MAYOR AND COUNCIL
JANUARY 6, 2020
Mayor Cerino swore in Thomas Herz as Second Ward Councilmember and Meghan Efland as Fourth Ward Councilmember before the beginning of the Utilities Commission at 7:30 p.m.
Mayor Cerino called the meeting to order at 7:50 p.m. In attendance were Councilmembers David Foster, Thomas Herz, Ellsworth Tolliver and Meghan Efland, W. S. Ingersoll (Town Manager), Jennifer Mulligan (Town Clerk) and guests.
Mayor Cerino asked if there were any additions or corrections to the minutes of the Mayor and Council Meeting of December 16, 2019. Mr. Herz moved to approve the minutes of the Mayor and Council meeting of December 16, 2019 as submitted, was seconded by Rev. Tolliver and carried unanimously.
Mayor Cerino stated that total operating funds on hand for unrestricted use was $1,236,266.75. Restricted funds for the Marina were set aside in the amount of $8,649.16.
Mayor Cerino asked for a motion to approve the payment of the bills. Mr. Foster moved to approve payment of the bills as submitted, was seconded by Ms. Efland and carried unanimously.
Mr. Ingersoll stated that Mr. Drew McMullen was present to discuss a proposal submitted on behalf of the Sultana Education Foundation to purchase the Shipyard portion of the Mill Street Town yard that has been in use by Sultana since 1997. Mayor Cerino recused himself from the discussion and the Council appointed Rev. Tolliver as the acting Mayor for that portion of the meeting.
Mr. McMullen stated that in 1997 when the Sultana Education Foundation was formed they searched for a property to build the Schooner. He said that the Town Council at that time was open to their request to use the corner of Cannon and Mill Street to build the Schooner Sultana and the boat launched in 2001.
Mr. McMullen stated that since 2001 the Sultana has done some smaller boat building in the Yard, but it has primarily been used for maintenance of the Sultana and as a storage facility for their canoe and kayak programs.
Mr. McMullen stated that in 2012, Sultana first began to explore the idea of purchasing the Shipyard, but their written request never received a formal response.
Mr. McMullen stated that the location of this site with its proximity to their dockside presence and the new Sultana Education Center made this site even more useful to them now. There is infrastructure on the land that was built by Sultana, namely the hoop shed, which has fully depreciated. He said that Sultana would like to make improvements to the land for future projects, but investments were easier to fund raise for when they owned a property.
Mr. McMullen stated that the property was originally owned by State Highway Administration, was sold to the County and then purchased from the County by the Town. He said he thought the original County purchase was made through or partially through Project Open Space funds and therefore had a deed restriction (reversion clause) where the property can only be used for public purposes or the State has the right to take the property and reimburse the Town $80,000.00 (the original purchase price).
Mr. McMullen stated that there were several factors in determining if this land could even be sold. The proposal submitted in late October was to “get the ball rolling” as it was thought that short of an official offer to purchase the property the State may not entertain any questions concerning the “reversion” clause in the deed. Mr. McMullen stated that this was an offer by Sultana, but it wasn’t set in stone and could go in any number of directions depending on how the State responds to the issue of reversion. Mr. McMullen stated that if the Town was able to turn a profit off the sale of the property he would be the first to encourage it. Mr. McMullen stated that because he knew the site and the previous uses, it was his opinion that anything short of a reclamation project would render useless for anything but a parking lot.
Mr. Herz stated that Mr. McMullen indicated that the lot would change to a storage site if the sale went through and questioned if that was the best use for the land. Mr. McMullen stated that if the Town could use the land for a higher and better use they should investigate that for their own good. Mr. McMullen stated that this land has been used as the shipyard for many years and they took pride in the way their facilities looked. He said that it was not prudent to improve the property without a long-term commitment. Mr. McMullen stated that there was also the possibility of a long-term lease, but Sultana Education Foundation would like to own the land outright.
