KENT COUNTY, MARYLAND
COUNTY COMMISSIONER'S

PUBLIC HEARING - 6/08/2004

PROPOSED FISCAL YEAR 2005 TAX RATE AND BUDGET


June 8, 2004

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 8, 2004, at 7:00 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, 2004 to increase property tax revenues by 5.3% above the Constant Yield Tax Rate.

The Constant Yield Tax Rate has been established by the Maryland Department of Assessments and Taxation at $0.961 per One Hundred Dollars of assessed valuation for Fiscal Year 2005. The proposed tax rate intended to be levied by the County Commissioners of Kent County will not change and is as follows: $1.012 per One Hundred Dollars of real property subject to taxation for County purposes and $2.53 per One Hundred Dollars of public utilities property subject to taxation for County purposes.

County Commissioners William W. Pickrum, Roy W. Crow, and Scott D. Livie were in attendance as well as Susanne Hayman, County Administrator, Thomas Yeager, County Attorney, Patricia Merritt, Director of Budget and Accounting, and approximately 16 citizens and members of the media.

Notice of the public hearing was read into the record by Mr. Yeager, who also reviewed the procedures for testifying. Mr. Yeager indicated that following opening remarks made by the Commissioners, the presentation of the Budget would then be made by the Commissioners, to then be followed by testimonies by citizens who had signed in the testimony log.

Commissioner Pickrum welcomed those in attendance and read the statement as follows:


This year our challenge has been to provide efficient cost-effective services to the citizens of Kent County, to continue quality education for our children, and to engender economic growth in an environment of declining fiscal resources. Our fiscal year 2005 budget process (our second budget process) was marked by the continued decline of state funding to county governments, increased demands for local services (both in scale and variety), and unexpected requests from state agencies to cover local services traditionally funded by the state. It has been a daunting task prioritizing all the worthwhile requests with limited resources, while maintaining the county's fiscal strength through strong reserves. This document has undergone extensive scrutiny and rigorous review. We and our staff have given our best. We are grateful to those who contributed extensive time and effort to finalize this budget. Thank you for your attendance and support.

The Board of County Commissioners for Kent County


Hand-outs of the proposed budget were distributed and a power point presentation was given.

Commissioner Crow reviewed the goals reflected in the proposed budget as follows:

Education - To partner with the Board of Education to provide quality education to the children of Kent County. This year's budget provides for competitive salaries for the County's teachers as well as the renovation of the High School to provide a more modern and effective learning environment.

Public Safety - To reduce the opportunity for crime and disorder, to address the root causes of crime through creative problem solving, and to provide security by protecting the life, property and constitutional rights of all citizens in Kent County. The Fiscal Year 2005 Budget includes a new public safety compensation scale (Sheriff's Office, Detention Center, Emergency Medical Services, 911) to compete with surrounding county's to hire and retain quality staff. A security system will also be implemented at the Kent County Court House.

Quality of Life - To enhance the quality of life for all Kent County citizens by providing responsive and effective services in the most cost efficient manner possible.

Economic Development - To think outside the box of traditional growth strategies and promote economic development that will maintain and compliment the unique agricultural and waterfront character of the County. One of the primary economic development goals is to expand the tax base by increasing job opportunities in the County. The Fiscal Year 2005 Budget includes funding for the following initiatives, Chesapeake Marine Trades Career School, The Kent County Business Park at Worton, the LaMotte Corporate Campus, and Chesapeake Fields Institute.

Tourism Development - To market and promote the County, encouraging visitors and leveraging visitor spending, while protecting the County's character, heritage, quality of life and unmatched natural and cultural resources. The economic impact of Tourism the County is 27 Million in dollars spent, 2 Million in tax dollars to local governments, and 300 jobs. The Fiscal Year 2005 Budget includes increased funding to enhance the marketing and promotion of the County, which in turn will positively impact our economy.

Social Services - To continue the County's commitment to its disadvantaged citizens. The Fiscal Year 2005 Budget reflects a commitment to the new Kent Center facility construction project and increased funding for emergency assistance provided by Saint Martins Ministries and the Local Emergency Assistance Program to County residents in need.

