 57,250 $ 50,750 -11% 0%

Code Enforcement

Summary Code Enforcement 2014 2015 2015 2016 % of Total % Inc/Dec 001-413.**** Actual Budget Estimate Budget Budget Total Code Enforcement $ 212,839 $ 206,063 $ 219,917 $ 225,969 3% 2%

Description The Code Enforcement department enforces Baldwin’s ordinances and codes related to the built environment. Expenditures for the department cover the wages and benefits of the Code Enforcement Officer and the Code Enforcement Clerk, payments for professional inspection services, and for the operations of the department (vehicle fuel, postage, office supplies, etc.). Code enforcement employees are on a UPMC medical insurance plan, along with all non-uniform employees. Plan premiums increased 35% between 2015 and 2016, and this increase is reflected in health insurance budget numbers.

The department is in the progress of creating a strategic program to fight blight within the community. The budget reflects a slight increase in funds dedicated for blighted property demolition and program implementation.

Budget Detail Code Enforcement 2014 2015 2015 2016 % of Total % Inc/Dec 001-413.**** Actual Budget Estimate Budget Budget

1100 Salary of Code Enforcement Officer $ 28,733 $ 52,658 $ 52,658 $ 54,106 3% 1% 1120 Salary of Clerk 36,142 35,964 35,877 36,954 3% 0% 1860 Uniform Allowance 474 500 150 300 100% 0% 1920 FICA/Medicare Employer Paid 4,941 6,780 6,773 6,966 3% 0% 1960 Health Insurance 12,272 17,111 18,110 24,764 37% 0% 2100 Office Supplies 1,817 2,000 1,000 1,800 80% 0% 2150 Postage 1,081 2,100 6,000 5,000 -17% 0% 2310 Gas - 1,200 1,750 1,750 0% 0% 2700 Computer Hardware & Software 16,278 4,500 4,000 4,500 13% 0% 3100 Professional Services - Court Reporter 2,273 2,000 750 3,500 367% 0% 3170 Professional Services - Inspections 103,104 53,500 75,000 60,530 -19% 1% 3210 Telephone 1,225 1,000 1,000 1,000 0% 0% 3240 Wireless Phone - 600 650 650 0% 0% 3310 Travel & Lodging - - - 600 - 0% 3410 Advertising 45 350 350 350 0% 0% 3420 Printing 98 400 250 350 40% 0% 3434 Codify/Zoning - 7,000 5,000 5,000 0% 0% 4200 Subscriptions & Memberships 40 1,250 400 500 25% 0% 4500 Removal Hazardous Structures 2,750 10,000 7,500 10,000 33% 0% 4510 Vehicle Maintenance & Repairs 61 500 950 1,450 53% 0% 4600 Continuing Education 1,247 2,000 1,500 1,500 0% 0% 4900 Bldg Permit Fees - Dept of Labor 260 650 250 400 60% 0% 4910 Blight & Abandonment - 4,000 - 4,000 - 0% Total Code Enforcement $ 212,839 $ 206,063 $ 219,917 $ 225,969 3% 2%

Planning & Zoning

Summary Planning & Zoning 2014 2015 2015 2016 % of Total % Inc/Dec 001-414.**** Actual Budget Estimate Budget Budget Total Planning & Zoning $ 2,500 $ 5,000 $ 23,500 $ 20,000 -15% 0%

Description The Borough makes a small annual contribution to the local economic development organization, Economic Development South, to contribute to improving the local South Hills economy. In 2015, the Elm Leaf Park Master Plan was created and adopted. In 2016, planning and zoning expenditures will cover the cost creating of the Colewood Park Master Plan.

Budget Detail Planning & Zoning 2014 2015 2015 2016 % of Total % Inc/Dec 001-414.**** Actual Budget Estimate Budget Budget

3100 Economic Development South $ 2,500 $ 5,000 $ 2,500 $ 5,000 100% 0% 3102 Park Master Planning - - 21,000 15,000 -29% 0% Total Planning & Zoning $ 2,500 $ 5,000 $ 23,500 $ 20,000 -15% 0%

Solid Waste Collection

Summary Solid Waste Collection & Disposal 2014 2015 2015 2016 % of Total % Inc/Dec 001-427.**** Actual Budget Estimate Budget Budget Total Solid Waste Collection & Disposal $ 1,418,738 $ 1,082,000 $ 1,247,734 $ 1,295,981 4% 12%

Description The Borough has a multi-year contract with Waste Management to collect solid waste at Baldwin residences on a weekly basis and recycling every other week. Each fall, Waste Management has six weeks of leaf collection. The Borough also pays for a Hazardous Waste Collection Program, which collects hazardous waste from residences on request.

Some municipalities have solid waste companies directly bill property owners for the service. Baldwin has and will continue to incorporate the cost of solid waste collection into the budget as an expenditure that is paid for with general tax revenues.

Budget Detail Solid Waste Collection & Disposal 2014 2015 2015 2016 % of Total % Inc/Dec 001-427.**** Actual Budget Estimate Budget Budget

4501 Garbage Collection $ 1,168,934 $ 863,500 $ 1,005,605 $ 1,044,865 4% 10% 4503 Recycling Collection 212,850 193,500 200,088 208,116 4% 2% 4504 Leaf Collection 5,590 - 20,041 25,000 25% 0% 4505 Yard Waste Disposal 31,364 25,000 22,000 18,000 -18% 0% Total Solid Waste Collection & Disposal $ 1,418,738 $ 1,082,000 $ 1,247,734 $ 1,295,981 4% 12%

Department of Public Works

Summary Public Works 2014 2015 2015 2016 % of Total % Inc/Dec 001-43*.**** Actual Budget Estimate Budget Budget Total Public Works $ 760,492 $ 761,531 $ 768,890 $ 802,781 4% 8%

Description The Borough’s Public Works department includes a Superintendent, a Foreman, and a full time maintenance crew of five. Additional seasonal help is hired during the summer months. Half of the Superintendent’s and Foreman’s wages and benefit expenditures are paid for through the General Fund, with the other half coming out of the Sewer Fund. The department is responsible for the upkeep of the Borough’s roads, parks, snow removal, and storm & sanitary sewer system. The labor costs associated with the sanitary sewer system are accounted for in the Sewer Fund.

All full-time public works personnel received a 3% wage increase from 2015 to 2016 in accordance with the collective bargaining agreement. DPW employees are on a UPMC medical insurance plan, along with all non-uniform employees. Plan premiums increased 35% between 2015 and 2016, and this increase is reflected in health care budget numbers.

One of the largest expenditures of DPW operations, is the purchase of rock salt. The majority of rock salt is purchased and reflected in the Highway Aid budget with the Liquid Fuels revenue Baldwin receives from the state. The per ton cost of rock salt has gone slightly down for the 2015-2016 winter season in comparison with the 2014-2015 winter season.

Traffic Control Devices. The Borough pays for the upkeep of traffic lights and street lights on Baldwin roads.

While the sanitary sewer system is funded by the Sewer Fund, any expenditures on the Borough’s storm sewer system is reflected in the General Fund. Some storm sewer system maintenance and repairs are completed by DPW employees, while some jobs are contracted out.

Capital Purchases

At the end of 2015, the Borough entered a lease for the purchase of three new DPW trucks; one F150 and two F550s. The first of the lease payments on these new vehicles will be due in 2016. In 2016, the Borough will lease a new 10-ton dump truck to replace the existing 10-ton (B-7), which will be 8 years old and due for replacement. Depending on the timing on the new lease, the first payment may not come due until 2017.

Budget Detail General Public Works 2014 2015 2015 2016 % of Total % Inc/Dec 001-430.**** Actual Budget Estimate Budget Budget

1100 Salary of Superintendent $ 35,357 $ 35,182 $ 35,182 $ 36,150 3% 0% 1120 Wages of Foreman 57,699 28,514 28,514 29,332 3% 0% 1121 Wages of Maintenance Crew 264,920 292,720 266,000 277,721 4% 3% 1150 Wages of Part Time Employees 20,886 11,000 14,781 11,850 -20% 0% 1800 Overtime 15,302 10,000 14,000 14,000 0% 0% 1801 Snow Removal Overtime 39,015 45,000 44,000 45,000 2% 0% 1860 Uniform Allowance 4,603 1,250 1,250 1,250 0% 0% 1870 Meal Allowance 205 250 400 300 -25% 0% 1920 FICA/Medicare Employer Paid 33,173 27,266 26,352 27,500 4% 0% 1960 Health Insurance 90,152 75,284 86,850 109,627 26% 1% 2200 Operating Supplies 11,994 18,000 12,850 7,500 -42% 0% 2310 Vehicle Fuel - Gas 15,307 18,000 15,000 26,000 73% 0% 2320 Vehicle Fuel - Diesel 16,537 20,000 12,000 17,500 46% 0% 2500 Vehicle Repair & Maintenance 21,922 20,000 25,000 15,000 -40% 0% 2600 Small Tools & Equipment 4,961 4,000 3,500 4,000 14% 0% 3000 Other Service & Charges 493 1,500 900 200 -78% 0% 3210 Telephone 200 700 2,500 950 -62% 0% 3240 Wireless Phone 907 1,000 1,500 1,350 -10% 0% 3270 Radio Maintenance Contract 5,049 5,900 8,000 4,000 -50% 0% 3800 Vehicle Purchase & Leases 52,417 73,465 75,400 98,801 31% 1% 3840 Rent of Machinery & Equipment 1,740 500 - 500 - 0% 4400 Safety Equipment 285 1,000 2,000 1,500 -25% 0% 4510 Contracted Vehicle Maint. & Repair 42,223 35,000 50,000 20,000 -60% 0% 4600 Continuing Education - - - 1,000 - 0% 4700 CDL, Drug, Alcohol Testing 207 500 350 250 -29% 0% 7400 Major Machinery & Equipment - - - 5,000 - 0% Total General Public Works $ 735,554 $ 726,031 $ 726,329 $ 756,281 4% 7%

Winter Maintenance 2014 2015 2015 2016 % of Total % Inc/Dec 001-432.**** Actual Budget Estimate Budget Budget

1870 Meal Reimbursement $ 2,500 $ 5,000 $ 5,000 $ 5,000 0% 0% 2460 Highway Supplies - Rock Salt - - 861 1,000 16% 0% Total Winter Maintenance $ 2,500 $ 5,000 $ 5,861 $ 6,000 2% 0%

Traffic Control Devices 2014 2015 2015 2016 % of Total % Inc/Dec 001-433.**** Actual Budget Estimate Budget Budget

2000 Street Signs/Markings $ 12,150 $ 15,000 $ 8,000 $ 12,500 56% 0% 2200 Street Light LED Conversion - - 2,500 5,000 100% 0% 2500 Maint. & Repair Traffic Signals 5,197 5,500 8,200 8,000 -2% 0% Total Traffic Control Devices $ 17,347 $ 20,500 $ 18,700 $ 25,500 36% 0%

Storm Sewer and Drains 2014 2015 2015 2016 % of Total % Inc/Dec 001-436.**** Actual Budget Estimate Budget Budget

2490 Storm Sewers & Drains $ 5,092 $ 10,000 $ 18,000 $ 15,000 -17% 0% Total Storm Sewer and Drains $ 5,092 $ 10,000 $ 18,000 $ 15,000 -17% 0%

Roads & Bridges

Summary Maintenance & Repair of Roads & Bridges 2014 2015 2015 2016 % of Total % Inc/Dec 001-438.**** Actual Budget Estimate Budget Budget Total Maintenance & Repair of Roads & Bridges $ 673,441 $ 872,100 $ 825,070 $ 877,700 6% 8%

Description Annually, the Borough hires a third party street resurfacing contractor to repave a portion of Baldwin roads, based on their condition. The Borough’s engineering firm creates the request for proposals (RFP) and oversees the bidding process and completion of the work. In addition, the public works department patches and repairs roads that are not being repaved in the current year.

The following table shows the budget amount for road repaving, the amount spent per year, and the number of miles paved.

Budgeted Year Amount Amount Spent Miles 2010 $ 408,519.00 $ 487,948.28 0.464 2011 $ 500,000.00 $ 414,578.63 0.765 2012 $ 750,000.00 $ 735,414.83 1.966 2013 $ 800,000.00 $ 748,602.19 1.889 2014 $ 800,000.00 $ 600,587.35 1.749 2015 $ 800,000.00 $ 746,241.32 1.213

Budget Detail Maintenance & Repair of Roads & Bridges 2014 2015 2015 2016 % of Total % Inc/Dec 001-438.**** Actual Budget Estimate Budget Budget

2450 Material - Patching & Repair Roads $ 14,021 $ 16,000 $ 15,000 $ 16,000 7% 0% 2503 Restoration 2,499 3,500 3,500 3,500 0% 0% 2510 Maint & Repairs - Unimproved Roads - - 570 600 5% 0% 3130 Engineering - Resurfacing Streets 56,334 52,100 52,000 52,100 0% 0% 3750 Maint & Repairs - Guide Rails - 500 - 500 - 0% 3751 Street Cleaning - - 4,000 5,000 25% 0% 6100 Const Contracts - Resurfacing Streets 600,587 800,000 750,000 800,000 7% 8% Total Maintenance & Repair of Roads & Bridges $ 673,441 $ 872,100 $ 825,070 $ 877,700 6% 8%

Parks & Recreation

Summary Parks & Recreation 2014 2015 2015 2016 % of Total % Inc/Dec 001-454.**** Actual Budget Estimate Budget Budget Total Parks & Recreation $ 116,275 $ 141,500 $ 99,469 $ 108,050 9% 1%

Description As of 2015, the wages and benefits for the public works employees who maintain Baldwin parks were moved to the General Public Works category. The parks and recreation category now represents expenditures for the vehicle fuel, supplies, utilities, equipment rentals, and contracted repair services, such as replacing fences and electrical wiring at local parks. The Borough also contributes $15,000 to administer and implement recreation programs throughout the community.

Budget Detail Parks & Recreation 2014 2015 2015 2016 % of Total % Inc/Dec 001-454.**** Actual Budget Estimate Budget Budget

1121 Bus Drivers $ 318 $ - $ 349 $ 350 0% 0% 2500 Maint & Repair Supplies - - 570 600 5% 0% 2510 Tractor Maintenance - 2,500 - - - 0% 3000 Services & Charges 650 500 - 100 - 0% 3600 Utilities 18,641 22,000 21,500 22,000 2% 0% 3700 Maintenance & Repair 27,342 35,000 18,000 15,000 -17% 0% 3800 Equipment Rental 8,400 8,000 8,000 8,000 0% 0% 4500 Contracted Services 41,972 55,000 36,050 42,000 17% 0% 6700 Security Equipment - - - 2,000 0% 7400 Machinery & Equipment 3,953 1,500 - 1,000 - 0% 7500 Recreation Programming 15,000 15,000 15,000 15,000 0% 0% 7501 Programming/Advertising - 2,000 - 2,000 - 0% Total Parks & Recreation $ 116,275 $ 141,500 $ 99,469 $ 108,050 9% 1%

Debt Service

Summary Debt Service 2014 2015 2015 2016 % of Total % Inc/Dec 001-47*.**** Actual Budget Estimate Budget Budget Total Debt Service $ 224,125 $ 250,000 $ 64,016 $ 249,754 290% 2%

Description In 2014 the Borough paid off all General Fund long-term debt. In 2015 the Borough issued a new bond to fund capital purchases and projects, aiming to maintain annual debt service payments at levels similar to what the Borough had been paying for previous debt – around $250,000 a year. Since the new bond was issued in 2015, the debt service for that year only included interest and was therefore a one-time dip in the total debt service payment schedule for the bond.

Budget Detail Debt Service - Principal 2014 2015 2015 2016 % of Total % Inc/Dec 001-471.**** Actual Budget Estimate Budget Budget

2000 General Obligation Bond $ - $ 210,000 $ - $ 145,000 - 1% Total Debt Service - Principal $ - $ 210,000 $ - $ 145,000 - 1%

Debt Service - Interest 2014 2015 2015 2016 % of Total % Inc/Dec 001-472.**** Actual Budget Estimate Budget Budget

2000 General Obligation Bond $ 224,125 $ 40,000 $ 64,016 $ 104,754 64% 1% Total Debt Service - Interest $ 224,125 $ 40,000 $ 64,016 $ 104,754 64% 1%

Pensions

Summary Employer Paid Benefits & Withholding 2014 2015 2015 2016 % of Total % Inc/Dec 001-48*.**** Actual Budget Estimate Budget Budget Total Employer Paid Benefits & Withholding $ 951,755 $ 936,320 $ 935,320 $ 908,539 -3% 9%

Description The Borough has three pension accounts. A defined benefit plan for police employed under the police collective bargaining agreement, a defined benefit plan for non-uniform employees hired prior to 2011, and a defined contribution plan for non-uniform employees hired after 2011.

A defined benefit plan sets a specific level of benefits that participants will receive once retired, and the municipality is responsible for funding the plan to ensure these benefits will be paid out. A defined contribution plan is more like a 401k account with an employer contribution. The Borough’s contribution level is set, and once participants vest in the plan, they will receive the Borough’s contribution and interest earnings after retirement. The Borough contributes 6% of each participant’s salary to the defined contribution plan.

All three pension plans are invested and managed by a professional financial management firm, currently Signature Financial. Annually, each of the defined benefit plans is studied by an actuary to report on the plans fund levels and the Borough’s minimum municipal obligation (MMO). The Borough then contributes to the defined benefit plans based on the MMO.

Budget Detail Employer Paid Benefits & Withholding 2014 2015 2015 2016 % of Total % Inc/Dec 001-48*.**** Actual Budget Estimate Budget Budget

481.1940 Unemployment Compenstation - PSAB $ 10,433 $ 13,000 $ 12,000 $ 14,000 17% 0% 483.1000 Police Pension Contribution 858,140 863,379 863,379 847,269 -2% 8% 482.3000 Non-Uniform Pension Contribution 83,182 59,941 59,941 47,270 -21% 0% Total Employer Paid Benefits & Withholding $ 951,755 $ 936,320 $ 935,320 $ 908,539 -3% 9%

Insurance

Summary Insurance 2014 2015 2015 2016 % of Total % Inc/Dec 001-486.**** Actual Budget Estimate Budget Budget Total Insurance $ 334,789 $ 293,314 $ 335,420 $ 313,081 -7% 3%

Description To reduce the Borough’s liability, we purchase multiple forms of insurance. For employees, Baldwin pays for group life insurance, worker’s compensation, and an employee assistance program. Expenditures also cover public official and police professional liability insurance. To protect Baldwin’s assets, we purchase fire and general liability auto, bond, and umbrella insurance policies. Due to pending lawsuits brought by past employees and officials, the Borough’s insurance premiums are going up by 18% in 2016.

Budget Detail Insurance 2014 2015 2015 2016 % of Total % Inc/Dec 001-486.**** Actual Budget Estimate Budget Budget

1501 Group Life Insurance Premiums $ 10,598 $ 10,400 $ 10,606 $ 10,706 1% 0% 1502 Hospitalization Insurance 30,259 20,000 24,000 - -100% 0% 1503 Employee Assistance Program 1,207 1,000 2,414 2,000 -17% 0% 3500 Public Officials Liability Insurance 13,624 8,802 10,239 9,885 -3% 0% 3502 Police Professsional Liability Insurance 18,538 17,786 17,786 21,877 23% 0% 3504 Worker's Compensation 201,259 150,000 180,000 180,000 0% 2% 3510 Fire & Auto General Liability Insurance 46,103 36,103 40,000 32,788 -18% 0% 3530 Bond 278 250 275 300 9% 0% 3550 Umbrella 12,923 48,973 50,100 55,525 11% 1% Total Insurance $ 334,789 $ 293,314 $ 335,420 $ 313,081 -7% 3%

Other Expenditures

Summary Other Uses 2014 2015 2015 2016 % of Total % Inc/Dec 001-4**.**** Actual Budget Estimate Budget Budget Total Other Uses $ 758,184 $ 288,300 $ 1,295,650 $ 845,800 -35% 8%

Description Library

Baldwin contributes $180,000 annually to the Baldwin Borough library.

Civil & Military Celebrations

Each August, Baldwin’s Community Day is held in the parking lot and open areas of the municipal building complex in North Baldwin.

Refunds

When property owners appeal the assessed value of their property to Allegheny County and receive a reduction, the Baldwin is responsible for refunding prior real estate taxes paid at the higher value.

Interfund Transfers

The General Fund uses an interfund loan from the Sewer Fund to stay cash positive prior to property tax collection. The repayment of the loan is recognized here.

The Borough’s swimming pool does not generate enough revenue from pool transactions to cover the expense of its operations, so the General Fund money is transferred to supplement the Swimming Pool Fund and keep the pool open.

Budget Detail Library 2014 2015 2015 2016 % of Total % Inc/Dec 001-456.**** Actual Budget Estimate Budget Budget

5000 Contribution $ 180,000 $ 180,000 $ 180,000 $ 185,000 3% 2% Total Library $ 180,000 $ 180,000 $ 180,000 $ 185,000 3% 2%

Civil & Military Celebrations 2014 2015 2015 2016 % of Total % Inc/Dec 001-457.**** Actual Budget Estimate Budget Budget

5400 Community Events $ 6,393 $ 9,300 $ 7,650 $ 8,000 5% 0% 7200 Borough Signage - - 10,000 1,300 -87% 0% Total Civil & Military Celebrations $ 6,393 $ 9,300 $ 17,650 $ 9,300 -47% 0%

Other Financial Uses 2014 2015 2015 2016 % of Total % Inc/Dec 001-49*.**** Actual Budget Estimate Budget Budget

491.0000 Refunds- Prior Year Receipts $ 57,116 $ 9,000 $ 62,000 $ 55,000 -11% 1% 491.0100 Refunds- Current Year Receipts 13,924 15,000 15,000 15,000 0% 0% 492.0800 Transfer to Sewer Fund 340,000 - 921,000 500,000 -46% 5% 492.1800 Transfer to Capital Fund 19,082 - - - - 0% 492.3100 Transfer to Pool Fund 65,000 75,000 100,000 81,500 -19% 1% 492.3500 Transfer to Liquid Fuels Fund 76,669 - - - - 0% Total Other Financial Uses $ 571,791 $ 99,000 $ 1,098,000 $ 651,500 -41% 6%

2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUE $ 10,071,959 $ 9,881,485 $ 10,713,712 $ 10,575,575 -1% TOTAL EXPENDITURES $ 10,503,915 $ 9,833,000 $ 10,627,475 $ 10,563,075 -1% DIFFERENCE $ (431,956) $ 48,485 $ 86,236 $ 12,500

General Fund Capital Revenue

Summary 2014 2015 2015 2016 Actual Budget Estimate Budget TOTAL REVENUES $ - $ - $ - $ 2,249,284

Description In 2015, the Borough created and adopted a five year (2016-2020) capital improvement plan to prioritize capital purchases and projects and plan for completing and financing those projects.

The capital plan identified four sources of revenue for capital improvements; grants, bond (borrowing), asset forfeiture, and general fund. Capital projects using asset forfeiture funds are reflected in the asset forfeiture fund budget.

In 2015, the Borough was awarded a $75,000 grant the Allegheny County’s Community Infrastructure and Tourism Fund grant program (CITF) to help pay for the removal and replacement of the wooden play structures at Elm Leaf and Colewood Parks.

The transfer from the Capital Improvement Fund is revenue generated by a 2015 bond issuance to pay for specific and much needed capital improvement projects through the Borough. The amount of revenue transferred in 2016 is in alignment with the cost estimates of the capital projects that will be completed in 2016.

The MRM dividend is revenue which Baldwin receives for belonging to the Municipal Risk Management (MRM) worker’s compensation pooled trust. Each month, the Borough pays into the trust in the form of worker’s compensation premiums. Once annually the MRM Trust considers claims and trust funding levels to calculate a dividend for member municipalities. Previous years MRM dividend revenue was reflected in the General Fund Operating Budget.

Budget Detail Culture & Recreation 2014 2015 2015 2016 % of Total 001-367.**** Actual Budget Estimate Budget Budget

3000 Recreation Grants - - - 75,000 3% Total Culture & Recreation $ - $ - $ - $ 75,000 3%

Proceeds of Fixed Asset Disposition 2014 2015 2015 2016 % of Total 001-391.**** Actual Budget Estimate Budget Budget

1000 Sale of Fixed Assets - - 1,200 4,000 0% Total Fixed Asset Disposition $ - $ - $ 1,200 $ 4,000 233%

Interfund Transfers 2014 2015 2015 2016 % of Total 001-392.**** Actual Budget Estimate Budget Budget

1800 Transfer from Capital Improvement Fund - - - 2,105,284 94% Total Inferfund Transfers $ - $ - $ - $ 2,105,284 94%

Refunds of Prior Year's Expenditures 2014 2015 2015 2016 % of Total 001-395.**** Actual Budget Estimate Budget Budget

0000 Refund of MRM Dividend $ - $ - $ - $ 65,000 3% 1800 Refund of Prior Year Expenditures - - - - 0% Total Refunds of Prior Year's Expenditures $ - $ - $ - $ 65,000 3%

General Fund Capital Expenditures

Summary 2014 2015 2015 2016 Actual Budget Estimate Budget TOTAL EXPENDITURES $ - $ - $ - $ 2,249,284

Description Details regarding all 2016 capital projects can be found in the 2016-2020 Capital Improvement Plan.

Buildings

Four new capital projects are expected to be in progress or completed during 2016 at the Borough Building at 3344 Churchview Ave; auditorium remodel & HVAC repair, remodel public works office, installation of an emergency generator, and replacement of the underground fuel tanks and associated fuel pump infrastructure.

Similar to the Borough Building, two new capital projects are expected to be in progress or completed during 2016 at the Leland Center at 5230 Wolfe Dr.; roof replacement and replacement of the underground fuel tanks and associated fuel pump infrastructure.

Public Works/Storm Sewer System

Baldwin must come into compliance with phase II of the Municipal Separate Storm Sewer System (MS4) permitting process through the Environmental Protection Agency (EPA) in order to avoid large fines and prevent contamination of fresh water. To do this, a few new projects will be undertaken in 2016. First, across from the DPW storage shelter on Elm Leaf Dr., there is an open storage yard with piles of materials just uphill from a stream. These materials need to be properly stored and the area remediated to prevent the materials from getting into the stream. Second, the Borough’s storm sewer system was built during the first half of the 1900s and the condition of these pipes is unknown. The Borough engineers has created a plan to CCTV all storm sewer lines in the Borough over the next five years. As the videos find problems, the pipes will be repaired as well.

Parks & Recreation

The Elm Leaf Park Master Plan was created and adopted at the end of 2015 and phase one of the plan is expected to be completed in 2016. During 2016, a Colewood Park Master Plan will be adopted and phase one of that plan is expected to be underway within the year.

Budget Detail Borough Building 2014 2015 2015 2016 % of Total 001-409.****-000 Actual Budget Estimate Budget Budget

6000 Auditorium Remodel & HVAC - - - $ 250,000 11% 6100 DPW Office Remodel - - - 10,000 0% 6200 Emergency Generator - - - 154,900 7% 6300 Fuel Tank Replacement - - - 300,000 13% Total Borough Building $ - $ - $ - $ 714,900 31%

Leland Center 2014 2015 2015 2016 % of Total 001-409.****-002 Actual Budget Estimate Budget Budget

6000 Roof Replacement - - - $ 200,000 9% 6100 Fuel Tank Replacement - - - 300,000 13% Total Leland Center $ - $ - $ - $ 500,000 22%

Storm Sewer and Drains 2014 2015 2015 2016 % of Total 001-436.**** Actual Budget Estimate Budget Budget

6000 Outdoor Storage Yard - - - $ 150,000 7% 6100 System CCTV and Cleaning - - - 113,400 5% 6200 Storm Sewer System Repairs - - - 40,000 2% Total Storm Sewer and Drains $ - $ - $ - $ 303,400 13%

Parks & Recreation 2014 2015 2015 2016 % of Total 001-454.**** Actual Budget Estimate Budget Budget

6000 Elm Leaf Park Improvements - - - $ 476,912 21% 6100 Colewood Park Improvements - - - 254,073 11% Total Parks & Recreation $ - $ - $ - $ 730,984 32%

2014 2015 2015 2016 Actual Budget Estimate Budget TOTAL REVENUES $ - $ - $ 1,200 $ 2,249,284 TOTAL EXPENDITURES $ - $ - $ - $ 2,249,284

Sewer Fund Revenue

Summary 2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 7,159,102 $ 7,687,050 $ 5,667,350 $ 11,399,050 101%

Description The majority of revenue in the Sewer Fund comes from sewer rents and bond proceeds. Sewage rates were last set in 2011 and since then the Authorities (Pleasant Hills and ALCOSAN) who collect and treat wastewater for Baldwin residents have significantly increased their charges. Therefore, to pay for these increased treatment fees, the sewage rates Baldwin residents pay will increase for 2016. The Borough took a forward looking approach and set the new rate at a level that will avoid further rate increase to residents for up to five years. See the expense description for more information about why the Sewer Fund expenses have gone up over time.

