MAYOR AND COUNCIL
APRIL 27, 2015
Mayor Cerino called the budget workshop to order at 6:00 p.m. In attendance were Council members Liz Gross, Linda Kuiper, Samuel T. Shoge and Mauritz Stetson, W. S. Ingersoll, Town Manager, Beth Campbell, Director of Finance, Adrien Baker, Chief of Police, and Jennifer Mulligan, Town Clerk.
Mr. Ingersoll stated that this was a challenging budget year because of the decreasing accessible base. Properties under tri-annual assessment were just catching up with the recession causing land assessments and increasing tax abatements. He said that this was the second year the budget was reflecting the economy of 2011 and 2012.
Ms. Campbell stated that the tax rate has remained the same even with the tax base decreasing. She said that insurance costs were rising and workmen’s compensation was high (32% higher than last year) and only two (2) companies that offered Maryland Workmen’s Compensation Insurance to municipalities. She was waiting on the second quote.
Ms. Gross asked if there could be separate insurance policies for the police department. Ms. Campbell stated that workmen’s compensation was for the entire town and she did not think that departments could be separated, but would ask the question.
Mr. Ingersoll stated that there have been three police (3) injuries in the past year where Workmen’s Compensation was claimed so the rates were higher and would continue at that rate until the claims went away.
Ms. Kuiper asked about self-insurance. Mr. Stetson and Mr. Shoge responded by saying that one case could bankrupt the Town. Ms. Campbell said that she would look into it to see if it was a possibility. Ms. Kuiper stated that the name of the company she was familiar with was called Euchere.
Ms. Campbell stated that health insurance was coming in at a 15% increase over last year’s figures and that seems to be the case for all small municipalities.
Ms. Campbell stated that the pension costs for the Police is going from 30.45 to 31.94% and the other Town employees’ pension costs decreased from 9.73% to 8.53%, noting that the State mandated the rate.
Mr. Ingersoll stated that Chief Baker has a request for an additional police officer and a new police car.
Mr. Ingersoll stated that there was $300,000.00 for road improvements in the budget because he did not think certain streets could be put off any longer. He said that this could be bid out now and put under unappropriated surplus as fuel prices were low and it may be the right time to lock in to a contract for street improvements using tonnage costs as a bid.
Mr. Ingersoll stated that this year the Town purchased a new police station and it was in the budget for the upcoming year to sell the current building. He said he budgeted for revenues of $250,000.00 for the sale, noting that it could be worth more or less. Mr. Ingersoll stated that he put in an additional $50,000.00 for other surplus property in Town he thought should be sold.
Mr. Shoge asked how much the Town anticipated saving in electric costs due to the solar installation. Mr. Ingersoll stated that they were projecting a 25% decrease in costs based on when the system goes online, anticipating September 2015. Over a full year, it should save 50%. Ms. Campbell stated that the figures were spread out across the budget but she would try to get a good number for the Council.
Ms. Campbell stated that a marketing position was shown in the budget and the Town has $25,000.00 listed for that position, plus $25,000.00 from an anonymous donor. The actual position will pay $37,000.00 and the rest will go towards the benefits.
Ms. Kuiper asked if the DCA had sent in a budget request. Mr. Ingersoll stated that Ms. Owen requested $1,000.00. Mr. Shoge stated that he spoke with Ms. Owen and said that he told her that their request would be rolled into the marketing budget as the efforts would ultimately be duplicated. The DCA request could be deleted and added to the marketing committee, making it $6,000.00 instead of $5,000.00. Ms. Kuiper stated that she would like to see an itemized budget for the marketing committee at the next meeting.
Ms. Kuiper stated that she would like to see a list of expenditures from the revenue of the hotel tax and that she would like the marketing committee funds to be shown as coming out of the hotel tax revenues.
Mr. Ingersoll sated that the budget does not track separate revenues with separate expenditures.
Mr. Shoge asked how the County is getting a windfall of income tax revenue and why the Town is not. Mr. Ingersoll stated that the 16% increase in income tax reflects the Town’s percentage, which accumulates to $100,000.00. Ms. Campbell stated that the County’s 16% comes out to $2,000,000.00.
