Last night, Annapolis Mayor, Josh Cohen addressed a very sparse crowd at the Mt. Olive Community Life Center on the realities of the FY 2012 budget that he is intending to send to the City Council on March 14th.
The City is not out of the financial woods yet as Cohen explained that City overspent in good years only to be crippled when the recession hit late 2008. In keeping with his campaign promise, Cohen is still avowing to avoid any tax increases. However, based on the needs of the City’s infrastructure, several fee increases are on the books. Cohen stressed that many of the services the City currently provides are not self supporting and they need to be. Water bills need to reflect the cost of providing the water.
Proposed Fee Increases
- Solid Waste –Average household fee is currently $380. A 12% increase will bring it to $426 per household per year.
- Water –The City operates the water plant at a deficit of $1.1 million. The Mayor will propose two alternatives. A 30% increase which will place some money in reserves to fix the aging system, and a 21% increase which will simply cover the deficit.
- Sewer –The City operates the sewer plant at a deficit of $1.9 million. The Mayor will propose two alternatives. A 49.5% increase which will place some money in reserves, and a 32% increase which will simply cover the deficit.
- Stormwater –The stormwater fee assigned to property is currently $22 per household and $120 per business per year. The Mayor is proposing increases between 25% and 100%.
- Transit –The current fare is $1.00 and the Mayor will look to increase that by 50% to $1.50. This is needed to establish a vehicle replacement schedule as our bus fleet is aging and we are still renting trolleys from Ocean City.
OPEB– This is the “Other Post-Employment Benefits” programs. In 2002, former Mayor Ellen Moyer established this program to pay for health benefits for former employees of the City in addition to other pension benefits. During robust years, the City paid these obligations through the general fund, but as of July 1, 2009 the City was required to fund these on an actuarial basis. On June 30, 2009 the liability for these benefits for former city employees was $43.6 million with zero in assets. The program is not funded. The police and fire pension is doing better and as of July 1, 2010 it was funded at 89% ($168 million liability, $149 million assets).
Refinancing Debt– The City is also looking to refinance its debt. The presentation last night indicated that this refinancing would save the City $18 million over several years. However, after the meeting, the Mayor told us that the savings would be less (in the $14 to 16 million range) due to the impending downgrade of our bond rating.
Economic Development– The Mayor also disclosed that in addition to the $400,000 the city gave to the newly formed Economic Development Corporation, they are also subsidizing their office space above Mills Fine Wine & Spirits. The Mayor estimated that the lease on the office space is $30,000 a year.
Residential Development– The presentation based some of the anticipated increased revenue on several new housing developments in various stages including:
- Koch Homes. 111 unit planned development known as Village Green Of Annapolis
- Katherine Properties. Continuiing care community of 80 apartments, 16 townhomes, 24 duplexes, 30 apartments over retail, 45 assisted living suites, 30 skilled nursing beds, 100 additional townhomes, 150,000 sf of retail, r restaurants, 100 room hotel, office space, and a concert venue.
- Reserve At Quiet Waters. 92 single family homes and 66 townhomes
- Haynes Property Annexation. 48 townhomes
- Carraway Development. 24 townhomes
Non Profits– The Mayor advised two representatives of local non-profits that the funding for grants would be held level in his proposed budget as the FY 11 budget. However., he cautioned that the City Council will ultimately decide if it stays at that level.
On the good news side, Mayor Cohen updated the room on the Roger “Pip” Moyer Recreation Center. When it was built, the City was expected to cover the debt service ($17 million) plus the operating costs for several years. However after one year of operation, the center is now covering its operating costs on its own.
The crowd last night consisted of the Mayor and seven staff members, three members of the press and five citizens. Several members of Mt. Olive Church joined in later.
This is an opportunity to voice your concerns, offer praise, offer criticism on how your City is managed. Please take advantage of it. There will be another Budget Forum tonight at 7:30pm at the Georgetown East Elementary School.