In 2011 and 2012, the Borough issued bonds to finance large scale sanitary sewer infrastructure projects. During 2016, the Borough expects to start construction on one of the major projects that has been in the works, the equalization basin next to Colewood Park. Besides reducing overflow events in Baldwin, the basin will also benefit Whitehall Borough, so they are contributing $100,000 a year over the next few years towards the work. This contribution is reflected in the budget as municipal coordination.

Budget Detail Revenue 2014 2015 2015 2016 % of Total % Inc/Dec 008-3**.**** Actual Budget Estimate Budget Budget

341.0000 Earnings From Temp Dep/Investments $ 95 $ 400 $ 50 $ 50 0% 0% 341.0004 Interest - Money Market Account - - 3,500 5,000 43% 0% 364.1001 Sewer Rents-Current Year Billing 4,306,877 4,381,325 4,200,000 5,305,000 26% 47% 364.1002 Sewer Rent-Delinquent 183,192 198,000 128,000 120,000 -6% 1% 364.1100 Tap-In Fees 8,202 10,000 7,000 8,000 14% 0% 364.6000 Credit From ALCOSAN 12,787 13,000 15,000 14,000 -7% 0% 364.8000 Charges-Letters & Certificates 10,580 10,000 10,500 10,500 0% 0% 364.9500 Municipal Coordination - - 100,000 100,000 0% 1% 392.0100 Transfer from General Fund 340,100 250,000 921,000 500,000 -46% 4% 392.1800 Transfer from Capital Improvement Fund 300,000 - - - - 0% 392.9900 Transfer from Fund Balance - - - - - 0% 393.1000 Sewer Sys Repair Bond Proceeds 1,997,268 2,824,325 282,300 5,336,500 1790% 47% Total Sewer Fund Revenue $ 7,159,102 $ 7,687,050 $ 5,667,350 $ 11,399,050 101% 100%

Sewer Fund Expenses

Summary 2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL EXPENSES $ 5,233,475 $ 7,687,124 $ 5,149,607 $ 11,297,940 119%

Description Sewer expenses can be categorized into three main sub-sections: personnel, infrastructure, and wastewater treatment.

The administration and maintenance of the Borough’s sanitary sewer system requires labor and materials from administrative and public works employees. Therefore, a portion of the Borough’s personnel expenses are paid out of the Sewer Fund, based on the job duties of the employees.

Due to Environmental Protection Agency (EPA) and the Pennsylvania Department of the Environment (DEP) Clean Water Act regulations and standards, Pittsburgh area municipalities are in a period of large infrastructure investment in order to come into compliance and reduce over flow events. 51% of 2016 Sewer Fund expenses are projected to be spent on the engineering and construction of these infrastructure projects. While bond proceeds revenue will cover most of these expenses, the Borough is responsible for repaying the bond borrowing through annual debt service payments. At the end of 2015 the Borough refinanced the 2011 bond to recoup a debt service savings of about $120,000 in 2016. However, after 2016 the annual debt service to repay the long-term bond borrowing will go up, as the individual bonds reach maturity.

About two-thirds of the Borough’s sewage is collected and treated by ALCOSAN, with the other third going to Pleasant Hills Authority. The treatment plants bill the Borough based on the number of gallons of sewage they collect and treat based on rates they set at their organizations. Since sewage rates to Baldwin residents were set in 2011, ALCOSAN has had a 17% increase in 2014, an 11% increase in 2015 and 2016, and plans for another 11% in 2017. Sewage rates charged by Pleasant Hills Authority are also going up, with a 48% increase from 2015 to 2016.

Budget Detail Sewer Administration 2014 2015 2015 2016 % of Total % Inc/Dec 008-400.**** Actual Budget Estimate Budget Budget

3210 Telephone $ - $ 500 $ 500 $ 500 0% 0% 4600 Refunds 53 1,000 - 1,000 - 0% Total Sewer Administration $ 53 $ 1,500 $ 500 $ 1,500 200% 0%

Auditing Services & Financial Administration 2014 2015 2015 2016 % of Total % Inc/Dec 008-402.**** Actual Budget Estimate Budget Budget

3110 Accounting & Auditing Services $ 6,963 $ 7,500 $ 8,704 $ 8,700 0% 0% 3900 Bank Service Charges - 100 - 100 - 0% Total Auditing Services & Financial Administration $ 6,963 $ 7,600 $ 8,704 $ 8,800 1% 0%

Solicitor/Legal Services 2014 2015 2015 2016 % of Total % Inc/Dec 008-404.**** Actual Budget Estimate Budget Budget

3102 Legal Expenses $ 8,334 $ 10,000 $ 8,334 $ 25,002 200% 0% 4100 Judgements & Damages - 2,500 - 2,500 - 0% Total Solicitor/Legal Services $ 8,334 $ 12,500 $ 8,334 $ 27,502 230% 0%

Other General Government Administration 2014 2015 2015 2016 % of Total % Inc/Dec 008-406.**** Actual Budget Estimate Budget Budget

1120 Salaries of Full-Time Staff $ 17,630 $ 71,521 $ 68,500 $ 73,894 8% 1% 1920 FICA/Medicare Employer Paid 1,349 4,161 400 5,653 1313% 0% 1960 Health Insurance 5,360 12,927 12,957 18,483 43% 0% 2100 Office Supplies 358 200 200 200 0% 0% 2150 Postage 274 200 200 200 0% 0% 2700 Computer Hardware & Software 2,546 2,500 2,500 2,500 0% 0% Total Other General Government Administration $ 27,517 $ 91,509 $ 84,757 $ 100,930 19% 1%

Billing & Collections 2014 2015 2015 2016 % of Total % Inc/Dec 008-407.**** Actual Budget Estimate Budget Budget

3000 Billing & Collections $ 122,063 $ 115,000 $ 116,900 $ 120,000 3% 1% Total Billing & Collections $ 122,063 $ 115,000 $ 116,900 $ 120,000 3% 1%

Engineering & Construction 2014 2015 2015 2016 % of Total % Inc/Dec 008-408.****-*** Actual Budget Estimate Budget Budget

3130-000 Engineering & Architectural Services $ 175,005 $ 100,000 $ 11,000 $ 15,000 36% 0% 3130-001 Engr Exp-ACO Manhole Insp 1,141 5,000 7,500 7,500 0% 0% 3130-002 Engr Exp-ACO GIS 43,664 - 1,301 7,500 477% 0% 3130-003 Engr Exp-ACO Feasability Study 80 2,000 - 35,000 - 0% 3130-004 Engr Exp-ACO O & M Plan - 2,000 1,062 2,000 88% 0% 3130-005 Engr Exp-ACO Administration 24,003 2,000 10,000 15,000 50% 0% 3130-008 Engr Exp-COA CCTV 2,385 10,000 - 10,000 - 0% 3130-010 Engr Exp-COA Manhole Insp 151 5,000 2,500 5,000 100% 0% 3130-011 Engr Exp-COA I/I Field Investigation - 20,000 500 2,000 300% 0% 3130-012 Engr Exp-COA Flow Monitoring 19,994 15,000 30,000 30,000 0% 0% 3130-015 Eng Exp-COA I/I Reduction Program 10,636 30,000 15,000 30,000 100% 0% 3130-017 Streets Run ACO Sanitary Repairs 184,789 75,000 - - - 0% 3130-020 Engr Exp-Glass Run Sewer 31,995 2,000 5,500 55,000 900% 0% 3130-021 Annual O & M Repairs - 250,000 5,000 250,000 4900% 2% 3130-023 Engr Exp-ACO Repairs 4 & 5 137,135 - 8,000 - -100% 0% 3130-025 Const Exp-Glass Run Road - 103,400 1,000 150,000 14900% 1% 3131-000 Online GIS Mapping - 25,000 1,500 7,200 380% 0% 3133-000 Engr Exp- Leona Dr - - 5,000 - -100% 0% 3133-001 Const Exp- Leona Dr - - 70,000 - -100% 0% 3135-000 Eng Exp - COA Wet Weather Flow 120,187 300,000 90,000 300,000 233% 3% 3135-001 Const Exp- COA Wet Weather Flow - 1,450,000 - 4,350,000 - 39% 3136-000 Eng. Exp- Missionary Dr & Deep Dig - - 15,000 50,000 233% 0% 3136-001 Const Exp- Missionary Dr & Deep Dig - 800,000 6,000 500,000 8233% 4% Total Engineering & Construction $ 751,164 $ 3,196,400 $ 285,863 $ 5,821,200 1936% 52%

Public Works 2014 2015 2015 2016 % of Total % Inc/Dec 008-426.**** Actual Budget Estimate Budget Budget

1100 Salaries of Dept Head $ 17,630 $ 71,521 $ 68,500 $ 73,894 8% 1% 1120 Salaries of Full Time Crew 323,835 294,094 308,200 332,631 8% 3% 1150 Wages - Part Time Crew - 9,000 9,000 11,850 32% 0% 1800 Overtime 5,874 6,000 7,000 7,000 0% 0% 1860 Uniform Allowance 3,142 2,000 1,500 1,250 -17% 0% 1870 Meal Reimbursement 300 400 320 500 56% 0% 1920 FICA/Medicare Employer Paid 31,954 27,266 30,042 30,456 1% 0% 1960 Health Insurance 74,747 75,284 80,170 104,978 31% 1% 2000 Supplies 1,866 2,500 500 2,000 300% 0% 2310 Vehicle Fuel -Gas 31,314 28,000 20,000 26,000 30% 0% 2320 Vehicle Fuel-Diesel 26,738 28,000 12,500 22,500 80% 0% 2510 Vehicle Parts 6,725 6,000 6,000 6,000 0% 0% 3210 Telephone - 1,200 1,200 950 -21% 0% 3240 Wireless Phones - 1,000 1,050 1,350 29% 0% 3270 Radio Maintenance Contract 2,658 800 800 4,000 400% 0% 3290 PA One Calls - - - 1,700 - 0% 3700 Repairs & Maintenance Services 10,617 7,500 4,000 6,000 50% 0% 3800 Vehicle Leasing 160,388 115,000 110,000 98,801 -10% 1% 3840 Rent of Machinery & Equipment - 1,200 - 500 - 0% 4500 Contracted Services 2,434 2,000 - 22,000 - 0% 4510 Vehicle Repairs & Maintenance 6,533 6,000 25,000 15,000 -40% 0% 4540 Misc. Expenses 5,167 3,500 2,000 2,000 0% 0% 4600 Continuing Education - - - 1,000 - 0% 4700 CDL, Drug & Alcohol Testing 35 250 200 250 25% 0% 6100 General Construction Contracts 35,985 20,000 18,000 - -100% 0% Total Public Works $ 747,943 $ 708,515 $ 705,982 $ 772,610 9% 7%

Wastewater Collection & Treatment 2014 2015 2015 2016 % of Total % Inc/Dec 008-429.**** Actual Budget Estimate Budget Budget

3640 ALCOSAN Sewage Treatment $ 1,485,437 $ 1,675,000 $ 1,675,905 $ 1,860,300 11% 16% 3641 Pleasant Hills Authority Sewage Treatment 783,319 802,651 616,813 915,243 48% 8% 3642 COA Civil Penalty - 12,000 - 12,000 - 0% Total Wastewater Collection & Treatment $ 2,268,756 $ 2,489,651 $ 2,292,718 $ 2,787,543 22% 25%

Public Works Road & Streets 2014 2015 2015 2016 % of Total % Inc/Dec 008-436.**** Actual Budget Estimate Budget Budget

2490 Storm Sewers & Drains $ 8,700 $ 5,000 $ 9,350 $ 8,000 -14% 0% Total Public Works Road & Streets $ 8,700 $ 5,000 $ 9,350 $ 8,000 -14% 0%

Debt Service 2015 % of Total 2014 Actual 2015 Budget 2016 Budget % Inc/Dec 008-471.**** Estimate Budget

1000 Debt Service Interest $ 512,799 $ 677,849 $ 677,849 $ 608,855 -10% 5% 2000 Debt Service Principal 240,000 260,000 260,000 410,000 58% 4% Total Debt Service $ 752,799 $ 937,849 $ 937,849 $ 1,018,855 -9% 9%

Employer Paid Benefits & Withholding 2014 2015 2015 2016 % of Total % Inc/Dec 008-48*.**** Actual Budget Estimate Budget Budget

481.1940 Unemployment Compensation- PSAB $ 1,989 $ 6,000 $ 2,500 $ 2,500 0% 0% 483.3000 Pension Contribution 46,509 45,000 45,000 45,000 0% 0% 484.0000 Worker's Compensation 15,094 50,000 60,000 60,000 0% 1% Total Employer Paid Benefits & Withholding $ 63,592 $ 101,000 $ 107,500 $ 107,500 0% 1%

Insurance 2014 2015 2015 2016 % of Total % Inc/Dec 008-486.**** Actual Budget Estimate Budget Budget

1503 Employee Assistance Program $ - $ 5,000 $ - $ 2,500 - 0% 1980 Group Life Insurance 5,593 5,600 11,150 11,000 -1% 0% 3510 Fire, Auto & General Liability - 10,000 10,000 10,000 0% 0% Total Insurance $ 5,593 $ 20,600 $ 21,150 $ 23,500 -11% 0%

Interfund Transfers 2014 2015 2015 2016 % of Total % Inc/Dec 008-492.**** Actual Budget Estimate Budget Budget

0100 Transfer to General Fund $ 470,000 $ - $ 570,000 $ 500,000 -12% 4% Total Interfund Transfers $ 470,000 $ - $ 570,000 $ 500,000 -12% 4%

2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 7,159,102 $ 7,687,050 $ 5,667,350 $ 11,399,050 101% TOTAL EXPENSES $ 5,233,475 $ 7,687,124 $ 5,149,607 $ 11,297,940 119%

Pool Fund Revenue

Summary 2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 114,209 $ 127,020 $ 245,423 $ 478,250 95%

Description The majority of revenue in the Pool Fund comes from charges for using the pool, funds from the General Fund, and starting in 2016 a portion of bond proceeds for capital improvement projects. Admission rates for pool access are not expected to be raised in 2016, but the Borough hopes an upgraded pool building will increase attendance.

Budget Detail Revenue 2014 2015 2015 2016 % of Total % Inc/Dec 031-3**.**** Actual Budget Estimate Budget Budget

341.0000 Earnings from Temp Dep/Investments $ 0 $ - $ 1 $ - -100% 0% 367.1100 Pool Passes & Tags 27,264 30,000 22,942 25,000 9% 5% 367.1110 Daily Admissions 16,415 16,800 15,920 16,000 1% 3% 367.1120 Private Pool Parties 3,150 3,000 3,600 3,200 -11% 1% 367.1130 Swimming Lessons - 500 549 550 0% 0% 367.1140 Lockers 20 20 - - - 0% 367.1300 Concession Stand 1,800 1,200 2,411 2,000 -17% 0% 367.8000 Misc 560 500 - - - 0% 392.0100 Transfer from General Fund 65,000 75,000 115,000 81,500 -29% 17% 392.0200 Transfer from Capital Improvement Fund - - 85,000 350,000 - 73% Total Pool Fund Revenue $ 114,209 $ 127,020 $ 245,423 $ 478,250 95% 100%

Pool Fund Expenses

Summary 2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL EXPENSES $ 108,073 $ 110,920 $ 244,473 $ 478,250 96%

Description The pool is operated and managed by a third party professional pool management company, Jeff Ellis Management. The Borough pays the company to staff and operate the pool from the end of May through the beginning of September each year.

2015 experienced higher than usual expenses for the pool, in large part due to a water leak and the motor failure of the pool filtration system. These issues have been repaired and expenses should return to 2014 levels for 2016.

In accordance the Borough’s five year capital improvement plan, the pool building will begin phase one of a complete renovation in 2016. Phase one will focus on the amenities on the interior of the building, including new restroom facilities, lockers, and entry area. Phase two will focus on the amenities and look of the exterior of the building, including canopy shade structures and improved signage. Further details on the project can be found in the Borough’s 2016-2020 Capital Improvement Plan.

Budget Detail Expenses 2014 2015 2015 2016 % of Total % Inc/Dec 031-4**.**** Actual Budget Estimate Budget Budget

406.3100 Bank Service Charges $ 66 $ 80 $ 100 $ 100 0% 0% 452.1100 Pool Management Fee 57,688 57,800 66,527 67,000 1% 14% 452.2200 Operting Supplies 4,345 5,900 5,200 5,900 13% 1% 452.2220 Chemicals 4,053 4,500 13,020 9,000 -31% 2% 452.3210 Telephone 513 450 700 700 0% 0% 452.3610 Utilities- Electricity 8,111 9,400 9,400 9,400 0% 2% 452.3620 Utilities- Gas 332 750 750 750 0% 0% 452.3660 Utilities- Water 23,019 26,340 45,700 26,500 -42% 6% 452.3700 Repairs & Maintenance Services 6,456 5,000 17,000 6,000 -65% 1% 452.4600 Misc - 50 - 50 - 0% 452.4601 Petty Cash (10) 100 312 100 -68% 0% 452.4602 Refunds - 50 265 250 -6% 0% 452.7400 Machinery & Equipment 3,500 500 500 500 0% 0% 461.6700 Security Equipment - - - 2,000 - 0% 461.7200 Roof Replacement - - 85,000 - - 0% 461.7201 Building Remodel - - - 350,000 - 73% Total Pool Fund Expenses $ 108,073 $ 110,920 $ 244,473 $ 478,250 96% 100% 62

2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 114,209 $ 127,020 $ 245,423 $ 478,250 95% TOTAL EXPENSES $ 108,073 $ 110,920 $ 244,473 $ 478,250 96%

Highway Aid Fund Revenue

Summary 2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 489,542 $ 439,681 $ 470,539 $ 540,887 15%

Description Revenue in the Highway Aid Fund comes from the annual liquid fuels state funding and the earnings from short-term investments of those funds. The State of Pennsylvania collects a tax on diesel, gasoline, and other liquid fuels sold in the state. They then distribute that tax revenue to local governments based on the number of miles of roads within the Borough or Township.

Budget Detail Revenue 2014 2015 2015 2016 % of Total % Inc/Dec 035-3**.**** Actual Budget Estimate Budget Budget

341.0000 Earnings from Temp Deposits/Investments $ 39 $ 30 $ 30 $ 30 0% 0% 354.0000 State Motor License Fund Grants 412,834 439,651 453,999 515,357 14% 95% 392.0100 Transfer from General Fund 76,669 - - - - 0% 392.9900 Transfer from Fund Balance - - 16,510 25,500 54% 5% Total Highway Aid Fund Revenue $ 489,542 $ 439,681 $ 470,539 $ 540,887 15% 100%

Highway Aid Fund Expenses

Summary 2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL EXPENSES $ 431,475 $ 439,681 $ 444,847 $ 540,887 22%

Description Highway Aid expenses are restricted to purchases and projects that fall within the State’s list of appropriate uses for liquid fuels monies. Baldwin follows the restrictions so that we will continue receiving liquid fuels tax revenue in future years. In the past, the funding has been spent on purchasing rock salt and street light electricity. In 2016, the amount of state funding as increased, while the price of rock salt has slightly decreased, which means the liquid fuels revenue will be able to pay for more than rock salt and street lights. An estimated $90,887 will be transfer to the General Fund and will go towards the 2016 road repaving program.

Budget Detail Expenses 2014 2015 2015 2016 % of Total % Inc/Dec 035-4**.**** Actual Budget Estimate Budget Budget

432.2450 Highway Supplies - Rock Salt $ 251,333 $ 189,681 $ 269,847 $ 275,000 2% 51% 434.3610 Street Light Electricity 180,142 250,000 175,000 175,000 0% 32% 492.0100 Transfer to General Fund - - - 90,887 - 17% Total Highway Aid Fund Expenses $ 431,475 $ 439,681 $ 444,847 $ 540,887 22% 100%

2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 489,542 $ 439,681 $ 470,539 $ 540,887 15% TOTAL EXPENSES $ 431,475 $ 439,681 $ 444,847 $ 540,887 22%

Asset Forfeiture Fund Revenue

Summary 2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 63,453 $ - $ 30,010 $ 106,625 255%

Description Revenue in the Asset Forfeiture Fund comes from money generated by the sales of assets the Drug Enforcement Administration (DEA) confiscates. Baldwin receives a percentage of each asset confiscated relating to cases the Baldwin Police Officer works on.

Budget Detail Revenue 2014 2015 2015 2016 % of Total % Inc/Dec 070-3**.**** Actual Budget Estimate Budget Budget

341.0000 Earnings from Temp Deposits/Investments $ 9 $ - $ 10 $ 10 0% 0% 351.1400 Federal Forfeiture Revenue 63,444 - 30,000 30,000 0% 28% 392.9900 Transfer from Fund Balance - - - 76,615 - 72% Total Asset Forfeiture Fund Revenue $ 63,453 $ - $ 30,010 $ 106,625 255% 100%

Asset Forfeiture Fund Expenses

Summary 2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL EXPENSES $ 4,479 $ - $ 10,000 $ 106,625 966%

Description The federal government has rules about what Asset Forfeiture funds can be used to purchase. In accordance with those guidelines, the funds will be spent on police equipment and machinery in 2016.

The service pistols are approaching 8-9 years old and are due for replacement. The 2016 budget accounts for replacement of 15 service pistols, moving to a 9mm platform from the current 40 caliber.

The department’s portable radios will continue to be upgraded and new vehicles will have their mobile radios upgraded.

One new Ford Interceptor vehicle will replace an older patrol vehicle.

To come into compliance with police operations standards, an interview area will be designated and video cameras will be installed in that space.

Budget Detail Expenses 2014 2015 2015 2016 % of Total % Inc/Dec 070-410.**** Actual Budget Estimate Budget Budget

2102 Supplies $ 279 $ - $ 5,000 $ 6,625 33% 6% 3800 Vehicle Lease & Purchase - - - 40,000 - 38% 7400 Machinery & Equipment 4,200 - 5,000 60,000 1100% 56% Total Asset Forfeiture Fund Expenses $ 4,479 $ - $ 10,000 $ 106,625 966% 100%

2014 2015 2015 2016 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 63,453 $ - $ 30,010 $ 106,625 255% TOTAL EXPENSES $ 4,479 $ - $ 10,000 $ 106,625 966%

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Table of Contents

OFFICIALS ………………………………………………………………………………………………..…………… 3

FUND LISTING ……………………………………………………..………………………………………….…… 4

MANAGER’S BUDGET MESSAGE …………………………………………………………………………… 5

GENERAL FUND REVENUES BUDGET …………………………………………………………….…… 12

GENERAL FUND EXPENDITURES BUDGET …………………………………………………………… 26

GENERAL FUND CAPITAL BUDGET ……………………………………………………………………… 52

SEWER FUND BUDGET ………………………………………………………………………..……………… 56

POOL FUND BUDGET ………………………………………………………………………………….……… 62

HIGHWAY AID FUND BUDGET …………………………………………………………….……………… 65

ASSET FORFEITURE FUND BUDGET ……………………………………………………………………. 67

Officials

Council Mayor David Depretis Michael Stelmasczyk, President

John Conley, Vice President

James Behers

Michael Ducker

Kevin Fischer

Edward Moeller

Frank Scott

Staff

Borough Manager Tax Collector Gail Dobson Mikush John M. Barrett

Finance Officer Code Enforcement Anthony Asciolla Molly Brennan

Police Chief Engineers Lennon, Smith, Souleret Engineering Inc. Michael Scott

Public Works Superintendent Solicitors Stanley & Michael Lederman Mark Stephenson

General Fund 001 – General Fund

The primary operating fund for the Borough which reflects the revenues and expenditures of all Borough operations that are not required by law or policy to be recorded elsewhere.

Special Revenue Funds Funds that are established to account for revenues that are legally restricted to be spent on specific expenses.

035 – Highway Aid Fund

Revenues for this fund come from the State of Pennsylvania Liquid Fuel Tax and are restricted to be used for the maintenance, repair, and construction of roads, streets, and bridges within Baldwin.

070- Asset Forfeiture Fund

Revenues for this fund come from the sale of assets confiscated by the Drug Enforcement Administration (DEA) and are restricted to be used for police department equipment and technology.

Proprietary Funds Funds that account for the operations of the Borough providing a good or service, which is paid for by charges to customers who use the good or service.

008- Sewer Fund

031- Pool Fund

The pool fund is used to account for all revenues and expenditures associated with operating the Borough’s swimming pool.

2017 Budget Message

Dear Members of Borough Council and Mayor Depretis;

On behalf of the Borough Administration, I am pleased to submit the 2017 Budget to members of Borough Council, Mayor Depretis, and the residents of Baldwin Borough. The Borough Administration continues to find creative ways to enhance and improve the Budget Document and Budgetary Process. The 2017 Budget Document strives to serve as a policy statement, an operational guide, a financial plan as well as a communications tool. The Budget Message is supported by illustrations and slides to further give context to our financial condition. The recommended budget complies with all local and state laws, and is supported by the Borough’s Financial Policies and Procedures Manual. The 2017 balanced budget consists of a $14,643,840 General Fund, $15,154,550 Sewer Fund, $541,847 Highway Aid Fund, $323,253 Swimming Pool Fund, and an Asset Forfeiture Fund of $80,960.

The General Fund supports the core services of the Borough, including Police, Public Works (Roads and Parks), Code Enforcement, Solid Waste Collection and Hauling, Recycling, as well as Administrative Services. The General Fund does not support sanitary sewer services, although the Borough Administration and Public Works employees coordinate all such activity. Traditionally, the majority of revenues supporting the General Fund are Real Estate and Earned Income Tax Revenue. These taxes alone make up over 60% of General Fund revenues.

The 2017 General Fund includes revenues generated by a tax-exempt borrowing that must be repaid over time. The graph below is the same as above, only without the consideration of the revenues generated through the borrowing, as the figures can distort the size of the General Fund.

The table on the previous page shows trend analysis performed by the Borough as part of the budget process. The analysis reveals the stability of the Borough’s revenues, which is largely a positive sign for the longevity of the community. However, the illustration also highlights the slow pace of growth for these revenues, which are easily outpaced by our expenditures. Our strategy to position the Borough for sustainable growth includes the aggressive pursuit of grants to support large capital projects. In addition, fees have been thoroughly reviewed and analyzed, and have been appropriately set for 2017. The Borough Administration also has implemented unique and creative tools to reduce costs, or generate additional revenues, such as Procurement Cards that offer ‘cash back’, short term investment of our assets, and the promotion of technology to reduce staff hours to provide services. While these efforts alone will not eliminate the structural deficit, they are in the best interest of the Borough and demonstrate our commitment to responsible fiscal policy. In addition to these revenues, the 2017 General Fund also includes proceeds from a Capital Borrowing required to support the replacement of the McAnulty Road Bridge, and an expanded Road Paving Program.

Like many other communities in southwestern Pennsylvania, Baldwin is somewhat limited by the relatively static, or sluggish growth rate of these tax revenues. Simultaneously, personnel and operating expenses are increasing at rates that far surpass the revenue growth rate. Recognizing that most Borough Employees are covered by Collective Bargaining Agreements that identify 3% annual wage increases, which total approximately $100,000 per year. In addition, the Borough Pension Plans must be appropriately accounted for and supported by the General Fund. Calculated by the Borough Actuary, the 2017 Minimum Municipal Obligation to our Police Pension Plan alone increased by 17% to $991,571. These unavoidable administrative expenses will reoccur and prevent the Borough from balancing the General Fund budget without an influx of additional revenues.

The predictable gap between revenues and expenditure creates a “structural deficit” that is unsustainable. The deficit is further amplified by infrastructure repair costs. In 2017, the best example of this cost is the projected $700,000 expense required to replace the McAnulty Road bridge. The structure is malfunctioning and is temporarily supported by steel plates. The Borough has taken prompt action to replace this structure, and the expense associated with the project will be offset by a tax-exempt borrowing. Upon committing to such a borrowing, Borough Council elected to increase the Real Estate Tax Millage to account for the debt service. The decision to increase millage was analyzed and scrutinized by Borough Officials. The ultimate increase is believed to be appropriate and moderate, while supporting the core services of the Borough and meeting the needs of our residents.

The 2017 Real Estate Tax Millage rate is 6.28 mills. To Baldwin residents, this means that for every $100,000 of assessed value of real estate owned, a payment of $628 is owed to the Borough. The adjustment to the 2017 millage will result in an additional $33 per year (assuming a $100,000 assessed value).

Ultimately, the 2017 budget reflects a responsible and prudent spending plan that supports and slightly expands service levels to residents. The budget is a result of a comprehensive and transparent process which was open to the public and led by Borough Council. The process forced the Borough to prioritize the needs of the community and to produce a strategy to continue to provide services at a high level and to appropriately plan for the operation and maintenance of our assets and infrastructure.

Basic Financial Policies

 Any increase in the rates of taxation will be considered only after all other efforts to reduce costs or increase revenues have been explored.

 It is the Borough’s policy to minimize borrowing. Borrowing for capital expenditures will only occur when sufficient current funds are unavailable for essential purchases. Any borrowing for 10

capital projects will be fully repaid prior to the useful life of the capital item being realized.

 Fees are charged for specialized services and our fee schedules are reviewed annually to assure that they adequately cover the total costs for providing those services.

 State, federal, and private grants are actively sought to assist with current or proposed projects or programs that have a fund shortage. Baldwin has been very effective in securing many grants and other funds to offset necessary expenses.