Mr. Ingersoll stated that there was not a lot of growth on the horizon for Chestertown’s tax rolls. He said that there were only three (3) to five (5) houses built last year and what was needed is the tax base to increase. He said Stepne would be built at some point, but it would take a couple years.
Mr. Ingersoll stated that assessments will rise from the commercial improvements made to Kent Plaza and Washington Square.
Mr. Ingersoll stated that the police station was bought at a bargain and said when the existing police department sold it would be a plus for the Town.
Ms. Kuiper asked how the Town would assume the $11,000.00 that the County was dropping for brush pick-up. She said that the Town funds Parks and Recreation $10,000.00 plus money for the bus to get the kids to Worton. She said that the Town is very generous and they may have to cut back on their donations.
Mr. Ingersoll stated that he thought it was a good idea to attend the County’s budget workshop on Tuesday, April 28th at 3:00 p.m. He said that the County should be asked to reinstate the tax differential.
Mayor Cerino stated that basically what the Town had to work with was a $300,000.00 deficit. Ms. Campbell stated that did include the Marina deficit.
Ms. Kuiper stated that the cash on hand should not be reported as “cash”, since it was not excess funds; the money was committed.
Ms. Gross asked if the new police department needed furniture or had those costs in the budget. Chief Baker stated that he was going to move the furniture that they currently had and they would share desks if they had to for a while. Chief Baker stated that the daycare still operating at the new location has not provided their move date and their rent could help with the purchase of desks and other goods for the department. Mr. Stetson stated that when purchasing furniture, the Chief should look into the State of Maryland Surplus program.
Mr. Ingersoll stated that if the Council decided to raise taxes, each penny added would yield $55,000.00. Other things that could be changed are raises, which in this budget assume a 4% raise for employees. Mr. Stetson stated that COLA in 2015 was 1.7% and 1.5% in 2014 and did not think Town employees should get more than that. Mr. Ingersoll stated that the Town was in line with the current compensation study. Mr. Stetson stated that there were employees who were at their maximum. Mr. Ingersoll stated that if Mr. Stetson was referring to him, he had not had a raise in 3 years.
Mr. Ingersoll stated that the dollar amount for each percent of raises was approximately $20,000.00 and there were other expenses associated with raises, such as payroll taxes and pension costs.
Mayor Cerino stated that removing the street paving from the 2016 budget would help balance the budget.
Mr. Stetson asked if the brush was going to continue to be picked up. Mr. Ingersoll stated that the brush had to be picked up and grinded for removal as Chestertown had a responsibility to its citizens for solid waste removal.
Ms. Kuiper asked if there was a way to project fixed costs for the next 2 years.
Mr. Ingersoll stated that the Town has been notified of a second $200,000.00 Waterway Improvement Grant for the Marina but he did not put it in the budget because it requires a $200,000.00 match. He said that the Town was putting almost $1-million dollars in grant funding and matches toward the Marina in this upcoming year.
Mayor Cerino stated that to get money needed for the Marina, work had to begin so people would understand what was being done and how it would pay off in the future.
Ms. Gross stated that she would be inclined to give a 2.5% raise to the employees. Ms. Kuiper suggested paying more of the health insurance rather than giving raises. Mr. Ingersoll stated that they were shopping around with health insurance but it was going up. The Council agreed to a 2.5% raise.
Mayor Cerino stated that Mr. Ingersoll would look into paving for this year’s budget and enter a 2.5% raise for employees. Mr. Ingersoll stated that he would contact the County about getting on their agenda for 3:00 p.m. on Tuesday and Mr. Shoge said he would go with him to represent the Council.
Ms. Campbell stated that she would work on the figures.
Mayor Cerino asked if there were any other cuts to the budget. Ms. Kuiper stated that funding the summer camp could be let go if the County was not going help with solid waste or reinstate a tax differential.
There being no further business, Mayor Cerino called the public meeting to a close at 7:30 p.m.
Submitted by: Approved by:
Jennifer Mulligan Chris Cerino
Town Clerk Mayor