Public Hearings - PROPOSED FISCAL YEAR 2008 TAX RATE AND BUDGET

June 5, 2007

In compliance with and pursuant to Section 6-308 of the Tax Property Article of the Annotated Code of Maryland, the County Commissioners held a public hearing on Tuesday, June 5, 2007, at 6:00 p.m. in the County Commissioners’ Hearing Room, County Government Center, 400 High Street, Chestertown, Maryland, on the proposed Fiscal Year Budget beginning July 1, 2007 to increase property tax revenues by 10.2% above the Constant Yield Tax Rate. The Constant Yield Tax Rate has been established by the Maryland Department of Assessments and Taxation at $.882 per One Hundred Dollars of real property of assessed valuation for Fiscal Year 2008.

The proposed tax rate intended to be levied by the County Commissioners of Kent County for FY08 is as follows: $.972 per One Hundred Dollars of real property subject to taxation for county purposes.

County Commissioners Roy W. Crow, Ronald H. Fithian, and William W. Pickrum, were in attendance as well as Susanne Hayman, County Administrator, and Patricia Merritt, Chief Finance Officer. Others in attendance were Jack Steinmetz, Economic Development Director, Gail Owings, Director of Planning, Jeff Troester, Director of Parks and Recreation, Sheriff John Price, Carl Starkweather, Addie Walters, Lauretta Freeman, Martha Wright, Lorraine Langenfelder, Muriel Cole, Dianne Carroll and Nancy Fernwalt, representing the Commission on Aging, Anthony Pack, Superintendent (and Community Center Authority Member), Francis Miller, Assistant Superintendent of Administrative Services, and Mary Etta Ready, representing Kent County Public Schools, Edward L. Birkmire, representing the Kent County Humane Society, Charles “Chip” MacLeod and Leon Frison, representing the Community Center Authority, approximately three other interested citizens, and one member of the media.

Notice of public hearing was read into the record by Commissioner Crow.

Commissioner Crow expressed appreciation to those in attendance and gave procedures for speaking at the public hearing. A power point presentation was then given by the Commissioners.

Commissioner Fithian stated the Commissioners feel that they have made a positive investment in services and projects and people in Kent County for this year. He stated that he feels positive about the direction that Kent County will be moving towards in the coming year.

Commissioner Crow informed of the Commissioners’ goals for the year, which include in this priority, education, water and wastewater services, and community Center, and a strong financial position. He noted that the 10.2 % is not a true factor in how much the budget has increased due to additional dollars that have come into the County (and that there is no property tax increase proposed even though the rate is above the Constant Yield Tax Rate). He also stated that this year demonstrated the team work approach of the Board of Education working with the local government to fulfill an appropriate outcome.

Education- The Commissioners remain committed to partnering with the Board of Education to provide quality education to the children of Kent County. Towards that end, this year’s budget contains $1,248,000 of new funding for the Kent County Public School System. This funding will be utilized to fund teachers’ negotiated salary increases, which will help to retain and attract highly qualified teachers and maintain the small teacher/student classroom ratios. It also funds new positions in the areas of language arts, mathematics, and special education. The County also appropriated an additional $1,450,000 in the capital projects fund for the Rock Hall Elementary HVAC project.

Water and Wastewater Services- Quality water and wastewater services at an affordable price is another objective of this year’s budget. The County will fund approximately $500,000, which is equivalent to 21% of the water and wastewater operating costs, to keep water-wastewater operating costs and to keep water and sewer rates at a more affordable level. Additionally, the County will appropriate $450,000 towards the closure of the Edesville Lagoon, relieving water and sewer customers of this cost.

Community Center- This year’s budget includes the first phase of the Community Center Project, which will Consist of an 18,000 square foot building with multi-use divisible activity space, community multi-purpose rooms, administrative offices and an option for possible expansion to include a pool at a future date.

Financial Position- The County continues to strive to maintain a strong financial position and has taken the following actions:

- The County does not plan to issue any new general fund debt in FY07.
- The County’s debt service costs will be reduced from 6.4% of the total general fund budget in FY07 to 5.1% in FY08.
- Based on the proposed budget, the County will achieve its goal of retaining a 6.85% fund balance at the end of FY08.

Commissioner Fithian then turned to the subject of revenues.

Property taxes are the County’s largest revenue source and are budgeted at $22,807.00 or 57% of the County’s total revenue. The fiscal year 2008 property tax rate will remain at $.972 per $100 of assessable property value. The increase for assessed value is 12% over last year’s budget.

Income taxes are the second largest revenue source and are budgeted at $10,950.00 or 28 % of the total revenue. The income tax rate will remain at 2.85% of taxable income. The increase is a 5% increase over last year’s budget.

Other local taxes account for $2,489,000 or 6% of the total budget and include the following taxes: admission and amusement, hotel, property transfer, recordation and documentation, and 911.

Intergovernmental revenue contributes to $1,012,000 or 3% of the total revenue and reflects monies received from federal, state, and local governmental agencies, primarily in the form of grants.

Other County revenues include service charges, license and permits, interest income, rental income, fines and forfeitures, sale of fixed assets, and transfers from other funds. This category is budgeted at $1,541,000 or 4% of total revenues.

Commissioner Pickrum outlined County expenditures as follows:

Public School funding accounts for 43% of the total budget, $17,462,000.Public School funding will increase 8% over last year’s budget as follows:

- $1,107,000 Operations- includes average salary increases of new staff. Positions include: Instruction Resource Teacher, Supervisor of Language
Arts, Supervisor of Mathematics, Coordinator of Special Education.
- $311,000 Capital- includes financial software, technology equipment, and a dump truck
- ($170,000) Debt Service- Fiscal Year 2002 debt retired, no new debt issued.

