March 28, 2023
Annapolis, US 45 F

County Fronts Money To City

County Executive Leopold today approved a wire transfer of $875,000 to the City of Annapolis as an early payment of revenues to aid the City’s budget.

“I approved this transfer to provide assistance to the City of Annapolis as Mayor Cohen works to balance the budget,” County Executive Leopold said.  “When our Capital City needs help, we are more than willing to oblige.  As a State Delegate and County Executive, I have always been an advocate for regionalism, because jurisdictions must work together to solve difficult problems.”

Every month the City and State of Maryland receive property tax payments at the beginning of the month.  At the end of each calendar year, the City receives its share of profits from Eisenhower Golf Course.  The payments today reflect $750,000 in property tax revenues and $125,000 in profits from the golf course.

“Despite the fact that the City Council passed a balanced budget for Fiscal Year 2011, the lack of cash in our reserves has posed a lingering challenge,” Mayor Josh Cohen said. “I appreciate County Executive
Leopold working with us to get the cash flowing so we can pay our bills more quickly.”

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  1. Here is the City’s release:

    Mayor Joshua J. Cohen announces that Anne Arundel County Executive John R. Leopold has authorized the early payment of $875,000 in property tax revenue and other funds to the City today.

    The county has expedited the disbursement of those funds, which are normally paid out in the fall, to help the City keep up with expenses at a time when its cash reserves are depleted.

    The $875,000 represents $750,000 of property tax revenue and $125,000 of the City’s profit share from the Eisenhower Golf Course. The City is scheduled to receive the balance of more than $17 million in property tax revenue by October from Anne Arundel County.

    “Despite the fact that the City Council passed a balanced budget for fiscal year 2011, the lack of cash in our reserves has posed a lingering challenge,” Mayor Cohen said. “I appreciate John working with us to get the cash flowing so we can pay our bills more quickly.”

    The Mayor’s priorities during this period are: 1) make payroll; 2) make debt payments; and 3) pay vendors. Based on the latest cash-flow projections, the City is expected to make payroll through September and is current on its debt payments.

    It remains unclear whether the City will have enough reserve funding to forgo additional short-term credit borrowing. The City has tapped a $10 million line of credit, and the City Council last month approved to raise the credit ceiling to $16 million. Acting City Manager Michael Mallinoff told the council that he could not rule out the possibility of asking the council to draw on that credit. However, updated cash-flow projections indicate that the amount of additional debt needed to get through this period, if any, will be significantly less than the $6 million authorized.

  2. Phill–At the last meeting, M. Mallinoff said that the payment from the county to the city would be accelerated with bi-weekly payments. Are we to assume that this is in lieu of that arrangement and that the county just agreed to front the payment?

  3. it is good that Leopold advanced the cash so that the city can pay its vendors make debt paymensts and keep the economy at large moving. But it appears that cohen is using the money to bail the government out in order to keep the sinking ship afloat for a little longer.

  4. I believe this payment is for tax receipts received by the County since July 1. Typically, the City would not have received them until early October. Now, the protocol will be bi-weekly with the $750K as the first installment. Apparently, these funds will be transferred by electronic transfer rather by check. This will afford faster collection and provide a safer means of transfer. Of course whatever is received now, will reduce the amounts the City will receive in October. The challenge will be better fiscal management. I wonder, too, if this cash facility will eliminate the need to draw down the additional $6MM recently authorized. Wouldn’t that be a nice benefit!

  5. The City press release indicates the balance of the real estate tax recepits will be paid in October and the County Executive’s statement doesn’t state or imply bi-weekly payments. If this is a one time payment, the cash flow problem will not be eliminated or even significantly reduced. it would be nice if the City or County would clarify this point for tax payers.

  6. Through October, Anne Arundel County will wire property tax revenue to the City twice a month instead of once a month, as is the normal practice. The amounts will vary based on the revenue collected.

  7. Phill –

    You mention “through October” … I recall Mike Mallinoff saying “going forward” the County would transfer funds bi-weekly. Has that changed?

  8. The “through October” statement is based on a conversation I had with Mr. Mallinoff this week. Certainly once the balance of the first installment of property tax revenue is received by mid-October, the immediate need for bi-weekly fund transfers will begin diminish.

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