Aberdeen residents could enjoy a 2-cent reduction in their real property tax rate during fiscal 2016, the result of nearly half a million dollars in hotel occupancy tax revenue that is expected to begin flowing into city coffers this summer.
The county-shared revenue section of next year's proposed Aberdeen budget includes a $445,000 line item for anticipated hotel tax revenue, which will be used for Ripken Stadium maintenance.
Mayor Mike Bennett said during a budget work session Monday that the revenue will help keep the home of the Aberdeen IronBirds "the number one tourist attraction in the county and keep things moving forward."
City officials plan to reduce the real property tax rate from 68 cents per $100 of property valuation to 66 cents as part of the proposed FY2016 budget, which must be adopted by the City Council before the current fiscal year ends June 30.
The personal property tax rate will remain the same at $1.70; water and sewer rates will not change either.
The Harford County Council approved the 6 percent hotel tax in January, and it took effect March 23. The tax is designed to raise money for local tourism.
Cindy Mumby, spokesperson for the county government, said Wednesday the payment of revenue collected during the fourth quarter of fiscal 2015, which is April through June, will be made to the municipalities in July. Mumby said the first payment will include revenue collected during the last week of March.
She said hotel tax revenue will be distributed to all three municipalities on a quarterly basis. Each city or town will receive 50 percent of the tax revenue collected from a hotel in the corporate limits of that municipality, Mumby said, citing the legislation passed by the County Council.
She said the remaining 50 percent goes to the county, which also receives 100 percent of the tax collected from a hotel outside municipal boundaries.
City officials also are expecting an additional $500,000 for Ripken Stadium repairs next year, thanks to a state bond bill sponsored by Harford County Del. Mary Ann Lisanti, whose district includes Aberdeen.
The bill was approved in the Maryland House of Delegates last month.
Additional spending items, lean department budgets
Aberdeen's proposed $14.36 million general fund budget for FY2016 is $323,088 lower than the $14.68 million general fund for this year because of tighter revenues.
Those tight revenues are the result of the proposed property tax reduction and a decrease in property assessments, according to City Manager Doug Miller.
Miller said during the work session that he has stressed to city department heads the need to keep their budget requests lean.
"Our department heads have painfully embraced the realities of our revenues, and they do not complain," he said. "They say, 'We'll live with what we have,' and I do congratulate them for their ingenuity and also their spirit of cooperation."
The general fund covers city operations such as police and public works.
Spending on capital projects will also be curtailed, from $3.7 million for the current year to $875,105 next year. The proposed budget shows a sharp drop in federal and state grants that would support those projects. The city also appropriated $1.18 million from its fund balance for capital projects this year, but no fund balance transfer is proposed for next year.
The budgets for the water, sewer and stadium enterprise funds, which are self-supporting, will either be larger than the current fiscal year, or about the same.
The water fund budget will increase by $261,731, from $2.8 million this year to $3.06 million next year. The sewer fund budget will increase by $301,348 from $3.5 million to $3.8 million, and the stadium fund will decrease by $200 from $681,623 to $681,423.
General fund bright spots
The general fund budget includes spending and revenue increases in specific areas, despite the leaner fund overall.
Miller said $40,000 has been requested for winter operations as part of the public works budget. The city allocated $30,000 for winter operations in fiscal 2015.
"Even though we have increased the amount there, the $40,000 in winter operations is simply a place holder," Miller said.
Miller noted it is difficult to predict whether $40,000 will be enough, as everything depends on the severity of next winter's weather.
"If we have a non-eventful winter, then that money that's left over goes into the fund balance, but typically, if we have a bad year, we have to pull [money] out of some other areas to cover it," he said.
The city received about $427,000 in highway user revenues from the state for the current fiscal year, and officials expect that to increase by 12.4 percent next year to $479,689, according to the budget.
Aberdeen and other municipalities around the state have lost highway user revenues in recent years, but Gov. Larry Hogan has pledged to increase the amount allocated.
The city contributed $131,225 to the volunteer fire department this year, and the amount is expected to nearly double to $260,000 next year.
"This budget does reflect that we will be increasing our contribution to the fire department, because their financing needs are somewhat critical," Miller said.
The city manager said later that the fire department is dealing with "astronomical" costs of replacing vehicles, such as more than $1 million for a new ladder truck or more than $130,000 for a new ambulance.
Council members praised city officials for their efforts in creating a balanced budget for FY2016.
"I'm always amazed that you can continually do more with less," Councilwoman Sandra Landbeck said.