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Staff projects $10.3 million deficit


Staff writer

In an effort to be more transparent about the county’s budgeting process, the commissioners began their process for the fiscal year 2015 budget during open session earlier this week.

After reviewing the projected fiscal 2015 budget, including a more than $10 million deficit, the Calvert County Board of County Commissioners approved staff’s initial budget development recommendations Tuesday.

The initial budget development guidance includes the request to cut 2 percent from county departments’ operating budgets where possible, informing outside agencies not to count on funding changes from this fiscal year and not hiring new staff or creating new county initiatives.

Commissioner Evan Slaughenhoupt (R) raised a concern about “slicing” the operating budgets by 2 percent when he hears year after year the county government is “lean already.” He said he doesn’t understand how those two concepts can work together.

“How can you say you can slice more if you’re already lean? It seems to me that another slice at 2 percent implies that there’s no effect,” he said. “… At some point, where do we end up looking at actually having to make cuts in what we do? Where’s the tipping point?”

Commissioner Gerald W. “Jerry” Clark (R) said a 2 percent cut in $35 million dollars equates to $700,000, which the commissioners reprioritize into other departments, such as public safety.

Commissioner Susan Shaw (R) said, “I have a question for you Commissioner Slaughenhoupt: What governmental services would you like to cut?”

“I would not like to cut any governmental services,” he responded.

Finance and Budget Deputy Director Joan Thorp said not every department can achieve the 2 percent cut because they may be too small or perform essential duties.

The county’s projected fiscal 2015 budget isn’t balanced yet, according to the presentation. With the county’s projected revenue at $232,133,865 and expenses at $242,474,466, county staff is projecting a $10,340,601 deficit in fiscal 2015.

“The fiscal year 2015 amounts are projections of the future and are subject to change and likely will,” Finance and Budget Director Tim Hayden told the commissioners.

With fiscal 2015 revenues projected to remain “relatively” the same as the fiscal 2014 budgeted revenue, Hayden said “the only meaningful expected increase” is the 4.8 percent increase in income tax.

Real property tax revenue is expected to decrease by $1.7 million due to declining real property assessments. A $6 million decrease in recordation revenue is also projected.

Even though the county and Dominion Cove Point Liquefied Natural Gas have been boasting the economic benefits of Dominion’s proposed LNG exportation project, the county isn’t projected to receive any increased corporate or public utility revenue from Dominion for the next few fiscal years, Hayden said. If Dominion’s project is approved and construction on the Lusby plant begins in early 2014 as anticipated, then the county might see a small increase in income tax revenue because of the effect of the construction efforts, according to the presentation.

When it comes to expenditures, Thorp said staff is recommending the county’s capital outlay for durable goods remain at $1.4 million for fiscal 2015. The fiscal 2015 projections show the Calvert County Board of Education budget also remaining at $109.8 million despite declining enrollment, Thorp said.

In addition to the 2 percent cut to operating budgets and no new county employee hires, Thorp said additional expense-cutting options and approaches might be developed and added throughout the budget process.

Hayden said one expense not accounted for in the projections is the cost of having two new county judges.

Slaughenhoupt asked fellow board members, “Is it our view … that regardless of whether the economy’s improving … staying flat or going down, do we think we’re at the tax rate that is going to stay that for the foreseeable future regardless of what the economy does? To me, that seems to be what we’re demonstrating.”

Clark said he’ll “bite into” the “political” question, saying, “We can have a philosophy to cut the rates, and we could cut the rates,” but it could be at the expense of the board of education and the Calvert County Sheriff’s Office. “I would argue with you that giving the people of this county a level tax rate and a level paying field — knowing where they’re at and keeping it at that — is the same as giving them a tax break, especially in the down years.”

Clark continued, saying Slaughenhoupt has only been on the board when the revenue is short, making it easier to prioritize and cut.

“It’s when you have to make decisions when you have excess funds when this job is harder than it is right now because you wanna do what’s good for the community and you wanna do what’s good for the citizens and try to help them,” Clark said.

Shaw questioned Slaughenhoupt’s timing. “Why would you bring that up when we have a projected deficit of $10,340,601? Why now? What’s behind your timing?”

Slaughenhoupt responded, “It’s the beginning of the budget year. It’s a good subject to raise any time one begins a budget, isn’t it?”

In other business, the commissioners:

• Directed staff to schedule a public hearing regarding two revisions to the county’s debt affordability model. The changes include lowering the ratio of general fund debt to assessed value of taxable real property from 4.5 percent to 1.8 percent and removing the debt per capita ratio, though it will always be calculated and available;

• Unanimously approved a $24,500 budget adjustment for a Governor’s Office on Crime Control and Prevention Byrne-Justice Assistance Grant to fund a booking workstation for Calvert County’s Live Scan program;

• Unanimously approved two contracts with Verizon for constructing an updated 911 phone system. The new phone system will be paid in full with a $860,780 grant from the Emergency Number Systems Board. The fee for the upgraded system is $1,500 per month, which is a $200 increase per month from the current system;

• Unanimously approved revisions to the shift differential section in the personnel chapter of the county code defining eligibility by function so position title changes will not require code revisions; and

• Unanimously approved a joint use agreement with Southern Maryland Electric Cooperative allowing the construction of Baythorne Road and Bradbury Lane by the developer of College Station subdivision phase 2, within SMECO’s easement. The construction will be under the county’s supervision, ensuring the developer adheres to certain stipulated conditions.

Looking ahead

The Calvert County commissioners began the nine-month county budget process earlier this week. Here’s a look at the tentative calendar:

Oct. 22: There will be a work session during the commissioners’ meeting to discuss the fiscal 2015 capital improvement project budget.

Nov. 19: The commissioners will meet with the county’s legislative delegation to review legislative requests, such as bond financing.

Jan. 15: The fiscal 2015 capital improvement project budget will be presented to the Calvert County Planning Commission.

Feb. 25: There will be a work session during the commissioners’ meeting to discuss the six-year capital improvement project budget.

March 18: County staff recommended budget will be presented at a public hearing tentatively scheduled at 7 p.m. at Calvert Pines Senior Center in Prince Frederick.

April: There will be work sessions during the commissioners’ meetings, as needed, leading up to the commissioners’ budget.

April 16: Changes, if any, to the fiscal 2015 capital improvement project budget will be presented to the Calvert County Planning Commission.

May 20: The commissioners’ budget will be presented at a public hearing tentatively scheduled at 7 p.m. at Calvert Pines Senior Center.

June 3: The commissioners adopt the fiscal 2015 budget.