Mayor and Council Budget Workshop – May 14, 2019

MAYOR AND COUNCIL

BUDGET WORKSHOP

MAY 14, 2019

Mayor Cerino called the budget workshop to order at 6:03 p.m. In attendance were Council members Linda C. Kuiper, Ellsworth Tolliver and Mauritz Stetson, W. S. Ingersoll (Town Manager), Amanda Miller (Financial Director), Jennifer Mulligan (Town Clerk) and guests.

Mr. Ingersoll stated that between the budget workshop and this meeting he realized that one additional cost increase that impacted the budget was the increased streetlight tariffs Delmarva Power put in place last summer. The tariffs went up almost 30% and there were hundreds of streetlights in Chestertown. He said that to offset that Delmarva has pledged to convert the streetlights to LED over a 10-year period. Mr. Ingersoll stated that there was a noticeable increase in the street light bills, which was over $100,000.00 this year alone. He said that he would follow up with Delmarva Power to see how to cut costs because the Town could not safely remove streetlights.

Ms. Miller stated that there is a one-time credit from LEOPS in the amount of $51,000.00 and the figures have been changed in the new packet the Council received tonight.

Mayor Cerino stated that he spoke with Kent County Administrator, Ms. Shelley Heller, and was told that if the Commissioners were looking into a tax differential. Ms. Miller stated that she read that the County Commissioners were also looking to raise the local income tax rate for Kent County, which would in turn amount to additional revenue for Chestertown.

Ms. Miller stated that there was a separate line in the draft budget for Main Street in the amount of $5,000.00. Ms. Miller stated that there was no request from Main Street to date and asked if it should be left in that line item or removed.

Mr. Ingersoll stated that he forwarded an email with estimates of revenues lost to local governments from Airbnbs. He said it was disappointing that Kent County would not apply the hotel taxes to people running Airbnbs. It was shown to be a sizeable loss to Kent County.

Mr. Ingersoll stated that hours at the Visitors Center could be changed but he did not like the thought of changing the mission of having the Center as it was vital to tourism in Chestertown and Kent County.

Mayor Cerino stated that the general fund was still short $65,000.00 and he asked the Council’s thoughts on where to find that money. Mr. Stetson stated that he thought recycling should be cut as it may garner the attention of County Commissioners (since the County borrowed the Town’s recycling figures to make their 15% recycling mandate with the State of Maryland). He said that the program could always start back up again if things improved and people can always contract with the hauler individually.

Mr. Ingersoll stated that a County-wide program for recycling was once in place and then the County cut it altogether circa 2007, which was when the Town began to employ pick up. Mr. Ingersoll stated that he would prefer to change contractors and have every other week recycling at a savings of $17,000.00, rather than cutting the recycling program altogether. Ms. Kuiper stated that she agreed with cutting the recycling program for now in order to balance the budget.

Mr. Ingersoll stated that he asked Mr. Schumann for a quote to pick up recycling bi-weekly and told him he needed the figures for the budget, but Infinity never responded with a quote.

Mr. Stetson stated that in reading through the minutes about the Marina budget and it being able to pay the interest on the loan but there was no mention of the salary that had to be met this year. He said that he was worried the Marina may not get ahead.

Mr. Stetson asked when the employees last received a raise. Ms. Miller stated that employees received a 2% raise last year but that it was less than the cost of living increase given to State retirees. This year there no raises were included in the budget, but the cost of living increase was at least 2.3%.

Mayor Cerino stated that cutting the recycling program balances the budget. Rev. Tolliver asked if they would still have to raise taxes or do away with any of the public safety. Ms. Miller stated that they would not have to do anything this year but next year they were going to be presented with the same problem.

Mr. Stetson asked what happened to last year’s cushion after raising taxes. Mayor Cerino stated that the Marina loan was never shown in the General Fund budget and it was a slow and steady strain. He said that there should be $540,000.00 extra in the General Fund (if the Town did not pay the principle on the loan). Mayor Cerino stated that the Council should also not forget that the County used to give the Town over $100,000 each year which they zeroed out the first year he was in the office. If that funding hadn’t stopped there would be a total of $1.1 million in the general fund.

Mr. Ingersoll asked for a consensus as to whether recycling should continue, be eliminated or if he should investigate using a new hauler. Ms. Kuiper and Mr. Stetson stated that they thought recycling should be cut. Rev. Tolliver asked how much would be saved with a new hauler. Mr. Ingersoll stated that it would save $17,000.00.

Ms. Miller stated that the Town was behind a penny behind Constant Yield and the tax rate should be brought up to $.43 as that would yield almost $57,000 in revenue. She said that part of last year’s cushion also went to falling assessments, noting that commercial properties were reassessed and values were appealed and abated down. According to the State of Maryland, the Constant Yield Tax Rate should be $.43.

