Mayor and Council Budget Workshop – May 9, 2016

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MAYOR AND COUNCIL

BUDGET WORKSHOP

MAY 9, 2016

Mayor Cerino called the budget workshop to order at 6:00 p.m. In attendance were Council members Liz Gross, Linda C. Kuiper, Samuel T. Shoge and Mauritz Stetson, W. S. Ingersoll, Town Manager, Amanda Miller, Accounting Treasury Specialist, Jennifer Mulligan, Town Clerk and guests.

Ms. Miller reviewed the changes to the budget since the May 5th budget workshop, including the changes to formulas where mistakes were found.  Mr. Ingersoll stated that there has not been much growth in the taxable base over the past few years.

Mr. Ingersoll stated that if the assets for are sold in this fiscal year the Town would be approximately $235,000.00 in excess. He said that he felt certain the police station building would sell this year.  He said the lots on Calvert and Lynchburg were priced to sell for qualified low and moderate income families who wanted to build a house at $15,000.00.

Mr. Shoge stated that the Young Professionals Group, who was running under the Chamber of Commerce umbrella, was planning a Beer Fest in August and he would like to see the Council make a donation towards that event. Mr. Ingersoll stated that smaller donations can be worked into the budget.

Mr. Stetson asked if the parking lot at Bailey Park was going to be finished in this upcoming year. Mr. Ingersoll stated that he was trying to finish that project before the end of the current budget year.

Mr. Ingersoll stated that Ms. Miller researched the covers for the meters and had costs for them. He had talked to the DCA about having their message on the covers of meters not related to the Fountain Park Farmers Market.

Mr. Shoge asked if the meters should be removed altogether. Chief Baker stated that the police department was able to handle parking enforcement on their end.  Mr. Ingersoll stated that the actual removal of the parking meter posts would be a large undertaking that should be considered before being done.  He said that the covers will run approximately $4,000.00.  Ms. Kuiper asked if Mr. Riggins at Skippy’s be contacted regarding silk screening the bags as he was a local business.  Mr. Ingersoll stated that many towns are turning to apps and GIS when it comes to paid parking.

Mayor Cerino stated that he has been working with the Garden Club to replace the benches in the Fountain Park and there are multiple donations for five (5) backed benches in the Park. Five (5) or six (6) curved benches will be installed along the outside ring of brick around the fountain.  Ms. Kuiper asked where the painted benches would be relocated, suggesting the Middle School.  Mayor Cerino stated that Rotary Club was purchasing benches for the Middle School and said he would like to see two (2) of the painted benches go to the AJAX pocket park, and the rest to Washington Park (where currently there were none).  Mr. Shoge suggested asking the Recreation Commission if they have any ideas as to where to put the benches.

Mayor Cerino asked if the $300,000.00 for paving was now included in the budget. Mr. Ingersoll said that the paving was added to the budget.

Mr. Ingersoll stated that he needed to know if anything was overlooked in the budget and what the Council wanted to do about salaries. He said that Chief Baker would like to speak to the Council regarding salaries.

Ms. Kuiper stated that she did not think the sale of assets from last year’s figures matched with the figures from the sale of Satterfield Court and the High Steps apartments.   She said the line item showed $124,376.00 but she recalled a figure of $75,000.00.

Ms. Kuiper asked about the $88,420.00 due for the Marina from General Funds for FY2016, noting that the principal reduction shows $88,500.00. Mr. Ingersoll stated that more principal was being paid each year according to the bond payment schedule.

Ms. Kuiper asked questions regarding income for the travel lift and winter storage and other line items at the Marina. Mr. Ingersoll stated that the Town was going to store boats again this winter and use the travel lift to do it.  Ms. Miller stated that there was miscellaneous income from the laundry machines.

Ms. Kuiper asked if the Town realized any reduction in electric costs since the solar panels were in use. Mr. Ingersoll stated that the Town should realize large savings once the billing was straightened out with Delmarva Power. Mr. Ingersoll stated that he reluctantly paid three (3) months of unpaid Delmarva bills because he knew felt that they were incorrect, but Delmarva was threatening to shut down unpaid accounts such as pump stations.  He said that the solar company was meeting with Delmarva’s team to go through the billing and hopefully straighten out the accounts.  Mr. Ingersoll stated that the Town agreed to $.045 per Kw and Delmarva Power was trying to impose distribution fees while at the same time confusing the bills by changing all account names to “Chestertown Utility Commission” and changed all of the account numbers, so it was hard for the Town was unable to reconcile the aggregated bills.