Personnel costs total $11,189,000 and account for 28% of the total budget. This category includes salaries, benefits, and payroll taxes. Personnel costs include the following:

- This year the County implemented a graduated market adjustment aimed at increasing the lower salaries at the beginning of the scale. Salary increases averaged 5.6%
- New positions include: 1 information system technician, 4 Custodians, 1 Planner, 1 Motor Equipment Operator II, 1 Chief Deputy/Accreditation Manager, 2 Correctional Officers, 1 Paramedic, 1 Jury Commissioner, 2 Office Assistants, and 1 Emergency Communications Specialist

Operating expenditures represent 10% of the budget and total $4,148,000. All goods and services purchased by the County (excluding capital expenditures) are reflected in this category. Items in this classification include property services, contracted services, and supplies. Increases will be in the following areas:

- $55,000- New housing preservation grant
- $52,000- Information System cost are increasing due to telecommunication costs and maintenance agreements
- ($41,000)- Planning costs are lower recognizing that the new planner position will complete some of the previously contracted master plans.

Agency allocations are $3,380,000 or 9% of the total budget and reflect funding to organizations and programs that are not a direct part of county government, but provide services to the citizens of Kent County. The most significant increases will occur in the following areas:

- $151,000 – The Health Department will receive additional funding for its mental health, adult day care, and school nurse programs
- $93,000 - The Volunteer Fire Companies will receive the mandated funding to be tied to the increase in the assessable base
- $38,000 – The Humane Society will receive additional funding to increase staff
- $25,000 – Chesapeake College will receive additional dollars based on the funding formula tied to enrollment.

Commissioner Fithian noted that the $93,000 allocated to the Fire Departments is in addition to dollars allocated in FY 07.

Debt service on county projects totals $1,080,000 or 3% of the total budget and includes principal and interest payments on short term and long term debt.

Fund transfers total $1,205,000 or 3% of the total budget and include transfers from the general fund to other funds.

Capital Expenditures total $751,000 or 2% of the budget and include the following:

- Computer Equipment $200,000
- Vehicles $178,000
- Machinery & Equipment $170,000
- Capital Repairs $168,000
- Other $ 35,000

Commissioner Pickrum noted that unlike other jurisdictions, Kent County has never gone into the bond markets. He stated that Kent County’s debt is funded through local banking institutions. He expressed appreciation for the local banking institutions for working with the County.

Commissioner Crow added that new positions are needed in Emergency Services due to an increase in call volume in the 911 call center. He also noted that the Humane Society was in need of an additional staff person because of their motto not to euthanize any animals and the increase in animals. He expressed his appreciation to the Humane Society for them raising part of their own money. He stated the Sheriff’s Office is in need of an Accreditation Manager due to the retirement of their current Volunteer Accreditation Manager.

Commissioner Crow invited persons who signed in to now testify.

Lorraine Langenfelder, Chairman, Commission on Aging, spoke and expressed appreciation for funds budgeted for the Commission on Aging to continue as an advocate for the County’s seniors. Ms. Langenfelder encouraged the Commissioners to provide funding for Upper Shore Aging. Ms. Langenfelder expressed concern over seniors having to pay increasing property tax bills. She stated that the tax amounts are escalating beyond senior citizens’ ability to keep up. Ms. Langenfelder asked that the Commissioners consider options on a freeze on property tax increases for senior citizens. She informed that the Commission on Aging has met with officials from St. Mary’s County, Howard County, and Carroll County, all of whom have instituted property tax breaks for seniors with limited incomes.

Charles “Chip” MacLeod, Chairman, Community Center Authority (CCA), expressed appreciation for funds budgeted to begin the first phase of the community center authority. He stated the need for a community center was recommended back in 1991. He stated that hopefully, at this time next year, the first phase of the project will be complete and expressed appreciation for the Commissioners’ support. Commissioner Fithian expressed appreciation to the work of the CCA on this project.

Edward Birkmire, Director, Humane Society, appeared and expressed appreciation to the Commissioners for including funding for the Humane Society in the FY08 budget. He felt the support given to the Humane Society is a giant leap in the Board’s leadership to address all departments no matter how small a part of the county government.

Commissioner Pickrum stated that although Kent County is small, it is the jewel of the State of Maryland. He stated that “we are all one community including the pets.”

Bob Kramer, expressed concern over the rising water and sewer fees. He also expressed concern over everyone paying a universal fee. He stated that he feels that low income households should benefit from households that are subsidized and pay a higher fee. Commissioner Crow reminded that subsidized payments do assist the lower income households because some of the households in the jurisdictions that have sewer and water that are within County limits are lower costs housing.

Anthony Pack, Superintendent, expressed appreciation to the Commissioners for funding being provided to the Kent County Public School System. He stated that the school system will continue to look at more ways to be more fiscally responsible. Commissioner Crow expressed appreciation for Mr. Pack and his staff for the positive working relationship between the Commissioners and the Board of Education. Commissioner Fithian added that the funding given to the Board of Education was not easy to come by, but he is very appreciative of the good relationship established with the Board of Education staff. He stated that the Commissioners are expecting great things from the school system.

It is proposed that the Commissioners will adopt the Fiscal Year 2008 Budget and Tax Levy on June 12, 2007 at 9:30 a.m.

This hearing was taped for reference and adjourned at 6:40 p.m.

THE COUNTY COMMISSIONERS
OF KENT COUNTY, MARYLAND


Janice F. Fletcher
Executive Assistant
Approved:

Roy W. Crow, President