Senior Citizens - To facilitate a satisfying and independent lifestyle for the County's older citizens. The Fiscal Year 2005 Budget includes additional funding to Upper Shore Aging, Inc. to support the operation of the Senior Center.

Governance - To strive for excellence in governance through leadership, integrity, innovation, teamwork, and communication.

Commissioner Livie reviewed the fiscal challenges and sources of revenue.

The budget summary was reviewed.

The Fiscal Year 2005 Revenue is budgeted to increase $2,170,000 or 7.6% over the 2004 budget level.

- Property Taxes will experience the largest growth, increasing $1,275,000 or 8.0%. There has been no increase in the property tax rate. The majority of the additional revenue is due to increased property assessments by the State.

- Income Tax Revenue is projected to rise by $305,000 or 4.0%. The projections incorporate an increase in the income tax rate from 2.58% to 2.85% effective January 1, 2005.

- Other Local Taxes are budgeted to rise $527,000 or 26.3%. Recordation Tax and Property Transfer Tax are expected to increase $258,000 and $210,500 respectively.

- Intergovernmental Revenue will increase $287,000 or 20.7% primarily due to the $347,000 Flood Elevation Grant.

- The use of Fund Balance Resources will decrease by $204,000 or 61.0%. The use of this revenue sources is being reduced in order to achieve the targeted 6.4% fund balance at the end of Fiscal Year 2005.

The following is a report of how Revenues are spent:

- The Kent County Public School System is the County's largest expenditure. Approximately 46.6% of the total County's operating budget is spent in this area as follows:

- Operations ......................... $13,675,000

- Debt Service for Capital Projects ........ (minus)$ 558,000 (Total - $14,233,000)

- The County will also allocate $1,610,000 in its Capital Projects Budget to fund the first phase of the High School renovation project.

- Kent County Public School System funding will increase $584,000 or 4.3%

$601,000 ................................. Operations
(Minus) 17,000................................. Debt Service for Capital Projects
(Total $584,000)

- The Majority of the additional Public School funding will go towards providing competitive teachers' salaries.

- Salaries and Benefits total $7,444,000 and account for 24.3% of the total budget. This category includes salaries, benefits and payroll taxes.

- Operating Expenditures represent 11.3% of the budget and total $3,465,000. All goods and services purchased by the County (excluding capital expenditures) are reflected in this category.

- County Allocations are $2,540,000 or 8.3% 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 the County, such as Volunteer Fire Companies, Chesapeake College, Health Department, Library, Human Society, Upper Shore Aging, Municipalities, and Extension Office.

- Pass Through Grant Programs consist of State or Federal programs in which the County acts as the fiscal agent, such as Upper Shore Aging, Volunteer Fire Companies, Highway Safety Grant, and other State grants. Monies for the programs are received are received by the County and distributed to the designated agency for program performance. This category totals $841,000 and accounts for 4.0% of the total budget.

- Debt Service includes principal and interest payments on short and long term debt as follows:

- County Projects .................................................................... $1,317,000

- Public School Projects ........................................................ (minus)$ 558,000 (Total $1,875,000)

- County debt service accounts for 4.3% of the total budget and includes the following projects: Nicholson Landfill closure, Edesville water and sewer project, CFF water and sewer project, Central Alarm Radio upgrade project, Public Works complex, County Government Center, Court House repairs, Dulin Rubblefill closure, Chesapeake College capital projects, the Senior Center, recycling and solid waste equipment, Detention Center roof repairs, the Kent County Business Park at Worton infrastructure, LaMotte Corporate Campus and net pension plan obligation.

- Capital expenditures total $210,000 or .7% of the total budget and include the following: County vehicles, computer equipment, capital repairs/improvements.

- Contingency Funds have been set at $200,000 or .7% of the total budget. These funds are budgeted to allow for unforeseen expenditures that may arise during the year.

- Salaries and Benefits total $7,440,000 and are budgeted to increase $559,000.

