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Budget Worksession Minutes
March 10, 2008

 

1. Mayor

Announcements: CM Dennison visited Berwyn Heights Elementary School and was informed that enrollment currently stands at 495 students, that a mobile science lab was brought to the school by science coordinator Margie Strohecker and that the administration is preparing for an audit.

Pension bond ordinance: TA Murphy explained that further changes were made to the pension bond ordinance after conversations with the bond counselor and the Town attorney. In the title of the ordinance, the  maximum amount to be borrowed was revised to include the costs of issuance and actuarial studies and spell out the full name of the retirement plan the Town plans to join. The Question, on which residents will have the opportunity to vote, was rephrased to reflect the changes made in the title. However, the question should be further simplified.

Mayor Calvo commented that the changes have made the question more complicated and confusing. He prefers to leave the maximum borrowing amount at $1,065,000 because this number has been used in all communications with the residents. He would also take out details about which type of plan within the State Pension System the Town intends to join, giving partial credit for prior service and cost of bond issuance. He asked that TA Murphy revise the question for introduction of the ordinance at the March Town meeting. There were no objections.

Mike Attick of 62nd Avenue commented that he believes there is a legal requirement to specify in the bond ordinance the exact borrowing amount and purposes for which the money will be used. Mayor Calvo said he believes that a requirement for exact wording related to the Charter Amendment, not the bond ordinance, adoption of which is subject to the Town Charter and Council Rules. Mr. Attick said that he will look up requirements for the wording of a bond ordinance. CM Lofgren said that Council needs to make sure that all legal requirements are met. However, a simplified version of the question explaining the purpose of the bond issue could be included in parenthesis on the ballot, as previously discussed.

CM Lofgren sought clarification as to whether the costs of issuance of a bond will have to be budgeted if they are not included in the bond issue. Mayor Calvo replied that there are other ways to finance these costs. However, he believes that the cost of crediting prior year service required to join the Pension Plan will be less than $1,065,000 and leave remaining funds to pay for bond issuance costs. Further, he believes that there is a good chance the Town will receive part of the Metroland compensation before the first pension plan payment is due. 

2. Budget

Mayor Calvo informed the Council that, due to a re-assessment of Verizon's personal property, the Town should expect a reduction in personal property tax receipts of $30,260 for FY 2009. He believes closing this budget gap must be priority. He proposed three ways to recover the lost funds:

  • Reducing the annual contribution to the Infrastructure Reserve by $10,000;

  • Raising the Public Safety Taxing District (PSTD) personal property tax by 5 cents per $100 of assessed value, which would generate $10,000 and impact larger businesses most;

  • Finding savings in line items throughout the budget.

Mayor Calvo began by offering the following cuts:

  • Taking back the increase in the Police Department training budget for a savings of $1,000;

  • Taking back last year's increase in the Fire Department contribution for a savings of $1,000;

  • Suspending the Town's membership in the National League of Cities for a savings of $700;

  • Freeing up $8,000 in the operating budget by moving the purchase of the slice seeder to the capital budget ($6,000 of which could be used to cover the higher than anticipated annual pension contribution rate, and the remaining $2,000 would be available to close personal property tax shortfall).

Together these savings add up to $24,700 leaving $5,300 in savings still to be found. Other savings proposed included purchasing less expensive police cars, cutting the Parks & Recreation Department's playground equipment and tree service line items, not purchasing a slice seeder for maintenance of the playing fields, increasing the rental license fee from $210 to $220 and revising upward receipts from building permit fees.

The Council discussed Revenues by line item. Mayor Calvo said that, in general, revenues have been estimated conservatively and could turn out to be higher in some instances. Personal property taxes, apart from the $30,300 loss in Verizon receipts, could be boosted by improving collection from the newly annexed properties on Branchville Road. Receipts from license and permit fees are highly variable and difficult to project. However, more receipts might be expected from building permits and POD permits. Highway User Revenues (HUR) have been estimated higher by the State but cannot be relied upon. Receipts from code fines have gone up considerably, mostly due to weekend and commercial clean lot enforcement, and might come in higher than projected. However, their receipt is difficult to predict. Town Center rental fees might be raised to cover wear and tear on the facility. Similarly, Bulletin advertising fees could be raised to cover increasing publishing costs.

At 8:20 p.m., the Council took a 10 minute break.

The Council discussed Expenditures by line item. The following changes were discussed:

Administration

  • Reducing the Bulletin expenses by asking departments and committees to condense their submissions when there is not much news.

  • Cutting $600 from the election appropriation.

