BUDGET WORKSESSION MINUTES
APRIL 11, 2005

The meeting was called to order at 7:00 p.m. Present were Mayor Calvo, CMs Dennison, Laughlin and McNulty. CM Gourley had an excused absence. Also present were Town Administrator Murphy, Clerk Harper and a citizen.

1.      Mayor

Announcements: Arbor Day will be celebrated in conjunction with the rain garden dedication on April 27. The Council is invited to attend a hoe down at Berwyn Heights Elementary School as part of the artist-in-residence program on April 21.

Citizen Comments: Mayor Calvo said that he spoke to Dana Taylor with the Berwyn Heights Boys and Girls Club who said that they have no objection to taking down the spectator stand at Sports Park. CM McNulty will follow up with the Men's League. Mayor Calvo spoke to a resident who recommended that the Town consider adopting a split rate property tax. The Council may want to consider such a tax for the unimproved properties along Ballew Avenue.

2.      Budget

Mayor Calvo said that the Council needs to finalize the budget for introduction at the April 13 Town meeting. A constant yield tax rate hearing is also scheduled. Updates to the budget spreadsheets were discussed.

Revenues

Personal Property Tax: Mayor Calvo explained that a State statute limits the personal property tax rate (PPT) to 2 ½ times the real property tax rate. For Berwyn Heights it means that the PPT cannot exceed $1.215 per one hundred dollars of assessed value. The current PPT rate is $1.19. Mayor Calvo moved to raise the PPT by 2.5 cents with the stipulation that it be dedicated to the Infrastructure Reserve Fund. CM Dennison seconded. TA Murphy explained that the Town notifies business owners of the tax increase after the adoption of the FY 2005-2006 budget and before the State-mandated notification deadline of July 15, 2005. There is no requirement for a hearing. The 2.5 tax increase was approved 4 to 0.

Mayor Calvo proposed to institute a $25 penalty per month for late payment of the PPT in addition to the 2/3 of 1% interest charged. This would help recover some of the cost of mailing out overdue notices. The Council discussed whether and where to set a minimum threshold for collecting the PPT. Mayor Calvo moved to set a $25 a month penalty for late payment with a $5 minimum threshold. CM Dennison seconded. The motion passed 4 to 0.

Business owner license fees: TA Murphy explained that he did an on-site inventory of all Town businesses over the past year and created two spreadsheets, one sorted by owner's name and the other by owner's business address. He has reviewed every license payment check to ensure that the business is correctly classified and tightened up the collection of late payment fees. As a result, more money was collected than was budgeted in the current fiscal year. TA Murphy recommended that the Ordinance be revised and definitions for business categories added. No decision on raising the license fees was made.

Rental license fees: TA Murphy explained that the rental license fee of $195 was arrived at by   multiplying the Code Department budget with the average time it took to process a rental license, including application, 1st inspection and one follow up inspection plus associated costs. Mayor Calvo said that State law allows a municipality to set the fee commensurate with the cost of administering rental licenses. Inflation would justify a $5 increase in the fee. TA Murphy was asked to consult with the Code Director to determine if the cost of the program has gone up.

At 8:20 p.m., the Council took a 5 minute break.

Highway User fees: Mayor Calvo said the Town should soon get an approximate idea as to whether it will receive the full amount in highway user fees from the State. If there is a reduction, the Infrastructure Reserve Fund will have to be reduced accordingly.

Real estate tax: Mayor Calvo asked Councilmembers if they wanted to comment on CM Gourley's proposal of a one-time real property tax increase of 6 cents to fund street repairs. CM Dennison said she is in favor of not raising this tax this year. However, she agrees that the Town needs to think carefully about how it wants to finance street improvements in the future. Mayor Calvo and CM McNulty were opposed, reasoning that residents will already face a 12.5 % increase in taxes due to rising assessments.

