Mayor and Council Budget Workshop – May 9, 2017

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MAYOR AND COUNCIL

BUDGET WORKSHOP

MAY 9, 2017

Mayor Cerino opened the budget workshop at 6:00 p.m. In attendance were Councilmembers Liz Gross, Linda C. Kuiper, Samuel T. Shoge and Mauritz Stetson, along with W. S. Ingersoll (Town Manager), Jennifer Mulligan (Town Clerk), Amanda Miller (Accounting/Treasury Specialist) and guests.

Mayor Cerino asked for highlights of the changes made since the April 27th meeting.  Mr. Ingersoll stated that the budget was not drastically changed but there were some cuts asked for by the Council at the previous workshop leaving revenues above expenses at approximately $55,000.00.

Ms. Miller stated that some cuts were to donations for non-profits where the entities who originally requested funds never asked for it. The Garfield Center ($1,800.00) and River Arts ($1,500.00) were two examples.  The Council also cut the $10,000.00 funding to the Kent County Parks and Recreation summer camp.

Ms. Miller stated that there were no new budget requests from the DCA, Recreation Commission or the Environmental Committee but they were given the same amounts received in their budget as last year.

Ms. Kuiper asked about the donations to the DCA. Mr. Ingersoll stated that there have been no specific funding requests this year but their annual requests are generally the same.

Mr. Ingersoll stated that there had to be a decision on the direction of Main Street. He said that he thought more grant money would have been raised to date.  Ms. Kuiper stated that Main Street had to look for grant sources.  The Council felt that there should be more of a dialogue between Main Street and the Mayor and Council.  Mayor Cerino stated that he would like Main Street to show that they have generated the income to support their requests.  Mr. Ingersoll stated that he thought Main Street expected the extra 40% from room the rental tax for their budget, however, there are plenty of Town costs for tourism.  Ms. Kuiper stated that the $75,000.00 for Main Street allotted by the Council was supposed to be for 3 years and only lasted 18 months due to the salary.  Mr. Shoge stated that he thought Main Street should present their budget to the Council in order to better understand the figures in their budget.

Ms. Kuiper stated that one item in the Main Street Budget was the Dicken’s Holiday which would replace Winterfest, but the Winterfest was already in the DCA budget. Mayor Cerino stated that Main Street was taking over Winterfest from the Downtown Chestertown Association and renaming it.  The funds should be moved from the DCA budget to the Main Street budget.

Mr. Ingersoll stated that furniture and plantings in the Main Street budget could be looked at in a different way. He said the Town owns benches in its parks but not elsewhere in front of businesses.  He said that other benches seen around Town are the property of the business in which they are located.  Mr. Ingersoll added that some of the budget funds they were requesting were woven into other parts of the budget under Curb Appeal and DCA and the Town has been funding those things over a number of years.  Mr. Shoge stated that the Town also had a website and Facebook which was free so that the Main Street website request might be cut.

Mr. Shoge stated that he thought having one person for Main Street, Arts & Entertainment and Economic Development was not right as it was a duplicate effort with Kent County Economic Development. He thought the job should be Arts & Entertainment and Main Street and said the point of those programs is to focus on the downtown areas.  Mr. Stetson stated that he thought economic development was needed in all of the town more than the Main Street and Arts & Entertainment District.

Ms. Gross asked why Main Street was buying Director’s and Officer’s insurance and not coming in under the Town’s insurance. Mr. Ingersoll stated that the Main Street Board was autonomous and not subject to open meetings such as other Town appointed commissions.  Ms. Gross asked Mr. Ingersoll to see if it was a requirement of Main Street to have a separate board and accounts.

Mr. Stetson suggested a separate tax for those living in the Arts & Entertainment and Main Street District to pay the salary. Mr. Shoge stated that this was not unheard of and was done in Baltimore City.  Mr. Shoge stated that it did seem as though there was duplication between Main Street and the things that the Downtown Chestertown Association does.  Ms. Kuiper stated that this was the issue when Main Street first began several years ago.  The original history of Main Street was that the Town, County and State put money forward and it went towards a salary and the program never took off.   Ms. Kuiper stated that she did not think that Chestertown had to have a Main Street to be an A&E District.  Mr. Ingersoll stated that one of the first tasks of the economic development position was to make mutual pathways so that there was not duplication of efforts and all of the downtown entities were working toward the same goal.

Ms. Gross stated that this discussion made her feel as though the board or a representative should have come before the Council at least once a quarter to report to the Town on their progress. Ms. Kuiper stated that she would like to see the economic impact on the Town thus far.  Mr. Shoge stated that the Council should also be clear on what they wanted to see as a result of the position.

Ms. Miller stated that there was a marketing budget in place of $6,000.00. Mr. Ingersoll suggested a second line item for Main Street with a $6,000.00 budget until the Council found out specific requests and how they came to the figures.  Mayor Cerino stated that although DCA was turning over the Winterfest to Main Street, the $1,500.00 allotted for Christmas lights was for maintenance of effort and buying additional lights.  There was also $1,000.00 for entertainment which should remain where it was in the budget.  Mayor Cerino asked that Ms. MacIntosh and members of the Main Street Board are invited to the meeting on May 15th to discuss their budget requests.