Mr. McMullen stated that the Sultana is not comfortable being in the space without making improvements and would be looking to invest over $100,000.00. He said that Sultana didn’t want to invest that kind of money without owning the property or with a long-term lease (30 years or more). He said that ongoing overhead expenses were hard to fundraise for when property was rented.
Rev. Tolliver asked for clarification on the deed restriction. Mr. McMullen stated that the Deed of Sale indicates that “subject to the stipulation that in the event that this tract should cease to be used for public purposes, all right, title, and interest in same shall immediately revert to the State of Maryland to the use of the State Highway Administration by the Department of Transportation, its successors and assignees in fee simple upon payment of $80,000.00 to the grantee”. Mr. Ingersoll stated that $80,000.00 was the original sale price that the County used to purchase the property from the State. He said that the County sold the property to the Town for the same amount.
Mr. McMullen stated that $80,000.00 purchase price included the entire Town yard and the area that the Sultana was using. Mr. Ingersoll stated that if the property ceased to be a public use the State could take the land for $80,000.00 and do with it as they wish. Mr. Ingersoll stated that there are monitoring wells on the site, but the idea of building fee simple houses, condos, or any use other than what exists is impossible until the deed was changed by the State.
Mr. Foster asked if the Sultana use of the property would be considered a public use if there was a sale. Mr. Ingersoll said that was a key question for the State of Maryland to answer, whether the nonprofit ownership of the land by the Sultana Education Foundation would constitute a public use. Mr. McMullen stated that if they could not continue to use the land they would find another property to use for their purposes and would simply ask for time to vacate the property.
Mr. Herz asked what type of vehicles would be used on site if the sale was to go through. Mr. McMullen stated that vehicles and parking during business hours would be modest as they only use passenger vans and a couple pick-up trucks. Mr. Herz asked if Mr. McMullen anticipated additional parking. Mr. McMullen stated that he was unaware of any additional traffic that this purchase would generate.
Mr. Herz stated that the dollar per year rent was discussed in the Spy article and asked how that came to be. Mr. Ingersoll stated that when the Sultana originally came before the Council, the Council was excited about the prospect of the shipyard being in this location and thought it would be better than the storage of Town trucks and snowplows on the corner lot. He said that they saw the shipyard as a unique opportunity to screen the community nicely from a street crew’s working yard. Mr. Ingersoll stated that charging full rent creates the unique problem of possibly triggering State property taxes on an income producing property.
Mr. Ingersoll was asked if the use of the yard by Sultana conformed with the zoning of the property. He stated that the underlying use and continual of the property dates to the 1940s when it first became the State Highway Department’s regional yard. This use continued to the present day by the County and Town’s use as road department operations and the use of the Shipyard to build a ship. Mr. McMullen stated that he was aware of one neighbor who was concerned with noise but it was infrequent on this site. Mr. McMullen stated that right now they were working on masts which was between two (2) and five (5) days of work which might cause noise as there is machinery at the shipyard, but it is only used occasionally during the day.
Mr. Ingersoll stated that he thought that the Attorney General was sent an inquiry in 2012 about the public use reversion clause but did not think the inquiry was answered by the Attorney General at the time. Mr. Ingersoll stated that it would take about six (6) weeks for the Town to declare the property surplus by Ordinance before any steps could be taken to sell the property. He said that the question could also be asked of the present Attorney General but the question would be easier to answer with a proposed reuse of the property. The question of “public use” would also have to be determined by the State of Maryland Board of Public Works who approved the conditions originally.
Mr. McMullen stated that the Sultana Education Foundation is also sensitive to a payment in lieu of taxes if the sale does materialize. Mr. Ingersoll stated that if the sale was $80,000.00 it would leave the Town with $80,000.00 in their coffers while still retaining ownership of four-fifths (4/5) of the property for its own use, which he thought was better than a dollar ($1.00) a year lease. Additionally, he was fairly sure that the Sultana Educational Foundation is prepared to pay an annual PILOT as they had on other properties.
