Millcreek Township Government Study Commission Member Makes Recommendation

Here is the transcript of Jim DeDad’s recommendation of a new form of government for Millcreek Township, Pennsylvania. These remarks were based on the findings of official audits of the township and were delivered at the Millcreek Township Government Study Commission meeting on Monday, May 12, 2025. The commission unanimously voted to recommend the council-manager form of government. This would consist of a township manager and five supervisors at large. The citizens of Millcreek Township will vote on this recommendation on Tuesday, November 4, 2025.

“Before I start, those who supported my petition to be on this Commission know that I had no prior stance on what the final decision would be. In fact, my knowledge of Millcreek Township government was limited. My desire was to become more informed and to use my analytical skills to reach an opinion on the form of government that is best for Millcreek’s future, whether that be the current form or something different. 

I earned a bachelor’s degree in business administration with a concentration in accounting, followed by an MBA, both from Gannon University. I retired in 2024, after a 44-year career with two large institutions in the financial services industry. The majority of my career has been dedicated to internal audit, and governance, risk, and compliance (GRC), where I’ve developed deep expertise in ensuring operational integrity and regulatory adherence. In other words, helping to ensure rules are followed and business runs smoothly without problems. I interacted often with our external auditors and compliance consultants.

Now, many citizens of Millcreek are aware of some controversies that exist with decisions made by the current supervisors. This was not our focus. There have been many Millcreek supervisors in our history and their decisions and actions were not always well received. The Budget and Finance Committee, which I chair, looked at trends. Our primary data comes from figures that have been audited by a reputable independent accounting firm in the region, as well as Millcreek Township’s official budgets. Similar information was obtained from other like-sized townships in Pennsylvania. 

Before continuing, I’d like to get one thing out of the way. Some have wondered if a change in the form of government would cost more in salaries. We analyzed the salary and benefits of our current supervisors who serve as full-time employees compared to the stipend-only compensation for supervisors, projected salary and benefits for a township manager, as well as potential additional hires or upgrades for other positions. Eliminating the full-time salaries and benefits of the three supervisors under our current form of government provides a considerable amount of money to pay part-time supervisors, a township manager, and if needed, an assistant township manager. I’ll note that the maximum compensation for part-time supervisors, by law, is $8,385 with no benefits. Predictions are hard to make. First, a township manager would be the one to determine employee needs and only after understanding what exists and what organization structure changes may be necessary. Justifications could be to improve efficiency or increase expertise to prevent costly mistakes. Second, comparisons to other townships are not helpful as we have found that titles may be the same, but responsibilities are often different. Third, even the closest townships in size to Millcreek have very unique differences and challenges which may require specialized skills for a comparable position. Lastly, Millcreek’s cost of living is significantly less than the townships that are closest in size to Millcreek. The bottom line is, it could be a break-even, or it could cost more, but not to the level of having a major impact on the decision to recommend change or no change to the form of government.

Also, it should be noted that under the current form of government, the supervisors could hire a township manager, but without eliminating their employee compensation, this would result in a significant increase in salary and benefits and not solve the issues leading to my recommendation.

My decision is based strongly on the auditor’s reports and audited financials, budgeted amounts and future outcomes. These are some of the findings that have led to my recommendation:

• Over the last three years, annual audits have been completed later and later with reports issued in August, September, and December. It is the 2023 audit that wasn’t issued until December 16, 2024. A trend like this is a sign of internal inefficiencies, financial concerns, or broader organizational issues. It is also a concern because without the audited financial amounts being available timely, it affects the accuracy of the projections in the budget for the years that follow. Accurate historical data is critical when creating a realistic budget. I’ll also note that the 2024 audit is currently in progress and we will be checking on the expected completion date.
• More alarming, the 2023 audit report, which wasn’t issued until December 2024, reported three material weaknesses in the system of internal control over the financial statements. This is evidence of mismanagement. It affected the accuracy of any unaudited financial information relied on by the township, residents, or others during the year. The independent auditors would have performed more work, at an additional cost to the Township, to gain comfort around the completeness and accuracy of the financial statements. To add some perspective, for public companies, a material weakness is a very serious issue as it could result in significant fines, regulatory consequences, and even prison for executives if they knowingly certify false financial statements. At the very least, it would result in loss of investor confidence, and reputational harm impacting future profitability. For Millcreek Township, it could affect their credit rating and negatively impact their ability to borrow at the best terms.
• The net change in General Fund balance has shown a successive negative trend for the most recent three years audited statements. It decreased $1.7 million in 2021, $4.9 million in 2022, and $11 million in 2023. During that same period of time the Fund Balance decreased from $35.9 million to $18.4 million. Almost cut in half in three years. The General Fund includes the revenue from taxes and other general revenues and is used to account for ordinary operations of the township. The Unassigned Fund Balance has also decreased yearly, from $10 million in 2021 to $3.4 million in 2023. That’s a decrease of almost two-thirds in three years. The Unassigned Fund Balance serves as a flexible reserve that can be used in emergency situations. It is often considered a key indicator of sound fiscal management. These persistent negative trends signal financial instability. It is a sign of poor management and issues with planning. 
• The 2025 budget, including an estimate for 2024, and projections for each year through 2028, also reveal similar concerns. The cumulative negative net change in General Fund balance for 2024 through 2028 is $17.8 million. The continuous decrease in the General Fund balance as evidenced by this finding and the previous finding is a bad trend that will have negative consequences for the Township and taxpayers if not properly managed. 
• The separate 2025 Fire Tax Fund budget shows a projected increase in Fire Tax Revenue between 2023 and 2028 of over 319%. That’s an increase of nearly 5 million during that span. Between 2025 and 2028 it is projected to more than double. Where is the revenue coming from? Effective management is a concern as this will significantly impact taxpayers. 
• The 2023 independent auditor report of the Millcreek Township General Authority reported that management did not provide their required discussion and analysis to supplement the basic financial statements, otherwise known as a narrative. The Government Accounting Standards Board considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. It should detail major investments, infrastructure projects, and debt management strategies. It should address financial challenges and anticipated developments. It helps officials and residents to make informed decisions about a municipality’s financial standing. This raises concerns about management’s comprehension of their responsibilities and their level of transparency. 
• A 2023 compliance audit of the township’s Aggregated Pension Plan contained a finding that resulted in a net underpayment of state aid to the township. This was attributed to a lack of adequate internal control procedures. Procedures that management is both responsible and accountable for.

These financial facts point to a series of significant negative trends and management issues. Our current government structure is antiquated and supervisors (past, present, and future) without significant municipal government experience and knowledge are not equipped to navigate the complexities of modern municipal governance, resulting in inefficiencies, missed opportunities, and potential setbacks in community progress and development. This, to the detriment of the township and its citizens.

The council-manager form of government is the most popular and trending form of municipal government in the United States according to the ICMA (International City/County Management Association). A newspapers.com search returns numerous articles of towns changing or working to change to the council-manager form. A study by professors at the University of Chicago’s Harris School of Public Policy identifies the comparative advantage of professional municipal governments. It emphasizes professional management and efficiency. The council-manager form of government separates the legislative and executive branches, providing necessary checks and balances. As a former audit and GRC professional, “separation of duties” was the most important requirement in the system of internal controls. It is the practice of dividing responsibilities among different individuals to prevent fraud, errors, or conflicts of interest – ensuring no single person has control over an entire process. It is the same concern if the board of directors also serve as executives within a company, or in municipal government terms, township supervisors also serving as executives of the township. Here’s why:

1. If supervisors also hold executive positions, the boundary between oversight and decision-making fades, weakening independent scrutiny.
2. If supervisors are also part of management, they may prioritize their own leadership decisions over objective municipal governance.
3. Supervisors may have general knowledge to provide strategic vision and governance expertise, but they often lack the specific operational knowledge and experience required to manage the day-to-day activities effectively.
4. In public companies, board independence is emphasized to protect shareholders. It follows that in a municipality, separating the legislative branch from the executive branch protects taxpayers.
5. If municipal executives make decisions related to the financial statements or are involved in their preparation and also oversee their approval as supervisors, there’s concern with transparency, manipulation of numbers, and possible misstatements. 

Millcreek Township has multiple challenges and complex projects in motion. Professional management is not a luxury, but a necessity. A five-member part-time at-large council will enable significantly more individuals to seek the role, many with extensive experience and knowledge in their professions to contribute to the success of the township. A five-member council also means greater oversight, improving accountability and reducing the potential for power concentration. By far, five or more members is the most desirable number for local governments across the nation. Also, under Pennsylvania’s Optional Plans Law, council members serve 4-year terms rather than 6-year terms under our current government structure.  

Therefore, it is my recommendation that Millcreek Township adopt the council-manager form of government and to set the number of council members (or as we call them, township supervisors) to five, all of whom will run and be elected at large. 

It is also my recommendation that the Treasurer role be an appointed position.”

James S. DeDad, elected member, Millcreek Township Government Study Commission.