Sincerely,

John M. Barrett Borough Manager

Real Estate Property Taxes

Summary Real Estate Property Taxes 2015 2016 2016 2017 % of Total % Inc/Dec 001-301.**** Actual Budget Estimate Budget Budget Total Real Estate Taxes $ 5,398,739 $ 5,318,000 $ 5,356,015 $ 5,630,000 5% 44%

The tax is calculated using the millage rate, set each year by Borough Council, and a property’s assessed value, set by Allegheny County. In 2017, Baldwin’s millage rate is 6.28, which means that a property with an assessed value of $100,000 would have a Borough real estate tax bill of $628 (100,000 x .00628).

Allegheny County and Baldwin Whitehall School District also collect property taxes based on millage rates they set each year. In 2016, the County’s millage rate was 4.73 and the School District’s was 19.25. The property taxes collected by these agencies are separate from those set and collected by the Borough.

Budget Detail Real Estate Property Taxes 2015 2016 2016 2017 % of Total % Inc/Dec 001-301.**** Actual Budget Estimate Budget Budget

1000 Current Year Levy $ 5,154,799 $ 5,053,000 $ 5,053,297 $ 5,350,000 6% 42% 2000 Prior Year's Levy 56,869 70,000 57,900 60,000 4% 0% 5000 Delinquent 187,071 195,000 244,818 220,000 -10% 2% Total Real Estate Taxes $ 5,398,739 $ 5,318,000 $ 5,356,015 $ 5,630,000 5% 44%

Local Taxes

Summary Local Enabling Act Taxes (Act 511) 2015 2016 2016 2017 % of Total % Inc/Dec 001-310.**** Actual Budget Estimate Budget Budget Total Local Tax Enabling Act Taxes $ 2,729,148 $ 2,795,000 $ 2,713,063 $ 2,822,000 4% 22%

Although the rate has not increased in recent years, EIT revenue is growing a little bit each year. This means either the number of Baldwin residents who are employed is growing annually and/or residents are getting paid higher wages for their work. Upward trends in EIT revenue not only contribute to the Borough’s financial stability, but provides a strong economic indicator that the quality of life for residents is improving as aggregate income rises. The School District also collects a .5% earned income tax.

Originally called the Emergency and Municipal Services Tax, the Local Services Tax is a $47 tax per employee working within the municipality who receives an annual income greater than $12,000. The School District also collects a $5 local service tax per person. Estimated revenue in 2017 assumes approximately 2,766 people work within the Borough of Baldwin and make over $12,000 a year.

Budget Detail Local Enabling Act Taxes (Act 511) 2015 2016 2016 2017 % of Total % Inc/Dec 001-310.**** Actual Budget Estimate Budget Budget

1000 Real Estate Transfer Tax $ 203,263 $ 185,000 $ 202,580 $ 202,000 0% 2% 2000 Earned Income Tax 2,388,100 2,475,000 2,385,483 2,490,000 4% 19% 5000 Local Services Tax 137,785 135,000 125,000 130,000 4% 1% Total Local Tax Enabling Act Taxes $ 2,729,148 $ 2,795,000 $ 2,713,063 $ 2,822,000 4% 22%

Licenses

Summary Licenses 2015 2016 2016 2017 % of Total % Inc/Dec 001-3**.**** Actual Budget Estimate Budget Budget Total Licenses $ 492,385 $ 487,240 $ 485,587 $ 421,240 -13% 3%

Description Baldwin requires the issuance of licenses and permits in order to conduct certain activities within the Borough. Generally, these are a means to assure that all municipal regulations and ordinances are upheld and to protect public welfare. Fees charged for permits and licenses are intended to cover the cost of inspection, enforcement, and administration.

The following operations require fees for the appropriate license or permit:

 Junk yards  Mechanical gambling devices  Cable Television Franchises  Dog or cat ownership

The main revenue source within this category is Cable Television Franchise Fees. The Borough grants non-inclusive Cable Franchise agreements to cable service vendors (currently Comcast Cable Communications and Verizon) and permits the cable providers to operate within the public right-of- ways. The Cable Television Franchise agreements are made in coordination with neighboring communities through the South Hills Area Council of Government (SHACOG).

Budget Detail Business License and Permits 2015 2016 2016 2017 % of Total % Inc/Dec 001-321.**** Actual Budget Estimate Budget Budget

3200 Junk Yard $ 240 $ 240 $ 240 $ 240 0% 0% 7200 Mechanical Devices 72,450 70,000 60,640 - - 0% 8000 Cable TV Franchise 418,680 416,000 423,706 420,000 -1% 3% Total Business License and Permits $ 491,370 $ 486,240 $ 484,586 $ 420,240 -13% 3%

Health 2015 2016 2016 2017 % of Total % Inc/Dec 001-365.**** Actual Budget Estimate Budget Budget

5000 Animal Control & Shelter Fees 1,015 1,000 1,001 1,000 0% 0% Total Health $ 1,015 $ 1,000 $ 1,001 $ 1,000 0% 0%

Public Safety

Summary Public Safety 2015 2016 2016 2017 % of Total % Inc/Dec 001-3**.**** Actual Budget Estimate Budget Budget Total Public Safety $ 336,848 $ 216,500 $ 248,652 $ 253,750 2% 2%

Description Public Safety revenue is generated from fines collected from violators of ordinances and statutes, reimbursements for special police details, and fees for building permits.

Besides police activity, the Borough works to enforce the public safety of the built environment. When occupants of a property change, the residence is required to receive an occupancy permit by passing an inspection completed by the Borough code enforcement officer. Annually, commercial properties are required to have fire safety inspections in order to reduce potential fire hazards and ensure safety standards are followed (detection and evacuation). Building permits are required for any changes or additions to the non-natural elements of a property (i.e. pool, porch, new construction, etc.).

Budget Detail Fines 2015 2016 2016 2017 % of Total % Inc/Dec 001-331.**** Actual Budget Estimate Budget Budget

1101 Vehicle Code Violations $ 17,130 $ 11,000 $ 11,600 $ 13,000 12% 0% 1103 County DUI Fines 32,050 19,000 30,000 30,000 0% 0% 1200 Violations of Ordinances 26,719 15,000 21,960 20,000 -9% 0% 1300 State Police Fines 9,264 5,000 4,300 5,000 16% 0% Total Fines $ 85,162 $ 50,000 $ 67,860 $ 68,000 0% 1%

Public Safety 2015 2016 2016 2017 % of Total % Inc/Dec 001-362.**** Actual Budget Estimate Budget Budget

1000 Special Police Services Reimbursements $ 85,315 $ 40,000 $ 33,200 $ 40,000 20% 0% 1100 Police Reports, Fingerprinting Fees 3,062 5,500 5,763 5,500 -5% 0% 1300 Security Alarm Monitoring 14,583 15,000 14,035 14,250 2% 0% 4100 Building Permits 67,002 25,000 48,905 45,000 -8% 0% 4110 Occupancy & Fire Permits 67,225 70,000 57,400 65,000 13% 1% Total Public Safety $ 237,186 $ 155,500 $ 159,302 $ 169,750 7% 1%

Highways and Streets 2015 2016 2016 2017 % of Total % Inc/Dec 001-363.**** Actual Budget Estimate Budget Budget

1000 Curb/Street Opening Permits 14,500 11,000 21,490 16,000 -26% 0% Total Highways and Streets $ 14,500 $ 11,000 $ 21,490 $ 16,000 -26% 0%

Interest & Rent

Summary Interest, Rents, and Royalties 2015 2016 2016 2017 % of Total % Inc/Dec 001-34*.**** Actual Budget Estimate Budget Budget Total Interest, Rents, and Royalties $ 19,591 $ 16,400 $ 22,145 $ 21,850 -1% 0%

Budget Detail Interest, Rents, and Royalties 2015 2016 2016 2017 % of Total % Inc/Dec 001-34*.**** Actual Budget Estimate Budget Budget

340.0000 Interest on Real Estate Taxes $ 112 $ 100 $ 90 $ 100 11% 0% 341.0000 Earnings from Temp Investments 90 100 105 100 -5% 0% 341.0002 Huntington P-Card Rebate 7,776 9,000 12,000 12,000 0% 0% 341.1000 Interest from Money Market 3,163 3,000 6,800 6,500 -4% 0% 342.2000 Rent of Buildings 4,300 - - - - 0% 342.5000 Park Grove Rentals 750 800 600 600 0% 0% 342.5500 Rent from Ads on Public Property 3,400 3,400 2,550 2,550 0% 0% Total Interest, Rents, and Royalties $ 19,591 $ 16,400 $ 22,145 $ 21,850 -1% 0%

Intergovernmental

Summary Intergovernmental Revenue 2015 2016 2016 2017 % of Total % Inc/Dec 001-35*.**** Actual Budget Estimate Budget Budget Total Intergovernmental Revenue $ 1,050,201 $ 1,072,583 $ 1,092,425 $ 1,112,000 2% 9%

The Federal government reimburses the Borough for the overtime a Baldwin Police Officer spends working on a Drug Enforcement Administration (DEA) Task Force.

PennDOT provides Baldwin funds for our employees to maintain state roads during winter storm events, such as plowing and salting. Under Act 101, the State provides funding to Baldwin based on the amount of recycling we collected during the previous year. Baldwin also receives state funding for specific police activity, such as the PA Impaired Driving Grant, the Buckle-Up Grant, and the Aggressive Driving Grant.

Budget Detail Intergovernmental Revenue 2015 2016 2016 2017 % of Total % Inc/Dec 001-350.**** Actual Budget Estimate Budget Budget

0100 County Sales Tax (Act 77) 568,247 570,000 562,084 565,000 1% 4% Total Intergovernmental Revenue $ 568,247 $ 570,000 $ 562,084 $ 565,000 1% 4% 20

Federal Revenue 2015 2016 2016 2017 % of Total % Inc/Dec 001-351.**** Actual Budget Estimate Budget Budget

0100 Reimbursements for DEA Task Force OT 17,374 17,548 17,548 17,500 0% 0% Total Federal Revenue $ 17,374 $ 17,548 $ 17,548 $ 17,500 0% 0%

State Capital and Operating Revenue 2015 2016 2016 2017 % of Total % Inc/Dec 001-354.**** Actual Budget Estimate Budget Budget

0000 State Grants for Police Work $ 49,561 $ 28,000 $ 30,000 $ 30,000 0% 0% 0300 Winter Maintenance of State Roads 11,518 10,000 8,135 10,000 23% 0% 1103 PA Impaired Driving Grant - 45,000 40,000 55,500 39% 0% 1500 Act 101 Recycling 10,455 8,035 8,035 8,000 0% 0% Total State Capital and Operating Revenue $ 71,534 $ 91,035 $ 86,170 $ 103,500 20% 1%

State Shared Revenue and Entitlements 2015 2016 2016 2017 % of Total % Inc/Dec 001-355.**** Actual Budget Estimate Budget Budget

0100 Public Utility Realty Tax (PURTA) $ 9,892 $ 10,000 $ 9,506 $ 9,800 3% 0% 0400 Alcoholic Beverage Licenses 5,000 5,000 4,700 5,000 6% 0% 0700 Foreign Fire Insurance Prem. Tax 103,947 105,000 103,181 104,000 1% 1% 0800 State Aid for Pensions 266,617 267,000 301,851 300,000 -1% 2% 0900 Act 13 Impact Fees 7,590 7,000 7,386 7,200 -3% 0% Total State Shared Revenue and Entitlements $ 393,046 $ 394,000 $ 426,624 $ 426,000 0% 3%

Charges for Services

Summary Charges for Services 2015 2016 2016 2017 % of Total % Inc/Dec 001-36*.**** Actual Budget Estimate Budget Budget Total Charges for Services $ 9,238 $ 7,000 $ 4,768 $ 4,500 -6% 0%

Description When municipal services are provided which only benefit a particular resident or property owner, the cost of that service is charged directly to that individual or company rather than being funded by the general tax payer dollars. This includes services such as, zoning hearing appeals, grading permits, subdivision approvals, land development rights, and recreation program attendance.

Budget Detail Charges for Services 2015 2016 2016 2017 % of Total % Inc/Dec 001-361.**** Actual Budget Estimate Budget Budget

3000 Sub-division & Land Development $ 800 $ 1,000 $ 1,000 $ 800 -20% 0% 3400 Zoning Hearing Fees 2,750 3,500 1,300 2,500 92% 0% 3500 Grading Permit Fees 78 500 178 200 12% 0% Total Charges for Services $ 3,628 $ 5,000 $ 2,478 $ 3,500 41% 0%

Culture & Recreation 2015 2016 2016 2017 % of Total % Inc/Dec 001-367.**** Actual Budget Estimate Budget Budget

2000 Recreation Program Fees $ 5,610 $ 2,000 $ 2,290 $ 1,000 -56% 0% Total Culture & Recreation $ 5,610 $ 2,000 $ 2,290 $ 1,000 -56% 0%

Long Term Debt Proceeds

Summary Proceeds of Long-Term Debt 2015 2016 2016 2017 % of Total % of Total 001-393.**** Actual Budget Estimate Budget Budget Budget Total Proceeds of Long-Term Debt $ - $ - $ - $ 2,000,000 110% 16%

Description In 2016, the culvert (bridge) that carries McAnulty Road over a stream degraded to the point where it is no longer structurally sound and must be rebuilt and repaved in 2017. The Borough engineers estimate this project to cost approximately $700,000.

In summer of 2017, the equalization basin and sanitary sewer improvements in and around Colewood Park will be complete. The roads surrounding the project have become thoroughly worn and in need of repaving. The Borough engineers estimate the cost to repave all the impacted roads at $1.2 million.

Due to the fact that the culvert must be repaired and the Borough does not want to defer maintenance to the Colewood roads, Council decided to accomplish both of these projects by securing funding through a new $2 million tax-exempt general obligation municipal bond. The new debt issuance will be taken in conjunction with the new borrowing needed to fund the sanitary sewer project near Gardenville Rd in order to most efficiently incur the issuance costs.

Budget Detail Proceeds of Long-Term Debt 2015 2016 2016 2017 % of Total % of Total 001-393.**** Actual Budget Estimate Budget Budget Budget

1000 General Obligation Bond $ - $ - $ - $ 2,000,000 110% 16% Total Proceeds of Long-Term Debt $ - $ - $ - $ 2,000,000 110% 16%

Misc.

Summary Misc Revenue 2015 2016 2016 2017 % of Total % Inc/Dec 001-380.**** Actual Budget Estimate Budget Budget Total Misc Revenue $ 46,545 $ 24,055 $ 38,763 $ 15,000 -61% 0%

Description Each year the Borough receives revenue that we did not know about during the budget making process. This could be a new one time grant, payment of an insurance claim for an unexpected issue, or a refund of expenditures made in the previous year.

Budget Detail Misc Revenue 2015 2016 2016 2017 % of Total % Inc/Dec 001-380.**** Actual Budget Estimate Budget Budget

0000 Misc Revenue Receipts $ 20,208 $ - $ - $ - - 0% 0300 Misc Reimbursements 7,311 5,000 12,358 5,000 -60% 0% 0400 Misc Insurance Receipts 19,027 19,055 26,405 10,000 -62% 0% Total Misc Revenue $ 46,545 $ 24,055 $ 38,763 $ 15,000 -61% 0%

Interfund Loans & Transfers

Summary Interfund Operating Transfers 2015 2016 2016 2017 % of Total % Inc/Dec 001-392.**** Actual Budget Estimate Budget Budget Total Inferfund Operating Transfers $ 16,456 $ 750,887 $ 660,000 $ 550,000 -17% 4%

The transfer from the Sewer Fund is an interfund loan, meaning the amount will be returned to Sewer Fund by the end of the 2017 fiscal year, and there is a matching expenditure in this budget to account for repayment. This interfund loan is taken at the beginning of the fiscal and calendar year, when property taxes have not been collected and General Fund cash is lacking. Although all the other sources of revenue will cover all expected General Fund expenditures, the General Fund will experience a cash negative position in the months prior to when property taxes are collected. Once property tax revenue is received, the loan is repaid. Some communities (including Baldwin in the past) use Tax Anticipation Notes (TAN), short term bank loans for this purpose. By using an interfund loan instead, the Borough is saving the interest a TAN would charge.

Budget Detail Interfund Operating Transfers 2015 2016 2016 2017 % of Total % Inc/Dec 001-392.**** Actual Budget Estimate Budget Budget

0800 Transfer from Sewer Fund $ 16,456 $ 660,000 $ 660,000 $ 550,000 -17% 4% 3500 Transfer from Highway Aid Fund - 90,887 - - - 0% Total Inferfund Operating Transfers $ 16,456 $ 750,887 $ 660,000 $ 550,000 -17% 4%

2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUE $ 10,182,759 $ 10,687,665 $ 10,621,418 $ 12,830,340 21%

General Government

Summary General Government 2015 2016 2016 2017 % of Total % Inc/Dec 001-400.**** Actual Budget Estimate Budget Budget Total General Government $ 45,998 $ 46,584 $ 46,098 $ 46,584 1% 0%

Description General Government expenditures cover the costs related to Baldwin’s elected officials. The Borough is governed by seven (7) elected Council members and a Mayor. The Mayor is elected for a 4-year term; council members are elected for 4-year overlapping terms. There are no term limits in Baldwin and all positions are at large. Borough Council takes action by adopting local laws (ordinances), resolutions, and motions at public meetings held twice a month. Baldwin Council is responsible for the adoption of the annual budget and the appointment of the Borough Manager.

This category also includes the cost of the annual recognition dinner, an event held in appreciation of appointed officials who volunteer their time on the Borough’s boards, commissions, and committees and the volunteer firefighters who run and staff Baldwin’s three fire companies.

Budget Detail General Government 2015 2016 2016 2017 % of Total % Inc/Dec 001-400.**** Actual Budget Estimate Budget Budget

1050 Salaries & Wages- Elected Officials $ 27,795 $ 28,875 $ 28,875 $ 28,875 0% 0% 1920 FICA/Medicare Employer Paid 936 2,209 2,209 2,209 0% 0% 4200 Dues, Subscriptions, Memberships 8,939 7,000 6,800 7,000 3% 0% 4540 Recognition Dinner 5,158 3,500 3,500 3,500 0% 0% 4600 Continuing Education 3,171 5,000 4,714 5,000 6% 0% Total General Government $ 45,998 $ 46,584 $ 46,098 $ 46,584 1% 0%

Executive

Summary Executive 2015 2016 2016 2017 % of Total % Inc/Dec 001-401.**** Actual Budget Estimate Budget Budget Total Executive $ 192,982 $ 220,177 $ 215,372 $ 288,081 34% 2%

Description The executive category includes the personnel costs of executive level administrative officials and employees, such as the Mayor, the Treasurer, the Borough Manager, the Assistant Secretary, and the Finance Officer. The wages of the Mayor and Treasurer are dictated by Baldwin’s charter, the same as the elected Council members. Half of the Borough Manager’s personnel expenses are reflected in this category and fund, while the other half are found in the Sewer Fund budget. Beginning in 2017, the Borough added a new executive administrative position, the Director of Municipal Services, to provide leadership and coordination of the Borough’s infrastructure projects and public works services. All non- uniform employees are on a UPMC medical insurance plan. By switching to an age tiered PPO with a higher deductible, health insurance premiums decreased between 2016 and 2017.

Budget Detail Executive 2015 2016 2016 2017 % of Total % Inc/Dec 001-401.**** Actual Budget Estimate Budget Budget

1050 Salary of Mayor $ 5,553 $ 5,700 $ 5,700 $ 5,700 0% 0% 1100 Salary of Treasurer 1,754 1,800 1,800 1,800 0% 0% 1101 Salary of Borough Manager 51,778 55,597 55,597 57,265 3% 0% 1120 Salary of Assistant Secretary 41,998 44,430 44,430 32,670 -26% 0% 1130 Salary of Finance Officer 52,734 56,650 56,650 62,416 10% 0% 1140 Salary of Director of Municipal Services - - - 66,667 - 1% 1920 FICA/Medicare Employer Paid 12,106 12,000 12,560 17,329 38% 0% 1960 Health Insurance 21,569 34,000 30,109 36,434 21% 0% 2310 Vehicle Fuel - Gas 300 500 624 800 28% 0% 3100 Professional Services - GASB - 1,500 1,500 - -100% 0% 3310 Travel 1,600 1,000 600 1,000 67% 0% 4510 Vehicle Maintenance & Repair 509 2,000 1,261 1,500 19% 0% 4600 Continuing Education 3,083 5,000 4,542 4,500 -1% 0% Total Executive $ 192,982 $ 220,177 $ 215,372 $ 288,081 34% 2%

Auditing & Financial Administration

Summary Auditing Services/Financial Admin 2015 2016 2016 2017 % of Total % Inc/Dec 001-402.**** Actual Budget Estimate Budget Budget Total Auditing Services/Financial Admin $ 7,025 $ 8,575 $ 8,988 $ 13,184 47% 0%

In 2017, the Borough is moving to outsource payroll processing to a third-party company. This move will provide employees with easy access to pay history and paid time off accruals, as well as simplify the internal payroll process.

Budget Detail Auditing Services/Financial Admin 2015 2016 2016 2017 % of Total % Inc/Dec 001-402.**** Actual Budget Estimate Budget Budget

3110 Accounting & Auditing Services $ 7,025 $ 7,075 $ 7,075 $ 7,300 3% 0% 3111 Payroll Services - - - 5,884 - 0% 4600 Financial Statement Preperation - 1,500 1,913 - -100% 0% Total Auditing Services/Financial Admin $ 7,025 $ 8,575 $ 8,988 $ 13,184 47% 0%

Tax Collection

Summary Tax Collection 2015 2016 2016 2017 % of Total % Inc/Dec 001-403.**** Actual Budget Estimate Budget Budget Total Tax Collection $ 58,103 $ 59,906 $ 65,596 $ 55,527 -15% 0%

Description Tax collection expenditures cover the costs to employ the Borough’s tax collector, maintain an operational tax collection office space, and pay Jordan Tax Services to collect delinquent taxes on behalf of the Borough. Since the tax collector is an elected official, their stipend is dictated by the Borough’s charter. Earned income taxes are collected by a third party agency appointed by the Allegheny County Southwest Tax Collection Committee, and the Borough pays a percentage commission based on the amount of taxes collected. Delinquent property taxes are collected by Jordan Tax Services, another third party agency, who charge 10% commission on all collections. The Borough’s tax office is located in the municipal building at 3344 Churchview Ave, Pittsburgh, PA 15227.

Budget Detail Tax Collection 2015 2016 2016 2017 % of Total % Inc/Dec 001-403.**** Actual Budget Estimate Budget Budget

1050 Salary of Tax Collector $ 12,178 $ 12,500 $ 12,500 $ 12,500 0% 0% 1920 FICA/Medicare Employer Paid 956 956 956 956 0% 0% 2100 Office Supplies 949 8,500 8,834 3,000 -66% 0% 2120 Computer/Copier Supplies 2,981 2,500 2,215 2,500 13% 0% 3101 Earned Income Tax Commission 351 1,000 423 1,000 136% 0% 3102 General Exp/Service Fees 533 1,000 1,962 1,000 -49% 0% 3103 Delinquent RET Commission 34,887 28,000 33,836 30,000 -11% 0% 3104 Local Services Tax Commission 3,446 3,200 2,903 3,200 10% 0% 3170 Tax Duplicate Diskette 5 1,250 1,240 621 -50% 0% 3210 Telephone 1,818 1,000 728 750 3% 0% 3500 Tax Collector's Bond Premium - - - - - 0% Total Tax Collection $ 58,103 $ 59,906 $ 65,596 $ 55,527 -15% 0%

Solicitor & Legal Services

Summary Solicitor/Legal Services 2015 2016 2016 2017 % of Total % Inc/Dec 001-404.**** Actual Budget Estimate Budget Budget Total Solicitor/Legal Services $ 101,424 $ 95,006 $ 101,250 $ 105,006 4% 1%

Description Borough code requires that Borough Council appoints a Borough Solicitor. The Solicitor attends Council meetings and serves to advise Council and the Borough Manager on legal issues. When issues arise that are outside of the Solicitor’s expertise, the services of specialized lawyers are retained, such as a labor attorney or bond counsel. When the Borough is sued, the expenditures to cover court and settlement costs are reflected in this category. Due to pending court cases, the Borough anticipates needing to pay the $20,000 deductible for our liability insurance in 2017.

Budget Detail Solicitor/Legal Services 2015 2016 2016 2017 % of Total % Inc/Dec 001-404.**** Actual Budget Estimate Budget Budget

3101 Solicitor $ 101,424 $ 75,006 $ 75,006 $ 75,006 0% 1% 3102 Solicitor's Expenses - 15,000 8,760 10,000 14% 0% 4100 Other Legal Expenditures - 5,000 17,484 20,000 14% 0% Total Solicitor/Legal Services $ 101,424 $ 95,006 $ 101,250 $ 105,006 4% 1%

Other General Government Administration

Summary General Government Administration 2015 2016 2016 2017 % of Total % Inc/Dec 001-406.**** Actual Budget Estimate Budget Budget Total General Government Administration $ 148,327 $ 142,400 $ 136,636 $ 115,032 -16% 1%

Description The executive administrative employees are supported by one full-time administrative assistant. All non- uniform employees are on a UPMC medical insurance plan. By switching to an age tiered PPO with a higher deductible, health insurance premiums decreased between 2016 and 2017.

Budget Detail General Government Administration 2015 2016 2016 2017 % of Total % Inc/Dec 001-406.**** Actual Budget Estimate Budget Budget

1170 Wages of Intern $ 252 $ 2,500 $ 3,123 $ - -100% 0% 1500 Salaries of Office Clerks 51,510 54,900 48,556 37,691 -22% 0% 1920 FICA/Medicare Employer Paid 4,045 4,200 4,435 2,883 -35% 0% 1960 Health Insurance 14,911 23,380 18,450 13,408 -27% 0% 2100 Office Materials & Supplies 5,116 6,500 6,500 6,500 0% 0% 2130 Computer/Copier Supplies 584 2,000 2,000 2,000 0% 0% 2150 Postage 2,045 2,000 1,450 2,000 38% 0% 2700 Computer Hardware & Software 43,261 20,000 21,420 20,000 -7% 0% 2900 Service Copier 2,244 1,000 1,000 2,100 110% 0% 3100 General Exp/Service Fees 379 500 49 200 308% 0% 3210 Telephone 4,779 4,000 5,321 4,800 -10% 0% 3240 Wireless Phone 920 920 823 900 9% 0% 3250 Internet 2,703 1,500 1,830 1,800 -2% 0% 3410 Advertising 1,421 3,000 5,250 4,500 -14% 0% 3420 Printing 7,413 6,000 6,298 6,000 -5% 0% 5000 SHACOG Act 77 Distribution 6,245 10,000 10,000 10,000 0% 0% 7400 Machinery & Equipment 500 - 131 250 90% 0% Total General Government Administration $ 148,327 $ 142,400 $ 136,636 $ 115,032 -16% 1%

Engineering Services

Summary Engineering Services 2015 2016 2016 2017 % of Total % Inc/Dec 001-408.**** Actual Budget Estimate Budget Budget Total Engineering Services $ 81,212 $ 83,500 $ 83,000 $ 58,500 -30% 0%

Description The Borough contracts with a local engineering firm to provide services as Baldwin’s engineers. A representative from the engineering firm attends Council meetings, where they update officials and the public on the status of engineering related projects. The engineers complete assessments of facilities, prepare bids, and oversee construction of infrastructure. The 2017 budget contains a decrease in expected engineering expenditures due to the new Director of Municipal Services who will take over some of the engineering responsibilities.

