2019, Mayor and Council, Minutes|

MAYOR AND COUNCIL BUDGET WORKSHOP

NOVEMBER 13, 2019

 

Mayor Cerino called the workshop meeting to order at 5:00 p.m. In attendance were Councilmembers David Foster, Linda C. Kuiper, Ellsworth Tolliver and Mauritz Stetson, W. S. Ingersoll (Town Manager), Amanda Miller (Finance), Jennifer Mulligan (Town Clerk) and guests.

Mr. Ingersoll stated that the handouts provided showed this year’s revenues so far and said that figures were provided for previous years back to 2016 for comparison. He said that real estate taxes look higher but there were small taxing rate increases in 2017-2018. There was about $536,000.00 in unpaid taxes which will trickle in until April 2020.

Ms. Miller stated that the amusement tax revenue is up but will go to pay the $75,000.00 County incentive loan for the movie theatre. Almost $15,000.00 of the loan has been paid back to Kent County to date.

Ms. Miller stated that income tax revenue was unpredictable but the new County income tax rates go into effect in January 2020. There was no way to calculate exactly how Chestertown will be affected by the change. Mr. Ingersoll stated that there was no rhyme or reason as to how much is received each year, with some taxpayers requesting extensions and paying late.

Ms. Miller stated that the Highway User funds look deceiving as prior years included a “one time” Transportation grant. The “one time” grant is no longer given but she thought that at the end of the fiscal year, the Town will end up receiving more funding than they have in prior years.

Ms. Miller stated that the Hotel Room Tax is basically about the same as it has been in prior years. Mr. Ingersoll stated that there has been no change in the Airbnb situation concerning hotel tax collection. Ms. Miller stated that the last payment received was from the quarter before last.   Mr. Ingersoll stated that Airbnb’s needed to be charged the Hotel Tax, but the County is the only entity that can collect it. He said that the County was waiting for State legislation to pass making it mandatory for Airbnb’s to pay the tax, but he did not think that was ever going to happen. Mr. Ingersoll stated that the Town provided all the information on known Airbnb’s in Chestertown to Kent County in the hopes that they would collect the tax, but nothing has been done to date.

Ms. Miller stated that Farmers Market revenue numbers were up because the payments went from $5.00 to $10.00 per space each week.

Ms. Miller stated that the only major change in the budget was the cost of the election, which was comparable to the 2017 election, but the most recent election was for two wards only, instead of the entire Town. The Town had to hire an outside company this year.

Mayor Cerino stated that revenues appear to be on target and there are no unexpected expenses to date. Mr. Foster asked if there was a change in figures due to property assessments. Mr. Ingersoll stated that he sent an abatement to the Council earlier in the day for Chestertown Cove and said the dropped value surprised him.

Mr. Ingersoll stated that there is no notice of appeals from the County and the County Appeals Board is not required to send them as they are considered “quasi-judicial”. Mr. Ingersoll stated that he did not know why the County would not want to attend these meetings because it was a large reduction in taxes for them as well as Chestertown. He said that in 2018 there were several large properties with lowered assessments but the one sent today was an appeal that had been granted by the Appeals Board. Mr. Ingersoll stated that a complaint was filed years ago by the Kent County News and they were found not to fall under the Open Meetings Act. Mr. Ingersoll stated that there was an option for the Town to appeal to a Tax Court, but the Town should at least be receiving notices of appeals.

Mayor Cerino asked if there was any noticeable savings to date by having Lt. Dolgos serve as acting Chief. Ms. Miller stated that she expected some savings, but Chief Baker was paid until the end of September, so nothing showed yet. Ms. Miller stated that Police overtime was up somewhat with 48% of the budgeted overtime already spent. Mr. Foster stated that the extra spending in overtime may be a warning. Mr. Foster asked if how many officers were based in the original budget. Ms. Miller stated that there were 13 officers factored into this year’s budget and there were 12 full-time officers currently on payroll. Mr. Ingersoll asked if special events were a reason for the overtime. Ms. Miller stated that she did not do payroll, so she did not know how the overtime hours were broken down, but special events had a separate line item in the budget.

