Budget, Mayor and Council, Town Agendas & Minutes, 2022|

Mayor and Council

Budget Workshop

May 9, 2022

Mayor Foster called the budget workshop to order at 6:01 p.m.  In attendance were councilmembers Tim O’Brien, Tom Herz, Jose Medrano and Meghan Efland, Amanda Miller (Director of Finance), Jennifer Mulligan (Town Clerk), Ron Dixon (Chief of Police) and guests.

Mr. Ingersoll stated that draft budgets had been sent to the Council on Friday for review.  He went over expected revenues first. He said that the budget was based on revenues given to the Town by the State Assessment Department and showed the Council a comparison chart of the last six years showing that their estimates were consistently low on their estimates of the assessable tax base by anywhere from $9 to 24 million dollars which resulted in unexpected revenues of $40 to $90 thousand a year.  He said that he also had taxing rate comparisons with other cities of a comparable size and structuring to Chestertown and the Town had the lowest tax rate.  Centreville was the nearest comparable, and they were $.10 higher at $.53. The other towns were double Chestertown’s taxing rate, and this did not even include what tax differential supplements that they might be receiving from their respective counties.

Mr. Ingersoll stated that the Town’s main revenues are property taxes and income taxes.  They were the largest part of the budget revenues.  He said that the chart he provided showed convincingly that the Town’s assessable base was moving up consistently and impressively even when a large amount of the assessable base’s improvement was temporarily restricted by the benefits of the Enterprise Zone to property developers.

Mr. Ingersoll stated that the Town was therefore healthy and the windfalls resulting from the State’s underestimation of the assessable base of the Town have added to the Town’s unappropriated surplus.  He recommended using the unappropriated surplus for capital projects whenever possible. He said that he also thought the Town should take full advantage of the ARPA funding now and not later.  He said that the Town currently spends a large portion of its budget on personnel and the required connected costs of FICA, pensions, and healthcare.  That did not always leave a lot for capital projects.

Mr. Ingersoll stated for the record that he did not think that ARPA funds should be handed out without taking care of the Town’s needs first.  Mr. Herz asked if there was a plan other than the needs assessment.  Mr. Ingersoll stated that he would like to fund the capital items that the Town needed.  Mr. Herz stated that asked if the paving that was not done this year is included in the funds on hand.  Mr. Ingersoll stated that the bid specifications for road improvement this year would include the one road that was anticipated in the current Town budget and ARPA funds would not pay the costs budgeted for that street.

Mr. Ingersoll stated that repayment of long term debt should also be considered when considering the funds on hand.  He said that $500,000 went out of the regular budget for the Marina that has not been paid back to the general fund.  Mr. Ingersoll stated that the Town is paying the principle on the loans and the Marina is paying the interest.  Mr. Ingersoll stated that the Town is already 10 years into paying off the Maryland Infrastructure Bond.

Ms. Miller stated that she had total revenues over expenses of $8,970.00 on the first draft budget sent out on the previous Friday.  She said, however, that the Town was funding for four (4) vacancies in the police department, including salaries and benefits, in that draft. A vacancy is also being funded in the Street Department and she accounted $65,000.00 for recycling.

Mr. Ingersoll stated that a bid opening was held today for curbside recycling and the Town only received one bid from Eastern Shore Environmental, LLC., at a cost of $234,000.00.

Mr. Herz asked how many people work in the Street Department.  Ms. Miller stated that there were nine (9) positions including the superintendent.  She said that one employee was leaving and will be replaced so they funded it fully.

Mr. Herz stated that grants from federal show the ARPA funds and then asked for an explanation of Schedule C.   Ms. Miller explained the document adding that there are expenses that can be seen in line items in each category, including bonuses under each department.

Mayor Foster asked about the police pensions on page 4, at $166,000 for FY2023.  He asked why it was almost double.  Ms. Miller stated that was because they were budgeting for vacancies and the police pension was funded at over 36% of each officer’s salary.  Other line items may be skewed because of the funding of the vacancies (because they included benefits including families to cover the costs to insure there was enough funding in the budget for a full staffing of the Department).

Mr. Ingersoll stated that there was not much in the way of construction “in the pipeline” at present, but some revenues may be coming in from the Village at Chestertown.  That project is being sold to a large national firm that builds housing and construction could start in the next fiscal year or sooner to build out that development.

Ms. Miller stated that the income tax line on page 1 of the general fund cannot be accurately predicted. She said that last year the Town received $550,000.00 and then Covid hit, so she did not know how that would pan out at the end of this fiscal year.

Mr. O’Brien asked where cuts could occur. He asked if the Town used other governmental agencies group bid fuel costs to save money.

Mr. Ingersoll stated that electricity is always bid out and they tried to co-op buy when they can.

Mr. O’Brien stated that the was curious on the history of the Visitors Center and how it was funded.  Ms. Miller stated that the County provided for $6,000.00 in rental fees each year for office space.  The main funding source was through the Hotel Tax, with the County giving the Town the entire proceeds of the in-town collection of the tax (minus a small collection fee).

Mr. Ingersoll stated that Kent County backed down from an agreement to staff the building with their Tourism staff after it was constructed.  They funded the Center with $6000 annually for the first few years.  Mr. Ingersoll stated that when the Hotel Tax was passed, Chestertown was initially given only 60% of the revenue but now they receive 100%.  He said that currently the County rents a suite on the second floor.  He said that he was disappointed over the fact that the County was not going after the Airbnb’s for the Hotel taxes because that would capture much more in revenues that would aid in the funding of the Kent County Visitor’s Center.  Mr. O’Brien asked if they could combine the Visitors Center with the Marina office or in what way they could save.