Mayor Cerino stated that he thought the taxes should be raised a penny and recycling should be cut, as much as he did not like to do it. He said that he would rather do this than to have to lay off any employees.

Ms. Kuiper stated that she wanted to mention that the Police Department budget did not include the Police Protection Grant and speed camera income. Mr. Ingersoll stated that the Chief had said the exact same thing earlier today. Ms. Kuiper stated that she always asked for a separate budget for the Police Department. Ms. Miller asked why the Police Department should be different than any other department. She asked if there should be a separate budget for the Street Department. Ms. Kuiper also stated that there should be no overtime if an employee did not work 40 hours per week. She asked what the Street Department’s overtime was last year. Ms. Miller stated that she was projecting $26,000.00. Mr. Ingersoll stated that most of that overtime was festivals and other special Town events. Ms. Kuiper suggested monitoring the time sheets so that if there is not 40 hours of physical work there is no overtime. Ms. Miller stated that she did not have a breakdown of that prepared, but it has been done in the recent past and it was only a savings of $6,000. Mr. Ingersoll stated that he discussed this matter with Ms. Lawson and the overtime was paid because the vacation or holiday had already been earned as paid for time and it did not amount to as much as one would think.

Mr. Ingersoll stated that special events overtime should be logged separately from regular work overtime in the Street Department (as they were for the Police Department) and he will work with Ms. Mulligan to put in place the fee schedule she drafted for special events overtime.

Mr. Stetson suggested scheduling one man per shift for “slack times” because 2 officers did not need to be riding together at night. Chief Baker stated that the officers are only one to a car and the accident that occurred with 2 officers in the car had an officer who was in field training.

Ms. Miller stated that she asked Mr. Sappington if the employees could take time off during the week and then work on Saturday. Mr. Sappington did not think that the employees would be receptive to that idea at all. Ms. Miller stated that the employees have an employer who was working like the devil to keep the expenses down. Ms. Kuiper stated that the problem was that the Saturday hours are only 3-hour shifts so an employee would effectively be working 6 days. Ms. Kuiper stated that it was a 40-hour work week and there should be no overtime. Mr. Ingersoll stated that he thought it was going to be enough this year to tell the employees that there were no raises let alone change the way overtime has been calculated for decades.

Mr. Stetson asked if the people who worked Saturdays in the Utilities Department were paid overtime. Ms. Miller stated that they are paid overtime.

Mayor Cerino stated that if the Town cut recycling and raised taxes a penny to meet constant yield they would be ahead by $60,000. He asked what the cost of living increase was this year and how much it would increase the budget. Ms. Miller stated that she thought the cost of living raise was 2.3%, but she had not prepared figures. Ms. Miller stated that she thought it would be more than $60,000.

Mayor Cerino asked what the Council wanted to do if the County provided for a 2₵ tax differential. The consensus was to recover that 2₵ in a tax increase if they did. If the Town increases by the penny it is behind on the Constant Yield it will recover $56,732.00 to make the same amount of revenue is last year.

Ms. Mulligan stated that advertisements for a change to taxes must be advertised in the May 23rd Kent County News.

Mayor Cerino stated that he would like to cut recycling and raise taxes by $.01. Ms. Kuiper and Mr. Stetson agreed. Mr. Stetson stated that he agreed to cut recycling, but he did not want to raise taxes. Rev. Tolliver did not comment.

Ms. Kuiper stated that she thought if taxes were raised by one cent that residents should not have to pay for extra pickups. Mr. Ingersoll stated that the bulk and brush fees would stay as people get way out of control with the amount of brush they expect to be picked up free of charge.

Mr. Stetson stated that if an employee quits or retires, their salary should go back to the general fund. He said that he did not want to lay anyone off but until the budget recovered they would not be replacing officers. Mayor Cerino stated that the threshold for the Police Department should be 12. Mr. Stetson stated that Kent County should be put on notice that the Sheriff’s Department would be called in for backup on some shifts.

Ms. Miller stated that the $50,000.00 credit was not going to last forever for LEOPS, and the full amount of the pension costs will have to be budgeted at some point.   She said that the Town expenses are not going to go down and she thought that the Council should not only be concerned with losing police officers but also employees from other departments who leave because they are not receiving a raise. Ms. Miller stated that employees who are loyal and hard-working expect something in return for their efforts.

Mayor Cerino closed the budget session at 6:36 p.m.

Submitted by:                                                 Approved by:

Jennifer Mulligan                                           Chris Cerino

Town Clerk                                                     Mayor

 

 

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