Ms. Miller stated that the numbers look good for the first quarter, but they always did. She said that it gets difficult at the end of the year when the tax revenues are no longer coming in.

Mr. Foster stated that he did not anticipate a large increase in overtime with the loss of a couple officers and said that he would like to see the reasons for the expenditures, not being less with the Chief’s salary out of the mix..

Ms. Kuiper asked if the police department has a separate Workman’s Compensation plan. Ms. Miller stated that they did not. Ms. Kuiper asked if Workman’s Compensation was self-insured. Ms. Kuiper asked if they were able to look at separate policies, one for the Police and one for the Town. Mr. Ingersoll stated that he could investigate it but thought that the Police Department needed the other Town employees to balance out their insurance costs because their department historically had a high amount of Workman’s Compensation claims.

Mayor Cerino asked where an unexpected windfall might come in on the revenue side. Ms. Miller stated that a windfall may come from Income Tax as the County increased the rate last year. Mayor Cerino stated that the Town revenues are based on things that happen at the State level with property assessments but that the Town can also only raise revenues by raising taxes and/or fees.

Mayor Cerino stated that fees for special events could help offset overtime for employees. Mr. Ingersoll stated that the Town liked to back the large events that bring people to visit. He added that the Town adopted the Enterprise Zone, which is a great thing because it spurred development, but the taxes were deferred on work performed for 7 years. He said that he thought they would see a slow increase in the taxable base each year as 20% was taxable in the Enterprise Zone. Mayor Cerino stated that the Enterprise Zone was giving entrepreneurs tax abatements off the added development value of a property or project, which encouraged people to invest in Town but delayed the municipality from receiving the total tax benefit for several years.

Ms. Samantha Branham, Marina Manager was present to answer any questions from the Council on the budget. Ms. Miller stated that the Marina fund paid the interest payment on the mortgage and is paying the salaries of those working at the Marina. The general fund is paying the principle portion of the original bond and the USDA payment. Ms. Miller stated that the Marina revenues broke even on the operational side but not on the debt service.

Ms. Kuiper asked that the Cannon Street pier rent be reflected to show rent as $2,500.00, as the budget still shows $1,500.00. Ms. Kuiper asked if there was a breakdown of what each entity was charged for rent. Ms. Miller stated that to date, $4,500.00 has been collected in rent which was back pay for some but both Sultana and Echo Hill were now current on rent.

Mr. Ingersoll stated that the Marina was often full this season. Ms. Branham stated that they sold more fuel this season than they have in the last 6 years. She said that the Marina went from twenty-six (26) to thirty-five (35) contracts during the season. There were eighteen (18) contracts already paid for next season. Ms. Branham stated that there would be winter storage this year with eight (8) slip holders having already committed, and there were three (3) still undecided. All eight (8) customers using winter storage are new customers.

Mr. Foster asked for clarification on slip rental noting that $32,000.00 was budgeted but the Marina figures show $41,000.00. Ms. Miller stated that the budgeted number was a guess because they were starting from zero. Mayor Cerino stated that there was $179,000.00 in revenue and $125,000.00 in expenses so far this year.

Ms. Miller stated that she thought the Marina could potentially cover the USDA quarterly payment and that it should be discussed during the next budget year.

Ms. Miller stated that revenues and expenses seem as predicted to date. Mr. Ingersoll stated that the grant for the Carpenter Park at Washington Park was almost complete.

Mr. Foster stated that he appreciated having this meeting as he did not want surprises in the Spring. Mr. Ingersoll stated that the audit should be available soon for anyone to review.

Mr. Stetson moved to adjourn the budget workshop at 5:38 was seconded by Rev. Tolliver and carried unanimously.

Submitted by:                                                 Approved by:

Jennifer Mulligan                                           Chris Cerino

Town Clerk                                                     Mayor

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