Mr. Ingersoll stated that the Town had to consider stressing to the County that they recover the unpaid room rental tax from the Airbnbs and requesting a tax differential or offset from Kent County.

Ms. Miller stated that she prepared a salary sheet with different figures including costs for pension and healthcare. She said that the budget they were working with this evening plugged in a 2.5% raise for all employees.

Mr. Ingersoll stated that one way to fund the budget was from unappropriated surplus from last year’s budget. He said that figures were included on what revenue would be generated by raising taxes.  Mr. Ingersoll stated that several new constructions should bring in additional revenues this upcoming year.  Mr. Shoge stated that the idea of a PILOT (Payment in Lieu of Taxes) should be further examined.

Mr. Ingersoll stated that the County claims there was a tax differential given to the Town up until two years ago. He said that Kent was only one of two counties in the State that does not give a tax differential, noting that it was law that the County have this discussion once a year with the Towns in the County.  Mayor Cerino suggested a letter be drafted on the subject with a request to get on the Commissioner’s meeting agenda.

Ms. Kuiper asked why there was a salary missing from the police budget. Ms. Miller stated that she cannot find where there was ever a salary included for a fourteenth officer.  Chief Baker stated that there was only a short time period where there was a fourteenth officer.  He said that it was a unanimous vote to approve a fourteenth officer two years ago.  Chief Baker stated that presently he had twelve officers (since one is deployed) but he wanted to actively pursue filling the position.

Chief Baker stated that he emailed the Council with information on step increases for the officers. He said that he thought that if the figures incorporate the salary increases for the officers this might not be the best time to incorporate the changes.  He said that he would ask the Council to consider the chart at a better time, suggesting that it be used as a model for all employees.

Chief Baker stated that he now has two officers on duty per shift at all times. He said that a fourteenth officer’s salary was needed in this budget.  K-9 Henzo would be retired this year and he would like $11,000.00 in funding for another dog.  Mr. Ingersoll stated that the dog should be purchased in this budget year.  Mayor Cerino asked if there were places in the police department’s budget where an additional salary could be found by eliminating some other line items.  Chief Baker stated that he was as tight as he could get with this budget.

Mr. Ingersoll stated that if there was salary for a fourteenth officer but there were only thirteen officers the additional salary not be used as a windfall for any line item at the end of the year. The money would be for personnel only.  The Council agreed.

Mr. Ingersoll stated that he thought the Council might consider charging for certain large public events as there is a lot of overtime paid by the Town for the police and the street crew.

Ms. Kuiper asked about fireworks. Mr. Ingersoll stated that the Town would not be able to offer the fireworks show next year as the Washington College boathouse site is being built upon.  Ms. Kuiper stated that eliminating fireworks freed up $14,000.00.  Mr. Stetson agreed.

Ms. Miller asked if other comparables were reviewed for the proposed pay scale steps, noting that she thought the population size should be similar to Chestertown. Chief Baker stated that he did look into that but did not have the figures.

Mr. Shoge stated that it appeared the utilities costs were high in the new building. Mr. Ingersoll stated that he just added that police station to the waterfall account for the solar array at a cheaper rate.  The Town was working on their propane gas expenses which should drop by $1.00 per gallon.

The Council discussed the possibility of a tax increase. Mr. Ingersoll stated that the tax differential should be discussed before raising taxes.  He said that if the County tax rate was reduced for in-Town residents, the Town should have been notified. Mr. Ingersoll stated that there were many things that the Town wanted to accomplish and he was bound and determined to find funding to do it.  Mr. Shoge stated that he could not raise taxes and give employees raises in the same year.

Mr. Ingersoll stated that the Utilities Commission budget was in a good place with the new annexation. He said the water and sewer fees that would be generated would be helpful.

Mr. Ingersoll stated that the employees lacked raises during the recession and they understood, but taxes weren’t ever raised either. He noted that property values had dropped during the recession and never recovered which actually shrank the taxable base.  Mr. Ingersoll stated that the 2.5% increase for the employees was minimal compared to the work they produced.

Ms. Miller stated that she did not have quotes yet for the self-funded health insurance and the projection in the budget was a 4% increase, but initial figures on self-funding shows a potential for a 10% decrease, which would help with the numbers.

Mayor Cerino asked what the tax differential should be. Mr. Ingersoll stated that it used to be over $100,000.00, since the Town taxpayer spends millions on duplicated services.

Mr. Ingersoll stated that he thought the unit price for trash was good when compared with other providers but said he did think that there would have to be a new vendor at some point. Mr. Ingersoll stated that if the vendor went to once a week trash pick-up it would not cut costs due to the number of trips that would be taken to the landfill.

The Council had requested certain changes be tried and Ms. Miller inserted them and stated that at this point the budget was short $20,766.00. Mr. Ingersoll stated that the numbers would likely work out as the budget changes during the year.  Ms. Miller stated that she would make the changes discussed and send out copies to the Council.

Mr. Ingersoll stated that the budget will be introduced at the Mayor and Council Meeting of May 15th but the budget can be changed up until it was adopted, which in this case would be June 6th.

Mayor Cerino closed the workshop meeting at 8:00 p.m.

Submitted by:                                                 Approved by:

Jennifer Mulligan                                            Chris Cerino

Town Clerk                                                     Mayor

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