This category reflects the following:

- $500 cola and step increase for County employees
- creation of a new Public Safety Compensation Scale for public safety employees
- health insurance increase of 15%
- increased State pension plan costs (5.01% to 7.29%).

- Debt Service will increase by $159,000.

- County Allocations will increase by $104,000.

The most significant increases in funding include:

- $39,000 Health Department funding to assist with the mental health program and to provide two school nurse positions with health benefits;

- $36,000 Volunteer Fire Companies mandated increase tied to the rise in the assessable base;

- $22,000 Upper Shore Aging funding to support the Senior Center and to provide matching grant funds to leverage State monies.

The following individuals offered testimonies as follows:

- Dr. James Siemen, President of the Board of Education, thanked the Board for their support and requested continued efforts by both the County Commissioners and the Board of Education to be good stewards of public funding.

- Dr. Bonnie Ward, Superintendent of Kent County Public Schools. Dr. Ward read from a prepared statement in support of the funding proposed for the Kent County Public School system, indicating

"We are very pleased to have received a funding increase of just over $500,000 in the Fiscal Year 2005 budget ...; We intend to put all of this increase into the classrooms and schools where it will directly impact students. It will permit us to retain and attract highly qualified teachers and staff who work directly with students each day. This increase will permit the school system to fully fund the negotiated agreements with its bargaining units, Kent County Teachers Association and the Kent County Education Support Professionals Association."

- Betty Weller, representing the members of the Kent County Teachers' Association. Ms. Weller read from a prepared statement in support of the proposed funding for the County Public School system, extending her appreciation to the Commissioners for their consideration of the Board of Education's budget request, and indicating that the proposed funding will increase the quality of education by attracting and retaining quality teachers.

- Wayne Bedwell, President, representing the Kent County Support Professional Association (KCSPA), of the Kent County Public Schools. Mr. Bedell advised that this was the first year the KCSPA was allowed to negotiate their funding contract and thanked the Commissioners for their financial support.

- Bob Lathroum, owner of Widow's Walk Inn, Chestertown, spoke in opposition to any increase in expenses in the proposed budget since they are not able to obtain additional sources of income. He feels that the Commissioners need to stop the upper spiral and freeze additional spending. As a taxpayer, he does not feel he can afford an increase in taxes and requested that the budget be held at the level of Fiscal Year 2004 for the next year or two.

- Richard Feeny, of Worton, expressed deep concern for the proposed increase in the Local Income Tax, as well as concern for unforeseen backlash of the costs to the citizens, such as increased interest rates.

- Leslie Raimond, President of the Kent County Arts Council, expressed appreciation for the funding allocated to the Council. The efforts of the Council, in addition to the Tourism Director and the towns, have added to the quality of life in the County.

Correspondence was received from Dr. Allan T. Hanifee, Sr., of Chestertown and former President of the Board of Education, which was directed to the Commissioners and read into the public record. Dr. Hanifee expressed his appreciation to the Commissioners on behalf of "the children, teachers, and the entire County Public School community" for the proposed funding in the Fiscal Year 2005 Budget for the County Public Schools. He added, "Your actions indicate strongly to me that you have concerns about the education of our children in Kent County Public Schools. You also share as team players in the total educational effort in the operation of our schools. ... I will make every effort to have the Board of Education work to team with you."

Commissioner Pickrum reiterated that it has been a difficult budget process and of the need to move forward. He advised that the Board is open for discussion/suggestions and of its desire to work with all agencies including the local legislators and the Governor. He stated that the Board did what it believes to be fair and just, not necessarily popular.

Written comments on the proposed budget will be received up to June 11 at 12 noon.

It is proposed that the Commissioners will adopt the Fiscal Year 2005 budget and tax levy on June 15, 2004 at 10:00 a.m.


This hearing was taped for reference and adjourned at 8:00 p.m.


THE COUNTY COMMISSIONERS
OF KENT COUNTY, MARYLAND


Janice F. Fletcher
Executive Assistant


Approved: William W. Pickrum, President