Budget Detail Engineering Services 2015 2016 2016 2017 % of Total % Inc/Dec 001-408.**** Actual Budget Estimate Budget Budget

3101 Engineer's Retainer $ 3,000 $ 3,000 $ 3,000 $ 3,000 0% 0% 3102 Engineering Expenses 77,962 80,000 80,000 55,000 -31% 0% 3130 GIS 250 500 - 500 - 0% Total Engineering Services $ 81,212 $ 83,500 $ 83,000 $ 58,500 -30% 0%

Borough Building Facilities

Summary Borough Building Facilities 2015 2016 2016 2017 % of Total % Inc/Dec 001-409.****-00* Actual Budget Estimate Budget Budget Total Borough Building Facilities $ 134,848 $ 146,117 $ 146,204 $ 155,192 6% 1%

Budget Detail Borough Building 2015 2016 2016 2017 % of Total % Inc/Dec 001-409.****-000 Actual Budget Estimate Budget Budget

1150 Wages of Custodians $ 41,078 $ 43,200 $ 46,566 $ 55,695 20% 0% 1860 Uniform Allowance 530 500 530 530 0% 0% 1920 FICA/Medicare Employer Paid 3,226 3,000 3,562 4,261 20% 0% 1960 Health Insurance 4,033 6,917 7,167 10,756 50% 0% 2000 Materials & Supplies 7,411 7,000 7,000 7,000 0% 0% 3100 Professional Services - Design 4,600 16,000 16,000 10,000 -38% 0% 3210 Telephone 1,198 1,200 1,200 1,200 0% 0% 3310 Custodian Travel - - 159 - -100% 0% 3600 Utilities 30,660 32,000 30,000 33,000 10% 0% 3700 Repairs & Maintenance 28,744 20,000 19,000 19,000 0% 0% 4530 Industrial Appraisal 2,488 1,000 660 3,000 355% 0% 6700 Security System - 4,300 4,302 2,000 -54% 0% 7400 Machinery & Equipment 250 500 500 500 0% 0% 7500 Minor Machinery & Equipment 2,750 500 500 500 0% 0% Total Borough Building $ 126,966 $ 136,117 $ 137,146 $ 147,442 8% 1%

Borough Building Salt Storage 2015 2016 2016 2017 % of Total % Inc/Dec 001-409.****-001 Actual Budget Estimate Budget Budget

2000 Supplies $ - $ 500 $ - $ - - 0% 3600 Utilities 4,754 4,500 4,100 4,750 16% 0% 3700 Repairs & Maintenance 3,129 5,000 4,958 3,000 -39% 0% Total Borough Building Salt Storage $ 7,882 $ 10,000 $ 9,058 $ 7,750 -14% 0%

Leland Center Facilities

Summary Leland Center Facilities 2015 2016 2016 2017 % of Total % Inc/Dec 001-409.****-00* Actual Budget Estimate Budget Budget Total Leland Center Facilities $ 45,748 $ 28,450 $ 13,278 $ 16,770 26% 0%

Budget Detail Leland Center 2015 2016 2016 2017 % of Total % Inc/Dec 001-409.****-002 Actual Budget Estimate Budget Budget

1150 Wages of Custodians $ 10,868 $ 5,000 $ 2,332 $ 2,090 -10% 0% 1860 Uniform Allowance - 150 - - - 0% 1920 FICA/Medicare Employer Paid 853 500 171 160 -6% 0% 1960 Health Insurance 10,484 - - - - 0% 2000 Materials & Supplies 948 2,500 25 1,000 3900% 0% 2600 Small Tools & Minor Equip - 250 - - - 0% 3210 Telephone 1,989 1,250 700 720 3% 0% 3600 Utilities 10,970 12,000 7,500 8,000 7% 0% 3700 Repairs & Maintenance 9,118 5,000 2,000 3,500 75% 0% Total Leland Center $ 45,229 $ 26,650 $ 12,728 $ 15,470 22% 0%

Leland Salt Storage 2015 2016 2016 2017 % of Total % Inc/Dec 001-409.****-003 Actual Budget Estimate Budget Budget

2000 Supplies $ - $ 500 $ - $ - - 0% 3600 Utilities 423 500 450 500 11% 0% 3700 Repairs & Maintenance 96 800 100 800 700% 0% Total Leland Building Salt Storage $ 519 $ 1,800 $ 550 $ 1,300 136% 0%

Police Department

Summary Police 2015 2016 2016 2017 % of Total % Inc/Dec 001-410.**** Actual Budget Estimate Budget Budget Total Police $ 3,564,814 $ 3,681,940 $ 3,599,901 $ 3,837,379 7% 30%

Description Police expenditures pay for the public safety services of the Borough. They account for the salaries and benefits of the Chief of Police, two Lieutenants, two Sergeants, the Juvenile Officer, the Narcotics Officer, 16 Full-Time Patrol Officers, 4 Part-Time Patrol Officers, and 1 Desk Clerk. Police expenditures also account for the costs to operate and maintain an office space in the Borough Building, the K-9 unit, supplies, vehicles, fuel, equipment, and continuing education. These expenditures do not account for the police pension or professional liability insurance.

The majority of police department expenditures are dictated by the 2016-2020 collective bargaining agreement negotiated and signed in 2016.

New in 2017

Personnel

A new line item has been added for part time police officers. The amount budgeted will cover four part- time officers starting mid-year working 24 hours a week at $30 an hour, with no additional benefits. Before 2016, all overtime was recognized in a single account, making it challenging to understand what overtime work is being spent doing. Starting in 2016, police overtime was broken down into three classifications; special services, training, and overtime. Special service overtime is fully reimbursed by the company or organization requesting the special detail. Training overtime occurs when officers who work night shifts need to come in during the day to attend firearm and other trainings.

Equipment

Vehicle lease payments are due for two 2015 Ford Interceptors, along with one 2016 Ford Interceptor. One new Ford Interceptor will be purchased in 2017 with three-year financing.

Additional new equipment will be purchased through the Asset Forfeiture Fund. Refer to the Asset Forfeiture Budget for details.

Budget Detail Police 2015 2016 2016 2017 % of Total % Inc/Dec 001-410.**** Actual Budget Estimate Budget Budget

1100 Salary of Chief $ 107,225 $ 110,367 $ 110,367 $ 110,367 0% 1% 1200 Salaries of Lieutenants 180,429 190,763 190,763 223,136 17% 2% 1210 Salary of Juvenile Officer 86,030 90,958 90,958 94,588 4% 1% 1230 Salaries of Sergeants 175,385 185,431 185,431 208,078 12% 2% 1240 Salaries of Patrol Officers 1,445,345 1,559,250 1,559,250 1,666,192 7% 13% 1250 Salary of Office Manager 45,181 47,926 47,926 49,364 3% 0% 1300 Wages of Part Time Officers - 18,750 - 75,000 - 1% 1720 Holiday Pay 115,757 107,200 95,505 101,545 6% 1% 1800 Office Overtime 661 - 95 - - 0% 1801 Officer Overtime 187,082 120,000 115,000 90,000 -22% 1% 1802 Special Service Overtime - 40,000 30,000 40,000 33% 0% 1803 Training Overtime - 10,000 9,919 10,500 6% 0% 1810 Court & Pre-Trial Hearings 45,800 53,000 40,000 53,000 33% 0% 1811 Magistrate Hearings 84,328 70,000 53,989 65,000 20% 1% 1820 DEA Task Force Overtime 18,212 17,548 17,548 17,500 0% 0% 1860 Uniform Allowance 18,908 23,750 23,735 23,750 0% 0% 1920 FICA/Medicare Employer Paid 41,335 44,000 38,696 43,722 13% 0% 1960 Health Insurance 634,646 630,000 630,000 586,043 -7% 5% 1980 Long Term Disability Insurance 20,400 15,000 16,560 17,000 3% 0% 2100 Office Materials & Supplies 8,707 10,183 7,876 9,750 24% 0% 2101 K-9 8,156 12,000 11,500 8,240 -28% 0% 2102 Ammunition & Range Supplies 2,923 15,000 20,000 18,000 -10% 0% 2130 Computer/Copier Supplies 2,036 2,500 2,000 2,500 25% 0% 2150 Postage 2,139 2,500 1,313 2,000 52% 0% 2310 Vehicle Fuel - Gas 25,219 18,000 17,500 30,000 71% 0% 2700 Computer Hardware/Software 23,292 17,000 12,000 15,000 25% 0% 2900 Computer Service/Maintenance 3,833 6,000 8,807 6,000 -32% 0% 3000 Civil Service Commission 9,265 1,500 - 3,800 - 0% 3110 Professional/Legal Services 65,132 45,000 57,000 50,000 -12% 0% 3210 Telephone 17,433 15,000 19,573 17,500 -11% 0% 3240 Wireless Phone 3,699 7,000 3,945 3,960 0% 0% 3250 Internet 7,074 6,200 5,500 6,200 13% 0% 3270 Radio Maintenance 2,863 5,500 7,792 5,000 -36% 0% 3310 Travel & Lodging 410 - 867 500 -42% 0% 3420 Printing 119 1,500 1,500 2,000 33% 0% 3701 Tires 8,135 6,000 4,180 6,000 44% 0% 3800 Vehicle Lease & Purchase 28,501 54,234 47,042 41,516 -12% 0% 4000 Lunch Allowance 3,750 3,500 3,000 4,000 33% 0% 4200 Subscriptions/Dues 7,019 8,000 7,440 8,035 8% 0% 4500 Contracted Services - Dog Catcher - 500 1,046 2,500 139% 0% 4510 Vehicle Maintenance & Repair 40,203 40,000 38,000 40,000 5% 0% 4600 Continuing Education 4,787 12,000 8,552 12,200 43% 0% 4900 CALEA Certification 5,500 8,080 8,415 4,595 -45% 0% 5000 DUI Grant 32,676 45,000 45,000 55,500 23% 0% 7400 Major Machinery & Equipment 45,224 2,000 500 4,000 700% 0% 7500 Minor Machinery & Equipment - 3,800 3,813 3,800 0% 0% Total Police $ 3,564,814 $ 3,681,940 $ 3,599,901 $ 3,837,379 7% 30%

Fire & Emergency Medical Services

Summary Fire & BEMS 2015 2016 2016 2017 % of Total % Inc/Dec 001-41*.**** Actual Budget Estimate Budget Budget Total Fire & BEMS $ 404,545 $ 400,750 $ 416,550 $ 400,740 -4% 3%

Description Each year the Borough contributes $173,000 to our three volunteer fire departments. The division of the contribution is based on the number of parcels each fire department is responsible for providing firefighting services to. The Borough also pays for the upkeep of the fire hydrants within the municipality. The Borough serves as a ‘pass through’ for state funds earmarked for fire fighters. Annually the Borough receives around $104,000 from the state and then passes it on to the local fire relief association. In 2015, the Borough applied for and received a grant for fire gear on behalf of the fire departments. In 2016, gear was purchased with those grant funds.

In addition to contributing to fire safety services, the Borough contributes $50,000 per year to Baldwin Emergency Medical Services (BEMS).

Budget Detail Fire 2015 2016 2016 2017 % of Total % Inc/Dec 001-411.**** Actual Budget Estimate Budget Budget

2310 Gas $ 2,820 $ - $ - $ - - 0% 2320 Diesel 6,093 - - - - 0% 3600 Fire Hydrants 73,188 72,000 73,119 73,200 0% 1% 4000 Gear & Equipment - - 16,795 - - 0% 5000 Contributions to Vol. Fire Companies 164,000 173,000 173,000 173,000 0% 1% 5001 Fireman's Relief Association 103,947 105,000 103,181 104,000 1% 1% Total Fire $ 350,048 $ 350,000 $ 366,095 $ 350,200 -4% 3%

BEMS 2015 2016 2016 2017 % of Total % Inc/Dec 001-412.**** Actual Budget Estimate Budget Budget

2310 Gas $ 400 $ - $ - $ - - 0% 2320 Diesel 8,576 - - - - 0% 3210 Telephone 1,522 750 455 540 19% 0% 5000 Contributions 44,000 50,000 50,000 50,000 0% 0% Total BEMS $ 54,498 $ 50,750 $ 50,455 $ 50,540 0% 0%

Code Enforcement

Summary Code Enforcement 2015 2016 2016 2017 % of Total % Inc/Dec 001-413.**** Actual Budget Estimate Budget Budget Total Code Enforcement $ 210,327 $ 169,269 $ 214,541 $ 183,765 -14% 1%

Description The Code Enforcement department enforces Baldwin’s ordinances and codes related to the built environment and property maintenance. Expenditures for the department cover the wages and benefits of the Code Enforcement Officer and 75% of the License, Permit, & Closing Clerk, payments for professional inspection services, and for the operations of the department (vehicle fuel, postage, office supplies, etc.). Code enforcement employees are on a UPMC medical insurance plan, along with all non- uniform employees. By switching to an age tiered PPO with a higher deductible, health insurance premiums decreased between 2016 and 2017.

Budget Detail Code Enforcement 2015 2016 2016 2017 % of Total % Inc/Dec 001-413.**** Actual Budget Estimate Budget Budget

1100 Salary of Code Enforcement Officer $ 51,317 $ 54,106 $ 54,106 $ 55,729 3% 0% 1120 Salary of Clerk 34,963 2,897 34,000 30,411 -11% 0% 1860 Uniform Allowance 71 300 300 300 0% 0% 1920 FICA/Medicare Employer Paid 6,775 6,966 6,966 6,590 -5% 0% 1960 Health Insurance 15,132 15,000 17,231 17,425 1% 0% 2100 Office Supplies 1,456 1,800 2,486 2,000 -20% 0% 2150 Postage 5,381 5,000 1,100 2,500 127% 0% 2310 Gas 1,569 1,750 1,100 2,500 127% 0% 2700 Computer Hardware & Software 8,093 4,500 11,125 4,500 -60% 0% 3100 Professional Services - Court Reporter 185 3,500 - 3,000 - 0% 3170 Professional Services - Inspections 70,968 35,000 53,373 40,000 -25% 0% 3210 Telephone 822 2,000 1,768 1,500 -15% 0% 3240 Wireless Phone 666 650 775 660 -15% 0% 3310 Travel & Lodging - 600 575 600 4% 0% 3410 Advertising 375 2,000 2,100 1,500 -29% 0% 3420 Printing 305 350 400 350 -13% 0% 3434 Codify/Zoning 8,122 25,000 24,895 5,000 -80% 0% 4200 Subscriptions & Memberships 247 500 40 300 650% 0% 4500 Removal Hazardous Structures 641 - - 5,000 - 0% 4510 Vehicle Maintenance & Repairs 861 1,450 288 1,000 247% 0% 4600 Continuing Education 2,131 1,500 1,441 1,500 4% 0% 4900 Bldg Permit Fees - Dept of Labor 248 400 372 400 8% 0% 4910 Blight & Abandonment - 4,000 100 1,000 900% 0% Total Code Enforcement $ 210,327 $ 169,269 $ 214,541 $ 183,765 -14% 1%

Planning & Zoning

Summary Planning & Zoning 2015 2016 2016 2017 % of Total % Inc/Dec 001-414.**** Actual Budget Estimate Budget Budget Total Planning & Zoning $ 26,829 $ 20,000 $ 11,690 $ 5,000 -57% 0%

Description The Borough makes a small annual contribution to the local economic development organization, Economic Development South, to contribute to improving the local South Hills economy. In 2015, the Elm Leaf Park Master Plan was created and adopted. In 2016, a Colewood Park Master Plan was created and adopted.

Budget Detail Planning & Zoning 2015 2016 2016 2017 % of Total % Inc/Dec 001-414.**** Actual Budget Estimate Budget Budget

3100 Economic Development South $ 2,500 $ 5,000 $ 2,500 $ 5,000 100% 0% 3102 Park Master Planning 24,329 15,000 9,190 - -100% 0% Total Planning & Zoning $ 26,829 $ 20,000 $ 11,690 $ 5,000 -57% 0%

Solid Waste Collection

Summary Solid Waste Collection & Disposal 2015 2016 2016 2017 % of Total % Inc/Dec 001-427.**** Actual Budget Estimate Budget Budget Total Solid Waste Collection & Disposal $ 1,377,681 $ 1,295,981 $ 1,228,904 $ 1,355,149 10% 11%

Some municipalities have solid waste companies bill property owners directly for the service. Baldwin has and will continue to incorporate the cost of solid waste collection into the budget as an expenditure that is paid for with general tax revenues.

Budget Detail Solid Waste Collection & Disposal 2015 2016 2016 2017 % of Total % Inc/Dec 001-427.**** Actual Budget Estimate Budget Budget

4501 Garbage Collection $ 1,092,317 $ 1,044,865 $ 1,009,391 $ 1,089,783 8% 9% 4503 Recycling Collection 217,317 208,116 176,513 217,366 23% 2% 4504 Leaf Collection 50,102 25,000 25,000 30,000 20% 0% 4505 Yard Waste Disposal 17,945 18,000 18,000 18,000 0% 0% Total Solid Waste Collection & Disposal $ 1,377,681 $ 1,295,981 $ 1,228,904 $ 1,355,149 10% 11%

Department of Public Works (DPW)

Summary Public Works 2015 2016 2016 2017 % of Total % Inc/Dec 001-43*.**** Actual Budget Estimate Budget Budget Total Public Works $ 738,801 $ 877,542 $ 828,121 $ 924,723 12% 7%

Description The Borough’s Public Works department includes a Superintendent, a Foreman, and a full time maintenance crew of five. Additional seasonal help is hired during the summer months. Half of the Superintendent’s and Foreman’s wages and benefit expenditures are paid for through the General Fund, with the other half coming from the Sewer Fund. The department is responsible for the upkeep of the Borough’s roads, parks, snow removal, and storm & sanitary sewer system. The labor and operating costs associated with the sanitary sewer system are accounted for in the Sewer Fund.

All full-time public works personnel are receiving a 3% wage increase from 2016 to 2017 in accordance with the collective bargaining agreement. DPW employees are on a UPMC medical insurance plan, along with all non-uniform employees. By switching to an age tiered PPO with a higher deductible, health insurance premiums decreased between 2016 and 2017.

Traffic Control Devices. The Borough pays for the upkeep of traffic lights and street lights on Baldwin roads.

While the sanitary sewer system is funded by the Sewer Fund, any expenditures related to the Borough’s storm sewer system are reflected in the General Fund. Some storm sewer system maintenance and repairs are completed by DPW employees, while some tasks are contracted out.

Capital Purchases

Vehicle leases payments are due for the 2015 International 10-ton dump truck, two 2015 Ford F550s, and a 2015 Ford F150. In 2017, the Borough will lease a new 10-ton dump truck to replace the existing 10-ton, which will be 9 years old and due for replacement. Depending on the timing of the new lease, the first payment may not come due until 2018.

Budget Detail General Public Works 2015 2016 2016 2017 % of Total % Inc/Dec 001-430.**** Actual Budget Estimate Budget Budget

1100 Salary of Superintendent $ 34,004 $ 36,150 $ 36,150 $ 37,235 3% 0% 1120 Wages of Foreman 28,102 29,332 29,332 30,182 3% 0% 1121 Wages of Maintenance Crew 259,630 277,721 277,721 287,754 4% 2% 1150 Wages of Part Time Employees 16,793 11,850 12,558 13,000 4% 0% 1800 Overtime 14,730 14,000 15,599 14,750 -5% 0% 1801 Snow Removal Overtime 42,205 45,000 30,000 42,904 43% 0% 1860 Uniform Allowance 1,883 1,250 2,120 2,000 -6% 0% 1870 Meal Allowance 484 300 300 400 33% 0% 1920 FICA/Medicare Employer Paid 30,910 27,500 30,704 32,518 6% 0% 1960 Health Insurance 74,885 109,627 103,000 116,880 13% 1% 2200 Operating Supplies 11,730 7,500 7,901 7,500 -5% 0% 2310 Vehicle Fuel - Gas 15,024 20,000 15,000 25,000 67% 0% 2320 Vehicle Fuel - Diesel 8,480 8,000 6,000 10,000 67% 0% 2500 Vehicle Repair & Maintenance 27,300 25,000 23,056 25,000 8% 0% 2600 Small Tools & Equipment 5,753 4,000 4,000 4,000 0% 0% 3000 Other Service & Charges 835 200 100 200 100% 0% 3210 Telephone 3,257 5,000 6,500 4,000 -38% 0% 3240 Wireless Phone 1,590 1,350 2,184 2,000 -8% 0% 3270 Radio Maintenance Contract 7,724 4,000 1,238 2,000 62% 0% 3800 Vehicle Purchase & Leases 50,860 98,801 98,801 80,000 -19% 1% 3840 Rent of Machinery & Equipment 595 500 150 500 233% 0% 4400 Safety Equipment 2,478 1,500 1,500 1,500 0% 0% 4510 Contracted Vehicle Maint. & Repair 53,272 20,000 28,499 25,000 -12% 0% 4600 Continuing Education - 1,000 - 1,000 - 0% 4700 CDL, Drug, Alcohol Testing 585 250 400 500 25% 0% 7400 Major Machinery & Equipment - 5,000 5,381 3,500 -35% 0% Total General Public Works $ 693,106 $ 754,831 $ 738,193 $ 769,323 4% 6%

Winter Maintenance 2015 2016 2016 2017 % of Total % Inc/Dec 001-432.**** Actual Budget Estimate Budget Budget

2460 Highway Supplies - Rock Salt 861 1,000 1,000 1,000 0% 0% Total Winter Maintenance $ 861 $ 1,000 $ 1,000 $ 1,000 0% 0%

Traffic Control Devices 2015 2016 2016 2017 % of Total % Inc/Dec 001-433.**** Actual Budget Estimate Budget Budget

2000 Street Signs/Markings $ 9,498 $ 12,500 $ 12,500 $ 10,000 -20% 0% 2200 Street Light LED Conversion - 4,711 4,711 4,500 -4% 0% 2500 Maint. & Repair Traffic Signals 15,764 5,000 8,369 5,000 -40% 0% Total Traffic Control Devices $ 25,262 $ 22,211 $ 25,580 $ 19,500 -24% 0%

Storm Sewer and Drains 2015 2016 2016 2017 % of Total % Inc/Dec 001-436.**** Actual Budget Estimate Budget Budget

2490 Storm Sewers & Drains $ 19,572 $ 15,000 $ 14,000 $ 15,000 7% 0% 3130 Engineering Services: MS4 - - - 35,400 - 0% 6100 System CCTV and Cleaning - 44,500 49,348 44,500 2% 0% 6200 Storm Sewer System Repairs - 40,000 - 40,000 2% 0% Total Storm Sewer and Drains $ 19,572 $ 99,500 $ 63,348 $ 134,900 113% 1%

Roads & Bridges

Summary Maintenance & Repair of Roads & Bridges 2015 2016 2016 2017 % of Total % Inc/Dec 001-438.**** Actual Budget Estimate Budget Budget Total Maintenance & Repair of Roads & Bridges $ 878,593 $ 871,700 $ 682,181 $ 2,554,442 274% 20%

The following table shows the budget amount for road repaving, the amount spent per year, and the number of miles paved.

Budgeted Year Amount Amount Spent Miles 2010 $ 408,519.00 $ 487,948.28 0.46 2011 $ 500,000.00 $ 414,578.63 0.77 2012 $ 750,000.00 $ 735,414.83 1.97 2013 $ 800,000.00 $ 748,602.19 1.89 2014 $ 800,000.00 $ 600,587.35 1.75 2015 $ 800,000.00 $ 746,241.32 1.21 2016 $ 800,000.00 $ 692,536.52 1.49

Starting in 2016, a portion of the construction costs incurred to repave the roads was paid for through the Highway Aid Fund. In 2017, the Borough anticipates funding $150,000 in road construction through the Highway Fund, in addition to the expenditures listed below.

In 2016, the culvert (bridge) that carries McAnulty Road over a stream degraded to the point where it is no longer structurally sound and must be rebuilt and repaved in 2017. The Borough engineers estimate this project to cost approximately $700,000 (engineering & construction)

Due to the McAnulty culvert repair and the need to repave around the Colewood project site, Council is substantially expanding the road program in 2017. Therefore, you can see a significant increase in the amount budgeted for engineering and construction. Beyond 2017, the road program will likely return to funding levels more consistent with previous years.

Budget Detail Maintenance & Repair of Roads & Bridges 2015 2016 2016 2017 % of Total % Inc/Dec 001-438.**** Actual Budget Estimate Budget Budget

2450 Material - Patching & Repair Roads $ 20,573 $ 10,000 $ 13,500 $ 13,000 -4% 0% 2503 Restoration 6,543 3,500 6,048 4,000 -34% 0% 2510 Maint & Repairs - Unimproved Roads 569 600 - 500 - 0% 3130 Engineering - Resurfacing Streets 95,529 52,100 64,802 200,000 209% 2% 3750 Maint & Repairs - Guide Rails - 500 500 500 0% 0% 3751 Street Cleaning 3,338 5,000 - - - 0% 6100 Const Contracts - Resurfacing Streets 752,041 800,000 597,331 2,336,442 291% 18% Total Maintenance & Repair of Roads & Bridges $ 878,593 $ 871,700 $ 682,181 $ 2,554,442 274% 20%

Parks & Recreation

Summary Parks & Recreation 2015 2016 2016 2017 % of Total % Inc/Dec 001-454.**** Actual Budget Estimate Budget Budget Total Parks & Recreation $ 82,071 $ 102,950 $ 92,161 $ 98,450 7% 1%

Description The parks and recreation category represents expenditures for the supplies, utilities, and equipment rentals used to repair and maintain Borough parks. The largest expense in this category is for contracted repair services to mow both Borough owned properties and vacant private properties.

In 2017, these expenditures are rising slightly due to the need to replace the roof on the blimp hanger located in Elm Leaf Park where equipment and supplies are stored.

Budget Detail Parks & Recreation 2015 2016 2016 2017 % of Total % Inc/Dec 001-454.**** Actual Budget Estimate Budget Budget

1121 Bus Drivers $ 349 $ 350 $ - $ 350 - 0% 2500 Maint & Repair Supplies 6,889 3,500 3,800 4,000 5% 0% 3000 Services & Charges 34 100 - 100 - 0% 3600 Utilities 22,148 22,000 18,000 20,000 11% 0% 3700 Maintenance & Repair 6,588 12,000 9,255 19,000 105% 0% 3800 Equipment Rental 8,130 8,000 7,216 8,000 11% 0% 4500 Contracted Services 37,933 42,000 42,000 45,000 7% 0% 6700 Security Equipment - 2,000 - - - 0% 7400 Machinery & Equipment - 1,000 1,360 1,000 -26% 0% 7500 Recreation Programming - 10,000 10,000 - -100% 0% 7501 Programming/Advertising - 2,000 530 1,000 - 0% Total Parks & Recreation $ 82,071 $ 102,950 $ 92,161 $ 98,450 7% 1%

Debt Service

Summary Debt Service 2015 2016 2016 2017 % of Total % Inc/Dec 001-47*.**** Actual Budget Estimate Budget Budget Total Debt Service $ 64,016 $ 249,754 $ 249,754 $ 325,396 30% 3%

Description In 2015 the Borough issued a new bond to fund capital purchases and projects, aiming to maintain annual debt service payments at levels similar to what the Borough had been paying for previous debt – around $250,000 a year.

In order to fund the replacement of the McAnulty culvert and the road program expansion, Council is authorizing a new borrowing during 2017. In the first year of a new debt issuance the additional debt service will only include interest, while future years will see an increase to debt service to cover both interest and principal.

Budget Detail Debt Service - Principal 2015 2016 2016 2017 % of Total % Inc/Dec 001-471.**** Actual Budget Estimate Budget Budget

2000 General Obligation Bond $ - $ 145,000 $ 145,000 $ 151,802 - 1% Total Debt Service - Principal $ - $ 145,000 $ 145,000 $ 151,802 - 1%

Debt Service - Interest 2015 2016 2016 2017 % of Total % Inc/Dec 001-472.**** Actual Budget Estimate Budget Budget

2000 General Obligation Bond $ 64,016 $ 104,754 $ 104,754 $ 173,594 66% 1% Total Debt Service - Interest $ 64,016 $ 104,754 $ 104,754 $ 173,594 66% 1%

Pensions

Summary Employer Paid Benefits & Withholding 2015 2016 2016 2017 % of Total % Inc/Dec 001-48*.**** Actual Budget Estimate Budget Budget Total Employer Paid Benefits & Withholding $ 959,325 $ 916,269 $ 922,425 $ 1,088,709 18% 9%

Budget Detail Employer Paid Benefits & Withholding 2015 2016 2016 2017 % of Total % Inc/Dec 001-48*.**** Actual Budget Estimate Budget Budget

481.1940 Unemployment Compenstation - PSAB $ 8,230 $ 14,000 $ 12,000 $ 12,200 2% 0% 483.1000 Police Pension Contribution 878,203 847,269 847,269 991,571 17% 8% 482.3000 Non-Uniform Pension Contribution 72,892 55,000 63,156 84,938 34% 1% Total Employer Paid Benefits & Withholding $ 959,325 $ 916,269 $ 922,425 $ 1,088,709 18% 9%

Insurance

Summary Insurance 2015 2016 2016 2017 % of Total % Inc/Dec 001-486.**** Actual Budget Estimate Budget Budget Total Insurance $ 342,388 $ 318,293 $ 309,876 $ 316,021 2% 2%

Description To reduce the Borough’s liability, we purchase multiple forms of insurance. For employees, Baldwin pays for group life insurance, worker’s compensation, and an employee assistance program. Expenditures also cover public official and police professional liability insurance. To protect Baldwin’s assets, we purchase fire and general liability auto, bond, and umbrella insurance policies. For the Borough’s 2017 insurance, a new cyber liability policy was added to cover potential losses from online activity or hacking.

Budget Detail Insurance 2015 2016 2016 2017 % of Total % Inc/Dec 001-486.**** Actual Budget Estimate Budget Budget

1501 Group Life Insurance Premiums $ 10,606 $ 10,706 $ 8,000 $ 8,500 6% 0% 1502 Hospitalization Insurance 29,552 - - - - 0% 1503 Employee Assistance Program 2,414 2,000 500 2,000 300% 0% 3500 Public Officials Liability Insurance 3,496 9,885 10,498 10,082 -4% 0% 3502 Police Professsional Liability Insurance 18,638 21,877 22,392 24,387 9% 0% 3504 Worker's Compensation 192,199 180,000 168,062 176,775 5% 1% 3510 Fire & Auto General Liability Insurance 45,384 38,000 41,572 26,994 -35% 0% 3530 Bond - 300 200 200 0% 0% 3550 Umbrella 40,099 55,525 57,208 63,703 11% 0% 3570 Cyber Liability Insurance - - 704 3,380 380% 0% 487.1000 Other Group Ins Benefits - - 740 - -100% 0% Total Insurance $ 342,388 $ 318,293 $ 309,876 $ 316,021 2% 2%

Other Expenditures

Summary Other Uses 2015 2016 2016 2017 % of Total % Inc/Dec 001-4**.**** Actual Budget Estimate Budget Budget Total Other Uses $ 416,765 $ 995,800 $ 992,365 $ 848,300 -15% 7%

Description Library

Baldwin contributes $185,000 annually to the Baldwin Borough library.