Ms. Kuiper asked if there was a way to recognize the saving on the Town Hall building from the solar panels. Mr. Ingersoll stated that Mr. de Mooy was working on those numbers.

Ms. Gross stated that under Mayor and Council expenses, the meetings and travel was listed at $9,000.00 but they have not used near that amount in the past couple years. Ms. Miller stated that she added in funding for the fall MML convention, but the money could be backed out if nobody attended it.  Mr. Ingersoll asked Ms. Miller to change the amount to $6,000.00.

Mr. Stetson suggested going to once week household trash pick-up. Ms. Kuiper stated that she thought a bigger savings would be with recycling changed to service twice a month.  Mr. Shoge stated that the budget looked good and he did not see a reason to reduce services in this upcoming year.

Ms. Kuiper asked about the funding to Parks and Recreation for camperships. Ms. Miller stated that she spoke with Ms. Myra Butler at Kent County Parks and Recreation and whatever donation was given by the Council would be used for Town scholarships.  Mayor Cerino suggested a $10,000.00 donation since transportation would not be offered this year.

Ms. Kuiper stated that she thought that certain other donations should be cut and that these organizations should look for grants to cover their activities. She said that she would like to see some of the organizations stand alone.  Mr. Stetson stated that that each organization should at least request funding each year, not just receive an automatic check.

Ms. Miller stated that the Recreation Commission had not put forth a budget to date and the $5,000.00 was the same figure used last year.

Ms. Kuiper stated that the Town had many grants listed that were helping to fund the budget. She said that if the grants were removed from the budget the Town was operating at a deficit.  She said that she worked with other programs that were grant funded and when the grants dried up, they went out of business.

Mr. Ingersoll stated that when the Town used grants, the funding was for a specific project. Ms. Gross stated that she agreed with Mr. Ingersoll and that grants were for a specific expense and if the grant isn’t received the expense would not be made. Ms. Kuiper stated that the grants in the budget were helping to balance the budget.  Mayor Cerino disagreed, noting that grants were used for specific purposes.

Ms. Kuiper stated that she has asked for separate budgets for grants but she would like to see the grants and their expenses shown together, noting that some of the grants needed matches and those funds would have to come out of the budget. Mr. Ingersoll stated that the $380,000.00 being spent at the Marina this year had a $180,000.00 match from the College and a $200,000.00 Waterway Improvement grant to go along with it.  Ms. Kuiper stated that she would like all of this information to be on the website so that people could see where the money was going, similar to the United Way, where goals reached for different projects could be shown.

Ms. Kuiper stated that she had many asking her when the last leg of the Rail-Trail was going to be finished. Mayor Cerino stated that was a hold up with the State Department of Transportation or MTA.

Ms. Kuiper stated that the agencies receiving money from the Town should come before the Council to tell them how the donation was used. Ms. Miller stated that the donations in black were carried over from last year’s donations and the numbers in green were donations that were specifically requested.  Mr. Ingersoll stated that organizations should make annual requests, including how the funding was used in the year prior.

Mayor Cerino stated that he saw the donation requests from DCA and other entities as marketing the Town. Ms. Kuiper stated that it did not market the entire Town, only the downtown.

Mayor Cerino stated that the money that was given for projects downtown was also executed by the DCA and made the Town look beautiful. He said it was an important piece of bringing people into Town and that the downtown events ultimately benefitted the entire Town.

Ms. Kuiper stated that she thought the Back Pack program donation through the People’s Bank was part of the Chester Gras festivities and should not be included twice for funding.

Ms. Kuiper stated that she did not understand the reduction in health care costs. Ms. Miller stated that there was a 3.8% reduction in the health care costs, but the premiums for the employees will remain the same.  Ms. Kuiper stated that the employees will recognize an increase in pay from the overall reduction in health care costs.  Ms. Miller stated that the employees’ rates for healthcare will remain the same.  Although the costs went down, the deductible to employees rose, so the employees will not realize any change in their benefits.  The deductible was not part of the employee’s salary.

