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Town Meeting Minutes
January 9, 2008

The meeting was called to order at 8:04 p.m. Present were Mayor Calvo, Mayor Pro-Tem (MPT) Jewitt, CMs Dennison, Gourley and Lofgren. Also present were Town Administrator Murphy, Chief of Police Murphy, Treasurer Lape, Clerk Harper, as well as Chair of the Education Advisory Committee (EAC) Ann Harris Davidson, Chair of the Neighborhood Watch/Emergency Preparedness Mike Attick, Co-Chair of the Safe Streets Committee Sharmila Bhatia, Bond Counselor Lindsey Rader and citizens.

Mayor Calvo led the Pledge of Allegiance.

1. Hearing

Private Sale Authority Charter Amendment: Mayor Calvo explained that the Town is taking steps to join the Maryland State Pension System. Currently, the Town has a defined contribution retirement system, in which the Town contributes 6% of an employee's salary to his or her 401(a) retirement fund and matches up to 3% in a 457 plan. The majority of the Council and Town employees would like to switch to a defined benefit system, in which benefits, based on years of service and average final years salary, are guaranteed after an employee retires. To be able to join the State Pension System, the Town is required to come up with a down payment, which gives an employee partial credit for past years of service with the Town. The Council has asked the State legislature to authorize admission on the basis of giving 1/3 credit for prior service, and Berwyn Heights' delegates have agreed to sponsor the legislation.

Mayor Calvo continued that the preliminary cost estimate of joining the State Pension System is $1,065,000. As the Town does not have reserves to pay for this sum, the money must be borrowed. The Council and Town Administrator have spent considerable time investigating the best financing options and concluded that selling bonds privately to financial institutions is the most cost-effective and least time-consuming way to borrow the money. However, the Berwyn Heights Charter does not allow the Town to avail itself of this relatively recent financing mechanism. Therefore, the Council plans to amend the Charter to give the Town private sale authority and has invited bond counselor Lindsey Rader to explain the process of amending the Charter and issuing privately negotiated bonds and to answer any questions.

Ms. Rader said that while the Charter amendment and the bond sale are linked, they are two separate issues. Incorporating private sale authority into the Charter makes more efficient borrowing possible but not necessary. Historically, municipal governments sold general obligation bonds, even in small denominations, by public sale at competitive bid. This required putting together an Official Statement, containing financial, economic and demographic information about the Town, obtaining a bond rating, publishing repeated notices of sale and establishing dates and times for the bid. Recently, however, banks have become interested in holding municipal bonds, and the State of Maryland passed legislation to allow municipalities to amend their Charters so that they can issue bonds to banks at private negotiated sales and take advantage of this more modern and efficient way of raising money.

Ms. Rader continued that if the Town decides to go forward and issue a pension bond, the Council only would need to adopt a bond ordinance, which states the maximum borrowing amount, describes the purpose of the bond and pledges the Town's full faith and credit to its repayment. Details would be fixed by adoption of a bond resolution later. As with any ordinance, the bond ordinance is subject to petition to referendum within 21 days after its adoption by 20% of eligible voters of the Town. Alternately, the Council could send the bond ordinance to referendum at the next election. However, this option would be more expensive, adding the cost of election preparations to bond counsel's  bill.

Mayor Calvo opened the meeting. Ron Shane of 57th Avenue commented that he welcomes the Council's efforts to secure better pension benefits for Town employees and to solicit citizen input. He would like to see both the bond ordinance and the decision to join the State Pension System submitted to referendum as it is a big financial commitment. He then sought clarification on whether annual retirement contributions of the Town would be higher with the new pension plan. He was informed that the Town's contribution would be 8.8% of the employees’ salary but may change over the years. Overall, the Town's contribution may be slightly higher as the plan must include part time employees.