Civil & Military Celebrations

Each August, Baldwin’s Community Day is held in the parking lot and open areas of the municipal building complex in North Baldwin.

Refunds

Interfund Transfers

The General Fund uses an interfund loan from the Sewer Fund to stay cash positive prior to property tax collection. The repayment of the loan is recognized here.

Budget Detail Library 2015 2016 2016 2017 % of Total % Inc/Dec 001-456.**** Actual Budget Estimate Budget Budget

5000 Contribution $ 180,000 $ 185,000 $ 185,000 $ 185,000 0% 1% Total Library $ 180,000 $ 185,000 $ 185,000 $ 185,000 0% 1%

Civil & Military Celebrations 2015 2016 2016 2017 % of Total % Inc/Dec 001-457.**** Actual Budget Estimate Budget Budget

5400 Community Events $ 7,873 $ 2,000 $ 370 $ 6,300 1603% 0% 7200 Borough Signage 18,825 7,300 9,250 1,000 -89% 0% Total Civil & Military Celebrations $ 26,698 $ 9,300 $ 9,620 $ 7,300 -24% 0%

Other Financial Uses 2015 2016 2016 2017 % of Total % Inc/Dec 001-49*.**** Actual Budget Estimate Budget Budget

491.0000 Refunds- Prior Year Receipts $ 61,015 $ 45,000 $ 5,000 $ 10,000 100% 0% 491.0100 Refunds- Current Year Receipts 13,552 15,000 12,000 14,000 17% 0% 492.0800 Transfer to Sewer Fund - 660,000 660,000 550,000 -17% 4% 492.1800 Transfer to Capital Fund - - 35,000 - - 0% 492.3100 Transfer to Pool Fund 135,500 81,500 85,745 82,000 -4% 1% Total Other Financial Uses $ 210,067 $ 801,500 $ 797,745 $ 656,000 -18% 5%

2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUE $ 10,182,759 $ 10,687,665 $ 10,621,418 $ 12,830,340 21% TOTAL EXPENDITURES $ 9,862,249 $ 10,631,463 $ 10,301,540 $ 12,791,950 24% DIFFERENCE $ 320,510 $ 56,202 $ 319,877 $ 38,390

General Fund Capital Revenue

Summary 2015 2016 2016 2017 Actual Budget Estimate Budget TOTAL REVENUES $ 65,141 $ 1,440,412 $ 215,479 $ 1,813,500

The capital plan identified four sources of revenue for capital improvements; grants, bond (borrowing), asset forfeiture, and the general fund. Capital projects using asset forfeiture funds are reflected in the asset forfeiture fund budget.

In 2015, the Borough was awarded a $75,000 grant from the Allegheny County’s Community Infrastructure and Tourism Fund grant program (CITF) to help pay for the removal and replacement of the wooden play structures at Elm Leaf and Colewood Park. $40,000 of the grant funds will be received in 2017.

The transfer from the Capital Improvement Fund is revenue generated by a 2015 bond issuance to pay for specific and much needed capital improvement projects through the Borough. The amount of revenue transferred in 2017 is in alignment with the cost estimates of the capital projects that will be completed in 2017.

Budget Detail Business License and Permits 2015 2016 2016 2017 % Inc/Dec 001-321.**** Actual Budget Estimate Budget

7200 Mechanical Devices - - - 60,640 - Total Business License and Permits $ - $ - $ - $ 60,640 -

Culture & Recreation 2015 2016 2016 2017 % of Total 001-367.**** Actual Budget Estimate Budget Budget

3000 Recreation Grants - 75,000 35,000 44,000 2% Total Culture & Recreation $ - $ 75,000 $ 35,000 $ 44,000 2%

Proceeds of Fixed Asset Disposition 2015 2016 2016 2017 % of Total 001-391.**** Actual Budget Estimate Budget Budget

1000 Sale of Fixed Assets 1,200 4,000 4,444 4,000 0% Total Fixed Asset Disposition $ 1,200 $ 4,000 $ 4,444 $ 4,000 -10%

Interfund Transfers 2015 2016 2016 2017 % of Total 001-392.**** Actual Budget Estimate Budget Budget

1800 Transfer from Capital Improvement Fund 65,141 1,295,377 110,000 1,638,860 90% Total Inferfund Transfers $ 65,141 $ 1,295,377 $ 110,000 $ 1,638,860 90%

Refunds of Prior Year's Expenditures 2015 2016 2016 2017 % of Total 001-395.**** Actual Budget Estimate Budget Budget

0000 Refund of MRM Dividend $ - $ 66,035 $ 66,035 $ 66,000 4% Total Refunds of Prior Year's Expenditures $ - $ 66,035 $ 66,035 $ 66,000 4%

General Fund Capital Expenditures

Summary 2015 2016 2016 2017 Actual Budget Estimate Budget TOTAL EXPENDITURES $ - $ 1,315,912 $ 204,244 $ 1,813,460

Description Details regarding all 2017 capital projects can be found in the 2016-2020 Capital Improvement Plan.

Buildings

Borough Building: 3344 Churchview Ave

In November 2016 the Borough awarded HVAC, electrical, and general constructions contracts to remodel the Auditorium. Construction will begin in January 2017 and take about 90 days. The renovations will make the space ADA accessible, improve the acoustics, create storage areas, and update the aesthetics.

In the fall of 2016, the pipes that carry hot and cold water throughout the building’s HVAC system deteriorated to the point where the system became inoperable. During the winter, the piping was replaced for a total project cost of approximately $200,000. A portion of the cost was paid in 2016, while the rest will be paid once work in completed in 2017.

The fuel tanks located behind the Borough Building will no longer pass inspection. Instead of replacing them, the Borough will close them in place and has moved to purchasing fuel at retail gas stations.

Leland Center: 5230 Wolfe Dr

During 2016, the Borough was a joint applicant with the Baldwin Library for a grant to renovate Leland Center into the new library location. If the grant is awarded, the Borough is committed to providing $300,000 of the project costs.

The fuel tanks located at Leland Center will no longer pass inspection. Instead of replacing them, the Borough will close them in place and has moved to purchasing fuel at retail gas stations.

Parks & Recreation

Phase one of the Elm Leaf Park Master Plan will be bid and constructed in 2017. During 2016, a Colewood Park Master Plan was adopted and in 2017, once the sanitary sewer improvements have been completed, phase one of the park redevelopment will be constructed.

Budget Detail Borough Building 2015 2016 2016 2017 % of Total 001-409.****-000 Actual Budget Estimate Budget Budget

6000 Auditorium Remodel & HVAC - $ 254,000 25,000 $ 232,860 13% 6001 Auditorium HVAC - 95,000 - 120,600 7% 6003 HVAC Pipe Replacement - - 98,175 100,000 6% 6100 DPW Office Remodel - 10,000 - 10,000 1% 6300 Fuel Tank Replacement - 150,000 - 75,000 4% Total Borough Building $ - $ 509,000 $ 123,175 $ 538,460 30%

Leland Center 2015 2016 2016 2017 % of Total 001-409.****-002 Actual Budget Estimate Budget Budget

6000 Roof Replacement - $ 20,000 10,043 $ 300,000 17% 6100 Fuel Tank Replacement - 150,000 - 75,000 4% Total Leland Center $ - $ 170,000 $ 10,043 $ 375,000 21%

Storm Sewer and Drains 2015 2016 2016 2017 % of Total 001-436.**** Actual Budget Estimate Budget Budget

6000 Outdoor Storage Yard - $ 100,000 8,275 $ - 0% Total Storm Sewer and Drains $ - $ 100,000 $ 8,275 $ - 0%

Parks & Recreation 2015 2016 2016 2017 % of Total 001-454.**** Actual Budget Estimate Budget Budget

6000 Elm Leaf Park Improvements - $ 476,912 45,000 $ 500,000 28% 6100 Colewood Park Improvements - 60,000 17,751 400,000 22% Total Parks & Recreation $ - $ 536,912 $ 62,751 $ 900,000 50%

2015 2016 2016 2017 Actual Budget Estimate Budget TOTAL REVENUES $ 65,141 $ 1,440,412 $ 215,479 $ 1,813,500 TOTAL EXPENDITURES $ - $ 1,315,912 $ 204,244 $ 1,813,460

Sewer Fund Revenue

Summary 2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 5,731,976 $ 10,023,450 $ 8,891,806 $ 15,154,550 70%

Description The majority of revenue in the Sewer Fund comes from sewer rents and bond proceeds. Sewage rates will remain at the same level in 2017 as there were in 2016, at $11.52 per 1,000 gallons used and a $6.75 monthly surcharge.

In 2011 and 2012, the Borough issued bonds to finance large scale sanitary sewer infrastructure projects. During 2016, the Borough started construction on one of the major projects that has been in the works, the equalization basin in Colewood Park. Besides reducing overflow events in Baldwin, the basin will also benefit Whitehall Borough, so they are contributing $100,000 a year over the next few years towards the work. This contribution is reflected in the budget as municipal coordination.

In 2017, the Borough will issue about $2.2 million in new long-term debt to finance the required repairs to the Gardenville area sanitary sewer system. This repair is required in order to comply with the Borough’s consent order agreement with the PA Department of the Environment (DEP).

Budget Detail Revenue 2015 2016 2016 2017 % of Total % Inc/Dec 008-3**.**** Actual Budget Estimate Budget Budget

341.0000 Earnings From Temp Dep/Investments $ 55 $ 50 $ 49 $ 50 2% 0% 341.0004 Interest - Money Market Account 3,054 5,000 7,000 6,000 -14% 0% 364.1001 Sewer Rents-Current Year Billing 4,515,301 5,288,247 5,131,325 5,290,000 3% 35% 364.1002 Sewer Rent-Delinquent 118,692 85,000 132,895 100,000 -25% 1% 364.1100 Tap-In Fees 6,010 8,000 (2,000) 2,000 -200% 0% 364.6000 Credit From ALCOSAN 13,658 14,000 15,000 14,500 -3% 0% 364.8000 Charges-Letters & Certificates 13,020 10,500 12,404 12,000 -3% 0% 364.9500 Municipal Coordination 100,000 100,000 100,000 100,000 0% 1% 380.0400 Misc Insurance Receipts - 16,153 16,153 - -100% 0% 392.0100 Transfer from General Fund 570,000 660,000 660,000 550,000 -17% 4% 393.1000 Sewer Sys Repair Bond Proceeds 392,186 3,836,500 2,818,980 9,080,000 222% 60% Total Sewer Fund Revenue $ 5,731,976 $ 10,023,450 $ 8,891,806 $ 15,154,550 70% 100%

Sewer Fund Expenses

Summary 2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL EXPENSES $ 4,862,881 $ 9,934,687 $ 8,441,948 $ 15,124,053 79%

Description Sewer expenses can be categorized into three main sub-sections: personnel, infrastructure, and wastewater treatment.

Due to Environmental Protection Agency (EPA) and the Pennsylvania Department of the Environment (DEP) Clean Water Act regulations and standards, Pittsburgh area municipalities are in a period of large infrastructure investment in order to come into compliance and reduce over flow events. 62% of 2016 Sewer Fund expenses are projected to be spent on the engineering and construction of these infrastructure projects. While bond proceed revenue will cover most of these expenses, the Borough is responsible for repaying the bond borrowing through annual debt service payments. At the end of 2015 the Borough refinanced the 2011 bond to recoup a debt service savings of about $120,000 in 2016. However, beginning in 2017 the annual debt service to repay the long-term bond borrowing will go up, as the individual bonds reach maturity.

Budget Detail Sewer Administration 2015 2016 2016 2017 % of Total % Inc/Dec 008-400.**** Actual Budget Estimate Budget Budget

3210 Telephone $ 500 $ 500 $ 300 $ 500 67% 0% 4600 Refunds - 3,000 2,396 3,000 - 0% Total Sewer Administration $ 500 $ 3,500 $ 2,696 $ 3,500 30% 0%

Auditing Services & Financial Administration 2015 2016 2016 2017 % of Total % Inc/Dec 008-402.**** Actual Budget Estimate Budget Budget

3110 Accounting & Auditing Services $ 8,704 $ 8,700 $ 7,874 $ 7,200 -9% 0% 3900 Bank Service Charges - 100 100 100 0% 0% Total Auditing Services & Financial Administration $ 8,704 $ 8,800 $ 7,974 $ 7,300 -8% 0%

Solicitor/Legal Services 2015 2016 2016 2017 % of Total % Inc/Dec 008-404.**** Actual Budget Estimate Budget Budget

3102 Legal Expenses $ - $ 25,002 $ 26,501 $ 26,320 -1% 0% 4100 Judgements & Damages - 2,500 1,199 2,500 - 0% Total Solicitor/Legal Services $ - $ 27,502 $ 27,700 $ 28,820 4% 0%

Other General Government Administration 2015 2016 2016 2017 % of Total % Inc/Dec 008-406.**** Actual Budget Estimate Budget Budget

1120 Salaries of Full-Time Staff $ 70,948 $ 73,894 $ 73,894 $ 67,402 -9% 0% 1920 FICA/Medicare Employer Paid 5,455 5,653 5,653 5,156 -9% 0% 1960 Health Insurance 15,555 18,483 19,000 11,758 -38% 0% 2100 Office Supplies - 200 210 300 43% 0% 2150 Postage 137 200 150 150 0% 0% 2700 Computer Hardware & Software 3,851 2,500 2,500 2,500 0% 0% Total Other General Government Administration $ 95,946 $ 100,929 $ 101,407 $ 87,266 -14% 1%

Billing & Collections 2015 2016 2016 2017 % of Total % Inc/Dec 008-407.**** Actual Budget Estimate Budget Budget

3000 Billing & Collections $ 135,003 $ 103,247 $ 125,000 $ 150,000 20% 1% Total Billing & Collections $ 135,003 $ 103,247 $ 125,000 $ 150,000 20% 1%

Engineering & Construction 2015 2016 2016 2017 % of Total % Inc/Dec 008-408.****-*** Actual Budget Estimate Budget Budget

3130-000 Engineering & Architectural Services $ 15,640 $ 15,000 $ 12,450 $ 12,500 0% 0% 3130-001 Engr Exp-ACO Manhole Insp 7,728 7,500 4,339 5,000 15% 0% 3130-002 Engr Exp-ACO GIS 4,759 7,500 1,546 5,000 223% 0% 3130-003 Engr Exp-ACO Feasability Study 665 35,000 6,038 30,000 397% 0% 3130-004 Engr Exp-ACO O & M Plan 2,098 2,000 1,905 2,000 5% 0% 3130-005 Engr Exp-ACO Administration 16,899 15,000 1,581 15,000 849% 0% 3130-008 Engr Exp-COA CCTV - 10,000 - 10,000 - 0% 3130-010 Engr Exp-COA Manhole Insp 1,885 5,000 5,817 6,000 3% 0% 3130-011 Engr Exp-COA I/I Field Investigation 237 2,000 - 2,000 - 0% 3130-012 Engr Exp-COA Flow Monitoring 35,983 30,000 19,571 20,000 2% 0% 3130-015 Eng Exp-COA I/I Reduction Program 51,209 30,000 33,417 35,000 5% 0% 3130-020 Engr Exp-Glass Run Sewer 9,381 55,000 36,543 15,000 -59% 0% 3130-021 Annual O & M Repairs - 250,000 - 250,000 - 2% 3130-023 Engr Exp-ACO Repairs 4 & 5 6,301 - - - - 0% 3130-025 Const Exp-Glass Run Road - 150,000 - 150,000 - 1% 3131-000 GIS Mapping 1,004 7,200 - - - 0% 3135-000 Eng Exp - COA Wet Weather Flow - 300,000 363,841 250,000 -31% 2% 3135-001 Const Exp- COA Wet Weather Flow - 3,350,000 2,331,530 5,749,861 147% 38% 3136-000 Eng. Exp- Missionary Dr & Deep Dig - 50,000 - - - 0% 3136-001 Const Exp- Missionary Dr & Deep Dig - - - - - 0% 3137-000 Eng. Exp- Gardenville/LR30 - - 20,000 250,000 1150% 2% 3137-001 Const Exp- Gardenville/LR30 - - - 2,500,000 - 17% Total Engineering & Construction $ 153,787 $ 4,321,200 $ 2,838,577 $ 9,307,361 228% 62%

Public Works 2015 2016 2016 2017 % of Total % Inc/Dec 008-426.**** Actual Budget Estimate Budget Budget

1100 Salaries of Dept Head $ 63,913 $ 73,894 $ 73,894 $ 67,800 -8% 0% 1120 Salaries of Full Time Crew 320,919 332,631 332,631 352,476 6% 2% 1150 Wages - Part Time Crew 8,083 11,850 11,866 13,000 10% 0% 1800 Overtime 6,208 7,000 4,980 6,228 25% 0% 1860 Uniform Allowance 4,293 1,250 2,375 2,000 -16% 0% 1870 Meal Reimbursement 240 500 250 300 20% 0% 1920 FICA/Medicare Employer Paid 30,533 30,456 32,388 33,593 4% 0% 1960 Health Insurance 73,488 104,978 105,000 111,395 6% 1% 2000 Supplies 443 2,000 1,000 1,500 50% 0% 2310 Vehicle Fuel -Gas 20,297 15,000 12,000 15,000 25% 0% 2320 Vehicle Fuel-Diesel 18,109 10,000 7,000 10,000 43% 0% 2510 Vehicle Parts 8,312 6,000 7,168 6,000 -16% 0% 3210 Telephone 1,200 950 950 1,000 5% 0% 3240 Wireless Phones 1,050 1,350 750 750 0% 0% 3270 Radio Maintenance Contract - 4,000 - 2,000 - 0% 3290 PA One Calls - 1,700 1,251 1,500 20% 0% 3700 Repairs & Maintenance Services 10,879 8,000 11,000 11,000 0% 0% 3800 Vehicle Leasing 145,026 98,801 90,105 80,000 -11% 1% 3840 Rent of Machinery & Equipment - 500 - 500 - 0% 4500 Contracted Services 15,947 35,000 36,000 35,000 -3% 0% 4510 Vehicle Repairs & Maintenance 22,754 15,000 15,867 15,000 -5% 0% 4540 Misc. Expenses 2,581 2,000 568 1,000 76% 0% 4600 Continuing Education - 1,000 50 1,000 1900% 0% 4700 CDL, Drug & Alcohol Testing - 250 195 250 28% 0% Total Public Works $ 754,274 $ 764,110 $ 747,287 $ 768,291 3% 5%

Wastewater Collection & Treatment 2015 2016 2016 2017 % of Total % Inc/Dec 008-429.**** Actual Budget Estimate Budget Budget

3640 ALCOSAN Sewage Treatment $ 1,674,921 $ 1,860,300 $ 1,826,040 $ 2,016,737 10% 13% 3641 Pleasant Hills Authority Sewage Treatment 616,813 915,243 917,899 917,000 0% 6% 3642 COA Civil Penalty - 12,000 5,000 12,000 - 0% Total Wastewater Collection & Treatment $ 2,291,733 $ 2,787,543 $ 2,748,939 $ 2,945,737 7% 19%

Public Works Road & Streets 2015 2016 2016 2017 % of Total % Inc/Dec 008-436.**** Actual Budget Estimate Budget Budget

2490 Storm Sewers & Drains $ 12,607 $ 8,000 $ 5,000 $ 8,000 60% 0% Total Public Works Road & Streets $ 12,607 $ 8,000 $ 5,000 $ 8,000 60% 0%

Debt Service 2015 2016 2016 2017 % of Total % Inc/Dec 008-471.**** Actual Budget Estimate Budget Budget

1000 Debt Service Interest $ 688,664 $ 608,855 $ 609,224 $ 626,696 3% 4% 2000 Debt Service Principal - 410,000 410,000 520,000 27% 3% Total Debt Service $ 688,664 $ 1,018,855 $ 1,019,224 $ 1,146,696 -13% 8%

Employer Paid Benefits & Withholding 2015 2016 2016 2017 % of Total % Inc/Dec 008-48*.**** Actual Budget Estimate Budget Budget

481.1940 Unemployment Compensation- PSAB $ 2,780 $ 2,500 $ 2,400 $ 2,500 4% 0% 483.3000 Pension Contribution 56,117 45,000 66,752 50,000 -25% 0% 484.0000 Worker's Compensation 55,181 60,000 67,993 45,082 -34% 0% Total Employer Paid Benefits & Withholding $ 114,078 $ 107,500 $ 137,145 $ 97,582 -29% 1%

Insurance 2015 2016 2016 2017 % of Total % Inc/Dec 008-486.**** Actual Budget Estimate Budget Budget

1503 Employee Assistance Program $ - $ 2,500 $ - $ 2,000 - 0% 1980 Group Life Insurance 11,131 11,000 11,000 11,500 5% 0% 3510 Fire, Auto & General Liability 10,000 10,000 10,000 10,000 0% 0% Total Insurance $ 21,131 $ 23,500 $ 21,000 $ 23,500 -12% 0%

Interfund Transfers 2015 2016 2016 2017 % of Total % Inc/Dec 008-492.**** Actual Budget Estimate Budget Budget

0100 Transfer to General Fund $ 586,456 $ 660,000 $ 660,000 $ 550,000 -17% 4% Total Interfund Transfers $ 586,456 $ 660,000 $ 660,000 $ 550,000 -17% 4%

2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 5,731,976 $ 10,023,450 $ 8,891,806 $ 15,154,550 70% TOTAL EXPENSES $ 4,862,881 $ 9,934,687 $ 8,441,948 $ 15,124,053 79% DIFFERENCE $ 869,095 $ 88,763 $ 449,858 $ 30,497

Pool Fund Revenue

Summary 2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 245,123 $ 621,188 $ 592,654 $ 323,253 -45%

Description The majority of revenue in the Pool Fund comes from charges for using the pool, funds from the General Fund, and bond proceeds for capital improvement projects. Admission rates for pool access are not expected to be raised in 2017, but the Borough hopes the upgraded pool facilities will increase attendance.

Budget Detail Revenue 2015 2016 2016 2017 % of Total % Inc/Dec 031-3**.**** Actual Budget Estimate Budget Budget

341.0000 Earnings from Temp Dep/Investments $ 1 $ - $ 3 $ 3 -11% 0% 367.1100 Pool Passes & Tags 22,942 25,000 22,942 25,000 9% 8% 367.1110 Daily Admissions 16,415 16,000 21,802 19,000 -13% 6% 367.1120 Private Pool Parties 3,600 3,200 2,750 3,000 9% 1% 367.1130 Swimming Lessons 549 550 904 550 -39% 0% 367.1300 Concession Stand 2,411 2,000 - 2,000 - 1% 392.0100 Transfer from General Fund 135,500 81,500 86,495 82,000 -5% 25% 392.0200 Transfer from Capital Improvement Fund 63,705 492,938 457,758 191,700 -58% 59% Total Pool Fund Revenue $ 245,123 $ 621,188 $ 592,654 $ 323,253 -45% 100%

Pool Fund Expenses

Summary 2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL EXPENSES $ 245,425 $ 621,188 $ 596,245 $ 322,850 -46%

In accordance with the Borough’s five-year capital improvement plan, in 2016 the pool building phase one renovations were completed. Phase one focused on the amenities inside the building, including new restrooms, lockers, and entry area. Phase two, which will be completed in 2017, will focus on the amenities and look of the exterior of the building, including canopy shade structures and improved signage.

Budget Detail Expenses 2015 2016 2016 2017 % of Total % Inc/Dec 031-4**.**** Actual Budget Estimate Budget Budget

406.3100 Bank Service Charges $ - $ 100 $ - $ - - 0% 452.1100 Pool Management Fee 66,902 67,000 74,037 72,500 -2% 22% 452.2200 Operting Supplies 5,156 5,900 4,290 5,200 21% 2% 452.2220 Chemicals 13,020 9,000 10,391 10,000 -4% 3% 452.3130 Professional Services: Architecture & Design 17,447 40,000 40,000 14,200 -65% 4% 452.3210 Telephone 1,836 700 1,106 1,250 13% 0% 452.3610 Utilities- Electricity 10,199 9,400 7,405 9,000 22% 3% 452.3620 Utilities- Gas 791 750 1,204 1,250 4% 0% 452.3660 Utilities- Water 48,340 26,500 15,163 20,000 32% 6% 452.3700 Repairs & Maintenance Services 17,454 6,000 30,491 8,800 -71% 3% 452.4600 Misc - 50 - 50 - 0% 452.4601 Petty Cash 312 100 - - - 0% 452.4602 Refunds 265 250 - 100 - 0% 452.7400 Machinery & Equipment - 500 533 500 -6% 0% 461.6700 Security Equipment - 2,000 - 2,000 - 1% 461.7200 Roof Replacement 63,705 16,938 16,938 - - 0% 461.7201 Building Remodel - 436,000 394,688 178,000 -55% 55% Total Pool Fund Expenses $ 245,425 $ 621,188 $ 596,245 $ 322,850 -46% 100%

2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 245,123 $ 621,188 $ 592,654 $ 323,253 -45% TOTAL EXPENSES $ 245,425 $ 621,188 $ 596,245 $ 322,850 -46%

Highway Aid Fund Revenue

Summary 2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 454,030 $ 540,887 $ 529,089 $ 541,847 2%

Budget Detail Revenue 2015 2016 2016 2017 % of Total % Inc/Dec 035-3**.**** Actual Budget Estimate Budget Budget

341.0000 Earnings from Temp Deposits/Investments $ 31 $ 30 $ 57 $ 50 -12% 0% 354.0000 State Motor License Fund Grants 453,999 515,357 529,032 541,797 2% 100% 392.9900 Transfer from Fund Balance - 25,500 - - - 0% Total Highway Aid Fund Revenue $ 454,030 $ 540,887 $ 529,089 $ 541,847 2% 100%

Highway Aid Fund Expenses

Summary 2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL EXPENSES $ 449,989 $ 540,887 $ 487,123 $ 530,000 9%

Description Highway Aid expenses are restricted to purchases and projects that fall within the State’s list of appropriate uses for liquid fuels monies. In the past, the funding has been spent on purchasing rock salt and street light electricity. In 2016, the amount of state funding as increased, while the price of rock salt has slightly decreased, leaving about $100,000 to fund the repaving roads. Due to a light 2015-2016 winter season, the Borough’s salt storage facilities are mostly full. Therefore, even more of the state funds will be available to contribute towards the Borough’s 2017 road repaving program.

Budget Detail Expenses 2015 2016 2016 2017 % of Total % Inc/Dec 035-4**.**** Actual Budget Estimate Budget Budget

432.2450 Highway Supplies - Rock Salt $ 269,847 $ 275,000 $ 214,272 $ 200,000 -7% 38% 434.3610 Street Light Electricity 180,142 175,000 173,645 180,000 4% 34% 438.6100 Constr Contracts - Road Paving - - 99,205 150,000 51% 28% 492.0100 Transfer to General Fund - 90,887 - - - 0% Total Highway Aid Fund Expenses $ 449,989 $ 540,887 $ 487,123 $ 530,000 9% 100%

2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 454,030 $ 540,887 $ 529,089 $ 541,847 2% TOTAL EXPENSES $ 449,989 $ 540,887 $ 487,123 $ 530,000 9%

Asset Forfeiture Fund Revenue

Summary 2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 67,805 $ 106,625 $ 43,584 $ 80,960 86%

Budget Detail Revenue 2015 2016 2016 2017 % of Total % Inc/Dec 070-3**.**** Actual Budget Estimate Budget Budget

341.0000 Earnings from Temp Deposits/Investments $ 12 $ 10 $ 10 $ 10 5% 0% 351.1400 Federal Forfeiture Revenue 54,947 30,000 19,480 20,000 3% 25% 392.9900 Transfer from Fund Balance 12,846 76,615 24,094 60,950 153% 75% Total Asset Forfeiture Fund Revenue $ 67,805 $ 106,625 $ 43,584 $ 80,960 86% 100%

Asset Forfeiture Fund Expenses

Summary 2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL EXPENSES $ 67,805 $ 106,625 $ 43,584 $ 80,000 84%

One new Ford Interceptor vehicle will replace an older patrol vehicle.

To come into compliance with police operations standards, an interview area will be built and video cameras will be installed in that space.