Mr. O’Brien stated that he would like to set aside funding in the budget for training for all employees.

Mayor Foster asked if there was an opportunity to work with the County on bulk purchasing with fuel or other items.  Mr. Ingersoll stated that he could look into it.

Mr. Ingersoll stated that the Visitors Center was built with a Federal MDOT grant (and a Maryland State Bond issue), and the cost of the Center was justified through the tourist revenues received through the hotel tax.  Mr. O’Brien stated that the cleaning costs were high.  Mr. Ingersoll stated that any comfort station should be cleaned on a regular basis, especially during COVID and there were costs associated with that.  Mr. Ingersoll noted that other municipalities have much higher tax rates and may also receive tax differential funding that could help with costs.  He said that the rents could be increased at the Visitors Center.

Mr. Herz stated that they discussed additional staffing at the Marina.  Mr. Ingersoll stated that a new hire started a couple of weeks by the name of Tom Leigh (a former Riverkeeper), who was going to work with Mr. Coleman.

Mr.  Ingersoll stated that salaries have gone up everywhere and they will probably continue to do so.  He said that it was difficult to keep employees with the salary competition created by nearby communities and counties.

Mayor Foster stated that they provided a bonus to employees earlier in the year, but there was discussion about a raise.  Chief Dixon stated that he has a system for raises based on time in the department.  He said that he has a proposed grade and scale to use as a selling point for employees, which he would forward to the Council.

Mr. O’Brien stated that there were discussions with the Sheriff’s Office for assistance and the Town was funding twelve (12) positions.  He asked if the twelve (12) positions were needed or was there going to be expanded cooperation with the County.  Chief Dixon stated that one of the places money was being wasted before he began working was in overtime, which has ended.  The police department used to be fully staffed at fourteen (14) officers and they cut it to twelve (12), but he said with that with the ebb and flows he would be happy if they had a full force of ten (10).

Ms. Efland stated that overtime numbers have not been changed in the budget.  Chief Dixon stated that he left the numbers as they were because he has not been here for a full year.  He said that the number was inflated, and staff was being better managed so the figure should drop.

Mayor Foster state that the Sheriff’s Department is cooperating with Chief Dixon which was one reason for the cut in overtime.  Beyond that, there was no guarantee that the Town may not have to pay for coverage with the additional officers.

Chief Dixon stated that he was comfortable budgeting for ten (10) officers and said that there was no need to add officers with specialties; the Town needs basic and intermediate services.

Ms. Miller pointed out the present draft of the budget showed Main Street and the Arts Council part-time staff is shown as funded at $78,000.00.  She said that was a figure from the previous year and would need the Council’s action.

Mr. Ingersoll stated that the cash on hand should be utilized, and the ARPA funds should be used to benefit of the Town.  Mr. Herz stated that the Town should be keeping aside a capital fund each year.

Mayor Foster stated that the Council had to keep in mind that Council’s before them were resistant to raising taxes, which is why Chestertown was at only $.43.  He also said that now would be a good opportunity to use unappropriated surplus to begin a capital project program.

Mayor Foster asked what is going to be done with curbside recycling.  Mr. Ingersoll stated that they could not afford a recycling program at $234,000.00 per year.  Mayor Foster stated that there were few communities that have twice weekly pickup of garbage.  He said that Wallace Henry does an excellent job, and he would like to keep this business viable for him.  Mr. Ingersoll added that the Town pays the tipping fees for trash delivered to the MES site by Mr. Henry.  It is not included in Mr. Henry’s annual costs. Mr. Ingersoll stated that the recycling bid could not be afforded, and he said that the gentlemen who submitted the bid told him that the service is becoming less available.  Mr. Ingersoll stated that the empty parking lot off of High Street that is now owned by Washington College, and they would be more likely to allow the igloos for recycling in the parking area.

Mr. Herz asked if the supervisors could come to the next budget workshop.

Mayor Foster stated that the Sheriff’s salaries increased 20% this year.  Ms. Miller stated that a 5% raise for staff was $85,000.00.  Ms. Efland asked if Chief Dixon could forward the scale that he discussed.  Chief Dixon stated that a starting scale for an officer at $50,000.00 would be a great beginning, but that would have to allow for a change in scale for all officers to begin with.  Ms. Efland asked for changes to the budget with the scaling in the police department.

Ms. Miller stated that she had a one page list of donation requests and reviewed them for the Council. She said that the HOYAS requested $2,500.00 and the Rising Sons Group for $1,200.00 for end of the school year picnic and summer activities.  Ms. Miller stated that the Samaritan Group was expected to put in a request.  Ms. Miller stated that she would like to see backup information outlining where the money was spent for the prior year.  Mr. Ingersoll suggested that specifics be added to the request form that require the agencies requesting funds to return to the Council after expending them and report on their use and benefits to town residents.

Ms. Miller stated that she was comfortable adding $50,000.00 to the property tax revenue estimates and $50,000.00 to income tax revenues for a surplus of revenues over expense of $108,900.  She added it would fund 5% raises for all employees.

The meeting at ended at 7:40 p.m.

Submitted by:                                                             Approved by:

Jennifer McCann                                                        David Foster

Town Clerk                                                                 Mayor

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