Mr. Shane further asked what percentage of the Town's budget the Town's retirement contributions would commit. He was informed the Town's retirement expenditure would be approximately $90,000 per year. Mr. Shane suggested that the Town consider joining the State pension plan without giving credit for prior years service or roll over the money in the current retirement funds to help pay for the cost of joining the Pension System. He was told that there is no precedent for joining the System without crediting any prior service and that rolling over the 401(a) funds would involve a lengthy and costly process of requesting permission from the Internal Revenue Service (IRS).  Money set aside in the 457 plan belongs to the employees and cannot be rolled over. Mr. Shane pointed out that this leaves employees with two retirement funding sources: the contents of the Town's current plans and the additional credit for prior service under the State Pension System. TA Murphy clarified that the Town's 401(a) contributions could only be rolled over into the Pension System if the Town were to credit 100% of past service. Mayor Calvo added that rolling over the 401(a) funds while joining the System at 100% credit for prior service would be more expensive than joining at 1/3 credit for prior service and letting employees keep the 401(a) funds.

Denise Nadasen of Natasha Drive commented that she declined joining the Maryland State Pension System when she started to work for the University of Maryland in 1995 because the benefits were not very good. Instead she signed up for a TIAA-CREF retirement plan and has not regretted it. She suggested the Town look into other retirement options offered by the State of Maryland that do not require the Town to credit prior service or, instead, to improve the benefits of the retirement plans now in place. Further, there may be other types of benefits apart from pensions that would retain and attract employees, such as better salaries or working conditions. Mayor Calvo replied that the State Pension System's benefits were not very good in the mid 1990s but were enhanced in 1998 and again in 2004. Now, an employee with 30 years of service receives approximately ½ of his final years average salary as opposed to 1/3 prior to the enhancements. In conversations with Town employees, he has presented the option of upgrading their current retirement funds instead of joining the Pension System but employees have, for the most part, said that they prefer the security of a defined benefit plan. Lastly, Ms. Nadasen stated that she has no problem with changing the Charter to allow for more efficient borrowing but asked that the Council allow citizens to vote on how much money is borrowed and for what purpose.

MPT Jewitt clarified that the Council cannot direct a Charter amendment to referendum. Only citizens can petition it to referendum either within 40 days after it has been adopted or by drafting and submitting the Charter amendment for Council approval. However, a bond ordinance can be directed to referendum by the Council.

Mike Attick of 62nd Avenue said that he supports the Charter amendment to give the Town greater borrowing flexibility. However, the question is whether the Council intends to submit the bond issue to referendum. He believes 1) that not enough research has been done on other retirement options, 2) that employees are being force fed a retirement plan that they don't fully understand, and 3) that the cost of joining the State Pension System is not yet fully known. Before committing the Town to spend such large sum of money, the Council should make sure it has looked into all viable options and calculated the full costs.

Responding to Mayor Calvo's request, Ms. Rader elaborated on the respective costs for a publicly offered bond and a privately negotiated bond. The former bond issue, which is already available under the current Charter, is likely to cost more than $60,000. The latter bond issue, to be approved in the proposed Charter amendment, would cost between $8,000 and $15,000 and can garner interest rates better than those yielded in a public offering.

Ron Shane calculated that with a combined bond repayment and pension plan contribution the Town would spend approximately $200,000 per year for the term of the bond. This represents about 8% of the Town budget. He again requested that the Council submit the bond issue to voter referendum.

Denise Nadasen asked if this sum is in the current budget. Mayor Calvo replied that it is not. However, as real property taxes, at the current tax rate, are set to rise by 13% over the next two years and similar amounts for 10 years thereafter, the Town will have an additional $130,000 - $140,000 annually to spend and the bond repayments of $109,000 could be absorbed. Also within the next two years, the Town is expecting to receive the first installment of the Metroland compensation in the amount $500,000, half of which is intended for pension improvements. Additionally, there is an undesignated surplus that can be used toward repayment of the bond. These sources could reduce significantly the amount the Town would need to borrow to join the Pension System.

Mr. Shane argued that it is unfair to the taxpayers for the Town to take on this liability so that employees can receive 1/3 credit for prior years service under the State Pension Plan. He said that employees have already received contributions for prior service under the Town's existing retirement system. Therefore, past contributions should either be rolled over into the new system or returned to the general fund.  Further, he thinks it likely that employees will not remain with the Town once they are vested in the Pension System and can collect their benefit for prior service. Mayor Calvo pointed out that employees are vested in the Pension System after 5 years. Under the 1/3 credit arrangement, this means an employee must have worked for the Town for 15 years before he or she would be eligible for the benefit at the outset.

