Budget Worksession Minutes
March 16, 2009

The meeting was called to order at 7:00 p.m. Present were Mayor Calvo, Mayor Pro Tem (MPT) Lofgren, CMs Ahrens, Dennison and Gourley. Also present were Town Administrator (TA) Murphy, and Clerk Harper.

1. Mayor

Announcements: Happy Birthday wishes were sent to Trinity Tomsic, and Sarah and Christopher Dennison. Residents were encouraged to sign up for the March 26 Talent Show at Berwyn Heights Elementary School (BHES).

2. Budget

TA Murphy provided updates on Highway User Revenues and an analysis of Police Department fines and fees received.

The Council discussed the FY 2010 budget line by line to seek answers to questions and to identify potential savings. Any proposed cuts that were approved by formal vote would be recorded in a ledger of undesignated funds, or 'kitty,' and spent on an agreed upon purpose later.

Revenues: Estimates of FY 2010 tax revenues are not likely to change much until adoption of the State budget. Real property taxes are projected to increase one more year by 12% to $1,546,000 before the triennial reassessment in 2010 which could reflect declining home values and tax revenues. Income tax revenue has gone down by 1% over last year, while the recycling tax paid by households was raised by 16% to $60 per year to cover the increased cost of the recycling program. Revenues from licenses and permits are mostly the same as last year. Exceptions are rental license and POD permit revenues,   which increased due to number of permits issued. Intergovernmental revenues are flat r declining, with Highway User Revenues posting a 16% or $33,000 decline. Fines and forfeitures, particularly those collected by the Police Department, have declined by 16%. Under miscellaneous revenues, interest earnings on investments and Bulletin advertising receipts have posted large declines. CM Gourley commented that revenues from building permits might be raised if the Town required permits for electric upgrades. In addition, dumpster permit revenues may be higher than projected, as may Bulletin advertising fees if new advertisers are recruited.

Expenditures:
General Government: Dues & Conventions appropriation, which includes ICMA conference expenses, could be reduced to save money.

Capital outlays: $500 in Administration may need to be increased if a new server is purchased.
CM Gourley proposed to establish a $3,000 equipment replacement reserve for the Town Center if extra money is found. CM Dennison said that the Seniors are requesting a new ceiling fan fixture for their game room, a new carpet and a handicap accessible door.

Public Safety/Police: The Dues & Conventions appropriation could be reduced to strike attendance at the International Conference of Police Chiefs. TA Murphy was asked to price the conference.

On a motion by CM Gourley and second by MPT Lofgren, $1000 was cut from the Training & Seminars appropriation, which had been added in the FY 2010 budget to provide performance incentives.

CM Gourley moved to cut $300 from the Electricity appropriation. There was no second.

CM Gourley moved, and CM Ahrens seconded, to cut $1,000 from the Communications appropriations. Mayor Calvo asked to table the motion until more documentation for this appropriation is available. On a motion by CM Gourley and second by CM Dennison, the motion was tabled.

CM Gourley moved and MPT Lofgren seconded to cut $300 from the Telephone appropriation. He was told that the Police Department had obtained a new, less expensive telephone service. Mayor Calvo asked to table the motion until more documentation is obtained. If telephone service has increased in cost, a cut does not result in real savings. On a motion by CM Gourley and second by MPT Lofgren, the motion was tabled.

MPT Lofgren requested documentation for the Uniform appropriation.

Code Compliance: CM Gourley said that the Postage appropriation may need to be raised because of impending postal rate increases. Mayor Calvo commented that he would encourage the Code Department to find ways to reduce the number of certified letters it sends out to notify homeowners of code violations by focusing on serious violations and repeat offenders.

Public Works: CM Gourley moved and MPT Lofgren seconded to cut $400 from the Public Works Building/Supplies appropriation. Mayor Calvo objected that there may be a reason for the increase in the money requested. He would like to have more documentation before making the cut. The motion passed 4 to 1 with Mayor Calvo opposed.

CM Gourley moved and CM Ahrens seconded to cut $1000 from the Building/ Maintenance & Repairs appropriation. Mayor Calvo objected. He said that he prefers to budget conservatively and leave a cushion for unforeseen expenses, such as an air conditioning replacement. This appropriation can vary a lot from year to year and needs the cushion. The Town has built up its surplus by budgeting conservatively, spending frugally and returning unspent funds at the end of the year. If the need for a major repair arises, the money has to be spent in any case and will have to be taken from the surplus. CM Gourley replied that he is trying to find small savings in many places so that the Town can buy a dump truck that was requested, as well as set up a Town Center equipment replacement fund, if possible. CM Dennison noted that only $650 was spent on maintenance this fiscal year, whereas $2,500 is budgeted for FY 2010. CM Ahrens moved and CM Gourley seconded to table the motion.

