Town officials, candidates get look at year-to-date budget

by Geoff Fox

Citing the upcoming election in April, Mayor Ralph Salvagno organized a public workshop for the current town officials and those running for office to familiarize themselves with the town’s budget.

While all current town officials were present at the meeting, only candidates Misty Cubbage and Levi Little attended the workshop. Cubbage is running for town council while Little is running for mayor.

Town Manager Joe Gilbert said the 2021 fiscal year, which runs July 1, 2020, to June 30, 2021, was an odd year due to the COVID pandemic and the order from Governor Larry Hogan that prevented municipalities from shutting off or serving notices on water service.

He noted there are still two billing quarters left before the end of the fiscal year. At the time of the workshop, meters were currently being read.

Eight months into the fiscal year, the town has revenues, year to date, at $986,964.17 on a budgeted revenue for the year of $2,160,264. That equates to 45.7% of budgeted revenues received.

“You got to realize that a budget is just a planning document,” Gilbert said. “There’s no way for me to know exactly what revenues are going to be and what exactly the expenses are going to be, so you take your best guess.”

According to a packet of slides Gilbert provided those in attendance, COVID-related revenues, such as rentals and delayed water collection, are down right now; the end of year Maryland state grant allocations will make up some of the deficit; and the town is not expected to realize a loss for the year with total expenses being $1,154,287 and revenue being $1,312,085.

Gilbert said there would be some tax money coming in later in the year, however that money is not reflected in the projection.

If the revenue stream continues, the town would have a budget surplus over $100,000.

“We’re not in the hole at all at the end of the year,” Gilbert said. “Even if things stay just the way they are, we’re going to be okay even though revenue is going to be down.”

With business being down across the state, the stream of sales tax monies coming into the town is diminished.

Expenditures, he said, have also gone down. However, some expenditures, such as Public Works, has gone up due to overtime, materials, equipment, and water mains, have gone up.

Gilbert used the example of a recent water main break in the area of Resley Street and Pennsylvania Avenue where town crews were working overnight Thursday into Friday.

He also pointed to a recent sewer line break behind NAPA that took two days to repair.

“That’s just the price of having an infrastructure that desperately needs repaired and replacement, which we are pursuing,” Gilbert said.

For expenses, total expenses year to date are $865,715.14, compared to the total budgeted expenses of $1,935,566. That equates to 45% of budgeted expenses as of March 10, 2021.

Attorney and accountant fees are exceeding budgeted allocation, sanitation revenue is $3,906 below expectations, and calculations do not include grant money received.

If expenses stay the same as well, there would still be the $100,000 surplus.

“Fiscally, we’re okay, even with COVID,” Gilbert said.

Last year, Gilbert added, he tried to budget low in revenue and high in expenses as a way to “paint a picture of not the worst case scenario, but a more realistic one” if something came out of the blue like a repayment of $200,000 to Maryland Department of Housing & Community Development.

That money was an unbudgeted expense, but Gilbert noted the town would still be in a surplus with that payment.

In the General Fund, revenues year to date are $648,878.98 compared to the budgeted is $1,288,662.

With the current rate, the total revenues will be around $1,297,756.

In the slide, Gilbert said the figure does not reflect the two remaining billing quarters.

The General Funds expenditures, year to date, are $479,251.06 compared to the budgeted $638,288.

Expenses for accounting services, legal fees, water main failures and repairs and equipment have increased expenditures, and will be offset in future revenues.

When looking at the Water Department side of the budget, year to date revenues are $112,196.36, which is the first two billing quarters with one being an estimate. That amount is compared to the budgeted $333,700.

The figure does not reflect the two billing cycles during the COVID restrictions not allowing the town to distribute shut off notices and inhibited collections.

Gilbert said in some cases, people have taken advantage of this and not paid their water bills.

Aside from accruing interest and keeping track of the billing, Gilbert and the town cannot go after those payments.

In terms of expenses, the year to date total is $175,973.59 compared to the budgeted $250,750.

At the current monthly rate, Gilbert said the Water Department would have a $263,969.39 surplus over budget.

In the Wastewater Department, the year to date revenue is $107,690.83 compared to the budgeted $394,800.

At the current rate, the department will generate $161,536.25 in revenue at the end of the fiscal year, however there are still two billing quarters left.

The expenses of the Wastewater Department, year to date, are $114,554.69 compared to the budgeted $231,575.

At the current rate, the department expenses would be $171,832.04 for the fiscal year and $59,742.96 under budget.

For sanitation, it will generate $128,283.52 in revenue by the end of the fiscal year, which is $14,818.42 below the projected amount.

At the current rate, the expenses would be $126,553.05 at the end of the fiscal year. This is $18,553.05 over the budget; bust still $1,730.50 above expenses.

There were some questions regarding the recycling program the town started a few years ago.

Councilman Roland Lanehart, Jr. said he’s had residents approach him about the trash company dumping recycling into the same truck as trash.

“That company is not recycling that,” he said.

Gilbert said he was told the company doing the recycling and trash doesn’t make any money through the recycling.

Lanehart said the contract with Apple Valley is coming up. The fees would be going up 20% with recycling would be doubled as well. The town is also paying tipping fees.

Mayor Ralph Salvagno said abandoning the recycling program would send a bad message to the community but it could be possible to have a recycling drop off for folks who’d want to do so.

With four months left in the fiscal year, some areas of the town are seeing a significant amount of money still in their budgets.

Parks, Recreation and Community Services have $22,133.91 remaining in their budget as they were at $11,266.09 in year to date expenses. They were budgeted $33,400.

Public Works has $24,765.05 remaining in their budget. Year to date, their expenses have been $51,684.95 compared to their budgeted $76,450.

Public Safety has $25,034.78 left in their budget. The expenses to date total $419,565.22 compared to the $44,600 that was budgeted.

The least amount spent has been on utilities, mayor and council and insurance.

Expenses in that area of the budget has been $73,995.87 compared to the $177,401.

Gilbert said there are a number of one-time monies coming in with the eventual sale of the Fulton Building to Harvest and COVID relief.

He’s already started working with accountants even before receiving the money so there are policies and procedures in place so when the money does come in, it’s tracked well and is easy to audit.

“I want to make sure that is accounted for well,” he said.

Salvagno said there was a change in auditors and over the last year, the audit has been perfected.

“As far as we can tell, everything is going fine this year,” the mayor said.

With the federal money coming in, the standards have been raised and if not used correctly, it won’t be seen again, he added.

There could be five possible anticipated purchases made in fiscal year 2022.

Among those are a new police vehicle, new Public Works backhoe, first aid kits for every town vehicle, first aid kits for every town building, and AEDs for every town building.