Mr. Attick asked Ms. Rader how much more bond counsel would charge for submitting a bond ordinance to referendum. She replied that her firm has never been asked to do this but her best estimate is between $5,000 and $10,000.

In response to residents calling in, Mayor Calvo said that the state of the economy does not directly affect the Town's real property tax receipts. It would affect income tax receipts and the ability of residents to pay rising real property taxes due to rising assessments. Regarding retirement plans used in other municipalities, Bowie, College Park, Colmar Manor, Edmonston and University Park, like Berwyn Heights, offer the International City Managers Association (ICMA) retirement funds to regular employees. Cheverly is in the Maryland State Pension System, as are District Heights, Greenbelt, Hyattsville, Landover Hills and New Carrollton. Laurel and Riverdale Park have established their own retirement systems. The larger cities of Bowie, Greenbelt and Hyattsville also have the very expensive Law Enforcement Officers Pension System (LEOPS) for their police officers.

At 9:27 p.m., Mayor Calvo closed the public hearing.

MPT Jewitt commented that the general obligation bond issue appears to raise the most concern. It is a complicated process that probably needs to be explained more fully to residents. The Charter amendment is merely enabling the Town to use a more modern borrowing method. The actual issuance of the general obligation bond is a separate decision, which the Council may choose to submit to a referendum. The employees are supportive of joining the plan because they see it as a serious commitment by the Town.

CM Dennison said that she supports the Charter Amendment but has concerns about borrowing over $1 million to finance the entry into the State Pension System. The decision to join the Pension System should be put to a referendum. While she understands the need to improve retirement benefits in order to retain and attract employees, she believes the Town should explore less expensive ways of doing it.

CM Lofgren defended previous Council's decision to take out an $800,000 general obligation bond, which the Town is still paying down, to finance a large street renovation project. He maintained that contractors are not interested in doing small projects costing $100,000. Regarding the proposed pension system, he said that several Councilmembers ran on this issue during the last election. He feels strongly that a retirement system should have been established a long time ago. The proposed pension plan is decent but not over-generous. None of the Town's employees is going to going to get rich because they would keep their old retirement funds. He knew of employees in Greenbelt and Berwyn Heights before these cities had retirement health benefits and pension plans, who were sick and destitute after many years of service. The cities then decided to give those men stipends so that could have some income in their old age. Cities and towns will still pay even if they don't have a retirement system. CM Lofgren concluded saying that establishing a pension system is a huge undertaking but will only get more expensive as time goes on. If the Council continues to study and debate the options, it will not get done.

CM Gourley said that he also ran on providing a better retirement for the Town's employees. When the newly elected Council discussed its goals, a pension plan was one of the top priorities. Without a viable pension plan, it will be very difficult to retain and recruit employees, especially police officers. Many residents he has spoken to have expressed their support for improving retirement benefits and asked why it hasn't been done before. He said that, earlier, the Town didn't have the money because real estate taxes were much lower. Now there are sufficient funds to tackle this problem and to join the State Pension System. There are many different financing options and annual costs may well be lower than the projected $109,000 if Metroland money or some of the Town's own reserves are used to pay off a bond issue. He is for getting residents' input and have them vote on the issue, but they need to understand that the Town will continue to lose employees if it doesn't offer better retirement benefits.

Mayor Calvo said that while he personally prefers to manage his own retirement funds, many of the Town's employees simply want to put the money away and know it is taken care of. They prefer the security of a plan that guarantees them certain benefits. As Mayor, he remains embarrassed that the Town does not offer any retiree health benefits. Currently, retirees would have to pay for medical expenses out of pocket, which could amount to many thousand of dollars a year if it includes family. They won't be able to afford it from their share of the $450,000 in the 401(a) account. The State Pension System would at least provide a guaranteed pension as well as disability and survivor benefits. In the long run, the Town may want to look into allowing its retirees to remain in its health insurance pool as a way to give them health coverage, too. He sees spending $1,065,000 for a decent pension as taking care of employees who have spent their lives taking care of the Town. He is happy to send the issue to referendum and thinks residents will approve it overwhelmingly.

