Budget Worksession Minutes

 March 12, 2007

The meeting was called to order at 7:05 p.m. Present were Mayor Pro Tem (MPT) Jewitt, CMs Dennison, Gourley and Lofgren. Also present were Town Administrator Murphy, Clerk Harper and citizens. Mayor Calvo had an excused absence.

1.    Mayor

Agenda changes: MPT Jewitt tabled the review of Minutes to focus on the budget.

59^th Avenue resolution: MPT Jewitt asked the Council to comment on the revised resolution for introduction at the March 14 Town meeting. Citizens will be given opportunity to comment at the Town meeting. TA Murphy highlighted the changes incorporated from the last worksession. These include new provisions referencing 1) negotiations of an agreement between the Town and Commerce bank; 2) notification of residents within a 2 block area of the project site and opportunity for public comment; 3) closure as a component of a comprehensive Safe Streets Committee plan; 4) closure to take place in the context of Commerce Bank project; and 5) closure subject to timetable of construction and the acceptance by the Town Council.

The Council made several additional changes including 1) not attributing a comprehensive traffic safety plan to the “Safe Streets Committee;” 2) linking the comprehensive traffic plan to the development of Greenbelt Station and Springhill Lake; 3) adding a provision stating the Town's interest in supporting a viable and successful commercial district; 4) adding a provision welcoming Commerce Bank as an attractive business to the commercial district; 5) deleting August 21 as the date of a public hearing; and 6) clarifying the location of the road closure. TA Murphy was asked to submit the newly revised resolution to the Town attorney for review. Mr. Attick requested that he be mailed a copy of the revised resolution.

MML hotel: The Council agreed to make reservations at the Princess Bayside hotel for the Maryland Municipal League (MML) conference, June 24 - 27.

2.    Budget Discussion

TA Murphy requested that the Council begin its deliberations with Public Safety Taxing District budget, for which increases of 3.5 cents per $100 of assessed property value in the real estate tax rate and 5 cents in the personal property tax rate have been proposed to fully fund an 8^th  police officer. An additional 3.5 cents would bring the real estate tax rate to 13.5 cents and generate $40,000, as opposed to $31,000 next year if it were kept at 10 cents. Raising the personal property rate from 5 to 10 cents would generate $25,000, as opposed to $12,000 if left unchanged. So far, the revenues generated in FY 2006 and FY 2007  have paid for a new police car and 6 months of salary for an 8^th police officer. The full year cost of a police officer is approximately $60,000 including benefits. 

MPT Jewitt and CM Dennison expressed reservation about raising public safety tax rates on businesses on top of a substantial increase in real estate taxes due to a very significant increase in the assessed values of the properties in the commercial district. CM Gourley pointed out that, prior to the creation of the Public Safety Taxing District, the businesses benefited from police protection that was paid for by Town residents. Also, the businesses were told at the outset that the funding for an 8^th officer would be phased in over 3 years. CM Lofgren said that the real estate tax to be paid by businesses may rise two or threefold this year as the homestead tax credit does not apply to them and rate caps are also higher. MPT Jewitt said that, if Councilmembers are opposed to increases in the public safety tax, they need to find money in the general budget to cover the funding gap for the 8^th officer.

TA Murphy continued with other budget highlights. This year's surplus is proposed to 1) finance the purchase of Public Works vehicles in the amount of $102,000; and 2) support the operating budget in the amount of $50,000. Revenues are projected to increase by 7% with most of the increase coming from real property taxes due to a 14% increase in real estate taxes. Revenues from licenses and permits are projected to come in at last year's levels, unless the Council makes adjustments to fees. Additional revenues could be raised by requiring higher building permit fees or requiring permits for plumbing and electrical installations. Rental licenses could be raised by $10 - $20 based on higher cost of processing rental licenses. Code and Police fines are projected to come in at last year's amounts or slightly lower unless the Council approves rate increases. Intergovernmental revenues are down by 5.4% due to decreases in State police aid and highway user revenues. Interest and dividend income went up due to a new investment strategy. 

CM Gourley thought that revenues from building permits might be under-estimated because weekend code enforcement may detect construction that previously went unnoticed. MPT Jewitt suggested that revenues from sales of assets may need to be revised as this year's revenues were higher than estimated.

At 8:15 p.m., the Council took a 5 minute break.

Budget discussion (continued): TA Murphy summarized the important budget changes in expenditures. Overall, expenditures are projected to rise 2%, with the operating budget going up by 4% and the capital budget going down by 8%. The operating budget includes a 2.5% Cost of Living Adjustment (COLA) for all employees as well as competitive salary adjustments. These account for the bulk of increase in the operating budget. TA Murphy then highlighted changes in each departmental budget and Council and TA Murphy identified line items that may need to be revised. These included:

·       Conferences & Training in the Town Council budget,

·       Bulletin and Elections in the Town Administration budget,

·       Maintenance & Repairs, Communications and Capital Outlays in the Police Department budget,

·       Emergency Preparedness (Emergency Operation Center) in the Miscellaneous Public Safety budget,

·       Part Time Wages in the Code Enforcement budget,

·       Capital Outlays > $500 in the Public Works Building budget,

·       Temporary Help in the Public Works Streets & Sanitation budget,

·       Sports Park, Pontiac Street fields and Playground Supplies in the Parks & Recreation budget,

·       Health Insurance (Dental Benefits) in the Miscellaneous budget,

·       B&GC Shed in the Capital budget

In discussions, CM Lofgren commented that tax rate cuts may not be feasible despite the increase in revenues because most expenditures, except salaries, have been funded at last year's levels. CM Dennison said she is ready to make adjustments to her budget and expressed concern that this year's salary increases may affect future budgets. She also asked about the status of joining the Maryland Retirement Plan. TA Murphy replied that he has contacted the Maryland Retirement Agency repeatedly and is waiting to hear from his contact regarding actuarial evaluations. CM Dennison suggested he work with Delegate Gaines.

TA Murphy distributed a one-page summary of the budget and went over the newly added fund balance information. He asked the Council to review it. MPT Jewitt remarked that one of the challenges of this budget is to fully fund the 8^th officer without raising public safety taxes. He requested that TA Murphy continue to provide budget memorandums to reflect any changes made from one meeting to another.

The meeting was adjourned at 10:00 p.m.

Kerstin Harper, Town Clerk

 
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