Public Hearings - PROPOSED FISCAL YEAR 2009 TAX RATE AND BUDGET
PUBLIC HEARING - June 10, 2008
PROPOSED FISCAL YEAR 2009 TAX RATE AND BUDGET
June 10, 2008
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 10, 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, 2008 to increase property tax revenues by 9.2% above the Constant Yield Tax Rate. The Constant Yield Tax Rate has been established by the Maryland Department of Assessments and Taxation at $.972 per One Hundred Dollars of real property of assessed valuation for Fiscal Year 2009.
The proposed tax rate intended to be levied by the County Commissioners of Kent County for FY09 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, Sheriff John Price, John Hall, Kent County Extension Director, Sabine Harvey, Extension Horticulture Assistant, Muriel Cole, representing the Commission on Aging, Frances Miller, Assistant Superintendent of Administrative Services, Edward L. Birkmire, Executive Director, Kent County Humane Society, Santo Grande and Jerome Phillips, representing Delmarva Community Services, Lee Ann Myers, Assistant Director of Human Resources, Karen Miller, Soil Conservation Service, Dr. Stuart Bounds, President, Chesapeake College, Wayne Darrell, Director of Emergency Services, Gregg Bird, Deputy Director of Emergency Services, Chesapeake College, Leslie Raimond, Director, Kent County Arts Council, approximately 10 other interested citizens, and one member of the media.
Notice of public hearing was read into the record by Commissioner Crow as well as procedures for testimony at the public hearing.
The Commissioners provided opening remarks.
Commissioner Crow commented that the Commissioners have been through a grueling 2.5 months for the FY09 budget process. He expressed appreciation to Ms. Merritt for the hard work put forth on the budget. He also commented that the nation is facing a slow economy and stated that the coming year will be interesting.
Commissioner Pickrum commented that the budget process is a tedious process. He expressed appreciation to Ms. Merritt and staff as well as Ms. Hayman and staff. He noted that the County’s dollars are not unlimited and the County is faced with the task of satisfying as many items as possible while maintaining Kent County as the same beautiful place.
Commissioner Fithian expressed appreciation to Ms. Merritt and staff and to Ms. Hayman and staff for the hard work contributed to the budget. He stated commented that there are many items for the County to be proud of for the FY09 budget, including the Homeowner’s property tax credit. He stated that the County is proud to sit in a stable financial condition.
A power point presentation was then given by Ms. Merritt.
Ms. Merritt reviewed the following County budget priorities and informed that in recognition of the tough economic times that citizens of the county are facing, the budget includes funding to lessen the costs of water and sewer charges and property taxes to its residents:
County Homeowner’s Property Tax Credit- Beginning this year the County will offer a homeowner’s property tax credit to citizens who are over the age of 60 and have an annual household income of less than $25,000.
Retirees Health Insurance Benefits- The Governmental Accounting Standards Board has promulgated new standards requiring governments to obtain actuarial valuations that:
- Determine the cost of paying out post employment benefits to employees when they retire.
- Determine the amount of an annual contribution that should be set aside in a trust each year to provide for those benefits.
- Failure to fund the annual contribution at an appropriate level could adversely impact the County’s financial statement, bond rating, and ability to borrow money at the most competitive rates.
- In order to maintain the County’s solid financial position, the County has decided to fund the annual contribution for FY09. This means a contribution of $181,000 for county employees and $1,033,000 for Board of Education employees.
Education- The Commissioners have committed $2,522,000 in new funding to Kent County Public Schools. This funding is $1,584,000 above the required maintenance of effort funding level. Funding will be used in the following ways: $1,000,000 will be utilized to fund a 4% salary increase, new textbooks, increases in the per pupil allocation at the high school and increases in utility and gasoline costs; $1,228,000 has been appropriated in the capital projects fund for high school parking lot repairs; $620,000 will be used to fund health insurance for retirees.