2. Minutes

Clerk Harper read a summary of the December 12, 2007 Town meeting minutes. On a motion CM Gourley and second by CM Dennison, the minutes were approved 5 to 0 with corrections.

3. Treasurer’s Report

Treasurer Lape gave the Treasurer's report for the month of December, 2007.

4. Mayor’s Report

Mayor Calvo provided a short state of the Town address. He said that, overall, the Town continues to be in good shape. Progress has been made on all priorities that this Council set at the beginning of its term:

  • Fiscal policy – Town's net worth increased by 33% over the last 2 years, with assets having reached $1,648,000. This is the result of consistent long-term planning, such as setting aside money in infrastructure and vehicle replacement reserves, which has sharply reduced the Town's debt.

  • Public Safety Taxing District – this year the Town has fully implemented the Public Safety Taxing District which funds an 8th police officer. Credit is due to Chief Murphy who has been able to recruit officers in a very competitive market for this position as well as replace other officers who left.

  • Salaries & Benefits – The Council was able to implement a comprehensive salary adjustment in FY 2007 in addition to Cost of Living Adjustment and merit increases that have helped retain quality employees.

  • Safe Streets – The all-volunteer Safe Streets Committee has completed a report and made recommendations on how to improve traffic safety in Berwyn Heights after a year of fact-finding and evaluating citizen input. Similarly, the Neighborhood Watch/Emergency Preparedness Committee has worked to improve coordination with the Police Department and drafted a plan for helping to patrol the Town.

  • Community outreach – After several years of high turnover of Berwyn Heights homes, the composition of its citizenry has changed substantially. The Berwyn Heights Elementary School PTA and Boys & Girls Club have played an important role in integrating the new residents but the Council needs to continue its efforts to encourage their participation in Town affairs.

Mayor Calvo thanked residents, Town staff and his colleagues on the Council for working together to move the Town forward. He continued with the announcement that the Council has switched its support to the westerly route of Nevada Street trail after hearing from County Councilmember Eric Olson that he favors this option and that funding is available. He further announced that Town elections will be held on May 6, that the candidate filing deadline is on March 4 and that the Town is still looking for election judges.

5. Department Reports

Administration: CM Gourley wished everyone a happy new year and reviewed the revenues received to date.

Code Enforcement: MPT Jewitt announced that the Code Department is still seeking a Code Assistant for 4 hours per week. Interested residents may contact Code Director Solomon or call the Town Office. He then reminded residents to put their trash out at the curb and bring empty containers back on trash collection day. Residents are also reminded that permits are now required for Temporary Portable Storage Units (PODS) and can be obtained at the Town Office. MPT Jewitt concluded with a report on code violations.

Parks and Recreation, Education and Civic Affairs: CM Dennison reported that she will be meeting with Town organizations about their budget requests. She attended the last PTA board meeting and was pleased to contribute a $250 check from the Council to the PTA's weekly reader program. On January 12, there will be a meeting to organize a Berwyn Heights marching band. All interested residents are welcome. At the last worksession, the Boys & Girls Club discussed plans on how to improve the Pontiac Street field with the Council. Referring to the Mayor's report, CM Dennison agreed that more outreach to new residents is needed. She suggested organizing block parties and putting together a welcome packet as possible ways to get in touch.

Public Health and Safety: Mayor Calvo announced that The Examiner, distributed free to residents on weekends, will carry a real estate feature on Berwyn Heights next weekend. Residents may want to look out for it. Further, he was invited by the Maryland Municipal League (MML) to testify before the Senate Budget & Tax Committee to testify on small town fiscal issues next Wednesday.

Chief Murphy gave the police activities report for the previous month. There were 9 Part I offenses, which is lower than the 5 year average of 12. Part I offenses for the entire year of 2007 came to 124, which is also lower than the 5 year average of 141. This represents a 5.3% decline of serious crimes over the previous year. Crimes against persons also declined from 28 in 2006 to 23 in 2007 or 17.8%. The reduction in crime took place despite a turnover of 50% of police department staff over the last 15 months. High turnover represents a serious loss of productivity and institutional knowledge for a police agency. The pension system proposed by the Council, which is preferred by most employees to the plan now offered, would likely help retain experienced officers. On average, a 15 year veteran has approximately ½ year's salary in his 401(a) retirement plan, not a large sum to roll over into pension system.

