Public Hearings - PROPOSED FISCAL YEAR 2011 TAX RATE AND BUDGET
PUBLIC HEARING - June 9, 2010
PROPOSED FISCAL YEAR 2011 TAX RATE AND BUDGET
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 Wednesday, June 9, 2010, 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, 2010 to increase property tax revenues by 7.9% above the Constant Yield Tax Rate. The Constant Yield Tax Rate has been established by the Maryland Department of Assessments and Taxation at $.9517 for Fiscal Year 2010.
The proposed tax rate intended to be levied by the County Commissioners of Kent County for FY10 is as follows: $1.027 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 Marty Hale, Director of Human Resources, Gail Owings, Director of Planning, Wayne Darrell, Director of Emergency Services, Dr. Leland Spencer, Health Officer, Frances Miller, Assistant Superintendent of Administrative Services, Lorraine Langenfelder, Margie Baker, and Addie Walters representing the Commission on Aging, Edward L. Birkmire, Executive Director, Kent County Humane Society, two members of the media and approximately 45 other interested citizens.
Notice of public hearing was read into the record by Commissioner Crow as well as the procedures for testimony.
Commissioner Crow commented that although this year was expected to be a tough year, the Board had no idea just how hard it would be. He noted that as a result of State budget cuts, and expenses consequently placed on the County’s shoulders, cuts were made throughout the year. Even with the cuts made, the County was left with a shortfall of over $2.5 Million to address. He added that the $2.1 Million in revenue being provided by the increase in the property tax rate will not even fill the hole left by the State. He stated that the Commissioners have made every attempt to spread the cuts evenly.
A power point presentation was then given by Ms. Merritt.
Ms. Merritt recapped how the County came to be in its current financial position. She noted that the County had a solid budget entering 2010 with a 10% fund balance. If the County were to attempt to maintain the same level of service entering into 2011, the ending fund balance would be (5%), due to a $4.4 Million decrease in revenues. In addition to the decrease in revenue, there has been a $.3 Million decrease in the available fund balance, which has left a $4.8 Million budget deficit to be addressed going into the FY11 budget. Ms. Merritt highlighted the County’s revenue decreases, including the following:
- Income tax revenue from taxpayers - $3.1Million
- Highway User Revenue from the State - $1.1Million (In FY08, County received $2.2 Million, In FY11, County will receive $66,680)
- Police Protection revenue from the State - $.1 Million
- Detention Center revenue - $.1 Million
Commissioner Fithian noted that the County Roads department was previously self sufficient through Highway User dollars. Commissioner Fithian added that Kent County Roads were previously listed as the best maintained roads in the State; however, this distinction may not be granted this year. Commissioner Fithian added that Kent County is responsible for maintaining 270 miles of County roads.
Fund Balance- Ms. Merritt advised that the target for the County fund balance (County savings account) is 5%. This is needed because the County’s incomes spike and valley, and a lack of income, forces the county to borrow. The projected fund balance going into the FY11 budget process was only 2.6%. The fund balance available for funding the 2011 budget is $.5Million; however, the fund balance used in the 2010 budget was $.9Million. There is $400,000 less available this year than there was in last year’s budget process.
Expenditures- Ms. Merritt noted that a large portion of the budget expenses are legislated or obligated and cannot be reduced, including mandated public school funding, debt service, fire company funding; and fixed costs. This leaves only 48% of the budget that can be cut. Ms. Merritt reviewed the proposed expenditure reductions, which include the following decreases: salaries $.8Million; benefits $.6Million; operating $.6Million; transfers to other funds $.5Million; capital $.4Million; public schools $.3Million; allocations $.2Million; and an increase in debt service of $.2Million for a total of $3.2Million. Even with these proposed expenditure reductions, there was a remaining budget deficit of $1.6 Million.
Revenues- Ms. Merritt stated that the overwhelming majority of the County’s revenues are received from property taxes (70%) and income taxes (23%). She reviewed the proposed revenue actions, including: use of the rainy day fund balance in the amount of $.2Million (which exhaust the rainy day fund); and an increase in property tax revenue totaling $1.4Million. The property taxes will increase by 5.5 cents from $.0972 to $1.027 per $100. Ms. Merritt noted that on a home with an assessment of $100,000, this increase would equate to a $55 increase on their property tax bill. She also informed that $250,000 of the revenue being received from the raised property tax rate will be earmarked for use on County roads. In response to question raise by Commissioner Fithian, Ms. Merritt informed that the total tax amount on a home assessed at $100,000 would be $1,027. Commissioner Fithian noted that an e-mail has been distributed around the County by Timothy Lloyd erroneously reporting that the property tax increase will cause a home assessed at $100,000 to have a property tax bill of $2,500. He added that someone seeking to be in a leadership position in which the public will depend on your information, it would be hoped that factual information would be given. Ms. Merritt informed that the rainy day fund in combination with the increase in property tax revenue will provide a total revenue increase of $1.6Million.
