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City budget, bond funding ordinance approved by Havre de Grace City Council

Havre de Grace City Council member David Martin has spent weeks battling illness, but he returned in time for Monday’s council meeting, in which he joined his five colleagues in a unanimous vote in favor of the city’s nearly $35 million budget for fiscal 2021.

The $34.96 million budget, which covers day-to-day city operations in the general fund, as well as the municipal water and sewer and marina enterprise funds, takes effect when the next fiscal year begins July 1.

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“We can keep the lights on July 1,” Finance Director George DeHority joked. “That’s always good news.”

Martin echoed comments other city leaders have made this spring, however, that the budget must be reviewed later on this year once officials have a better idea of how the coronavirus pandemic has affected city revenues.

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Mayor William T. Martin — who is not related to the council member — introduced his proposed budget to the council in mid-March, right around the time much of Maryland’s economy went into lockdown mode to slow the spread of the virus.

“We will be looking at the budget later to address the shortcomings that may come up,” Council member Martin said Monday.

He noted, as an example, Havre de Grace’s share of the state’s highway user revenues. Those funds are supported by gas and vehicle title taxes, and the state shares a portion of the revenue with county and municipal governments that they, in turn, put toward road maintenance.

“During this stay-at-home time, people haven’t been on the highways, so the gas taxes haven’t been collected,” Martin said.

DeHority said the city reduced its spending on capital projects by about $300,000 during the current fiscal year.

He noted that it was “our intent to go slow while uncertainly ruled the day, especially with capital projects, where we could slow it down without causing any undue impact to the citizens or the infrastructure.”

Martin urged residents to have faith in the council, as well as the mayor and his staff, that “in the future, we will be reviewing the budget to make sure it stays balanced, and we stay on track” in the next fiscal year.

Bond ordinance adopted

The council also approved, unanimously, Ordinance 1036, which gives city leaders the authority to borrow up to $15 million in bond funding to support repairs and replacement of aging water and sewer infrastructure, as well as build new water and sewer lines.

The city received approval to go to the bond market from more than 70% of voters during a special election in February.

A public hearing on this proposal preceded the formal council meeting Monday, but no one from the public commented, either in person or through written remarks submitted ahead of time. Council President David Glenn then sought guidance from City Attorney April Ishak as to whether the council could vote on the ordinance during the meeting — rather than vote on it at the next meeting July 6 — “given the importance of trying to get the bonds in place to capitalize on the interest rates.”

“Under the charter, for exigent circumstances, you can waive the requirement of the second reading not being on the same date as the public hearing,” Ishak replied.

She recommended that doing so would be appropriate, as state officials have requested that all documentation for the bond issue be in place by the first week of July — Havre de Grace is conducting the borrowing process through the state.

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The council agreed unanimously to hold a vote Monday on adopting the ordinance. The mayor closed out the five-minute hearing shortly after.

During the meeting, Council member Martin praised the volunteer members of the city’s water and sewer commission, the mayor and his staff, plus the council for their efforts in conducting research on the bond measure, identifying projects that could be supported by bond funding — including projects in the fiscal 2021 budget — and ultimately, his council colleagues “for taking the time to go through this in great detail.”

“I’m proud of the legislation,” said Martin, the council liaison to the water and sewer commission. “I’m proud of the work they all did.”

Projects ‘teed up’

Tim Whittie, director of public works, later thanked council members for their work on the bond ordinance, which he described as “a very important step in upgrading the water and sewer systems in the city.”

Whittie said he has capital projects “teed up” for the coming fiscal year, and he has selected engineering firms, but they have not yet been cleared to proceed.

“I have not given the notice to proceed until we actually have the bond in place, and we can actually tap into that money,” he said.

City officials are “moving forward very, very rapidly” with their preparations, and they expect the bond issue will happen in the next month to six weeks, DeHority said.

The first issue of funds would be close to $9.5 million and cover two-and-a-half to three years of capital projects, with the second issuance happening 18 months to two years after the first one, according to DeHority.

“We now can get the ball rolling, and I appreciate that,” he said.

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