Budget Detail Expenses 2015 2016 2016 2017 % of Total % Inc/Dec 070-410.**** Actual Budget Estimate Budget Budget

2102 Supplies $ 3,765 $ 6,625 $ 2,420 $ 5,000 107% 6% 2130 Computer & Copier Supplies 2,652 - - - - - 2600 Small Tools & Minor Equipment 7,980 - 5,350 5,000 -7% - 3270 Radio Maintenance 10,230 - - - - - 3800 Vehicle Lease & Purchase 29,183 40,000 19,765 40,000 102% 50% 4200 Meetings & Traings 4,370 - - - - - 4510 Vehicle Maintance & Repairs 5,022 - - - - - 6000 Capital Constr: Interview Room - - - 20,000 - - 7400 Machinery & Equipment 4,603 60,000 16,049 10,000 -38% 13% Total Asset Forfeiture Fund Expenses $ 67,805 $ 106,625 $ 43,584 $ 80,000 84% 100%

2015 2016 2016 2017 % Inc/Dec Actual Budget Estimate Budget TOTAL REVENUES $ 67,805 $ 106,625 $ 43,584 $ 80,960 86% TOTAL EXPENSES $ 67,805 $ 106,625 $ 43,584 $ 80,000 84%

APPENDIX D

2015 Municipal Annual Audit and Financial Report [ THIS PAGE INTENTIONALLY LEFT BLANK ] Borough of Baldwin

Primary Government Financial Statements and Required Supplementary Information

Year Ended December 31, 2015 with Independent Auditor’s Report [ THIS PAGE INTENTIONALLY LEFT BLANK ] BOROUGH OF BALDWIN

YEAR ENDED DECEMBER 31, 2015

TABLE OF CONTENTS

Independent Auditor's Report

Primary Government Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position 1

Statement of Activities 2

Fund Financial Statements:

Balance Sheet - Governmental Funds 3

Statement of Revenues, Expenditures, and Changes in Fund Balance - Governmental Funds 4

Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund 5

Statement of Net Position - Proprietary Funds 6

Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds 7

Statement of Cash Flows - Proprietary Funds 8

Statement of Net Position - Fiduciary Funds 9

Statement of Changes in Net Position - Fiduciary Funds 10

Notes to the Primary Government Financial Statements 11 BOROUGH OF BALDWIN

YEAR ENDED DECEMBER 31, 2015

TABLE OF CONTENTS (Continued)

Required Supplementary Information:

Pension Plans:

Schedule of Changes in the Borough’s Net Pension Liability and Related Ratios – Service Employees Plan 43

Schedule of Changes in the Borough’s Net Pension Liability and Related Ratios – Police Plan 44

Schedules of the Borough’s Contributions and Investment Returns 45

Schedule of Funding Progress – Post-Employment Benefits Other Than Pension Benefits (OPEBs) 46

Notes to Schedules of Required Supplementary Information 47 Pittsburgh Harrisburg Butler 503 Martindale Street 3003 North Front Street 112 Hollywood Drive Suite 600 Suite 101 Suite 204 Pittsburgh, PA 15212 Harrisburg, PA 17110 Butler, PA 16001 Main 412.471.5500 Main 717.232.1230 Main 724.285.6800 Fax 412.471.5508 Fax 717.232.8230 Fax 724.285.6875

Independent Auditor’s Report

Members of Council Borough of Baldwin

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Borough of Baldwin (Borough), as of and for the year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise the basic financial statements of the Borough’s primary government as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based our audit. We conducted our audit 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 from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Basis for Adverse Opinions on Governmental Activities and Discretely Presented Component Units

As described in Note 2, the Borough prepares its statement of net position and statement of activities for governmental activities using the modified accrual basis of accounting. Accounting principles generally accepted in the United States of America require the preparation of these government-wide financial statements using the full-accrual basis of accounting, including capitalizing and depreciating capital assets, recognizing long-term debt and post-employment benefit obligations, and allocating certain expenses by function. The amount by which this departure would affect the assets, deferred outflows,

Pursuing the profession while promoting the public good® www.md-cpas.com Members of Council Borough of Baldwin Independent Auditor’s Report Page 2 liabilities, deferred inflows, net position, revenues, and expenses of the governmental activities has not been determined.

The financial statements referred to above do not include financial data for the Borough’s legally separate component unit (Baldwin Public Library). Accounting principles generally accepted in the United States of America require financial data for that component unit to be reported with the financial data of the Borough’s primary government unless the Borough also issues financial statements for the financial reporting entity that include the financial data for its component unit. The Borough has not issued such reporting entity financial statements. The amount by which this departure would affect the assets, liabilities, net position, revenues, and expenses of the government-wide financial statements has not been determined.

Adverse Opinions on Governmental Activities and Discretely Presented Component Units

In our opinion, because of the significance of the matter discussed in the first paragraph of the “Basis for Adverse Opinions” section, the financial statements referred to above do not present fairly the financial position of the governmental activities of the Borough, as of December 31, 2015, or the changes in financial position thereof for the year then ended, in accordance with accounting principles generally accepted in the United States of America.

In addition, in our opinion, because of the significance of the matter discussed in the second paragraph of the “Basis for Adverse Opinions” section, the financial statements referred to above do not present fairly the financial position of the discretely presented component unit of the Borough as of December 31, 2015, or the changes in financial position thereof for the year then ended, in accordance with accounting principles generally accepted in the United States of America.

Unmodified Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities, each major fund, and the aggregate remaining fund information for the Borough as of December 31, 2015, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the General Fund for the year then ended, in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the pension and other post-employment benefit information as listed in the table of contents be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the Members of Council Borough of Baldwin Independent Auditor’s Report Page 3 information for consistency with management’s responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The Borough has not presented the Management’s Discussion and Analysis that accounting principles generally accepted in the United States of America have determined is necessary to supplement, although not required to be part of, the financial statements.

Pittsburgh, Pennsylvania April 22, 2016 BOROUGH OF BALDWIN STATEMENT OF NET POSITION

DECEMBER 31, 2015

Primary Government Governmental Business-Type Activities Activities Total Assets and Deferred Outflows of Resources

Assets: Current assets: Cash and cash equivalents$ 521,416 $ 2,248,757 $ 2,770,173 Cash and cash equivalents - restricted 3,467,498 9,663,864 13,131,362 Taxes receivable, net 1,115,918 - 1,115,918 Accounts receivable - sewage, net - 464,195 464,195 Other receivables 13,356 16,153 29,509 Prepaid expenses 189,553 39,384 228,937 Internal balances (436,630) 436,630 - Total current assets 4,871,111 12,868,983 17,740,094

Noncurrent assets: Infrastructure - 12,899,325 12,899,325 Swimming pool - 892,185 892,185 Machinery and equipment - 560,614 560,614 Construction in progress - 649,594 649,594 Accumulated depreciation - (4,638,070) (4,638,070)

Total noncurrent assets - 10,363,648 10,363,648

Total Assets 4,871,111 23,232,631 28,103,742

Deferred Outflows of Resources: Deferred charges on refunding - 248,919 248,919

Total Assets and Deferred Outflows of Resources $ 4,871,111 $ 23,481,550 $ 28,352,661

Liabilities, Deferred Inflows of Resources, and Net Position

Liabilities: Current liabilities: Accounts payable $ 248,814 $ 470,746 $ 719,560 Accrued payroll - 9,079 9,079 Long-term debt - current portion - 505,460 505,460 Other liabilities 186,544 - 186,544

Total current liabilities 435,358 985,285 1,420,643

Noncurrent liabilities: Long-term debt - long-term portion - 20,595,000 20,595,000 Less discount on bonds - (329,220) (329,220)

Total noncurrent liabilities - 20,265,780 20,265,780

Total Liabilities 435,358 21,251,065 21,686,423

Deferred Inflows of Resources: Unavailable revenue 474,200 - 474,200

Total Liabilities and Deferred Inflows of Resources 909,558 21,251,065 22,160,623

Net Position: Net investment in capital assets - (494,809) (494,809) Restricted: Supplies and street lighting 30,806 - 30,806 Capital improvements 3,458,888 - 3,458,888 Unrestricted 471,859 2,725,294 3,197,153 Total Net Position 3,961,553 2,230,485 6,192,038 Total Liabilities, Deferred Inflows of Resources, and Net Position $ 4,871,111 $ 23,481,550 $ 28,352,661 The notes to the primary government financial statements are an integral part of this statement.

1 BOROUGH OF BALDWIN

STATEMENT OF ACTIVITIES

YEAR ENDED DECEMBER 31, 2015

Program Revenues Net (Expense) Revenue and Change in Net Position Operating Charges for Grants and Governmental Business-Type Functions/Programs Expenses Services Contributions Activities Activities Total Governmental Activities: General government $ 817,439 $ 171,254 $ - $ (646,185) $ - $ (646,185) Public safety - police 3,625,837 170,478 17,374 (3,437,985) - (3,437,985) Public safety - fire 350,048 - 103,947 (246,101) - (246,101) Public safety - other 293,750 - - (293,750) - (293,750) Public works - sanitation 1,377,690 - 10,455 (1,367,235) - (1,367,235) Public works - highways 2,029,869 - 515,078 (1,514,791) - (1,514,791) Culture and recreation - library 180,000 - - (180,000) - (180,000) Culture and recreation - other 110,168 14,060 - (96,108) - (96,108) Capital outlay 235,453 - - (235,453) - (235,453) Debt service 250,704 - - (250,704) - (250,704) Insurance and employee benefits 1,293,483 - 266,617 (1,026,866) - (1,026,866) Total governmental activities 10,564,441 355,792 913,471 (9,295,178) - (9,295,178) Business-Type Activities: Swimming pool 182,075 46,556 - - (135,519) (135,519) Sewer system 4,744,068 4,995,492 - - 251,424 251,424 Total business-type activities 4,926,143 5,042,048 - - 115,905 115,905 Total Primary Government $ 15,490,584 $ 5,397,840 $ 913,471 (9,295,178) 115,905 (9,179,273)

General revenues: Taxes: Property taxes, levied for general purposes 5,411,385 - 5,411,385 Earned income taxes 2,388,100 3,110 2,391,210 Other taxes levied for general purposes 413,498 - 413,498 County sales tax (Act 77) 568,247 - 568,247 Cable franchise fees 418,680 - 418,680 PURTA and alcohol beverage tax 14,892 - 14,892 Investment earnings 27,859 - 27,859 Refund of prior year expenditures (revenues), net 9,043 - 9,043 Bond issue proceeds 3,670,000 - 3,670,000 Capital lease proceeds 235,453 - 235,453 Other 57,662 - 57,662 Transfers (182,749) 182,749 - Total general revenues 13,032,070 185,859 13,217,929 Change in Net Position 3,736,892 301,764 4,038,656 Net Position: Beginning of year 224,661 1,928,721 2,153,382 End of year $ 3,961,553 $ 2,230,485 $ 6,192,038

The notes to the primary government financial statements are an integral part of this statement.

2 BOROUGH OF BALDWIN BALANCE SHEET - GOVERNMENTAL FUNDS

DECEMBER 31, 2015

Other Capital Governmental Total General Improvements Highway Aid Governmental Fund Fund Fund Funds Assets Cash and cash equivalents $ 487,132 $ 6,050 $ 28,234 $ 521,416 Cash and cash equivalents - restricted - 3,467,498 - 3,467,498 Taxes receivable, net 1,115,918 - - 1,115,918 Other receivables 13,356 - - 13,356 Prepaid expenses 189,553 - - 189,553 Due from other funds - - 2,572 2,572 Total Assets $ 1,805,959 $ 3,473,548 $ 30,806 $ 5,310,313

Liabilities, Deferred Inflows of Resources, and Fund Balance Liabilities: Accounts payable $ 248,814 $ - $ - $ 248,814 Other liabilities 186,544 - - 186,544 Due to other funds 424,542 14,660 - 439,202 Total Liabilities 859,900 14,660 - 874,560

Deferred Inflows of Resources: Unavailable revenues 474,200 - - 474,200

Total Liabilities and Deferred Inflows of Resources 1,334,100 14,660 - 1,348,760 Fund Balance: Nonspendable - prepaids 189,553 - - 189,553 Restricted: Supplies and street lighting - - 30,806 30,806 Capital improvements - 3,458,888 - 3,458,888 Unassigned 282,306 - - 282,306 Total Fund Balance 471,859 3,458,888 30,806 3,961,553 Total Liabilities, Deferred Inflows of Resources, and Fund Balance $ 1,805,959 $ 3,473,548 $ 30,806 $ 5,310,313

The notes to the primary government financial statements are an integral part of this statement.

3 BOROUGH OF BALDWIN STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS

YEAR ENDED DECEMBER 31, 2015

Other Capital Governmental Total General Improvements Highway Aid Governmental Fund Fund Fund Funds Revenues: Taxes $ 8,781,230 $ - $ - $ 8,781,230 Licenses and permits 418,920 - - 418,920 Fines and forfeitures 85,163 - - 85,163 Interest and rents 19,591 16,687 31 36,309 Intergovernmental 482,969 - 453,999 936,968 Charges for services 260,924 - - 260,924 Other 46,546 2,326 - 48,872

Total revenues 10,095,343 19,013 454,030 10,568,386

Expenditures: Current: General government 817,439 - - 817,439 Public safety - police 3,625,837 - - 3,625,837 Public safety - fire 350,048 - - 350,048 Public safety - other 293,750 - - 293,750 Public works - sanitation 1,377,690 - - 1,377,690 Public works - highway 1,587,563 - 442,306 2,029,869 Culture and recreation - library 180,000 - - 180,000 Culture and recreation - other 110,168 - - 110,168 Capital outlay 235,453 - - 235,453 Debt service 143,377 77,283 - 220,660 Insurance and employee benefits 1,293,483 - - 1,293,483

Total expenditures 10,014,808 77,283 442,306 10,534,397

Excess (Deficiency) of Revenues Over Expenditures 80,535 (58,270) 11,724 33,989

Other Financing Sources (Uses): Refund of prior year expenditures 83,608 - - 83,608 Refunds of prior year revenues (74,565) - - (74,565) Bonds issued - 3,670,000 - 3,670,000 Discount on bonds - (30,044) - (30,044) Proceeds from fixed asset disposition 1,200 - - 1,200 Proceeds from capital lease obligation 235,453 - - 235,453 Operating transfers in 81,597 - - 81,597 Operating transfers out (135,500) (128,846) - (264,346)

Total other financing sources (uses) 191,793 3,511,110 - 3,702,903

Net Change in Fund Balance 272,328 3,452,840 11,724 3,736,892

Fund Balance: Beginning of year 199,531 6,048 19,082 224,661

End of year $ 471,859 $ 3,458,888 $ 30,806 $ 3,961,553

The notes to the primary government financial statements are an integral part of this statement.

4 BOROUGH OF BALDWIN

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND

YEAR ENDED DECEMBER 31, 2015

Budget Variance with Original Final Actual Final Budget Revenues: Taxes $ 8,598,945 $ 8,598,945 $ 8,781,230 $ 182,285 Licenses and permits 397,240 397,240 418,920 21,680 Fines and forfeitures 91,250 91,250 85,163 (6,087) Interest and rents 9,850 9,850 19,591 9,741 Intergovernmental 453,500 453,500 482,969 29,469 Charges for services 247,575 247,575 260,924 13,349 Other 16,500 16,500 46,546 30,046 Total revenues 9,814,860 9,814,860 10,095,343 280,483 Expenditures: General government 784,540 784,540 817,439 (32,899) Public safety - police 3,821,567 3,821,567 3,625,837 195,730 Public safety - fire 354,000 354,000 350,048 3,952 Public safety - other 272,463 272,463 293,750 (21,287) Public works - sanitation 1,082,000 1,082,000 1,377,690 (295,690) Public works - highway 1,626,856 1,626,856 1,587,563 39,293 Culture and recreation - library 180,000 180,000 180,000 - Culture and recreation - other 181,800 181,800 110,168 71,632 Capital outlay - - A 235,453 (235,453) Debt service 250,000 250,000 143,377 106,623 Insurance and employee benefits 1,229,634 1,229,634 1,293,483 (63,849) Total expenditures 9,782,860 9,782,860 10,014,808 (231,948) Excess (Deficiency) of Revenues Over Expenditures 32,000 32,000 80,535 48,535 Other Financing Sources (Uses): Refund of prior year expenditures 67,000 67,000 83,608 16,608 Refunds of prior year revenues (24,000) (24,000) (74,565) (50,565) Proceeds from fixed asset disposition - - 1,200 1,200 Proceeds from capital lease obligation - - A 235,453 235,453 Operating transfers in - - 81,597 81,597 Operating transfers out (75,000) (75,000) (135,500) (60,500) Total other financing sources (uses) (32,000) (32,000) 191,793 223,793 Net Change in Fund Balance $ - $ - 272,328 $ 272,328

Fund Balance: Beginning of year 199,531 End of year $ 471,859

A - Capital leases are accounted for as an other financing source and expenditures in the year the lease was entered into for the full value of the lease. The Borough does not budget for the full amount of the capital lease.

The notes to the primary government financial statements are an integral part of this statement.

5 BOROUGH OF BALDWIN STATEMENT OF NET POSITION PROPRIETARY FUNDS DECEMBER 31, 2015 Other Enterprise Sewer System Swimming Fund Pool Fund Total Assets and Deferred Outflows of Resources Assets: Current assets: Cash and cash equivalents $ 2,246,467 $ 2,290 $ 2,248,757 Cash and cash equivalents - restricted 9,663,864 - 9,663,864 Accounts receivable - sewage, net 464,195 - 464,195 Accounts receivable - other 16,153 - 16,153 Prepaids 39,384 - 39,384 Due from other funds 449,336 - 449,336 Total current assets 12,879,399 2,290 12,881,689

Noncurrent assets: Sewer infrastructure 12,899,325 - 12,899,325 Swimming pool - 892,185 892,185 Equipment 560,614 - 560,614 Construction in progress 649,594 - 649,594 Accumulated depreciation (3,809,236) (828,834) (4,638,070) Total noncurrent assets 10,300,297 63,351 10,363,648 Total Assets 23,179,696 65,641 23,245,337 Deferred Outflows of Resources: Deferred charges on refunding 248,919 - 248,919 Total Assets and Deferred Outflows of Resources $ 23,428,615 $ 65,641 $ 23,494,256

Liabilities and Net Position Liabilities: Current liabilities: Accounts payable $ 469,761 $ 985 $ 470,746 Accrued payroll 1,290 7,789 9,079 Long-term debt - current portion 505,460 - 505,460 Due to other funds - 12,706 12,706 Total current liabilities 976,511 21,480 997,991 Noncurrent liabilities: Long-term debt - long-term portion 20,595,000 - 20,595,000 Less discount on bonds (329,220) - (329,220) Total Noncurrent Liabilities 20,265,780 - 20,265,780 Total Liabilities 21,242,291 21,480 21,263,771 Net Position: Net investment in capital assets (558,160) 63,351 (494,809) Unrestricted 2,744,484 (19,190) 2,725,294 Total Net Position 2,186,324 44,161 2,230,485 Total Liabilities and Net Position $ 23,428,615 $ 65,641 $ 23,494,256 The notes to the primary government financial statements are an integral part of this statement.

6 BOROUGH OF BALDWIN STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION PROPRIETARY FUNDS

YEAR ENDED DECEMBER 31, 2015

Other Enterprise Sewer System Swimming Fund Pool Fund Total

Operating Revenues: User charges $ 4,660,671 $ 46,556 $ 4,707,227 Tap-in fees 6,010 - 6,010 Other 228,811 - 228,811

Total operating revenues 4,895,492 46,556 4,942,048

Operating Expenses: Administration 817,631 151,247 968,878 Engineering services 153,789 - 153,789 Maintenance 191,266 30,474 221,740 Depreciation 366,301 354 366,655 Insurance and employee benefits 135,209 - 135,209 Sanitation - ALCOSAN 1,674,921 - 1,674,921 Sanitation - Pleasant Hills 616,813 - 616,813

Total operating expenses 3,955,930 182,075 4,138,005

Net Operating Income (Loss) 939,562 (135,519) 804,043

Non-operating Revenues (Expenses): Bond issuance costs (99,474) - (99,474) Shared contracted intergovernmental services 100,000 - 100,000 Interest income 3,109 1 3,110 Interest expense (688,664) - (688,664)

Total non-operating revenues (expenses) (685,029) 1 (685,028)

Income (Loss) before Transfers 254,533 (135,518) 119,015

Other Financing Sources (Uses): Transfers in - 199,205 199,205 Transfers out (16,456) - (16,456)

Total other financing sources (uses) (16,456) 199,205 182,749

Change in Net Position 238,077 63,687 301,764

Net Position: Beginning of year 1,948,247 (19,526) 1,928,721

End of year $ 2,186,324 $ 44,161 $ 2,230,485

The notes to the primary government financial statements are an integral part of this statement.

7 BOROUGH OF BALDWIN STATEMENT OF CASH FLOWS PROPRIETARY FUNDS

YEAR ENDED DECEMBER 31, 2015

Other Enterprise Sewer System Swimming Fund Pool Fund Total Cash Flows From Operating Activities: Cash received from user charges $ 4,615,034 $ 46,556 $ 4,661,590 Cash received from other sources 228,811 - 228,811 Cash paid for operations and maintenance (3,802,097) (194,166) (3,996,263)

Net cash provided by (used in) operating activities 1,041,748 (147,610) 894,138

Cash Flows From Capital and Related Financing Activities: Purchase of capital assets (252,138) (63,705) (315,843) Cash received from shared contracted intergovernmental services 100,000 - 100,000 Proceeds from issuance of debt 5,893,853 - 5,893,853 Costs from issuance of debt (99,474) - (99,474) Payment to refunded bonds escrow (5,698,919) - (5,698,919) Principal debt service payments (293,124) - (293,124) Interest debt service payments (688,664) - (688,664)

Net cash provided by (used in) capital and related financing activities (1,038,466) (63,705) (1,102,171)

Cash Flows From Investing Activities: Interest and dividends 3,109 1 3,110

Cash Flows From Non-Capital Financing Activities: Transfers (to) from other funds 7,510 211,911 219,421

Net Increase (Decrease) in Cash and Cash Equivalents 13,901 597 (1,870,891)

Cash and Cash Equivalents: Beginning of year 11,896,430 1,693 11,898,123

End of year $ 11,910,331 $ 2,290 $ 10,027,232

Reconciliation of Net Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities: Net operating income (loss) $ 939,562 $ (135,519) $ 804,043 Adjustments to reconcile net operating income (loss) to net cash provided by (used in) operating activities: Depreciation expense 366,301 354 366,655 Amortization expense 8,665 - 8,665 Change in assets and liabilities: Accounts receivable - sewage (35,494) - (35,494) DueAccounts to other receivable funds - other (16,153) - (16,153) Prepaid expenses (39,384) - (39,384) Accrued payroll (14,179) 360 (13,819) Accounts payable (167,570) (12,805) (180,375)

Net cash provided by (used in) operating activities $ 1,041,748 $ (147,610) $ 894,138

The notes to the primary government financial statements are an integral part of this statement.

8 BOROUGH OF BALDWIN

STATEMENT OF NET POSITION FIDUCIARY FUNDS

DECEMBER 31, 2015

Service Police Employees Pension Fund Pension Fund Total Assets

Cash and cash equivalents $ 1,510 $ 1,499 $ 3,009 Investments: Equity mutual funds 7,211,482 1,552,714 8,764,196 Alternative funds 1,792,730 390,620 2,183,350 Bond funds 3,961,944 844,731 4,806,675

Total Assets $ 12,967,666 $ 2,789,564 $ 15,757,230

Net Position

Restricted for pension benefits $ 12,967,666 $ 2,789,564 $ 15,757,230

Net Position $ 12,967,666 $ 2,789,564 $ 15,757,230

The notes to the primary government financial statements are an integral part of this statement.

9 BOROUGH OF BALDWIN

STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS

YEAR ENDED DECEMBER 31, 2015

Police Service Pension Employees Fund Pension Fund Total Additions: Contributions: Employer, including state aid $ 863,379 $ 104,941 $ 968,320 Plan members 202,289 31,075 233,364 Other income - 462 462

Total contributions 1,065,668 136,478 1,202,146

Investment earnings: Net appreciation (depreciation) in fair value of investments (1,512,924) (266,700) (1,779,624) Interest and dividends 748,737 187,060 935,797

Total investment earnings (764,187) (79,640) (843,827)

Total additions 301,481 56,838 358,319

Deductions: Benefits 855,971 124,519 980,490 Administrative expenses 54,717 22,753 77,470

Total deductions 910,688 147,272 1,057,960

Change in Net Position (609,207) (90,434) (699,641)

Net Position: Beginning of year 13,576,873 2,879,998 16,456,871

End of year $ 12,967,666 $ 2,789,564 $ 15,757,230

The notes to the primary government financial statements are an integral part of this statement.

10 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

1. THE REPORTING ENTITY

The Borough of Baldwin (Borough) was incorporated under the laws of the Commonwealth of Pennsylvania in 1952 and operates under an elected Mayor-Council form of government. Members of Council (Council) appoint a Borough Secretary to administer the day-to-day operations of the Borough. The major functions of the Borough include public safety, maintenance of the Borough infrastructure, sanitation and sewage control, maintenance of parks and other recreational facilities for use by Borough residents, and general administrative functions necessary to facilitate Borough resident needs and responsibilities.

Consistent with applicable guidance, the criteria used by the Borough to evaluate the possible inclusion of related entities within its reporting entity are financial accountability and the nature and significance of the relationship. In determining financial accountability in a given situation, the Borough reviews the applicability of the following criteria:

The Borough is financially accountable for:

1. Organizations that make up the legal municipal entity.

2. Legally separate organizations if the Council appoints a voting majority of the organizations' governing body and the Borough is able to impose its will on the organization or if there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the Borough.

a. Impose its Will - If the Borough can significantly influence the programs, projects, or activities of, or the level of services performed or provided by, the organization.

b. Financial Benefit or Burden - Exists if the Borough (1) is entitled to the organization's resources, (2) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide support to, the organization, or (3) is obligated in some manner for the debt of the organization.

3. Organizations that are fiscally dependent on the Borough. Fiscal dependency is established if the organization is unable to adopt its budget, levy taxes or set rates or charges, or issue bonded debt without approval by the Borough.

Component Unit

The following separately administered organization meets the criteria for inclusion in the Borough's reporting entity.

11 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Baldwin Public Library

The Baldwin Public Library (Library) is a non-profit educational institution. The Library is primarily funded through public donations and an annual subsidy from the Borough. The Borough contributed $180,000 to the Library during 2015. All members of the Library Board must be approved and appointed by the Council. Although the Library qualifies for inclusion in the Borough's financial reporting entity, Borough management has opted to exclude the Library from these primary government financial statements. Separate financial statements for the Library are available at the Library.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Government-Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the non-fiduciary activities of the Borough. For the most part, the effect of inter-fund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

Separate fund financial statements are provided for governmental, proprietary, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The business-type information on the government-wide financial statements is reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements and the governmental-type activities on the government-wide statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Governmental-type activities reported under this focus and basis of accounting is not in accordance with generally accepted accounting principles (GAAP). Revenues are recognized as soon as they are both

12 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015 measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Borough considers revenues to be available if they are collected within sixty days from the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under the accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, earned income taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent they have been collected within sixty days of year end.

The Borough reports the following major governmental funds:

The General Fund is the Borough’s primary operating fund. It accounts for all financial resources except those required to be accounted for in another fund.

The Capital Improvements Fund is used to account for disbursements related to capital projects within the Borough.

Additionally, the Borough reports on the following governmental fund:

The Highway Aid Fund is established and restricted under Act 655 of the Commonwealth of Pennsylvania. Funding is received from the Commonwealth of Pennsylvania and is restricted in use for the maintenance, repair, and construction of roads, streets, and bridges for which the Borough is responsible.

The Borough reports the following major proprietary fund:

The Sewer System Fund is used to account for resources derived from sewer billings to Borough residents and related disbursements.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the Borough’s proprietary funds are charges to customers for sales and services.

Additionally, the Borough reports on the following proprietary fund:

13 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

The Swimming Pool Fund is used to account for resources derived from the swimming pool user fees and related disbursements.

Additionally, the Borough reports the following fiduciary funds:

The Pension Trust Funds are used to account for assets held by the Borough in a trustee capacity for employee retirement. These funds were established to provide pension benefits for the Borough’s eligible policemen and service employees.

Revenue Classification on the Government-Wide Statement of Activities

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Amounts reported as program revenues include 1) charges to customers for services provided and rents, 2) operating grants, and 3) capital grants. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Use of Restricted and Unrestricted Resources

When both restricted and unrestricted resources are available for use, it is the Borough’s policy to use restricted resources first, then unrestricted resources as they are needed.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Borough considers all investments with maturities of three months or less when purchased as cash.

Investments

Investments are reported at fair value. Funds are invested in accordance with the Borough’s investment policy guidelines as described in Note 3.

Allowance for Doubtful Accounts

Receivables are reported at their net value. Where appropriate, receivables are reduced by the estimated portion that is expected to be uncollectible. At December 31, 2015, the Borough reported an allowance for doubtful accounts in the General Fund of $371,998 related to real estate taxes and in the Sewer Fund of $99,096 related to sewer charges. Sewer receivables also include sewer charges based on billings made during the following month and unbilled charges

14 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Prepaid Items

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

Capital Assets

Capital assets, which include property, plant, equipment, and sewer infrastructure assets, are reported in the applicable proprietary fund and business-type activities columns in the government-wide financial statements. Capital assets are defined by the Borough as land, buildings, equipment, and infrastructure valued at more than $15,000 and an estimated useful life of more than one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

Capital assets of the Borough are depreciated using the straight-line method over the following estimated useful lives:

Sewer infrastructure 40 years Swimming pool 30 years Parks and playgrounds 20 years Equipment 5-10 years

Compensated Absences

In accordance with the terms of its various collective bargaining unit agreements, the Borough is responsible to pay eligible employees up to 100 days (police) and 75 days (service employees) of accumulated unused sick days at their daily rate of pay upon separation of service from the Borough. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee retirements. As of December 31, 2015, the value of accumulated sick days to be paid in future years is $785,032.