Rev. Tolliver asked if Sultana had an urgent need to purchase the property. Mr. McMullen stated that this was not an urgent matter for Sultana, but any investments for improvements on the property would be kept to a minimum until the issue was resolved.
Ms. Cynthia Saunders asked what would happen to the Betty Anne Connelly Garden, located at the corner of the property, if the sale was to go through. Mr. Ingersoll stated that the pocket park would remain in perpetuity as part of any new deed or would be subdivided out of the parcel.
Reverend Tolliver asked Mr. Ingersoll if he had received a PIA request on this matter recently. Mr. Ingersoll said he had, and he had already sent some information to the individual who requested it. He said that the Sultana offer was not submitted until a few days before the election. At that time, he decided that it was not fair for the Council to start a land sale process that could not be finished before the Council changed. He emailed the Sultana Education Foundation proposal to the Council, except for Mayor Cerino who had an obvious conflict of interest by working for the Sultana Education Foundation. After the election he emailed the same packets of information to the newly elected individuals. He said that the intention was always to bring this matter up at the first meeting of the new year with the newly elected Council members. Mr. Ingersoll stated that this process was going to take a good deal of time and it was a complex decision for the Council to make.
Mr. Ingersoll stated that the Sultana has done a lot for the community and that they and Echo Hill paid their share of the new pier at the Foot of Cannon Street when it was originally built. Mr. McMullen stated that he could be faulted for not returning to the Town each year to discuss rent, but he said that in addition to the dollar rent, the Sultana Education Foundation raised over $650,000.00 toward the Marina upgrades, built the pier, and demonstrated their commitment to Chestertown over the years.
Mr. Foster stated that it sounded like more information was necessary but that could not be done until the State defined “public use”. Mr. Ingersoll stated that he would not recommend agreeing to the offer from Sultana Education Foundation until the Town finds out for sure that all the requirements of the original deed.
Ms. Jorgenson asked if the Council could move forward asking the State a definition on “public use” before declaring the land surplus. Mr. Ingersoll stated that it sounded like the Council was headed toward asking the State questions before declaring the land surplus. He reiterated that the land was not currently surplus or for sale and could not be sold until it was declared surplus by Town Ordinance. Ms. Jorgenson asked if there was a pledge from the Council that there would be transparency in their discussions with the State.
Ms. Maguire stated that everyone in Chestertown supports Sultana and asked if the Connelly Garden was part of the lot. Mr. Ingersoll stated that the Betty Anne Connelly Garden was part of the parcel requested and reiterated that the park would be either maintained in perpetuity by the ultimate buyer or subdivided back to the Town for preservation.
Ms. Maguire stated that at the last budget cycle the residents were threatened with recycling being taken away followed by the police department and said that the State should be asked if more than $80,000.00 could be received for the lot. Ms. Maguire stated that she thought it unrealistic that parking would not change adding that Mill Street already had parking issues. Mr. McMullen stated that there would not be additional traffic as a result of this sale.
Ms. Maguire stated that the Town should have written the people surrounding the area that there was an offer of purchase and asked about the Town’s the process for selling property. She said that she shouldn’t have to read about something of this nature in the Chestertown Spy. Mr. Ingersoll stated that the property was not for sale, nor could it be sold until it was declared surplus by the Mayor and Council by Ordinance at which point it would have been advertised to the public after being publicly initiated. The Sultana Education Foundation submitted an offer to purchase land. He said again that in order to entertain the offer, the Town would first have to declare the land surplus by Ordinance which took approximately six (6) weeks. This coupled with the issue of answers from the Attorney General would take a good deal of time.
Mr. McMullen asked if he could say a few additional things. Mr. McMullen stated that he wanted to clarify that this transaction would not create more traffic and there was no intent to use the facility any differently than they have been. He said if that was a concern of the neighbors he would be happy to put that in writing.