Expenditures

Mayor Calvo asked the Council to decide some inter-departmental issues. The money cut from various appropriations and set aside in a “kitty” amounts to $12,965, including $4,455 from discontinued debt service on a police car. Mayor Calvo moved to place the $4,455 into the Infrastructure Reserve Fund. CM Dennison seconded. CM McNulty said he preferred to use the money for a vehicle replacement fund, as some expensive Public Works vehicles will have to be purchased soon. Mayor Calvo said that he regards the Infrastructure Reserve Fund as more important. A vehicle replacement fund would better be started next year in conjunction with the purchase of a new vehicle. At that time, $22,500 will become available in debt service savings, which could go towards the purchase of a new trash truck. The rest would be taken from the surplus. CM Laughlin said that she prefers not to distribute money from the “kitty” until the budget has been finalized. The motion passed 3 to 1 with CM Laughlin opposed.

Unemployment insurance: TA Murphy said that he has received notice that unemployment insurance will go up from 1% to 2.4% of the payroll next year. CM Dennison moved to transfer $1,000 from the undesignated funds into unemployment insurance. CM Laughlin seconded. The motion passed 4 to 0.

ATHA signs (added item): CM Laughlin said that the Anacostia Trails Heritage Association (ATHA) is requesting $500 for signs that identify municipalities as members. More information about the signs will be sought including from former CM Lofgren before a decision is made.

Mayor  &  Council: CM McNulty reported that he has asked the Neighborhood Watch/Emergency Preparedness Committee (NW/EP) to provide the Council with a list of needed supplies. He asked to reserve funds that can be restored to the Committee budget when a list is received.

Administration: Mayor Calvo said that the Council cut $1,500 from the Dues & Conventions and Town Council Dues line items because there was a combined increase of $3,200. TA Murphy said that the budget increase is due to increased costs of conventions and memberships. Mayor Calvo suggested canceling membership in the National League of Cities (NLC) because the organization is geared more to the concerns of larger cities. CM Laughlin said that she and several former Councilmembers have attended the NLC conferences and have found the organization valuable. The NLC membership was dropped but no other cuts were made.

No changes were made to the Municipal Building and Town Center budgets.

Police Department: CM McNulty took Gasoline & Oil off the funding priority list. No other changes were made to the Police budget.

Code Enforcement: CM Laughlin moved to restore $4,000 for a weekend code enforcement officer. The motion failed for lack of a second. Further, she moved to restore $300 for Books & Periodicals. The motion failed for lack of a second.

Public Works:  Mayor Calvo said the Salaries & Wages appropriation has gone up by $4,500 over the current fiscal year. He would consider further cuts in the Temporary Labor budget. TA Murphy said that the cost of temporary labor is going up by 8% this year. No cuts were made to the Street & Sanitation budget, the Public Works Building or Street Lighting budgets.

Parks and Recreation, Education and Civic Affairs: No changes were made.

Miscellaneous: Mayor Calvo moved to restore $600 from the undesignated pool to the Merit Increases line item. CM McNulty seconded. He explained that $600 was transferred from Merit Increases to fund the Employee Recognition program at the last budget worksession.  The motion passed 4 to 0.

With the pool standing at $6,900, Mayor Calvo moved to transfer $6,000 to the Miscellaneous line item to reserve for spending on employee benefits if the Council so chooses. CM McNulty seconded. The motion passed 3 to 1 with CM Laughlin opposed.

Capital budget: Mayor Calvo moved to transfer $900 from the pool to the Infrastructure Reserve Fund. CM Dennison seconded. The motion passed 4 to 0.

In concluding remarks, it was noted that the undesignated reserves may come in at $300,000 in the FY 2006 budget, or $50,000 above the $260,000 anticipated, depending how much is spent from surplus this year. Revenues have been strong and can absorb the projected increases in the operating budget. Councilmembers agreed to each present an overview of their departmental budgets during the Town meeting.

3. Executive Session (postponed to next worksession)

The meeting was adjourned at 9:55 p.m.

Kerstin Harper, Town Clerk

Copyright © Town of Berwyn Heights.