Long-term Obligations

In the business-type activities on the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations

15 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015 are reported as liabilities in the applicable business-type activities or proprietary fund type statements of net position. Bond premiums and discounts are amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements and governmental-type activities on the government-wide statements, bond premiums and discounts, as well as bond issuance costs, are recognized during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. The amount of long-term obligations related to governmental activities, while not reported on the government-wide statements, are included in Note 6.

Fund Balance

In the fund financial statements, governmental funds report fund balance in categories based on the level of restriction placed upon the funds. These levels are as follows:

 Nonspendable - This category represents funds that are not in spendable form and includes prepaid expenses.

 Restricted - This category represents funds that are limited in use due to constraints on purpose and circumstances of spending that are legally enforceable by outside parties.

 Committed - This category represents funds that are limited in use due to constraints on purpose and circumstances of spending imposed by the Council. Such commitment is made via a Council resolution and must be made prior to the end of the fiscal year. Removal of this commitment requires a Council resolution. The Borough currently does not have any committed funds.

 Assigned - This category represents intentions of the Council to use the funds for specific purposes.

 Unassigned - This category represents all other funds not otherwise defined.

The Borough's policy is to use funds in the order of the most restrictive to the least restrictive.

16 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ than those estimates.

Budgets and Budgetary Accounting

Formal budgetary accounting is employed as a management control for all funds. Annual operating budgets are adopted each fiscal year through the passage of an annual budget ordinance. The same basis of accounting is used to reflect actual revenues and expenditures/expenses recognized on a GAAP basis, with exception of capital leases. Capital leases are accounted for as an other financing source and expenditure in the year the lease is entered into for the full value of the lease. The difference between the basis used and that which is consistent with GAAP is not material.

The Borough may, in its reasonable discretion, modify the budget after its final adoption provided such modifications are within the current year's revenues or such additional monies as required therefore are promptly made available through borrowing as allowed by law.

All annual appropriations lapse at year-end. The level of control (level at which expenditures cannot legally exceed appropriations) over expenditures in budgeted funds is by department.

Interfund Receivables, Payables, and Transfers

Activities between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due to/from other funds.”

Individual fund receivable and payable balances at December 31, 2015, as well as interfund transfers for the year ended December 31, 2015, were as follows:

17 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Fund Transfer In Transfer Out Due To Due From Governmental activities: General Fund $ 81,597 $ 135,500 $ 424,542 $ - Capital Improvements Fund - 128,846 14,660 - Highway Aid Fund - - - 2,572 Business-type activities: Swimming Pool Fund 199,205 - 12,706 - Sewer System Fund - 16,456 - 449,336 Total $ 280,802 $ 280,802 $ 451,908 $ 451,908

Transactions between funds that are not expected to be repaid are accounted for as transfers. In those cases when repayment is expected within the next fiscal year, the transactions are accounted for through the various due from and due to accounts.

The due from the General Fund to the Sewer System Fund relates to temporary cash flow loans. Transfers primarily related to funds provided by the General Fund to the Swimming Pool Fund to support operations and transfers from the Capital Improvements Fund to other funds as reimbursement for capital expenditures incurred.

Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. The Borough only has one item that qualifies for reporting in this category, the deferred charge on refunding. The deferred charge on refunding resulted from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government has only one type of item, which arises under a modified accrual basis of accounting, that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from taxes. This amount is deferred and recognized as an inflow of resources in the period that the amounts become available.

18 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Net Position

The Borough classifies net position into three components – net investment in capital assets, restricted, and unrestricted. These classifications are defined as follows:

 Net investment in capital assets - This component of net position consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt are also included in this component of net position. If there are significant unspent related debt proceeds or deferred inflows of resources at the end of the reporting period, the portion of the debt or deferred inflows of resources attributable to the unspent amount is not included in the calculation of net investment in capital assets. Instead, that portion of the debt or deferred inflow of resources is included in the same net position component (restricted or unrestricted) as the unspent amount.

 Restricted - This component of net position consists of constraints placed on net position use through external restrictions.

 Unrestricted - This component of net position consists of net position that does not meet the definition of “restricted” or “net investment in capital assets.”

Adopted Pronouncements

The requirements of the following Governmental Accounting Standards Board (GASB) Statements were adopted for the Borough’s financial statements:

GASB Statement No. 68, “Accounting and Financial Reporting for Pensions,” and Statement No. 71, “Pension Transition for Contributions Made Subsequent to the Measurement Date.” These statements establish new financial reporting requirements for most governments that provide their employees with pension benefits.

Pending Pronouncements

GASB has issued the following statements that will become effective in future years as shown below. Management has not yet determined the impact of these statements on the Borough’s financial statements:

19 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

GASB Statement No. 72, “Fair Value Measurement and Application,” effective for fiscal years beginning after June 15, 2015 (the Borough’s financial statements for the year ending December 31, 2016). This statement addresses accounting and financial reporting issues related to fair value measurements.

GASB Statement No. 73, “Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB 68, and Amendments to Certain Provisions of GASB Statements 67 and 68,” effective for fiscal years beginning after June 15, 2015 (the Borough’s financial statements for the year ending December 31, 2016) – except those provisions that address employers and governmental nonemployer contributing entities for pensions that are not within the scope of Statement No. 68, which are effective for financial statements for fiscal years beginning after June 15, 2016 (the Borough’s financial statements for the year ending December 31, 2017). This statement establishes requirements for those pensions and pension plans that are not administered through a trust meeting specified criteria (those not covered by Statements No. 67 and 68).

GASB Statement No. 74, “Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans,” effective for fiscal years beginning after June 15, 2016. This statement addresses reporting by OPEB plans that administer benefits on behalf of governments. This statement replaces Statement No. 43.

GASB Statement No. 75, “Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions,” effective for fiscal years beginning after June 15, 2017 (the Borough’s financial statements for the year ending December 31, 2018). This statement addresses reporting by governments that provide OPEB to their employees and for governments that finance OPEB for employees of other governments. This statement replaces the requirements of Statement No. 45.

GASB Statement No. 76, “Hierarchy of Generally Accepted Accounting Principles for State and Local Governments,” effective for fiscal years beginning after June 15, 2015 (the Borough’s financial statements for the year ending December 31, 2016). This statement identifies the hierarchy of generally accepted accounting principles (GAAP), reduces this hierarchy to two categories of authoritative GAAP, and addresses the use of authoritative and nonauthoritative literature in the event that the accounting treatment for a transaction or other event is not specified within a source of authoritative GAAP. This statement supersedes Statement No. 55.

GASB Statement No. 79, “Certain External Investment Pools and Pool Participants,” effective for fiscal years beginning after June 15, 2015 (the Borough’s financial statements

20 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

for the year ending December 31, 2016). This statement addresses accounting and financial reporting for certain external investment pools and pool participants.

GASB Statement No. 80, “Blending Requirements for Certain Component Units,” effective for fiscal years beginning after June 15, 2016. This statement clarifies the financial statement presentation requirements for certain component units, amending Statement No. 14.

GASB Statement No. 81, “Irrevocable Split-Interest Agreements,” effective for fiscal years beginning after December 15, 2016. This statement improves accounting and financial reporting for irrevocable split-interest agreements by providing recognition and measurement guidance for situations in which a government is a beneficiary of the agreement.

3. DEPOSITS AND INVESTMENTS

Pennsylvania statutes provide for investment of governmental funds into certain authorized investment types including U.S. Treasury bills, other short-term U.S. and Pennsylvania government obligations, equities, insured or collateralized time deposits, and certificates of deposit. The statutes do not prescribe regulations related to demand deposits; however, they do allow the pooling of funds for investment purposes. Fiduciary fund investments may also be made in corporate stocks and bonds, real estate, and other investments consistent with sound business practice.

The Borough does not have a formal deposit and investment policy; as such, the Borough has no policy on custodial credit risk, credit risk, interest rate risk, or concentration of credit risk. The Borough adheres to state statutes and prudent business practice. Deposits of the governmental funds are either maintained in demand deposits or savings accounts. There were no deposit or investment transactions during the year that were in violation of state statutes.

The following is a description of the Borough’s deposit and investment risks:

Deposits

Custodial Credit Risk – Custodial credit risk is the risk that in the event of a bank failure, the Borough’s deposits may not be returned to it. As of December 31, 2015, $2,760,463 of the Borough’s bank balance of $3,010,463 was exposed to custodial credit risk, which is collateralized in accordance with Act 72 of the Pennsylvania state legislature, which requires the institution to pool collateral for all governmental deposits and have the collateral held by an approved custodian in the institution’s name. As of December 31, 2015, the carrying amounts of the Borough’s deposits were $2,773,182.

21 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

In addition to the deposits noted above, included in cash and cash equivalents is the following short-term investment:

Pennsylvania Local Government Investment Trust (PLGIT) of $13,131,362. PLGIT has received an AAA rating from Standard & Poor’s. The investments in PLGIT are “pooled” with other local governments and school districts in an effort to maximize return and minimize costs associated with investing. PLGIT invests in two basic types of federal securities: obligations backed by the full faith and credit of the United States Government and short-term obligations of the United States Government or its agencies or instrumentalities (which may or may not be backed by the full faith and credit of the United States Government). The PLGIT Trust may also invest in full faith and credit obligations of the Commonwealth of Pennsylvania and its agencies and may also have repurchase agreements. Finally, the trust is also authorized to invest in certificates of deposit which are insured by the FDIC or which are collateralized as provided by law. The fair value of the Borough’s investments in PLGIT is the same as the value of the pool shares. All investments in an external investment pool that is not SEC registered are subject to oversight by the Commonwealth of Pennsylvania.

Pension

The Pension Trust Funds' investments are held separately from those of other Borough funds. Assets in the Pension Trust Funds are stated at fair value and are comprised of various mutual funds and common/collective funds.

The Pension Trust Fund investments are not exposed to custodial credit risk because they are not evidenced by securities that exist in physical or book entry form. The following table summarizes the Borough’s investments related to its Pension Trust Funds at December 31, 2015:

22 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Investment Police Service Total Equity Funds: Domestic $ 5,313,878 $ 1,141,595 $ 6,455,473 International 1,897,604 411,119 2,308,723 Alternative Funds: Real Estate 1,045,014 232,527 1,277,541 Commodity 747,716 158,093 905,809 Fixed Income Funds: Domestic 2,641,166 563,127 3,204,293 Government 1,320,778 281,604 1,602,382 Total $ 12,966,156 $ 2,788,065 $ 15,754,221

The following is a description of the Pension Trust Funds’ deposit and investment risks:

Credit Risk - For investments, the risk that an issuer or other counterparty to an investment will not fulfill its obligations is called credit risk. The Pension Trust Funds have an investment policy that limits its investment choices based on credit ratings by nationally recognized statistical rating organizations. As of December 31, 2015, the Borough’s investments were comprised entirely of mutual funds and common/collective funds and were not rated.

Interest Rate Risk – The Pension Trust Funds investment policy limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates.

Concentration of Credit Risk – The Pension Trust Funds place no limit on the amount invested in any one issuer.

Concentration of credit risk for investments in marketable securities is mitigated by the overall diversification of managed investment portfolios. Due to the level of risk associated with certain investments, it is at least reasonably possible that changes in values of investments will occur in the near-term and that such changes could materially affect the amount reported on the combining statement of fiduciary net position.

4. CAPITAL ASSETS

The following is a summary of changes in business-type capital assets for the year ended December 31, 2015:

23 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Balance at Balance at January 1, 2015 Additions Deletions December 31, 2015

Business-Type Activities: Capital assets, not being depreciated: Construction in progress $ 545,835 $ 103,759 $ - $ 649,594

Capital assets, being depreciated: Sewer infrastructure 12,813,282 86,043 - 12,899,325 Swimming pool 828,480 63,705 - 892,185 Equipment 498,278 62,336 - 560,614

Total capital assets, being depreciated 14,140,040 212,084 - 14,352,124

Less: accumulated depreciation for: Sewer infrastructure (3,044,749) (322,488) - (3,367,237) Swimming pool (828,480) (354) - (828,834) Equipment (398,186) (43,813) - (441,999)

Total accumulated depreciation (4,271,415) (366,655) - (4,638,070)

Total capital assets being depreciated net 9,868,625 (154,571) - 9,714,054

Business activities capital assets, net $ 10,414,460 $ (50,812) $ - $ 10,363,648

5. REAL ESTATE TAXES

Real estate taxes based on assessed valuations provided by Allegheny County (County) are levied on February 1 of the taxable year. The 2015 assessed value of real estate property totaled approximately $916 million. Real estate taxes are billed and collected by an elected tax collector. Taxes paid by April 15 are given a 2% discount. Amounts paid after June 1 are assessed a 10% penalty. Any uncollected balances at the end of the year following the taxable year are collected by an outside service.

Under the Borough Code, the Borough is permitted to levy real estate taxes up to 30 mills for general purposes. Additional taxes may be levied for certain specified purposes. Borough real estate taxes were levied at the rate of 5.950 mills.

24 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

6. LONG-TERM DEBT

Capital Leases

The Borough has entered into various capital leases for vehicles and a sewer camera with maturity dates ranging from 2015 to 2020. Interest rates for these leases range from 3.09% to 6.50%. These leases require either quarterly or annual payments of principal and interest and contain a bargain purchase option at the end of the lease term. During the year ended December 31, 2015, the Borough made lease payments of $225,503.

The future minimum lease obligations and the net present value of the minimum lease payments related to these capital leases as of December 31, 2015 were as follows:

2016 $ 196,344 2017 96,310 2018 82,074 2019 65,086 2020 34,115 Less: amounts representing interest (31,124)

Present value of minimum lease payments $ 442,805

Long-term debt activity for the year ended December 31, 2015 was as follows:

25 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

January 1, December 31, Due Within 2015 Additions Repayments Refunding 2015 One Year

Governmental activities: G.O. Bonds - 2015 $ - $ 3,670,000 $ - $ - $ 3,670,000 $ 145,000 Capital leases 349,707 235,453 (237,815) - 347,345 88,937

Governmental activities long-term liabilities $ 349,707 $ 3,905,453 $ (237,815) $ - $ 4,017,345 $ 233,937

Business-type activities: G.O. Bonds - 2011 $ 6,805,000 $ - $ (10,000) $ (5,450,000) $ 1,345,000 $ 160,000 G.O. Bonds - 2012 A 3,015,000 - (240,000) - 2,775,000 245,000 G.O. Bonds - 2012 B 11,010,000 - (10,000) - 11,000,000 5,000 G.O. Bonds - 2015 - 5,885,000 - - 5,885,000 - Capital leases 33,124 95,460 (33,124) - 95,460 95,460

Business-type activities long-term liabilities $ 20,863,124 $ 5,980,460 $ (293,124) $ (5,450,000) $ 21,100,460 $ 505,460

General Obligation Bonds - 2011

• In 2011, the Borough issued $7,425,000 in General Obligation Bonds Series of 2011 (2011 bonds) with interest rates from 1.0% to 4.0%. The 2011 bonds are due serially through November 2032. Payments made semi-annually on May 1 and November 1. Proceeds were used to currently refund the Borough’s two Pennvest 2002 notes and the Pennvest 2003 note and pay for sewer repairs. As of December 31, 2015, $0 of the defeased $620,000 remained outstanding. During 2015, the Borough partially refunded $5,450,000 of the outstanding 2011 bonds, leaving the total amount outstanding on the 2011 bonds at $1,345,000. These bonds are expected to be repaid from future sewer system revenues.

General Obligation Bonds – 2012

• In 2012, the Borough issued $3,360,000 in General Obligation Bonds Series 2012 A (2012A bonds) and $11,010,000 in General Obligation Bonds Series of 2012 B (2012B bonds) with interest rates from 1.0% to 3.65%. The 2012A and 2012B Bonds are due serially through November 2043. Payments made semi-annually on May 1 and November 1. Proceeds were used to currently refund $3,315,179 of the Borough’s Pennvest 2004 note and $620,000 of the 2011 bonds and pay for sewer repairs. These bonds are expected to be repaid from future sewer system revenues.

26 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

General Obligation Bonds – 2015

• In 2015, the Borough issued $3,670,000 in General Obligation Bonds Series 2015 (2015 bonds) with interest rates from 0.8% to 3.5%. The 2015 Bonds are due serially through December 2035. Payments made semi-annually on June 1 and December 1. Proceeds are to fund a variety of capital projects including improvements to the Borough’s building, municipal pool, parks and playgrounds and pay the costs of issuing the bonds. These bonds are expected to be repaid from future tax revenues.

General Obligation Bonds – Refunding 2015

• In 2015, the Borough issued $5,885,000 in General Obligation Bonds Refunding Series 2015 (2015 refunding bonds) with interest rates from 2.0% to 3.1%. The 2015 refunding bonds are due serially through November 2032. Payments made semi-annually on May 1 and November 1. Proceeds were used to advance refund a portion of the Borough’s 2011 bonds and pay the costs of issuance. As a result, that portion of the 2011 bonds is defeased, and the Borough has removed that portion of the liability from its accounts. The outstanding principal of the defeased bonds is $5,450,000 at December 31, 2015. This transaction resulted in an economic gain of $117,598 and a decrease in cash flows of $112,622. These bonds are expected to be repaid from future sewer system revenues.

Annual debt service requirements of the Borough are as follows:

Governmental Activities Business-type Activites Principal Interest Principal Interest 2016 $ 145,000 $ 104,754 $ 410,000 $ 608,855 2017 145,000 103,594 520,000 626,696 2018 150,000 99,244 545,000 497,038 2019 155,000 96,244 555,000 486,739 2020 155,000 93,144 565,000 475,607 2021-2025 835,000 413,781 3,035,000 2,765,906 2026-2030 955,000 293,000 3,450,000 2,347,022 2031-2035 1,130,000 121,275 3,990,000 1,808,650 2036-2040 - - 4,695,000 1,096,288 2041-2043 - - 3,240,000 238,380 Total $ 3,670,000 $ 1,325,036 $ 21,005,000 $ 10,951,181

27 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

7. PENSION PLANS

Summary of Significant Accounting Policies

Financial information of the Borough’s pensions plans (Plans) is presented on the accrual basis of accounting. Employer contributions to each plan are recognized when due as required by applicable law.

Benefits and refunds are recognized when due and payable in accordance with the terms of the Plans.

Investments of the plans are reported at fair value. Short-term investments are reported at cost, which approximates fair value. Assets of the plans are invested primarily in mutual funds and common/collective funds. There were no investment transactions with related parties during the year.

Plan Descriptions

The Borough administers two single-employer defined benefit pension plans that cover substantially all full-time employees: Police Pension Plan (Police Plan) and Service Employees Pension Plan (Service Employees’ Plan). Both plans provide retirement benefits and special provisions for death benefits to plan members.

Plan provisions are established by municipal ordinance with the authority for municipal contributions required by Act 205 of the Commonwealth of Pennsylvania (Act). The plans do not issue separate reports.

The plans are governed by the Council, which is responsible for the management of Plan assets. Signature Financial Planning and the Hartford Life Insurance Company have been designated by the Borough to handle investment management in both plans. Resources accumulated to provide pension benefits are presented in the Borough’s financial statements as the Pension Trust Funds.

At December 31, 2015, Plan membership consisted of the following:

28 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Service Police Employees Inactive plan members or beneficiaries currently receiving benefits 25 13 Inactive plan members entitled to but not yet receiving benefits 0 9 Active plan members 24 14 Total plan members 49 36

The pension plans provide pension benefits, deferred allowances, and death and disability benefits. The Borough makes annual contributions to the pension plans equal to the amount required to adequately fund the benefits provided under the plans.

Specific provisions of each plan are presented below:

Police:

A policeman hired prior to January 1, 2010, may retire after reaching the age of 50 with 25 years of service with the Borough. Those hired on or after January 1, 2010, may retire after reaching the age of 55 with 25 years of service. Benefits vest after 12 years of service. Policemen who retire at or after age 50 with 25 or more years of service are entitled to pension payments for the remainder of their lives equal to 50% of their final monthly average salary plus a service increment, if any. The final monthly average salary is the average monthly compensation earned during the last 36 months of active service. The service increment is $20 per month for each year service exceeds 25 years, up to a maximum of $100 per month. The plan also contains a cost-of-living adjustment for policemen.

Pension provisions include death and disability benefits whereby the disabled policeman or surviving spouse is entitled to receive payments. A surviving spouse, until death, will continue to receive a survivor benefit in the amount of 50% of the monthly retirement benefit. In the event of death, each of the participant’s dependent children will receive an equal share of the benefit until their 18th birthday. The disabled policeman is entitled to receive disability payments for life equal to 50% of final 36 months’ average salary offset by Social Security disability benefits.

Service Employees:

A member may retire after reaching the age of 62 and accumulating 12 years of aggregate service with the Borough. Participants are fully vested after completion of seven years of service. Employees who retire are entitled to pension payments for the remainder of their lives equal to 1.5% of their final 60 months’ average compensation times the number of full

29 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015 years for which they were employed by the Borough. The maximum benefit is 40% of average earnings.

Pension provisions include death and disability benefits whereby the disabled employee or surviving spouse is entitled to receive payments. A surviving spouse will receive a refund of contributions with interest and a lump sum of vested accrued benefit if death occurs before retirement; after retirement the surviving spouse receives the benefit payment in force at the time death occurs. The disabled employee is entitled to receive a refund of contribution with interest and a monthly benefit equal to the vested accrued benefit a date of disablement.

Both plans provide terminated employees with a return of their contributions, plus interest.

Contributions and Funding Policy

The Plans are funded by the Borough on an annual basis pursuant to the provisions of the Act. The Act requires that annual contributions be based upon the calculation of the Minimum Municipal Obligation (MMO). The MMO calculation is based upon the biennial actuarial valuation. Employees are not required to contribute under the Act; such contributions are subject to collective bargaining. The Commonwealth of Pennsylvania allocates certain funds to assist in pension funding. Any financial requirement established by the MMO, which exceeds the Commonwealth of Pennsylvania allocation must be funded by the Borough.

For the year ended December 31, 2015, employee contributions were required as follows: Police contributed 8.0% and Service Employees contributed 3.0%. During the year, the Borough made their required contributions of $104,941 and $863,379 to the Non-uniform and Police Plans, respectively, based upon the MMO.

Administrative costs, including investment, custodial trustee, and actuarial services are charged to the appropriate plan and funded from investment earnings.

Net Pension Liability

The components of the net pension liability of the Plans at December 31, 2015 were as follows:

30 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Police Service Employees

Total pension liability $ 19,503,454 $ 3,299,381 Plan fiduciary net position (12,967,666) (2,789,564) Net pension liability $ 6,535,788 $ 509,817

Plan fiduciary net position as a percentage of the total pension liability 66.49% 84.55%

Actuarial Assumptions – The total pension liability was determined by an actuarial valuation using the following actuarial assumptions, applied to all periods in the measurement:

Service Police Employees Actuarial valuation date 1/1/2015 1/1/2015

Actuarial cost method Entry Age Entry Age Normal Normal

Actuarial assumptions: Investment rate of return 7.5% 7.5% Projected salary increases 5.0% 4.5% Underlying inflation rate 3.0% 3.0%

Cost-of-living adjustments increase A n/a

n/a = not applicable A = Cost-of-living adjustment is determined by Council and is not to exceed 30% of original benefit.

RP-2000 Combined Healthy Mortality Table with Blue Collar Adjustment, with rates set forward 5 years for disabled lives. Rates are projected to improve with 75% of scale AA.

Changes in Actuarial Assumptions – Based upon an actuarial valuation performed as of January 1, 2015, there were no changes in actuarial assumptions.

Investment Policy – The Plans’ policies in regard to the allocation of invested assets is established and may be amended by the Board by a majority vote of its members. It is the policy of the Board to pursue an investment strategy that reduces risk through the prudent diversification of the portfolio across a broad selection of distinct asset classes. The pension plans’ investment policy discourages the use of cash equivalents, except for liquidity

31 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015 purposes, and aims to refrain from dramatically shifting asset class allocations over short time spans.

Long-Term Expected Rate of Return – The long-term expected rate of return on Plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

The following was the asset allocation policy and best estimates of arithmetic real rates of return for each major asset class included in the Plans’ target asset allocation as of December 31, 2015:

Long-Term Expected Target Allocation Real Rate of Return Service Service Asset Class Police Employees Police Employees

Equities 60.0% 60.0% 6.3% 6.3% Fixed income 40.0% 40.0% 2.0% 2.0% 100.0% 100.0%

Rate of Return – The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. For the year ended December 31, 2015, the annual money-weighted rate of return on the Police and Service Employees Plan investments, net of investment expense, was -5.70%) and (2.77%), respectively.

Concentrations – At December 31, 2015, the Plan had no investments in any one issuer that represented 5% or more of either Plan’s fiduciary net position.

Discount Rate – The discount rate used to measure the total pension liability for the Police Plan and Service Employees Plan was 7.5%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that the Borough’s contributions will be made based on the yearly MMO calculation. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan

32 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015 members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the Plans calculated using the discount rates described above, as well as what the Plans’ net pension liabilities would be if they were calculated using a discount rate that is one-percentage-point lower or one-percentage-point higher than the current rates:

1% Decrease Current Discount 1% Increase (6.50%) Rate (7.50%) (8.50%) Police Plan $ 8,959,838 $ 6,535,788 $ 4,455,949

1% Decrease Current Discount 1% Increase (6.50%) Rate (7.50%) (8.50%) Service Employees Plan $ 877,754 $ 509,817 $ 187,286

As the Borough reports its governmental activities on the modified accrual basis of accounting, the employer net pension liability and related items have not been incorporated in the government-wide financial statements; however, the following information is provided for disclosure purposes.

Changes in the Net Pension Liability

The changes in the net pension liability of the Police Plan at December 31, 2015 were as follows:

33 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Increases / Decreases Total Pension Plan Fiduciary Net Pension Liability Net Position Liability

Balances at December 31, 2014 $ 17,368,537 $ 13,576,873 $ 3,791,664

Changes for the year: Service cost 514,135 - 514,135 Interest 1,391,041 - 1,391,041 Differences between expected and actual 1,132,778 - 1,132,778 Changes of assumptions (48,884) - (48,884) Contributions - employer - 863,379 (863,379) Contributions - employee - 202,289 (202,289) Net investment income - (764,187) 764,187 Benefit payments, including refunds (854,153) (855,971) 1,818 Administrative expense - (54,717) 54,717

Net changes 2,134,917 (609,207) 2,744,124

Balances at December 31, 2015 $ 19,503,454 $ 12,967,666 $ 6,535,788

Plan fiduciary net position as a percentage of the total pension liability 66.49%

The changes in the net pension liability of the Service Employees’ Plan at December 31, 2015 were as follows:

34 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Increases / Decreases Total Pension Plan Fiduciary Net Pension Liability Net Position Liability

Balances at December 31, 2014 $ 3,123,631 $ 2,879,998 $ 243,633

Changes for the year: Service cost 58,717 - 58,717 Interest 234,382 - 234,382 Differences between expected and actual 713 - 713 Contributions - employer - 104,941 (104,941) Contributions - employee - 31,075 (31,075) Net investment income - (79,640) 79,640 Benefit payments, including refunds (118,062) (124,519) 6,457 Administrative expense - (22,753) 22,753 Other changes - 462 (462) Net changes 175,750 (90,434) 266,184

Balances at December 31, 2015 $ 3,299,381 $ 2,789,564 $ 509,817

Plan fiduciary net position as a percentage of the total pension liability 84.55%

Deferred Inflows of Resources and Deferred Outflows of Resources Related to Pensions

At December 31, 2015, deferred outflows of resources and deferred inflows of resources related to the Plans from the following sources:

35 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Deferred Outflow of Resources: Police Service Employees Differences between expected and actual experience $ 930,496 $ 539 Changes in assumption - - Net difference between projected and actual earnings on pension plan investments 1,419,208 234,045 Total deferred outflows of resources $ 2,349,704 $ 234,584

Deferred Inflows of Resources: Differences between expected and actual experience $ - $ - Changes in assumption 40,155 - Net difference between projected and actual earnings on pension plan investments - -

Total deferred inflows of resources $ 40,155 $ -

Amortization of the deferred outflows of resources and deferred inflows of resources related to the Plans is as follows:

Service Year ended December 31, Police Employees 2016 $ 548,355 $ 58,685 2017 548,355 58,685 2018 548,355 58,685 2019 548,355 58,529 2020 116,129 - Thereafter - -

8. DEFINED CONTRIBUTION PLAN

The Borough also provides pension benefits for its service employees hired after January 1, 2011 through a defined contribution pension plan (plan). This plan is in accordance with Internal Revenue Code Section 414(H). Benefits to retired employees depend on amounts contributed plus investment earnings. Employee contributions to the plan as specified in the plan document are 2% of base compensation for all service employees.