  • Raising the salaries of 2 employees. CM Gourley proposed shifting money within the Administration Department to bring these salaries up to the salary plan minimum. He moved to raise the salary (and benefits) of the longer serving employee by $750 by shifting money from the election ($600) and books & periodicals ($140) lines. CM Lofgren seconded. Mayor Calvo said that he believes now is not the time to single out employees for pay raises. Closing the budget shortfall takes precedence. MPT Jewitt said he would consider it if money is left after the shortfall is addressed. The motion failed 2 to 3 with Mayor Calvo, MPT Jewitt and CM Dennison opposed. CM Dennison moved to cut $600 from the election line to use in closing the budget shortfall. CM Lofgren seconded. The motion passed 4 to 1 with CM Gourley opposed.

Town Center

  • A handicap accessible front door to the Senior Center, estimated to cost $7,700, was not added to the budget because there already is a handicap accessible entrance through the elevator tower. However, the button that opens it automatically may need to be repaired.

Police

  • On a motion by CM Dennison and second by MPT Jewitt, the training & seminars appropriation was reduced by $1,000. The motion passed 5 to 0.

  • CM Gourley moved to cut $2,000 from the Police maintenance & repair appropriation. MPT Jewitt seconded. Mayor Calvo proposed to cut only $1,000 from the appropriation. The original motion passed 4 to 1 with Mayor Calvo opposed.

  • CM Gourley moved to cut $1,000 from the communications appropriation. The motion failed for lack of a second.

Public Safety Miscellaneous

  • MPT Jewitt moved to reduce the contribution to the Volunteer Fire Department by $1,000. CM Gourley seconded. CM Lofgren noted that last year's increase in the contribution was specifically intended for the purchase of defibrillators. CM Dennison moved to amend the motion to cut only $500. There was no second. The original motion passed 4 to 1 with CM Dennison opposed.

Public Works Department- Streets & Sanitation

  • CM Lofgren asked whether a 9th full-time employee is included in this budget. He was told it is not.

  • CM Gourley moved to reduce the maintenance & repair appropriation by $2,000. MPT Jewitt seconded. The motion passed 5 to 0.

  • MPT Jewitt moved to cut the mosquito control appropriation by $200. CM Dennison seconded. The motion passed 4 to 0 (Mayor Calvo was away from table).

  • CM Gourley said that more money may need to be appropriated for gas & oil budgets with gas costing $4 per gallon. He will wait to make a motion until all cuts have been made.

Parks & Recreation Department

  • CM Dennison moved to reduce the playground equipment appropriation by $800. MPT Jewitt seconded. The motion passed 4 to 1 with CM Gourley opposed.

  • Mayor Calvo highlighted spending $630 for a Historical Committee conference and noted that the furnishing of the museum should be a priority. No motion was made to change the appropriation.

Miscellaneous – Employee Benefits

  • Mayor Calvo explained that $84,000 are budgeted for the Town's current retirement plan contributions. Shifting this money, however, would not be sufficient to pay for the $91,100 needed to pay for annual contributions of the Maryland State Pension Plan at the revised higher rate of 9.17%. He proposed to make up the $7,100 difference by eliminating the purchase of a seed slicer, budgeted under the Capital Expenditures – Operating Budget at $8,100, as agreed to by CM Lofgren. CM Gourley moved to delete the seed slicer. MPT Jewitt seconded. The motion passed 5 to 0. MPT Jewitt moved to substitute the Maryland State Pension Plan annual contribution for the current 457 and 401 (a) plan contributions and to add $7,100 to that appropriation from seed slicer savings. CM Gourley seconded. The motion passed 5 to 0. Mayor Calvo proposed adding the remaining $1,000 in savings from the seed slicer to close the budget shortfall leaving another $1,500 to be found.

  • MPT Jewitt moved to increase the rental license fee by $10 for a total of $1,400 per year to be used to close the shortfall. CM Gourley seconded. The motion passed 5 to 0.

  • CM Gourley moved to increase the PSTD personal property tax by 5 cent per $100 assessed for a total increase of approximately $10,900 per year. CM Lofgren seconded. The motion passed 5 to 0.

  • MPT Jewitt moved to reduce the contribution to the infrastructure fund by $10,000. CM Gourley seconded. The motion passed 5 to 0.

  • MPT Jewitt moved to increase the recycling tax by $5 per year per household for a total increase of $ 3,100 per year. CM Dennison seconded. The motion was approved t to 0.

The meeting was adjourned at 10:07 p.m.

Kerstin Harper, Town Clerk


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