[0:02] my name is Alan McCarthy and I would
like to welcome everyone here tonight
[0:07] for a public citizens input on the
annual operating capital budgets here in
[0:13] Cecil County it is important to me that
I hear your comments your suggestions
[0:18] and your priorities at the early stage
of the budget process for 2021 your
[0:25] suggestions will be incorporated
whenever possible into the new budget
[0:29] which will be submitted at a County
Council for consideration on April 1st
[0:33] of this year in advance of hearing your
concerns our budget manager Miss Becky
[0:41] Anderson will present some preliminary
information including financial data
[0:45] relating to years physical budgeting
process I am certain that you will find
[0:51] her comments very interesting I
appreciate and thank you for being here
[0:55] tonight and I'll now turn it over to
Becky thank you dr. McCarthy good
[0:59] evening I would like to start off this
year's presentation by reviewing where
[1:03] we last left the budget conversation
with the approval of the FY 2020 budget
[1:08] the FY 2020 budget will impact how we
review and evaluate what will continue
[1:13] to be funded and where there's room for
improvement that is why we invited you
[1:17] here today to take part in the formation
of the FY 2021 budget so know so in
[1:22] order to get an idea of exactly what
we're working with I'm asking do you
[1:26] know what the total amount of the FY
2020 general fund budget was the general
[1:33] fund budget was approximately two
hundred and two million eight hundred
[1:36] fifteen thousand which was an increase
over 3.8 percent over the prior years
[1:41] approved budget so let's review how the
county budgeted 202 million dollars how
[1:47] much of the FY 2020 budget was allocated
for the educational needs of our
[1:51] citizens 103 million seven hundred
ninety four thousand which includes
[1:57] funding for pre-k K through 12 education
Cecil College and the Public Library
[2:01] System over half 51 percent of the
budget goes to direct allocations to aid
[2:07] in educating Cecil County citizens the
level to which these entities are funded
[2:11] includes a minimum threshold
determined by the state that must be met
[2:15] with county revenues how much of the FY
2020 budget was allocated to protecting
[2:20] our citizens 20 percent or forty million
seven hundred sixteen thousand was
[2:26] budgeted to address public safety
concerns in Cecil County this includes
[2:30] everything from deputies on the street
to animal enforcement officers how much
[2:35] of the FY 2020 budget was allocated to
pay for death that was to help build new
[2:39] County schools libraries bridges
communication systems and other capital
[2:43] improvement projects a little over 16
million or eight percent as capital
[2:49] projects are approved and construction
begins the county has to borrow the
[2:53] funds to meet the capital demands of our
county once borrowed the loan is
[2:57] normally paid back over 20 years I hope
you're taking notes as we go along and
[3:02] keeping track of how much of our pie is
left and thinking about the budget items
[3:07] you may be here tonight to support and
where they fit in the county budget how
[3:11] much of the FY 2020 budget was needed to
fund the county portion of state
[3:15] regulated functions that often the
county does not have the discretion on
[3:19] how to fund and at what level a little
over 11 million dollars or 6% of the
[3:26] county's general fund operating budget
has to support state regulated items
[3:30] such as a circuit court system the
office of the state's attorney and the
[3:34] Board of Elections
often times the state set salary and
[3:38] fringe limits for some of those
personnel employed by these offices that
[3:41] the county has little room to negotiate
or change the budget has to support
[3:46] whatever payment is due to support the
service in our County have you been
[3:50] keeping track of the pie chart are you
thinking where are some of the items we
[3:54] have not even discussed like Public
Works Parks and Rec and where do they
[3:58] fit in the budget as you can see on this
slide 15 percent of the general fund
[4:03] operating budget consists of that entire
list of departments Public Works alone
[4:07] is 40 percent are a little over 12
million of the remaining slice of the
[4:12] Cecil County operating pie remember the
county roads division is responsible for
[4:17] the maintenance of all County bridges
and approximately 615 miles of roads as
[4:21] state support for roads infrastructure
continues to be minimal the county
[4:26] continues to face the chain
challenge to find greater efficiencies
[4:28] within this small group of departments
to make sure county roads are safe the
[4:33] rest of County's government functions
have to provide the needed services with
[4:36] the remaining budget available the
county executive has to make tough
[4:40] decisions in order to be certain there
is enough pie in each area to provide