Ms. Merritt stated that a $4.8 Million budget with a $3.2 Million reduction in expenditures and a $1.6 Million increase in revenues will provide a 5% fund balance for FY2011. She then reviewed a side by side comparison of the County’s FY2010 proposed revenues versus the FY2011 proposed revenues line by line.
Commissioner Crow applauded the Finance Office staff for their year long efforts on this budget. He noted that the County is at times the last resort for funding for local agencies, which makes it important to maintain a proper fund balance.
Commissioner Fithian stated that he feels that raising taxes during this economic climate is not a positive thing to do. He encouraged anyone with a better solution to bring it forth for the Commissioners consideration. He added that the Board of Commissioners have tried to spread the pain of the cuts out evenly.
Commissioner Pickrum stated that he feels that first and foremost Government should take care of the safety and security needs of the population. Items over and above safety and security are options. The County places value in many items including farmland, open space, arts, education and more, and attempts not to hinder the progress made by these valuable items through the budget process. However, there are other items that the County is mandated to fund and they cannot be reduced. He added that the County has been very local regarding unfunded mandates.
Commissioner Crow invited persons who signed in to now testify.
Mike Kilgus, Vice President, Chesapeake College, expressed appreciation for the Commissioners’ support and for providing level funding for FY11. He advised, however, that level funding does not take enrollment increases into account. Chesapeake College has experienced a 20% enrollment increase over the last two years. As a result, tuition was increased $3.00/credit hour in the Spring and will be increased $5.00/credit hour in the Fall. Additionally, fewer course will be offered.
Edward Birkmire, Executive Director, expressed appreciation for funding on behalf of the animal’s of the county.
Karl Ewing, expressed concerns regarding increases in property assessments and the proposed increases in the property taxes. Commissioner Crow reminded of the Homestead Property Tax Credit, which keeps assessment increases capped at 5%.
William Short, expressed concerns regarding the proposed increase in property tax assessments. Mr. Short urged the Commissioners to fight back against the State’s mandates.
Richard Goodall, Dixon Valve, suggested that the County attempt to save dollars by combining efforts with the Board of Education on duties such as maintenance and grounds work.
The Commissioners advised that the County has begun to combine efforts with the Board of Education on Information Technology, and have been investigating combining maintenance efforts.
Charlotte Staelin, representing Chester River Valley Mediation, expressed appreciation for the Commissioners’ support.
Lorraine Langenfelder, Commission on Aging, urged the Commissioners to reinstate funding cut from the Upper Shore Aging (USA). She noted that meals on wheels will be impacted as a result of the funding cuts, as well as the USA’s hours of operation and renovations needed for the building.
Jim McColigan, expressed concerns regarding the property tax increase as compared to the take home wages of county homeowners. He also noted that he is concerned for the economic future of Kent County and urged the Commissioners to reconsider the property tax increase.
Shirley Devaris expressed concerns regarding increases in the water and sewer fees and various items of the proposed budget.
Ron Athey, representing KRM Development, informed that he is losing tenants at his business developments as a result of downsizing due to the economy. He stated that if expenses continue to rise, including property taxes, there will a snowball effect felt on citizens. Commissioner Pickrum commented that in the past two years, the property tax rate has been lowered twice. He advised that the Economic Development Department has been tasked to give businesses all of the possible assistance needed to remain in the County and to grow.
Diane Daniels, representing the Museums of Kent County, expressed appreciation for keeping this organization within the County’s budget.
Barb Vernot expressed concerns over funding cuts to the Upper Shore Aging Center. She commented on the importance of the programs and trips offered to seniors at the Amy Lynn, and urged the Commissioners to restore funding to the USA.
Leslie Raimond, representing the Kent County Arts Council (KCAC), expressed appreciation to the Commissioners for continuing to see the importance of the arts in the community and for supporting the KCAC.
Dr. Leland Spencer, Health Officer, informed that the $30,000 cut to the Health Department budget will affect the school nurse program and force the loss of one nurse. He noted that this will cause the student to nurse ratio to increase, which will affect the quality of care given to the students. He asked that this funding be restored if any additional financing is received later in the year.
Gail Vucci, Director of School Nursing, expressed the importance of health benefits to the school nurses, and their importance in attracting new nurses to the school health program in the future.
Allan Schauber, Volunteer Fire Fighter, informed that mandated items to be funded by the Volunteer Fire Departments have been put on contract in order to save money.
Alex Rasin expressed concerns that the State Government has been the cause of the County’s budget deficit.
Commissioner Pickrum informed that the Kent County Homeowner’s Property Tax Credit will continue for those over 60 years old within certain income limits.
It is proposed that the Commissioners will adopt the Fiscal Year 2011 Budget and Tax Levy on June 15, 2010 at 10:15 a.m.
This hearing was taped for reference and adjourned at 7:50 p.m.
THE COUNTY COMMISSIONERS
OF KENT COUNTY, MARYLAND
Denisha C. Brown
Roy W. Crow, President