Mr. Ingersoll stated that he prepared a document showing what each percentage of any raise would cost the Mayor and Council and Utilities Commission and passed them out.

Chief Baker stated that the Police Department was having difficulty hiring candidates to fill vacant positions, noting that there was only one (1) vacancy at the moment but there were three (3) officers who were going through the process of being hired at other agencies. He said that the three (3) leaving indicate their reason for leaving is due to salary.

Chief Baker stated that last year he lost officers to the Kent County Sheriffs Department and Chevy Chase, Maryland due to the fact that the salaries offered were greater.

Chief Baker gave figures of starting salaries at Queen Anne’s and Kent County Sheriff’s Departments at approximately $43,000.00, Maryland State Police were $46,000.00 and National Resources Police started at $46,000.00. He said that the starting salary at Chestertown Police is $40,000.00.  Chief said that these jobs are comparable to and where his officers are leaving to go.

Chief Baker stated that at the last meeting there was a discussion about cost of living increases. He said that he agreed that cost of living is for what its name implies and was relevant to inflation, but what he was talking about was the fact that a 3% increase, as built into this budget, will keep his department comparable with others.  Chief Baker stated that he would like to at least have something to keep him on a level playing field competing agencies.  He said the gap only widens when there is nothing given.

Chief Baker stated that he agreed with Councilman Stetson where a step program would be the correct way to address the salary situation and would also benefit in recruiting new officers. He said that a step program is complicated but he would like to have the latitude of a 3% increase this year and return to the Council with a proposal for a step arrangement to keep the officers progressing.

Chief Baker stated that he was able to promote two (2) officers this year, but elevating in a small department was difficult with promotions few and far between. Chief Baker stated that the department has been functioning on the raises that were given each year but said he did not think they were cost of living raises; rather they were increases to keep the employees current with the market.  He said that cost of living raises should be based on inflation and did fluctuate but were also not what the 3% represented.

Mr. Shoge stated that salaries should not have to come up each year. He said that it was awkward for him to discuss employee’s salaries and thought there should be another solution mitigating the conversation and showing where the numbers should be.

Chief Baker stated that the compensation study performed by Hendricks & Associates compared the police salaries to other small town police departments, not where his men were leaving to go. He said as a manager, it was costing him money to train an officer only to have him leave for another agency and was why he tried to hire officers that were already certified.  He said that the Town was losing their investment by not staying competitive.  Chief Baker stated that when Ms. Miller said the 3% increase was off of the mid-point salary outlined for each employee, it was using the study as reference.

Chief Baker stated that he would return with a step study in the next year for the Council to review. The Council agreed.

Ms. Miller stated that the 3% raise indicated in salaries was not “across the board”; the 3% went by each employee’s mid-point and would depend on where the employee fell within their salary range. Mr. Ingersoll stated that he would like to take the salary study and bring it up to date for all employees because it was already over four (4) years old.

Ms. Gross stated that at the last meeting she questioned the 3% increases thinking they were a cost of living raise. She said that she now knew that it was not a cost of living increase, but an increase in an attempt to keep the employees competitive with other markets.  She said that she withdraws any objections she raised at the last meeting because she now understood the true intention of the increase.

Mr. Shoge stated that he would like to tie the salaries in with a study or cost of living for the future as it would remove awkwardness of dealing with an individual’s salary.

Ms. Gross suggested performance evaluations and merit increases which would be fair to all. She said that ineffective employees were being rewarded as well as, and at the same rate, of those who were highly effective.

Chief Baker stated that he performs evaluations and if someone was not performing satisfactorily they would not be awarded the percentage. He also said that at this point he did not anticipate anyone not performing satisfactorily.  Ms. Gross stated that there were other departments who did not function as well.

Ms. Gross stated that she thought the Council should pass the budget. Mr. Ingersoll stated that this was only a workshop and that the budget would be introduced at the Mayor and Council meeting on May 16, 2016.

Mayor Cerino asked if everyone was comfortable presenting the budget at Monday’s meeting. The Council agreed that they were comfortable with the budget.

Mayor Cerino called the workshop budget to a close at 7:40 p.m.

Submitted by:                                                             Approved by:

Jennifer Mulligan                                                        Chris Cerino

Town Clerk                                                                 Mayor

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