[4:44] the services that County citizens need
now I'm not sure if you're asking
[4:48] yourself
but where does Cecil County get 202
[4:51] million dollars the number one revenue
source for Cecil County is real and
[4:56] personal property tax revenue in FY 2020
the county county is expecting to
[5:01] receive a little over a hundred eighteen
millions in property tax the current
[5:06] real property tax rate was set back in
FY 2018 at one point zero four one four
[5:11] per $100 of assessed property value the
county rate continues to be below the
[5:16] state average the rate has only been
increased one time in the last eight
[5:20] fiscal years as this administration
needed to address the declining county
[5:24] reserve fund and the underfunded
critical needs in our County such as
[5:28] deteriorating roads infrastructure and
public safety needs operating revenues
[5:33] meeting or exceeding current operating
expenditures was a priority that needed
[5:37] to be addressed as balancing the budget
with unassigned fund balance or this
[5:42] County savings account was a policy
decision that needed to be changed and
[5:46] it were to provide the fiscal stability
necessary for the future of Cecil County
[5:50] another question we often receive as why
has my real estate tax bill continued to
[5:55] increase if the tax rate has only
changed once in the last eight fiscal
[5:59] years the answer is simple the value of
your property has changed based on state
[6:04] assessments the State Department of
assessments performs evaluation of your
[6:08] property each county is divided into
tier groups and assessments occur every
[6:13] three years within a different tier if
your property tax bill is more your
[6:17] property is worth more the most recent
assessments and Cecil occurred in area
[6:21] two which can be seen in yellow on this
map the number two source of revenue in
[6:27] Cecil County is income tax a little over
63 million is anticipated to be received
[6:32] in FY 2020 from income tax today the
income tax rate has only increased once
[6:38] in the last 19 fiscal years
can be seen on this slide there are 12
[6:42] counties with an income tax rate higher
than that of Cecil County and eight
[6:46] counties have already met are at the
maximum rate allowed under Maryland
[6:50] state statute have you been keeping
track property and income tax account
[6:55] for ninety percent of the county's
revenue to provide all the funding
[6:58] necessary for education Public Safety
etc before we move on in the
[7:04] presentation for just a moment let's
stop and review fiscal responsibility
[7:09] from a couple different perspectives
the term deficit by definition is an
[7:13] amount by which a resource especially
money fall short of what is required a
[7:18] deficit occurs when expenses exceed
revenues the current federal deficit for
[7:24] FY 2019 was 984 billion dollars it's
estimated that it'll reach one trillion
[7:30] in FY 2020 a structural deficit by
definition is when a budget deficit
[7:36] persists for some time and eventually
pose a problem when budgeted revenues do
[7:41] not perform at a level to afford the
expenditures funded at the mandated
[7:45] levels the structural deficit outlook
for the state of Maryland according to
[7:50] the recent calculations put together by
the American Association of counties for
[7:54] the proposed FY 21 governor's budget is
37 million with large expenditure bills
[8:00] now being introduced and discussed in
Annapolis such as Kerwin and House bill
[8:04] 1 school construction the deficit
outlook for Maryland will continue to
[8:08] grow the focus of the county executive
and the administration should be and
[8:13] always has been Cecil County Cecil
County curly does not have a deficit or
[8:18] a structural deficit in today's world
you should all realize this is a big
[8:22] deal
our county's approach to fiscal
[8:24] stability and the conservative spending
of county government have poised it for
[8:28] future fiscal success as long as we
continue to be cognizant that our
[8:32] spending has to be supported by what we
bring in in revenue the county savings
[8:37] account or fund balance is shown for the
past five years the fund balance has
[8:42] increased in recent years as the county
has witnessed new business investment
[8:46] and sound fiscal management and
enhancement to our reserve policy was
[8:51] passed to support this administration's
number-one goal
[8:54] fiscal stability as outlined in the
strategic plan in previous years when
[8:59] the county leadership saw dips in
revenues and increase in expenditures it
[9:03] became the normal strategy to use
unassigned fund balance to fill the gap
[9:06] instead of raising additional revenues
to meet the need
[9:09] although improvements to the reserves
have been accomplished the county still
[9:14] fall short of the national reserve
median of thirty four point two percent
[9:17] dr. McCarthy continues to be adamant
that we must face the reality of what
[9:22] the cost of doing business is and then