Rev. Tolliver asked what needed to be done tonight. Mr. Ingersoll stated that tonight was supposed to be the meeting where the offer was initially discussed and made public. He said that now that the new Council has been sworn in, he would like permission to find out about the “reverter” clause and how the Attorney General defined “public use”. He said that the Council would also have to decide if they were going to declare the land surplus. Mr. Ingersoll stated that since Mr. McMullen indicated that this was not urgent, the Council may want to consider the issue and address it at a future meeting and with permission he would draft a letter to the Attorney General for the SHA asking for definition of the reversion clause.
Ms. Jorgenson asked for Mr. Barroll’s opinion about the reverter clause. Mr. Ingersoll stated that Mr. Barroll was not present at the meeting and he didn’t want to speak for him. Ms. Jorgenson asked if that information would be in the emails he was going to forward her from the PIA request. Mr. Ingersoll stated that the opinion was in the first email he sent to Ms. Jorgenson today.
Rev. Tolliver moved for the Council to ask the Attorney General the following questions:
- Definition and clarity on the “reversion clause”;
- Definition and clarity on “public use”;
- Did the Sultana Education Foundation qualify as a public use;
- Did the Town have the right to declare the property surplus;
- Will the State Highway Administration exercise the reversion clause if the Town declared the land surplus;
- If the Town declares the property surplus, can the property be listed at market value, and is there an obligation to reimburse the State for the grant monies that were used to purchase the property.
The motion was seconded by Mr. Herz and carried unanimously.
Mr. Bowering asked when the original agreement for purchase was made and if the State would just release Chestertown from the provisions in the deed. Mr. Ingersoll stated that he was not certain if the Department of Transportation had any current interest in this property, especially since the oil monitoring wells were still in place. He said that he would draft a letter, have it vetted by the Town Attorney, and send it to anyone who was interested in reading it. Mr. Ingersoll stated that the reverter clause said that the State of Maryland would take the property back for the purchase price of $80,000.00.
Mr. Ingersoll stated that in the previous Utilities Commission meeting, Mr. Sipes discussed the fiber work being performed underground. Mr. Ingersoll stated that there was a draft ordinance in the works with more specificity on the matter, but in the interim he would recommend using the Ordinance in place, Chapter 145 – Streets and Sidewalks, to control the work being done in Town rights of way. Chapter 145 makes it unlawful to begin construction, alter, grade, etc. without bonding. He read some of the article into the record including a section that required that an engineer inspect the work for the contractor. Mr. Ingersoll stated that due to the destruction caused by underground work in the last year, a bond amount should be determined before any contractor moves forward with additional work. He said that at the next meeting he would like to discuss an amount for the bond. Mr. Ingersoll stated that Talkie insisted that they cannot provide a performance bond to the Town because they were not working for the them, but said he disagreed with that line of thought.
Mr. Ingersoll stated that major “No Smoking” changes were recommended to be added to the proposed Parks and Public Spaces Ordinance by Main Street and some additional remarks from a local citizen and former planning Commission member were also received. He said that he would like to discuss this at the next meeting after hearing back from Mr. Barroll and Acting Chief Dolgos as to whether they could enforce the “No Smoking” changes as proposed.
Mr. Ingersoll stated that Resolution 06-2019 for Talkie should be signed on the advice of the Town Attorney who deemed that if Talkie met all the requirements of the Enterprise Zone then approval should not be withheld due to any other non-related issues.
Mayor Cerino read the winners of the 2019 Christmas Decorating Contest into the record as follows:
1st Ward: $50.00 James Smith, 111 N. Queen St.
$25.00 George Nelson, 210 Byford Drive
2nd Ward: 3-way tie:
$25.00 Marguerite Gulbrandsen, 110 Spring Avenue
$25.00 Daniel Premo, 231 Kent Street
$25.00 Peter Bourne, 227 Kent Street
3rd Ward: $50.00 Matthew King, 108 Devon Drive
$25.00 Veronica Newnam, 103 Roosevelt Drive
4th Ward: $50.00 William & Sheila Lepter, 201 Glen Street
$25.00 Thomas & Angelica Walls, 409 Greenwood Avenue
1st Place: $100.00 – Chestertown Natural Foods, 303 Cannon Street
2nd Place: $50.00 – Peoples Bank, 100 Spring Avenue
Mayor Cerino asked for Ward Reports.