County Compensation- The County remains committed to its new “pay for performance” compensation structure. Benefits of the new system include: higher return for dollars invested; salary increases are based on employee evaluations and job performance; motivates employees to excel; system rewards high performers; results in retention are the most qualified personnel; increases job satisfaction by giving employees influence over their compensation; and most effective manner to allocate available dollars among employees.
Community Center- This year’s budget includes the continuation of the Community Center project. This will be a multi generational facility consisting of an approximately 18,000 square foot building with multi-use divisible activity space, community multi-purpose rooms, administrative offices and a pool.
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.
Ms. Merritt then turned to the subject of revenues.
Property taxes are the County’s largest revenue source and are budgeted at $25,256.000 or 58% of the County’s total revenue. The fiscal year 2009 property tax rate will remain at $.972 per $100 of assessable property value. Property taxes are increasing 11% over last year’s budget.
Income taxes are the second largest revenue source and are budgeted at $12,400,000 or 29% of the total revenue. The income tax rate will remain at 2.85% of taxable income. The increase is a 13% increase over last year’s budget.
Other local taxes account for $2,841,000 or 7% of the total budget and include the following taxes: admission and amusement, hotel, property transfer, recordation and documentation, and 911. Other local taxes are increasing 14% above last year’s budget.
Grant revenue contributes $831,000 or 2% to total revenue and reflects monies received from federal, state, and local governmental agencies. Grant revenues are decreasing 53% over last year’s budget.
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 $1,188,000 or 3% of total revenues. Other revenues are decreasing 28% from last year’s budget.
Ms. Merritt outlined County expenditures as follows:
Public School funding accounts for 43% of the total budget, $18,756,000. Public School funding will increase 7% over last year’s budget as follows:
-$1,000,000 Operations- 4% salary increase, new textbooks, increases in the per pupil allocation at the high school and increases in utility and gasoline costs.
-$620,000 Benefits- Retirees health insurance
-($311,000) Capital- No capital expenditures are included in the FY09 Budget
-($15,000) Debt Service
Personnel costs total $12,020,000 and account for 28% of the total budget. This category includes salaries, benefits, and payroll taxes. Personnel costs include the following:
- The County funded a 2% cost of living increase.
- Most County employees were also eligible for a performance increase based on their evaluation and a merit increase based on the completion of predetermined goals. The combined salary increase in these two areas averaged 1.7%.
- The County completed its compensation survey for the detention center, paramedic and central alarm employees. As a result of this survey, salary adjustments were made to several job classifications to bring them more in line with the market in the surrounding area.
Operating expenditures represent 11% of the budget and total $4,694,000. 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:
- $119,000- Electric
- $ 75,000- Legal Expenses relating to litigation
- $ 74,000- Data processing maintenance contracts
- $ 57,000- Gasoline
- ($ 64,000)- Consulting
Agency allocations are $3,760,000 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:
- $94,000 – The Health Department will receive additional funding for its environmental health, mental health, adult daycare and school nurse programs
- $71,000 - The Volunteer Fire Companies will receive the mandated funding to be tied to the increase in the assessable base
- $62,000 – Chesapeake College will receive additional dollars based on the funding formula tied to enrollment.
- $40,000 – Delmarva Community Services will receive additional funding to defray rising gasoline costs.
Debt service on county projects totals $1,328,000 or 3% of the total budget and includes principal and interest payments on short term and long term debt.
Fund transfers total $897,000 or 2% of the total budget and include transfers from the general fund to other funds.
Capital Expenditures total $730,000 or 2% of the budget and include the following:
- Vehicles $236,000
- Machinery & Equipment $183,000
- Infrastructure $168,000
- Computer Equipment $ 93,000
- Other $ 50,000
Commissioner Crow commented that the GASB has been federally mandated. He noted that there are some people who are not in agreement with this program, because dollars will have to be set aside in a fund that could be utilized elsewhere in the county. He also noted that although more money is going into the general fund for water and wastewater, it will not make rates decrease; however, increases will not be as significant. He commented that litigation fees referred to in the budget will be used toward legal battles to prevent the spread of sewage sludge in the county.
