Finance committee finds a partial fix to whopping Annapolis tax increase

E.B. Furgurson III
Contact Reporterpfurgurson@capgaznews.com

The up and down process of setting the Annapolis property tax rate continued Friday with the latest recommendation putting the possible increase at 10.5 cents

That’s less than the 13-cent increase that suddenly was back on the table last week after the discovery of accounting errors threw the city’s long, convoluted budget process into even more turmoil. It is the fourth proposal for a tax increase since Mayor Gavin Buckley introduced his budget in March.

The latest change would be possible if the City Council approves using $1.6 million in bond funds slated for re-bricking Main Street for citywide road and sidewalk repairs instead. That would push back the long-planned capital project to 2020.

“Because of changes in the budget we needed to find a way to take care of streets and sidewalks without taking it out of the general fund,” Alderman Ross Arnett said during a council work session Friday.

Much of the budget confusion has taken place since City Manager Teresa Sutherland has been working to figure out sometimes convoluted city finances.

A former Anne Arundel County auditor, she previously discovered that under Mayor Mike Pantelides, the city was counting savings from anticipated employee vacancies that may never have materialized.

Last week, she found accounting errors, including $2.8 million in transfers between enterprise funds — which account for utilities like water and sewer — and the general fund. The general fund accounts for other government-related expenses and revenues.

The former finance director included an allocation to the planning and zoning department even though it doesn’t provide services to the enterprise funds, Sutherland said.

Bruce Miller, Annapolis finance director since 2010, resigned early last month unexpectedly. Neither city officials nor Miller offered an explanation for his departure.

Sutherland’s review of finances had previously allowed aldermen to propose a 9.9 cent increase to the property tax rate, down from Buckley’s original 13 cents. He introduced the concept of a tax increase, saying the city had put off much-needed expenses for several years.

The discovery of accounting errors though took that idea out of consideration and pushed the tax rate needed to generate enough revenue to cover expenses to nearly 13 cents. City officials said a smaller rate would mean cuts including layoffs before the budget is finalized June 18.

The new plan recommended Friday, which will face a final vote June 18, reduces the potential tax increase by 2.4 cents.

If passed, the proposal would raise the municipal tax rate to 75.5 cents per $100 of assessed value, bumping the cumulative city-county-state rate residents pay to $1.195 per $100.

Arnett, chairman of the Finance Committee, said there were only two big pockets of money in the unspent bond money — $4.6 million to rebuild the Spa Road maintenance facility and $1.6 million earmarked for the Main Street brick work.

That project already has been put on hold this year as Mayor Gavin Buckley readies a proposal to re-configure Main Street.

“We would put the Main Street repavement back in 2020,” said Arnett, D-Ward 8.

The committee has recommended other changes to the budget proposal submitted by Buckley during its 22 sessions on the fiscal 2019 budget set to take effect July 1.

Alderman plan to propose changed that would restore some environmental line items, community-school liaisons, allowing families to pay for memberships to the Pip Moyer Recreation Center on a monthly basis, and more.

A hiring freeze was discussed by members of the council.

Alderman Savidge, D-Ward-7, said having information on the effect of freezes was important.

“We need to have a firm foundation before we add rooms to the house,” he said.

Alderwoman Sheila Finlayson, D-Ward 4, said slashing personnel sounds like a quick fix, but would fraught with consequences.

“Don’t think we can cut people and not affect services,” Finlayson said. “Because the work does not go away.”

As the meeting was about to wind down Alderwoman Shaneka Henson, D-Ward 6, called all the department heads seeking to hire people in the budget to the rostrum, one by one, to explain each request.

All did and noted each of the hires, some new but most to fill long vacant slots, were vital to their department meeting their mission.

A previous version of this article incorrectly stated the ward Alderwoman Shaneka Henson represents. It has been updated.
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