Mr. Foster stated that he attended the annual Volunteer Awards at the Chestertown Volunteer Fire Company and said that he was so impressed by the number of people who volunteer and the time that they dedicate.
Mr. Foster stated that he had attended the legislative breakfast earlier in the day. He said that when he returned home he watched The Spy interview featuring Mr. Fithian on the tax differential and said that it surprised him. Mr. Foster stated that Mr. Fithian agreed to work with him last year and they discussed hiring an objective analyst to review the numbers. He said that one good meeting took place and then the talks broke down for reasons he did not know. He said that he would encourage everyone to watch the video that was posted today. Mayor Cerino stated that Mr. Fithian’s points were not a good argument as the projects and programs he used as examples were countywide projects or services that all county residents paid for with their taxes. He didn’t address any services that Chestertown provides which relieved the County of their duties in Town. The issue is that the residents of Chestertown are paying the full County tax rate for services that are not performed in Town limits by Kent County. He said that the Town should either be reimbursed by the County for the services that the Town provides or the County tax rate should adjusted to reflect a tax reduction to Chestertown residents, which is the norm for all but two (2) counties in Maryland. Mr. Foster stated that he planned to attend the next County Commissioners meeting.
Mr. Ingersoll stated that Mayor Cerino submitted a letter to the County Commissioners in December 2019 asking that they consider a tax rebate or tax differential. This was because in the past the Town was told by the County that they did not meet the 6-month advance deadline and we wanted to make sure that this did not occur again this year.
Mr. Herz stated that he wanted to thank the Ward 2 voters for their support and to Ms. Kuiper for leaving the Second Ward in such good shape. He also thanked his wife, Sharon, for her support and the treasurer of his campaign, Liz Gross. He said that the Town Council and staff have been helpful since the election and thanked them as well.
Mr. Herz stated that he has noticed cables and wires hanging from many utility poles around Town and was hoping that they could be tidied up. He said that he marked and geolocated them and put them on a Google map to be submitted to Delmarva Power. He asked Councilmembers to look for poles that could be added to the spreadsheet with a request that they send him a picture of the pole numbers along with the closest street address and he would update the spreadsheet before he submitted it to Mr. Ingersoll.
Mr. Herz stated that now that he has taken his oath he would like to switch all email communications to email@example.com.
Rev. Tolliver stated there was an armed robbery over the weekend at Uncle Charlie’s Bistro and hoped that the police would be able to solve the case soon.
Rev. Tolliver stated that he wanted it on record that he signed the resolution for tax credits for Talkie in protest, as he did not think that the company deserved a tax break or any type of incentive until they cleaned up the mess that has been made and they are continuing to make in Chestertown.
Ms. Efland stated that her concern for the Fourth Ward were the continued leaks in College Heights due to the installation of fiber, which Mr. Sipes addressed in the Utilities Meeting earlier this evening. Ms. Efland asked that if work like this is presented to the Town in the future, she would like for residents to be given notification before construction begins. She suggested that it be woven into the draft ordinance for utilities in the right-of-way. Mr. Ingersoll stated that they may be able to put it up on the website or there could be a requirement that the company doing the work provide the community with advance notice.
Mayor Cerino stated that the next meeting would take place on Monday, January 27th at 7:30 p.m. due to the Martin Luther King holiday.
There being no further business and no other questions or comments from the audience, Mr. Herz moved to adjourn the meeting at 8:35 p.m., was seconded by Rev. Tolliver and carried unanimously.
Submitted by: Approved by:
Jennifer Mulligan Chris Cerino
Town Clerk Mayor