Chief Murphy continued that Officer Unger was promoted to Private First Class after his first year of service. The Department also received an $8,500 grant for Detective Antolik's participation in the US Secret Service Metropolitan Fraud Task Force, and an $8,000 traffic enforcement grant from the Prince George's Highway Safety Office for 2008. Lastly, he and 3 other officers yesterday went to a free training session on gang investigations at Southern Maryland College.

Public Works: CM Lofgren reported that the Public Works Department was able to double the load of leaves collected at a time with the addition of a new leaf machine. Overall, 57 loads or 138 tons of loose leaves were collected during the season and deposited at a College Park mulching facility at a cost of $5,000. From now on, leaves must be bagged for collection.

6. Committee Reports

Education Advisory Committee: Chair Ann Harris Davidson thanked CM Dennison for her faithful support of the EAC and Secretary John Trangsrud, Vice Chair Mel Tremper, PTA Liaison Beth Brittan Powell and Safe Streets Representative Jeff Knutson for their help. At the January election, the currently serving officers agreed to continue to serve.  Ms. Davidson then reviewed the accomplishments of the Committee during 2007. Among these are:

  • Having taken the lead (starting with testifying before the County Planning Commission and the Board of Education on January 11, 2008) in opposing a January 9, 2007 Board of Education vote to sign a letter of intent to give away its 14 acre Springhill Lake Elementary School property, which eventually resulted in a reversal of the decision;

  • Organizing meet-and-greets with School Board representatives Rosalind Johnson on June 12 and Heather Iliff on August 14;

  • Organizing a rededication of the Miriam Farwell memorial at Berwyn Heights Elementary School (BHES) with Principal Singer and Historical Committee Chair Cheryl Jewitt;

  • Presenting the PGCPS' planned middle school initiative. with a focus on the plans for the  International Baccalaureate Middle Years Program at Greenbelt Middle School with Principal Judy Austin on August 14;

  • Liaising with Parkdale High School by attending its open house on November 15 and supporting efforts to strengthen its language program;

  • Assisting Greenbelt residents in establishing an e-mail communications list; and

  • Taking the lead in ensuring BHES' inclusion in the PGCPS preK-8 restructuring plans and providing residents of Berwyn Heights and neighboring communities with detailed presentations of the plan on November 13 and December 11.

Ms. Davidson concluded with the announcement that the EAC's February meeting will be canceled due to the Maryland primaries and that the Committee will possibly host School Board member Amber Wallace at the March meeting.

Historical Committee: CM Dennison reported for Chair Cheryl Jewitt that there will be budget meeting with the Committee on January 13 and that planning for a wine and cheese reception has begun. The next regular meeting will take place on January 29 

Neighborhood Watch/Emergency Preparedness: Chair Mike Attick announced that the next Committee meeting will be held on February 6, at which the budget and recruitment of new members will be discussed. He thanked Chief Murphy and Officer Young for working with the Committee on improving patrolling in Berwyn Heights.

Recreation Council: CM Dennison reported that the Recreation Council will begin planning Berwyn Heights Day at its next meeting and is seeking to secure the regular representation from other Town organizations at its meetings.

Safe Streets Committee: Co-Chair Sharmila Bhatia reported that this Committee has concluded its main business 1 year after it was established. The Committee last met on December 20 to discuss the report of the traffic engineers and submitted its recommendations on which traffic problems should receive funding for further study. The Committee stands ready to discuss its recommendations with the Council at a future worksession.

7. Unfinished Business

There was none.

8. New Business

There was none.

9. Citizens Discussion

Ann Harris Davidson reported that the street light at the corner of Pontiac Street and 57th Avenue, which she first reported to be out in May 2007, is still out.

The meeting was adjourned at 10:30 p.m.

Kerstin Harper, Town Clerk


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