36 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Employee contributions during 2015 were $31,959. There were no employer contributions during 2015.

9. DEFERRED COMPENSATION PLAN

The Borough provides all full-time employees an option to participate in a deferred compensation plan (Plan) created in accordance with Internal Revenue Code Section 457 (Section 457). The Plan permits participants to defer a portion of their salary until future years. Participation in the Plan is optional. The deferred compensation is not available to the employee until termination, retirement, or death. At December 31, 2015, all amounts of compensation deferred under the Plan, all property and rights purchased with those amounts, and all income attributable to those amounts, are held in trust solely for the benefit of the participants. Deferred compensation assets at December 31, 2015 totaled approximately $992,000. Under the provisions of GASB Statement No. 32, “Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans,” the Plan is not required to be included in the Borough’s financial statements.

10. COMMITMENTS AND CONTINGENT LIABILITIES

Various claims and lawsuits are pending against the Borough. The ultimate outcome of these claims and lawsuits cannot presently be determined and, accordingly, no provision for amounts arising from settlements has been made in these financial statements. In the opinion of management and legal counsel, the effect on the financial statements of potential losses on any claim and/or lawsuit should not be material.

In 1997, the United States Environmental Protection Agency (USEPA) identified 51 communities tributary to the Allegheny County Sanitary Authority (ALCOSAN) whose sanitary sewers had been subject to wet weather overflows. The Borough signed an Administrative Consent Order (ACO) in 2004. The ACO details the timetable for completion of each phase which will involve inspecting, mapping, correcting, and monitoring the sewer system. The Borough is subject to a civil penalty for untimely completion of each term or provision of the ACO. The Borough has paid no civil penalties for the year ended December 31, 2015. The Borough has estimated the remaining completion cost of the projects mandated by the consent decree to be approximately $9.7 million.

The Borough participates in a number of federal, state, and county programs that are fully or partially funded by grants received from other governmental units. Expenditures financed by grants are subject to audit by the appropriate grantor government. If expenditures are disallowed due to noncompliance with grant program regulations, the Borough may be

37 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

required to reimburse the grantor government. The Borough believes that disallowed expenditures, if any, based on subsequent audits will not have a material effect on any of the individual governmental funds or the overall financial position of the Borough.

11. RISK MANAGEMENT

The Borough is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the Borough carries commercial insurance. There have been no significant changes in insurance coverage since the prior year.

For its workers’ compensation insurance coverage, the Borough participates in the Municipal Risk Management Worker's Compensation Pooled Trust (Trust), a public entity risk pool operated for the benefit of 199 cities, municipalities, boroughs, townships, and municipal authorities. Trust underwriting and rate-setting policies are established after consultation with an independent actuary and certain approvals of the Pennsylvania Department of Labor and Industry as mandated by Act 44 of 1993 (Act 44). All Trust participants may be subject to a supplemental assessment/dividend based on the overall experience of the participants, pursuant to Act 44. Each participant of the Trust agrees to jointly and severally assume and discharge the liabilities arising under the Workers' Compensation Act and Occupational Disease act of each and every participant of the Trust. Political subdivisions joining the Trust must remain members for a minimum of four years; a member may withdraw from the Trust after that time by giving ninety days notice, subject to approval by the Trust actuary under specified circumstances related to the continued fiscal stability of the pool. At the time of withdrawal, the participant is responsible for their share of assessments but has no claim on any other assets of the Trust.

12. OTHER POST-EMPLOYMENT BENEFITS (OPEBS)

Plan Description

In addition to the pension benefits described in Note 7, the Borough provides post- employment health care benefits to all retired police officers and non-uniformed union employees, in accordance with collective bargaining agreements, as well as certain non- union employees. The plan is a single-employer defined benefit plan. The benefit limits and employee and employer contributions are established through the agreements. The plan is not accounted for as a trust fund, an irrevocable trust has not been established, and the plan does not issue a separate report. Expenditures for post-retirement health care benefits are recognized in the General Fund when paid by the Borough.

38 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

The Borough provides post-retirement medical, dental, and vision coverage to all eligible police retirees in accordance with the requirements set forth by the collective bargaining agreement. Upon early, normal, or disability retirement, the Borough will provide coverage at the level in effect at retirement. The coverage will continue until the earlier of eligibility for similar coverage from another source, the retiree's Medicare eligibility, or the retiree's death. Retirees hired after December 31, 2005 must contribute, on a monthly basis, the dollar amount equal to the premium increases from the time of retirement. Retirees who waive coverage shall receive annual compensation equal to 33% of the premium for applicable coverage.

The Borough provides post-retirement medical, dental, and vision coverage to all eligible non-uniformed, union, and certain non-union retirees. Upon attaining age 62, the Borough will provide coverage at the individual level. The coverage will continue until the retiree's Medicare eligibility. Retirees are not required to contribute.

As of January 1, 2015 (the date of the latest actuarial valuation), 13 retirees met the eligibility requirements to receive OPEBs.

Funding Policy

These benefits are expensed when incurred and are financed on a pay-as-you-go basis. During 2015, the Borough paid $292,234 in OPEB costs.

The Borough's annual OPEB cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and to amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the component of the Borough's annual OPEB cost for the year, the amount actually contributed, and changes in the Borough's net OPEB obligation:

39 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Annual required contribution $ 457,724 Interest on net OPEB obligation 57,965 Adjustment to annual required contribution (79,079) Annual OPEB cost 436,610 Contributions made (292,234) Increase in net OPEB obligation 144,376 Net OPEB obligation - beginning of year 1,288,116 Net OPEB obligation - end of year $ 1,432,492

The Borough's annual OPEB cost, the percentage of annual OPEB cost contributed and the net OPEB obligation were as follows:

Annual % of AOC Net OPEB Fiscal Year Ending OPEB Cost Contributed Obligation December 31, 2015 $ 436,610 66.93% $ 1,432,492 December 31, 2014 489,348 61.95% 1,288,116 December 31, 2013 492,612 49.41% 1,101,915

The ARC for the current year was computed as of January 1, 2015 using the following actuarial assumptions:

. actuarial cost method - entry age normal cost; . amortization method - level dollar; . amortization period - 30 year open period; . discount rate - 4.5% compounded annually; . mortality – RP-2000 Combined Healthy Mortality Table with Blue Collar Adjustment and ages set forward 5 years for disabled lives

The schedule of funding progress as of January 1, 2015 for the post-employment medical and benefits is as follows:

40 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015

Actuarial Unfunded Actuarial Actuarial Value Accrued Liability Accrued Liability Funded Covered of Assets (AAL) (UAAL) Ratio Payroll (a) (b) (b)-(a) (a)/(b) (c)

Police: $ - $ 4,798,664 $ (4,798,664) 0.0% N/A Non-Uniformed: $ - $ 285,986 $ (285,986) 0.0% N/A

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the employer subsidy. Amounts determined regarding the funded status and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The required schedules of funding progress present multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations.

13. MUNICIPAL EMPLOYERS INSURANCE TRUST

The Borough participates as a member in Municipal Employers Insurance Trust (d/b/a Municipal Benefit Services (MBS)), a public entity risk pool. MBS provides certain benefits including, but not limited to, the following coverages: health benefits, short-term accident and sickness disability benefits, long-term accident and sickness disability benefits, dental benefits, vision care, prescription drugs, and life insurance for those eligible employers. All participants of MBS may be subject to supplemental premiums based on the overall experience of the participating members. Reserves generated by MBS for self-insured health premiums paid by members exceeding claims and expenses are held by MBS for the benefit of all participating members. During 2014, a portion of the excess reserves were deposited in

41 BOROUGH OF BALDWIN

NOTES TO THE PRIMARY GOVERNMENT FINANCIAL STATEMENTS

YEAR ENDED DECEMBER 31, 2015 eligible clients’ Rate Mitigation Accounts (RMA) as determined by the MBS’s actuary. RMA funds are held by MBS and are available to the Borough to reduce future costs associated with participating coverage. RMA funds are forfeited if the member terminates participation in the MBS medical insurance program. The Borough’s RMA funds were approximately $32,000 as of December 31, 2015.

42 [ THIS PAGE INTENTIONALLY LEFT BLANK ] Required Supplementary Information BOROUGH OF BALDWIN

SCHEDULES OF REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN

SCHEDULE OF CHANGES IN THE BOROUGH'S NET PENSION LIABILITY AND RELATED RATIOS

SERVICE EMPLOYEES PLAN

YEAR ENDED DECEMBER 31, 2015

2015 2014 Total Pension Liability: Service cost $ 58,717 $ 58,379 Interest 240,839 226,001 Differences between expected and actual experience 713 - Benefit payments, including refunds of member contributions (124,519) (126,253)

Net Changes in Total Pension Liability 175,750 158,127

Total Pension Liability - Beginning 3,123,631 2,965,504

Total Pension Liability - Ending (a) $ 3,299,381 $ 3,123,631

Plan Fiduciary Net Position: Contributions - employer$ 104,941 $ 110,814 Contributions - member 31,075 23,679 Net investment income (79,640) 120,319 Benefit payments, including refunds of member contributions (124,519) (126,253) Administrative expense (22,753) (22,672) Other 462 (41,043)

Net Change in Plan Fiduciary Net Position (90,434) 64,844

Plan Fiduciary Net Position - Beginning 2,879,998 2,815,154

Plan Fiduciary Net Position - Ending (b) $ 2,789,564 $ 2,879,998

Net Pension Liability - Ending (a-b) $ 509,817 $ 243,633

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 84.55% 92.20%

Covered Employee Payroll $ 787,288 $ 789,011 Net Pension Liability as a Percentage of Covered Employee Payroll 64.76% 30.88%

See accompanying notes to schedules of required supplementary information - pension plan.

43 BOROUGH OF BALDWIN

SCHEDULES OF REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN

SCHEDULE OF CHANGES IN THE BOROUGH'S NET PENSION LIABILITY AND RELATED RATIOS

POLICE PLAN

YEAR ENDED DECEMBER 31, 2015

2015 2014 Total Pension Liability: Service cost $ 514,135 $ 467,127 Interest 1,392,859 1,338,891 Differences between expected and actual experience 1,132,778 - Changes of assumptions (48,884) - Benefit payments, including refunds of member contributions (855,971) (940,073)

Net Changes in Total Pension Liability 2,134,917 865,945

Total Pension Liability - Beginning 17,368,537 16,502,592

Total Pension Liability - Ending (a) $ 19,503,454 $ 17,368,537

Plan Fiduciary Net Position: Contributions - employer$ 863,379 $ 858,140 Contributions - member 202,289 242,636 Net investment income (764,187) 308,358 Benefit payments, including refunds of member contributions (855,971) (940,073) Administrative expense (54,717) (49,222) Other - -

Net Change in Plan Fiduciary Net Position (609,207) 419,839

Plan Fiduciary Net Position - Beginning 13,576,873 13,157,034

Plan Fiduciary Net Position - Ending (b) $ 12,967,666 $ 13,576,873

Net Pension Liability - Ending (a-b) $ 6,535,788 $ 3,791,664

Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 66.49% 78.17%

Covered Employee Payroll $ 2,537,780 $ 2,526,389 Net Pension Liability as a Percentage of Covered Employee Payroll 257.54% 150.08%

See accompanying notes to schedules of required supplementary information - pension plan.

44 BOROUGH OF BALDWIN SCHEDULES OF REQUIRED SUPPLEMENTARY INFORMATION - PENSION PLAN

SCHEDULES OF THE BOROUGH'S CONTRIBUTIONS AND INVESTMENT RETURNS

YEAR ENDED DECEMBER 31, 2015

SERVICE EMPLOYEES PLAN:

Schedule of Baldwin Borough's Contributions 2015 2014

Actuarially determined contribution $ 104,941 $ 110,814 Contributions in relation to the actuarially determined contribution 104,941 110,814 Contribution deficiency (excess) $ - $ -

Covered employee payroll $ 789,011 $ 789,011

Contributions as a percentage of covered employee payroll 13.30% 14.04%

Investment Returns

Annual money-weighted rate of return, net of investment expense -2.77% 4.32%

POLICE PLAN:

Schedule of Baldwin Borough's Contributions 2015 2014

Actuarially determined contribution $ 863,379 $ 858,140 Contributions in relation to the actuarially determined contribution 863,379 858,140 Contribution deficiency (excess) $ - $ -

Covered employee payroll $ 2,526,389 $ 2,526,389

Contributions as a percentage of covered employee payroll 34.17% 33.97%

Investment Returns

Annual money-weighted rate of return, net of investment expense -5.70% 2.35%

See accompanying notes to schedules of required supplementary information - pension plan.

45 BOROUGH OF BALDWIN

SCHEDULES OF FUNDING PROGRESS - POST-EMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (OPEBs)

Actuarial Excess of Excess Actuarial Actuarial Accrued AAL as a Percentage Valuation Value of Liability (AAL) Over Funded Covered of Covered Date Assets Entry Age Normal Assets Ratio Payroll Payroll

Police: 1/1/2009 $ - $ 3,840,468 $ (3,840,468) 0.00% N/A N/A 1/1/2012 - 5,316,284 (5,316,284) 0.00% N/A N/A 1/1/2015 - 4,798,664 (4,798,664) 0.00% N/A N/A

Non-Uniformed: 1/1/2009 $ - $ 243,273 $ (243,273) 0.00% N/A N/A 1/1/2012 - 218,683 (218,683) 0.00% N/A N/A 1/1/2015 - 285,986 (285,986) 0.00% N/A N/A

Note: Valuation as of 01/01/09 represents the initial valuation for the plan as required under GASB Statement No. 45 (implemented in 2009).

See accompanying notes to schedules of required supplementary information.

46 BOROUGH OF BALDWIN

NOTES TO SCHEDULES OF REQUIRED SUPPLEMENTARY INFORMATION

YEAR ENDED DECEMBER 31, 2015

1. PENSION INFORMATION

Benefit Changes

In 2015, no benefit terms were modified

Actuarial Methods and Assumptions

The information presented in the required supplementary pension schedules was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation follows:

Service Police Employees

Actuarial valuation date 1/1/2015 1/1/2015

Actuarial cost method Entry Age Entry Age Normal Normal

Actuarial assumptions: Investment rate of return 7.5% 7.5% Projected salary increases 5.0% 4.5% Underlying inflation rate 3.0% 3.0%

Cost-of-living adjustments A n/a

Additional Information Related to Funding: Amortization method Level Dollar Level Dollar Closed Closed Amortization period 11 years aggregate 8 years aggregate Asset valuation method 4-Year Smoothing 4-Year Smoothing

n/a = not applicable A = Cost-of-living adjustment is determined by Council and is not to exceed 30% of original benefit.

47 BOROUGH OF BALDWIN

NOTES TO SCHEDULES OF REQUIRED SUPPLEMENTARY INFORMATION

YEAR ENDED DECEMBER 31, 2015

2. OPEB INFORMATION

The information presented in the required supplementary OPEB schedule was determined as part of the actuarial valuations at the dates indicated. Additional information as of the latest actuarial valuation follows:

Actuarial Data:

Valuation Date: January 1, 2015 Actuarial Cost Method: Entry age normal cost Amortization Method: Level dollar

Economic Assumptions:

Interest Rate: 4.50% Annual Trend Rates for OPEB Costs:

Year Medical Dental/Vision 2015 -1.50% 0.00% 2016 and later 5.00% 3.00%

Demographic Assumptions:

Mortality: RP-2000 Combined Healthy Mortality Table with Blue Collar Adjustment Adjustments and ages set forward 5 years for disabled lives

Mortality Improvement: Rates projected to improve with 75% of Scale AA

Withdrawal: Police: Table T-1, Actuary's Pension Handbook Non-Uniformed: Table T-2, Actuary's Pension Handbook Disablement: Police: Rates derived from the Social Security Administration's 2010 projections of disability incidence (ultimate rates only) Non-Uniformed: None assumed Valuation Retirement Age: Normal Retirement Age, or attained age if currently eligible to retire

48 BOROUGH OF BALDWIN

NOTES TO SCHEDULES OF REQUIRED SUPPLEMENTARY INFORMATION

YEAR ENDED DECEMBER 31, 2015

Participation: Police: 100% of eligible retirees Non-Uniformed: 100% of eligible retirees

Coverage Level: Future Police Retirees: Before 1/1/2006: 20% Individual, 65% Husband/Wife, 15% Family After 1/1/2006: 50% Individual, 40% Husband/Wife, 10% Family Future Non-Uniformed Retirees: 35% Individual, 65% Husband/Wife Current Retirees: Continuation of current coverage level

Spouse Age: Female spouse assumed to be three years younger than male spouse

Child Coverage: Future and Current Police Retirees: Child dependents until retiree's age 62

Insurance Premiums:

Current Premium Schedules: The reported annual applicable rates for medical, dental, and vision coverage for 2015

Age Adjustments: Costs for medical benefits are projected with age-adjusted rates derived from the 2015 premium schedules for the available plan Dental and vision coverages are not age dependent; therefore, the premiums were not age-adjusted

APPENDIX E

Specimen Municipal Bond Insurance Policy

[ THIS PAGE INTENTIONALLY LEFT BLANK ] MUNICIPAL BOND INSURANCE POLICY

ISSUER: Policy No: -N

BONDS: $ in aggregate principal amount of Effective Date: Premium: $

MUNICIPAL ASSURANCE CORP. ("MAC"), for consideration received, hereby UNCONDITIONALLY AND IRREVOCABLY agrees to pay to the trustee (the "Trustee") or paying agent (the "Paying Agent") (as set forth in the documentation providing for the issuance of and securing the Bonds) for the Bonds, for the benefit of the Owners or, at the election of MAC, directly to each Owner, subject only to the terms of this Policy (which includes each endorsement hereto), that portion of the principal of and interest on the Bonds that shall become Due for Payment but shall be unpaid by reason of Nonpayment by the Issuer.

On the later of the day on which such principal and interest becomes Due for Payment or the Business Day next following the Business Day on which MAC shall have received Notice of Nonpayment, MAC will disburse to or for the benefit of each Owner of a Bond the face amount of principal of and interest on the Bond that is then Due for Payment but is then unpaid by reason of Nonpayment by the Issuer, but only upon receipt by MAC, in a form reasonably satisfactory to it, of (a) evidence of the Owner's right to receive payment of the principal or interest then Due for Payment and (b) evidence, including any appropriate instruments of assignment, that all of the Owner's rights with respect to payment of such principal or interest that is Due for Payment shall thereupon vest in MAC. A Notice of Nonpayment will be deemed received on a given Business Day if it is received prior to 1:00 p.m. (New York time) on such Business Day; otherwise, it will be deemed received on the next Business Day. If any Notice of Nonpayment received by MAC is incomplete, it shall be deemed not to have been received by MAC for purposes of the preceding sentence and MAC shall promptly so advise the Trustee, Paying Agent or Owner, as appropriate, who may submit an amended Notice of Nonpayment. Upon disbursement in respect of a Bond, MAC shall become the owner of the Bond, any appurtenant coupon to the Bond or right to receipt of payment of principal of or interest on the Bond and shall be fully subrogated to the rights of the Owner, including the Owner's right to receive payments under the Bond, to the extent of any payment by MAC hereunder. Payment by MAC to the Trustee or Paying Agent for the benefit of the Owners shall, to the extent thereof, discharge the obligation of MAC under this Policy.

Except to the extent expressly modified by an endorsement hereto, the following terms shall have the meanings specified for all purposes of this Policy. "Business Day" means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in the State of New York or the Insurer's Fiscal Agent are authorized or required by law or executive order to remain closed. "Due for Payment" means (a) when referring to the principal of a Bond, payable on the stated maturity date thereof or the date on which the same shall have been duly called for mandatory sinking fund redemption and does not refer to any earlier date on which payment is due by reason of call for redemption (other than by mandatory sinking fund redemption), acceleration or other advancement of maturity unless MAC shall elect, in its sole discretion, to pay such principal due upon such acceleration together with any accrued interest to the date of acceleration and (b) when referring to interest on a Bond, payable on the stated date for payment of interest. "Nonpayment" means, in respect of a Bond, the failure of the Issuer to have provided sufficient funds to the Trustee or, if there is no Trustee, to the Paying Agent for payment in full of all principal and interest that is Due for Payment on such Bond. "Nonpayment" shall also include, in respect of a Bond, any payment of principal or interest that is Due for Payment made to an Owner by or on behalf of the Issuer which has been recovered from such Owner pursuant to the Page 2 of 2 Policy No. -N

United States Bankruptcy Code by a trustee in bankruptcy in accordance with a final, nonappealable order of a court having competent jurisdiction. "Notice" means telephonic or telecopied notice, subsequently confirmed in a signed writing, or written notice by registered or certified mail, from an Owner, the Trustee or the Paying Agent to MAC which notice shall specify (a) the person or entity making the claim, (b) the Policy Number, (c) the claimed amount and (d) the date such claimed amount became Due for Payment. "Owner" means, in respect of a Bond, the person or entity who, at the time of Nonpayment, is entitled under the terms of such Bond to payment thereof, except that "Owner" shall not include the Issuer or any person or entity whose direct or indirect obligation constitutes the underlying security for the Bonds.

MAC may appoint a fiscal agent (the "Insurer's Fiscal Agent") for purposes of this Policy by giving written notice to the Trustee and the Paying Agent specifying the name and notice address of the Insurer's Fiscal Agent. From and after the date of receipt of such notice by the Trustee and the Paying Agent, (a) copies of all notices required to be delivered to MAC pursuant to this Policy shall be simultaneously delivered to the Insurer's Fiscal Agent and to MAC and shall not be deemed received until received by both and (b) all payments required to be made by MAC under this Policy may be made directly by MAC or by the Insurer's Fiscal Agent on behalf of MAC. The Insurer's Fiscal Agent is the agent of MAC only and the Insurer's Fiscal Agent shall in no event be liable to any Owner for any act of the Insurer's Fiscal Agent or any failure of MAC to deposit or cause to be deposited sufficient funds to make payments due under this Policy.

To the fullest extent permitted by applicable law, MAC agrees not to assert, and hereby waives, only for the benefit of each Owner, all rights (whether by counterclaim, setoff or otherwise) and defenses (including, without limitation, the defense of fraud), whether acquired by subrogation, assignment or otherwise, to the extent that such rights and defenses may be available to MAC to avoid payment of its obligations under this Policy in accordance with the express provisions of this Policy.

This Policy sets forth in full the undertaking of MAC, and shall not be modified, altered or affected by any other agreement or instrument, including any modification or amendment thereto. Except to the extent expressly modified by an endorsement hereto, (a) any premium paid in respect of this Policy is nonrefundable for any reason whatsoever, including payment, or provision being made for payment, of the Bonds prior to maturity and (b) this Policy may not be canceled or revoked. THIS POLICY IS NOT COVERED BY THE PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW YORK INSURANCE LAW.

In witness whereof, MUNICIPAL ASSURANCE CORP. has caused this Policy to be executed on its behalf by its Authorized Officer.

MUNICIPAL ASSURANCE CORP.

By Authorized Officer

A subsidiary of Assured Guaranty Ltd. 1633 Broadway, New York, N.Y. 10019 (212) 974-0100

Form 500NY (5/13) (MAC) APPENDIX F

Form of Opinion of Bond Counsel [ THIS PAGE INTENTIONALLY LEFT BLANK ] OPINION OF BOND COUNSEL

The form of the approving legal opinion of Dinsmore & Shohl LLP, Bond Counsel, is set forth below. The actual opinion will be delivered on the date of delivery of the Bonds and may vary from the form set forth to reflect circumstances both factual and legal at the time of such delivery. Bond Counsel has no duty, and has assumed no obligation, to revise, update or supplement its opinion to address or reflect a change or changes in such circumstances subsequent to the date of delivery of the Bonds, whether or not it has notice or obtains knowledge of the same, and whether or not this Official Statement shall be recirculated. The approving legal opinion of Bond Counsel represents its considered professional judgment, following a comparison of relevant factual certifications to applicable law. Such opinion is not a guarantee of a particular result, nor is such opinion binding on any administrative or judicial tribunal.

We have served as Bond Counsel to the Borough of Baldwin (Allegheny County, Pennsylvania) (the "Local Government Unit") and do hereby undertake to advise you in connection with the issuance, sale and delivery of its $______aggregate principal amount of General Obligation Bonds, Series of 2017 ( the "Bonds") issued in fully registered form, denominated in $5,000.00 or any integral multiple thereof, dated and bearing interest from ______, maturing on various annual dates ending ______, and subject to redemption at the option of the Local Government Unit prior to maturity beginning ______.

In that capacity, we have examined the Constitution of the Commonwealth of Pennsylvania; the Borough Code, Act 581 of 1965, P.L. 1656, as amended (the "Municipal Code"); the Local Government Unit Debt Act, as codified by the Act of December 19, 1996 (P.L. 1158, No. 177), (the "Debt Act"); the formal action of the Governing Body of the Local Government Unit authorizing the incurrence of nonelectoral debt evidenced by the Bonds (the "Debt Ordinance"); the corresponding Certificate of Approval of the Department of Community and Economic Development; the Internal Revenue Code of 1986, as amended (the "Tax Code"); and such other certificates, proceedings and law as we deemed necessary in order to render this opinion. We have reviewed the Federal Income Tax Certificate of an authorized officer of the Local Government Unit, along with other closing certificates of the Local Government Unit and other parties to the issuance and sale of the Bonds. Unless separately noted, we have relied upon, but have not independently verified, factual certifications made to us by the Local Government Unit, its officers and agents, and by said other parties, both in such certificates and otherwise during the course of our engagement.

Both principal of, and interest on, the Bonds are payable at the principal corporate trust office of U.S. Bank National Association, Pittsburgh, Pennsylvania, as Paying Agent for the Local Government Unit; said bank has additionally been appointed Registrar and Sinking Fund Depository for the Bonds.

These proceedings demonstrate that, in the absence of any meritoriously-based action in a governmental or judicial forum affecting the validity of the Bonds, the same have been delivered upon full payment.

We have not been engaged nor undertaken to review the adequacy of disclosure in the Official Statement nor in any other securities offering material produced in respect of the Bonds and, except as to matters set forth in this opinion and described as such in said Official Statement, we express no opinion or belief with respect thereto.

1. Based on the foregoing, we are of the opinion on this date as follows:

(a) The Bonds are valid and binding general obligations of the Local Government Unit.

(b) The Bonds are issued for a valid purpose under the Municipal Code.

7495209v1 (c) The Bonds, and all other outstanding debt of the Local Government Unit, are within constitutional and statutory limitations.

(d) The Debt Ordinance authorizing the Bonds was duly and properly enacted and is in full force and effect.

(e) The Bonds conform, in all substantial respects, to the form provided in the Debt Ordinance.

2. The Bonds are secured by a pledge of the full faith, credit and taxing power of the Local Government Unit. The Local Government Unit has effectively covenanted in the Debt Ordinance to include the amount of debt service on this issue, in each fiscal year for which such sums are due, in its budget for that year; to appropriate such amount to the payment of such debt service; and to pay or cause to be paid, from time to time as and when due, the principal of every Bond and the interest thereon on the dates, at the place and in the manner stated in the Bonds.

3. Presently included among the general revenues of the Local Government Unit available for the payment of the Bonds are ad valorem taxes which may be levied, without limitation as to rate or amount, upon all taxable real property situate within the corporate limits of the Local Government Unit.

4. The Bonds are payable and enforceable according to their own terms, those of the Debt Ordinance and all provisions of the Debt Act; however, any such payment and enforcement could be restrained by a court of proper jurisdiction operating under the authority of bankruptcy, receivership and other similar laws of accommodation and adjustment of creditors' rights, as then applicable. Upon the satisfaction of certain preconditions under the Municipalities Financial Recovery Act, a municipality may seek to restructure its debt under the supervision of the Department of Community and Economic Development and is also authorized to file a Federal municipal debt adjustment action under Chapter 9 of the U.S. Bankruptcy Code.

5. The Bonds, having all the qualities and incidents of securities under Article 8 of the Uniform Commercial Code, are negotiable instruments.

6. The Bonds are authorized investments, under the Probate, Estates and Fiduciaries Code, as amended, for fiduciaries and personal representatives (as such terms are therein defined) within the Commonwealth of Pennsylvania.

7. Under the laws, regulations, rulings and judicial decisions in effect as of the date hereof, interest on the Bonds (including, in the case of Bonds sold at an original issue discount, the difference between the initial offering price and par) is excludible from gross income for Federal income tax purposes, pursuant to the Tax Code. Furthermore, interest on the Bonds will not be treated as a specific item of tax preference, under Section 57(a)(5) of the Tax Code, in computing the alternative minimum tax for individuals and corporations. Due to the designation of the Bonds as "qualified tax-exempt obligations" pursuant to Section 265(b)(3) of the Tax Code, certain financial institutions may be able to deduct 80% of the interest expense incurred in purchasing or carrying the Bonds. In rendering the opinions in this paragraph, we have assumed continuing compliance with certain covenants designed to meet the requirements of Section 103 of the Tax Code. We express no opinion as to any other Federal income tax consequence arising from ownership of the Bonds.

8. The Bonds, and interest income therefrom, are free from taxation for purposes of personal income, corporate net income and personal property taxes within the Commonwealth of Pennsylvania.

7495209v1