CM Gourley moved to cut $300 from the Streets & Sanitation/ Miscellaneous appropriation. Mayor Calvo said, again, this appropriation covers unforeseen expenses and does not provide opportunities for large savings.

CM Gourley moved to cut $850 from the Uniforms appropriation. There was no second.

CM Gourley moved to cut $700 from the Equipment Rental appropriation. There was no second. Mayor Calvo said that this line item pays for the rental of a crack sealing machine, which costs $2,500. Thus the line item should be cut entirely or not at all.

CM Gourley moved to cut $600 from the Mosquito Control appropriation. TA Murphy explained that expenditures for mosquito control are unpredictable because they depend on weather, mosquito counts and request for spraying. There was no second.

CM Gourley moved to cut $500 from the Storm Drains appropriation. There was no second.

CM Gourley moved to cut $1,000 from the Pedestrian Bridge appropriation. There was no second. MPT Lofgren sought clarification as to whether this money could be spent to install new energy efficient lights on the bridge and whether Council approval was needed. TA Murphy said the lights could be paid from this appropriation and does not need Council approval because the cost is under $2,000.

At 8:40 p.m., the Council took a 10 minute break.

Mayor Calvo earmarked the Temporary Labor appropriation for a $5,000 to $7,000 reduction. He said that Public Works gained additional labor capacity when it hired a 9th employee for the in-house recycling program. MPT Lofgren added that the Part Time Labor appropriation also offers some flexibility if additional manpower is needed. MPT Lofgren proposed cutting $500 from the Tree Service appropriation, because the Tree City USA requirement of spending $2 per household on trees is satisfied with a $6,000 appropriation. If PRECA's tree funds are added to Public Works', the Town spends $6,500 on tree service. No action was taken.

Parks & Recreation (PRECA): The Equipment appropriation has been increased by $1,000. This should be enough to pay for repairs of Pop's Park playground equipment, but not to purchase new pieces. CM Dennison would prefer to consult with playground users about what kind of equipment is wanted first and then apply for a State grant to help pay for it. Mayor Calvo proposed to create an appropriation for BHES, which would include $250 for a weekly reader.

Miscellaneous: Mayor Calvo noted that retirement expenditures in the Employee Benefits budget have been transferred from the 451 (a) Plan and Deferred Compensation 457 Plan to match payments for the Maryland State Pension plan. The pension plan's back payment for employee's prior years’ service turned out to be much less than anticipated and was paid off in FY 2009. MPT Lofgren sought clarification on the $14,000 in additional expenditures for domestic partnerships. TA Murphy said that the cost is absorbed mostly in the Health Insurance appropriation. It depends on the category of coverage entailed by the domestic partnership, such as 2 adults or family. With respect to pension benefits, an employee may designate anybody he/she likes for survivor benefits upon retirement. The total amount of survivor benefits is determined by both the survivor's and retiree’s life expectancy at time of retirement to calculate annual pension benefits.

Capital Budget: Mayor Calvo said he is not opposed to funding a new dump truck, which is estimated to cost $90,000 in this budget. However, his preference is to wait until next year to make a decision. The fiscal outlook will be clearer after the next triennial assessment, while the surplus might be built up again. CM Gourley begged to differ. He said that a truck can probably be had for a lot less money now, perhaps for $60,000 or $70,000 because automakers want to reduce their inventories. The contribution to the vehicle replacement reserve could be reduced to less than $9,000 per year if the replenishment of the reserve is stretched over 13 years rather than 10. CM Ahrens asked if the Council has considered buying a used truck. Councilmembers advised against it. Mayor Calvo said that the Town can buy a new truck from surplus if a good deal comes up. But that decision can wait until the opportunity arises.

Capital Projects: TA Murphy said that the Public Works snow clearing equipment is likely to cost $10,500 rather than $11,300 budgeted.

Public Safety Taxing District: Mayor Calvo noted that revenues are rising faster than expenditures this year. But this may change after the reassessment.

Mayor Calvo said after the first round of cuts, $1,400 has been set aside in the kitty. Other cuts will likely be made when more information becomes available on appropriations earmarked for cuts. CM Gourley commented that some money might be saved by collecting heavy trash once a month rather than once a week.

Signed: Kerstin Harper, Town Clerk

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