Commissioner Crow officially welcomed Dr. Bounds to the budget presentation and expressed appreciation for his many years of service to the Chesapeake College. He also welcomed Mr. Grande and expressed appreciation for the transportation services provided to Kent County by Delmarva Community Transit.
Commissioner Crow invited persons who signed in to now testify.
Dr. Bounds expressed appreciation for the County’s support of the college. He also expressed appreciation for the County’s support and leadership of the Kent Humanities building. The necessary approval has been received for this capital project for this spring. Dr. Bounds confirmed that the board has revised the budget to keep the county increase at 2%, which has resulted in an increase in tuition. Dr. Bounds stated that he and his successor will be committed to keeping the cost at a minimum for the Kent Humanities building project.
Mr. Birkmire expressed appreciation for the County’s support in providing funding to make it possible for the Humane Society to hire a separate Animal Control employee. He stated that the County’s interest, dedication and generosity to the Humane Society cannot be underestimated. Commissioner Crow stated that it is the generosity of the Human Society Board and donors that also allow for many of the functions of the Humane Society.
Ms. Raimond expressed appreciation for funds being received in support of the arts in Kent County, as well as the Prince Theatre. She stated that the arts are reaching into many aspects of society.
Mr. Hall requested that the Commissioners reconsider providing funding for a Master Gardner for Kent County. He stated that he is not requesting a full position, but is requesting 500 hours, for a total dollar request of $10,000. He stated that Mrs. Harvey has been a wonderful addition to the County and the Extension Office would like to keep her.
Shirley Kearney stated that the Horticulture/Master Gardner position is critical in Kent County and urged the Commissioners to fund this position.
Kevin Walsh expressed concern related to property tax assessments, impact fees and traffic concerns in Chestertown. He commented that if new developments in Chestertown were charged impact fees, there would be money in the budget to install traffic lights at locations such as the bypass and Washington Square Shopping Center in Chestertown. He also stated that affordable housing needs to be addressed in the County. Commissioner Pickrum stated that the law that allows local jurisdictions to establish impact fees is cumbersome. He stated that a lot of
the law deals with funding increased school enrollment which Kent County does not have. He also stated that impact fees are a one time fee and are not sustainable. He stated that the developments being cited by Mr. Walsh are located in an incorporated town, which the county has no control over.
Arthur Nemeroff expressed concerns relating to property taxes in the county and residents who meet the requirements of the Homestead Property Tax Credit.
Elliott Fuhrman expressed concerns relating to the amount of property taxes being paid by non-full time residents in Kent County. Mr. Fuhrman stated that revenues should be raised as taxes are raised. He stated that there is not enough waterfront development in Chestertown to produce a revenue stream. Mr. Fuhrman suggested that more funding be provided to the Economic Development department. He also suggested that a property tax break be provided those in the armed forces fighting overseas.
Mrs. Harvey commented that she has had a wonderful time as a Horticultural Assistant in the County. She commented that she has been involved in many of the County’s budget priorities, such as wastewater, public education and the community center. She informed that she has been participating in school gardens and would like to be involved in the plants for the community center. She also stated that she could provide assistance with helping people grow their own vegetables at home. She commented that Kent County is only one of three Counties in Maryland without a Master Gardner or Horticulture agent.
The Commissioners voted to amend the FY09 budget to include $10,000 for the Extension Office for the Master Gardner position.
Sheriff Price expressed appreciation to the Commissioners for their support during the FY09 budget.
Mr. Grande expressed appreciation to the Commissioners for their support in Transportation services.
It is proposed that the Commissioners will adopt the Fiscal Year 2009 Budget and Tax Levy on June 17, 2008 at 8:30 a.m.
This hearing was taped for reference and adjourned at 6:53 p.m.
THE COUNTY COMMISSIONERS
OF KENT COUNTY, MARYLAND
Denisha C. Brown
Roy W. Crow, President