CHESTERTOWN — County officials are taking strides to finalize their budget for next year.
Chief Finance Officer for the County Pat Merritt attended the budget work session on Tuesday, to go over what they’ve worked on since April.
Commission President Ron Fithian said he’s getting to a point where he’s satisfied with the budget.
“I think we’re close enough. If we go further, we’ll start hurting ourselves,” he said, referring to making cuts and last-minute adjustments.
However, there were still some suggestions after Merritt made her presentation.
Some changes made to line items included:
Removing the infrastructure project on state Route 213 out of the budget.
Reducing the number in the Kent Center housing project.
Under appropriations, they split the leadership training costs into recurrent and non-recurrent costs.
And finally they added $60,000 to the Health Department.
Merritt took note of the changes, reminding the commissioners they’re not meeting again until the public budge hearing on June 4.
She provided an overview of the work they’ve done so far.
The proposed budget totals $61,947,813, with $2.2 million in new revenue.
The fund balance will be just under $5 million, over their target balance.
“It’s good having $5 million in one-time money sitting there when we need it if we come up short on something,” Fithian said.
Merritt separated these numbers into two categories: recurring (paid on a continual yearly basis) and non-recurring (one-time pay).
Commissioner John Price had a few questions for Merritt concerning the project on state Route 213 pertaining to $450,000 allocation in this year’s budget.
County Administrator Shelley Heller and Merritt pointed out it was set aside for that project specifically, but it could be adapted for other use.
The decision was to take that allocation out of the budget for now, then study how to use it for a later date.
Price then pointed out under the county’s allocations, the Kent Center made a request for $98,000. Price proposed they give them $78,000 instead, commenting they can build a lot of projects with that amount.
Based on what they asked for in the past, Merritt said that is a “significant amount.”
From there, Merritt presented the Public Hearing Draft of the budget, inviting the commissioners to provide input.
Merritt’s presentation further broke down the budget.
Mainly where the county gets its money is 62% property tax and 20% income tax.
Merritt noted Kent now has the highest property tax rate on the Eastern Shore. Previously Cecil County held that rank.
Price said he’d like Kent’s taxes lowered too, but “folks have to realize that regardless of the size of the county, government operations cost the same amount.”
Fithian backed him on that.
As high as that is, the property tax rate won’t be raised, remaining at $1.022 per $100 of assessable base for FY 2025.
However the water and sewer rates will increase by 4% as recommended by consultants.
And with the county trying to get short term rental tax via identification and outreach programs, they anticipate getting additional dollars from that.
Merritt, moving ahead, compared income tax rates for Kent with neighboring counties.
“We are one of 11 counties that have the maximum income tax rate,” she said.
She talked about what will be going up.
Property tax is over $1.8 million, with assessed value increasing about 5.6% this year. Interest income was the largest in that category, seeing an increase over $400,000, which Merritt said, has to do with the rising interest rates and higher cash balances.
What’s going down then?
Intergovernmental revenue decreases by $173,000; most of that is due to the $250,000 they got last year for additional state funding for the Blueprint Education reform bill.
Merritt projected the fund balance at the end of this year will be a little over $17 million, a 29.6% fund balance. Their target was 7.5%.
Furthermore she projected that at the end of 2025, it’ll be a little under 15%, which can be used to pay for capital projects coming up.
Expenditures are going up a little under $6.9 million with the largest for the public school system at just under $20.4 million.
Funding for public schools is going up $728,000 — $173,000 of that required by the state’s Blueprint for Education mandate.
Salaries are going up also, at 6%, about the same as neighboring counties.
Recurring allocations are increasing at $97,000. The Health Department, Chesapeake College and Volunteer Fire Companies are all formula-driven, and take up the majority of those.
Debt service is going up $95,000; vehicle leases make up $73,000 of that.
And transfer to other funds is going up $240,000, mostly in water and wastewater.
On the non-recurring side, expenditures total around $8 million. The items that make up that number up are in capital expenditures, capital projects, leased capital, non-recurring allocations, and the pilot program for the Betterton ambulance.
On the capital side, most is in public works, Merritt said. Road infrastructure, road equipment, a stormwater project out of Kennedyville and HVAC equipment.
“We’ve got a little over 5 million dollars for capital projects,” Merritt said.
Under Eeucation, the middle school design will cost the county $1,749,000, that is if the state and county still have a 50/50 cost share.
A one-time allocation to public safety consists of a little over a million dollars put towards building an Emergency Services Facility, the tri-county detention facility design and communication radio upgrade.
Other projections include:
Wastewater services- $852,000 in projects.Millington design, the solid press at the Worton facility and the pump stations at Kennedyville$685,000 for bridge repair, which will be reduced by $450,000.Bayside Landing $611,000 pier and bulkhead replacement.Project Open Space, $70,000 worth of projects at Worton Park and Toll ParkTechnology improvements, $30,000
Merritt highlighted what areas she sees as challenges.
Under capital projects, the new middle school, public safety infrastructure and courthouse renovations total $87 million.
“If you look at FY-28, we’re looking at $5 million in debt service if we were to finance the $87 million. That number might be slightly higher.”
How are we going to pay for those three projects if we decide to move them forward was her question.
“The other thing hitting us are the state mandates,” Merritt said, referring to mandated public school funding by the Blueprint. Merritt said without anything else altering, they’d need to increase their property tax rate by a third to pay for implementing the Blueprint over time.
Also included in the category of state mandates was the Time to Care Act, the Maryland Department of Labor’s bill to address paid family leave.
Both state mandates are expected to hit the county and the state hard unless changes are made.
“These are the challenges. As that first slide showed it was a lot of work to get this budget to down to where it is. It wasn’t easy,” Merritt said.
Price added, “We have to do what we have to do, and if we made a mistake, we’ll fix it.”
Merritt was commended by the commissioners for her hard work.
The next step is the public hearing, where Merritt and the commissioners will go over this information and hear concerns from the public.
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