CHESTERTOWN — The proverbial belt-tightening and fiscally prudent spending has the town of Chestertown projecting a surplus of about $75,000 for fiscal year 2021.
That was the outcome of a second budget workshop for the mayor and council Monday, May 18.
A public hearing on the proposed spending plan will be held 7 p.m. Monday, June 1. The hearing will be held on the Zoom platform.
The mayor and council are scheduled to adopt the budget at their regularly scheduled meeting that begins that night at 7:30.
After raising the tax rate in fiscal years 2019 and 2020, the rate for the coming year will remain at 43 cents per $100 of assessed value. The constant yield tax rate — the rate at which property tax revenue would equal that of the prior fiscal year — is slightly higher at 43.32.
Town Manager Bill Ingersoll and Accounting/Treasury Specialist Amanda Miller “really crunched the numbers and did yeoman’s work,” Mayor Chris Cerino said at last week’s budget workshop.
Because so much is unknown about how the COVID-19 pandemic will affect the economy, “we tried to be as conservative as we could on the revenue side and really tried to tighten our belts as much as we could on the expense side without sacrificing any personnel or major services,” Cerino said.
He added: “I hope our projections hold.”
Cerino and the council members agreed to reassess both sides of the ledger in December or January “to see how the health crisis is turning out,” he said.
The new fiscal year begins July 1.
The proposed budget includes a 2% pay raise across the board for town employees — this does not include the mayor, council members and town manager — and full funding of a 12-officer police department.
The 2% increase is a tad bit more than the Cost of Living Adjustment, Miller said.
In other good news, the anonymous benefactor recommitted to a contribution of $18,750 that will allow for full funding of $37,500 for the economic development and marketing coordinator.
Also, the town is expected to collect $55,000 in permit fees related to Brookmeadow and the Kent County Family YMCA building projects.
Being cautious, Miller told the council she had budgeted $450,000 for income tax revenue, $50,000 less than has been the norm.
The largest source of revenue (68%) is from real estate taxes. The amount is $2.57 million, “what it should be if everyone pays their taxes,” Miller said.
Miller said the pause in services due to COVID-19 restrictions has led to a drop in revenue from the farmers market, parking fines, bulk trash pickup and the RedSpeed camera.
The $100,000 projected revenue from RedSpeed was not inflated to reflect two additional cameras that may be installed, pending State Highway Administration approval.
The amount of revenue from highway user fees is down from the $230,000 the town was initially told to expect to $180,000.
To help make the numbers work, the town is poised to decrease the allocation to the Recreation Commission from $5,000 to $1,000 and eliminate Music in the Park altogether at a savings of $4,500.
Initially the plan was to cut any funding to Main Street, since its current $5,000 allocation has not been spent. After lobbying from Councilman Tom Herz, whose Second Ward includes the downtown area, $1,000 was put back into the budget for Main Street.
Other allocations include: Chester Gras, $1,000; National Music Festival, $1,000; Environmental Committee, $500; Earth Day, $500; Samaritan Group, $1,000; Curb Appeal, $2,000; Eastern Shore Heritage, $1,000; and the Bayside HOYAS, $500.
Public safety ($1.55 million) and public works ($1.25 million) account for 42% and 34%, respectively, of the spending plan.
Next comes $526,000 in general government costs and $193,711 in debt service.