fund it without using the county savings
[9:26] account now let's move on to the FY 2021
budget the outline on the screen follows
[9:32] the budget development process as it is
specifically written in the county's
[9:36] Charter section 504 no later than April
1st the county executive shall prepare
[9:41] and submit a budget to Council for the
ensuing year based upon the rules we
[9:46] have developed this calendar to guide
the executive departments and outside
[9:50] agencies of key dates in order to meet
the budget deadline of no later than
[9:54] April 1st as you can see on this slide
dr. McCarthy's intention is that the FY
[9:59] 2012 but 2021 budget will be submitted
to Council on April 1 the final approved
[10:05] budget must be passed by council on or
before June 15th or the budget reverts
[10:09] to the executives proposed budget the
budget for Cecil County is directly
[10:14] impacted by the state budget which is
being reviewed by the General Assembly
[10:18] the governor presents a proposed budget
much like that seen between the
[10:23] executive here and our county council
many of the county's revenue streams are
[10:28] directly affected by the decisions made
in Annapolis the state budget process
[10:32] presents a challenge for us as the
portions impacting Cecil County can
[10:36] change while we're building our own
budget we must constantly monitor the
[10:40] budget approval process in Annapolis and
adjust accordingly shown on the screen
[10:45] are some of the estimated impacts of the
governor's budget for 2021 I will
[10:50] highlight just a few of them
although the governor's budget seeks to
[10:54] fund highway user revenues formula for
maintenance of county roads the increase
[10:58] is estimated to just be a little over
46,000 dollars for FY 2012 2020 let's
[11:05] not lose sight of the fact that the
county used to receive over
[11:08] million dollars annually from the state
that went directly to roads maintenance
[11:11] the county continues to struggle to keep
up with the road maintenance needs which
[11:15] sucks with such little support from the
state there is a proposed increase in
[11:20] the county's disparity grant of 340 mm
this grant was enacted to help counties
[11:25] receiving less per capita income tax
revenues as compared to wealthier
[11:29] counties in Maryland
of course the governor's budget will
[11:32] continue to fund educate education
according to mandated funding formulas
[11:36] however especially here in Cecil County
we know the funding formulas continue to
[11:41] fall short of the need the next two
slides sum up what we feel are the
[11:46] realities as we put together the FY 2021
budget the county executive has already
[11:51] made the decision that he will not
support a property tax or income tax
[11:55] increase for the FY 2021 budget and
knowing that he will not allow us to use
[12:00] the unassigned fund balance to make up
any shortfalls it means this budget is
[12:04] tied to the estimating operating
revenues that we are estimating for FY
[12:08] 2021
even though property assessments are up
[12:12] in area two by 9% this increase is
phased over a three-year period thus the
[12:18] increase is spread over the next three
fiscal years the possibility of a
[12:23] recession continues to be on the minds
of many economists as they try to figure
[12:27] out when it will hit before it happens
in the FY 2012 budget adding anything
[12:32] new is always risky if you believe your
revenue sources have the positive
[12:35] ability of being less in the
not-too-distant future there is
[12:41] increasing difficulty to build and
retain a quality workforce especially
[12:46] within the public safety sector we
continue to compete with other
[12:49] jurisdictions in the area to be the
employer of choice the substance abuse
[12:54] issue is a problem for our entire nation
trying to find meaningful solutions
[12:59] within our County will take efforts
across all of our respective communities
[13:02] to rewrite the script the reality is
that state funding formulas for public
[13:07] education continue to be inadequate to
meet the challenges schools face in our
[13:11] changing world the county becomes the
only source of additional support when
[13:16] the state passes down and
ever-increasing education burden on the
[13:20] county's Reese
sponsible growth in this county will
[13:23] require additional infrastructure to
compete having the necessary resources
[13:27] in place will continue to attract new
investments and residents to our County
[13:32] the county is facing many challenges in
the upcoming fiscal year it's not an
[13:37] easy task to determine at what level
some of these most critical functions of
[13:40] the counties should be funded our
challenge is to craft a budget that will
[13:45] deliver in the most efficient and
effective manner the services Cecil
[13:49] County citizens expect and deserve while
preserving our strong fiscal position
[13:54] Thank You dr. McCarthy thank you very
much mrs. Anderson