www.co.worcester.md.us

Fiscal Year 19 Budget Approved - Worcester County Retains Current Tax Rates

June 5, the Worcester County Commissioners approved the fiscal year 2018/2019 (FY19) Operating Budget of $190,030,719 in appropriations for the coming fiscal year.  This reflects a decrease of $8,901,956 or 4.7% less than the FY18 budget while requested expenditures of $211,611,999 have been reduced by $21.5 million.  Included in the revenue reduction is Room and Food Tax revenue totaling $15,140,419 which will be accounted for in a new Agency fund in order to meet recently passed Governmental Accounting Standards Board Statement No. 84, Fiduciary Activities (GASB 84). Also included is $6,238,463 of additional revenues which are detailed below.

The approved FY19 budget maintains tax rates at their current levels of 83.5¢ per $100 of assessed value for real property taxes and 1.75% for the County’s local income tax rate.

The Commissioners would like to thank County departments and agencies for maintaining and or reducing operating expenses wherever possible. This fiscally conservative budget maintains funding for valuable public services residents can count on, such as public safety, education and infrastructure. To simplify the permitting process, the County will relocate the Environmental Programs and Development Review & Permitting department personnel from the Isle of Wight office to Snow Hill for FY19. The operations of the Treasurer and Health Department will continue to be offered at the Isle of Wight.

Anticipated General Fund Revenues

  • Based on the Real Property tax rate of $0.835, NET property taxes increased by $2,880,921 or 2%.
    • The Homestead Credit cap remains unchanged at 3% and is estimated to be $1,326,247 for the County’s qualified principal resident homeowners effective July 1, 2018.
  • Local Income Tax rate remains the same at 1.75% which began January 1, 2016. Revenues are anticipated to increase by $500,000 over the current year based on actual receipts and increased estimates for FY19.
  • Other Local Taxes decreased by $13,638,314:
    • Recordation Taxes increased by $750,000 and Transfer Taxes increased by $250,000 at the current rate based upon FY19 projections.
    • The NET effect to the implementation of GASB 84 for Room and Food Tax is a decrease of $14,638,314; municipalities pass through room and food tax decreased by $15,140,419 and revenue increases include $502,105 for unincorporated room tax and administration collection fees.
  • State Shared revenues increased by $7,546 mainly due to a slight increase in Highway User Revenues as projected by the State.
  • Federal Grants decreased by $102,824 which includes a decrease in funding of $110,985 for the Emergency Shelter Grant to be administered by the Lower Shore Continuum of Care.
  • State Grants increased by $492,102 which includes an increase of $659,651 in Program Open Space Grants for Parks and an increase of $319,942 in the Transportation Grant for Roads. Decreases include $211,274 for the 911 Systems Grant and $120,000 for Administrative Office of the Courts Security Grant.
  • Licenses and Permits increased by $99,306; changes include increased estimates of $60,000 for liquor licenses, $14,000 for Vending Machine Licenses and $35,000 for Building Permits.
  • Charges for Services increased by $29,500; changes include increased Stormwater Management review fees of $30,000, $25,000 in Fire Inspection Fees for upcoming projects, $9,000 in various accounts for Recreation and Parks for increased Tournaments and Special Events and decreases of $9,950 of Solar Energy Credits and $21,750 in Library E-Rate reimbursement
  • Interest on Investments increased by $1,175,000 due to improving investment rates.
  • Transfers in:
    • Other Funds decreased by $208,125 based on the final transfer in of bond premium proceeds that occurred in fiscal year 2018.
    • Planned use of Casino/Local Impact Grant Funds decreased by $254,206 for the debt payment for the Worcester Career and Technical High School in FY19.
    • Transfers In of existing Budget Stabilization Funds increased by $32,000 which will be passed through to the Solid Waste Enterprise Fund to cover the cost of Recycling at $1,033,339 and Homeowner Convenience Centers at $664,984.

 

Major Approved General Fund Expenditures

County Departments and Agencies:

Significant increases and decreases are outlined as follows:

  • Circuit Court decreased by $92,990 mainly due to discontinuation of a Court Security Grant for $120,000 budgeted in the current fiscal year
  • Elections Office increased by $190,469
    • Increased by $79,039 for salaries and benefits based on State Elections requested salary upgrades
    • Increased by $94,611 for temporary clerical staff to assist with elections and includes $67,800 in rent to cover temporary office space
  • Development Review & Permitting increased by $103,845
    • Increased by $61,026 in salaries
    • Increased by $60,000 in capital equipment to replace 3 trucks
    • Decreased by $23,000 in other capital equipment as compared to the current year
  • Sheriff’s Department increased by $158,448
    • Increased by $102,810 in salaries and includes 1 new Deputy Sheriff for school security
    • Increased by $65,000 for overtime
    • Decreased by $110,200 for software licensing purchased in the current year
    • Increased by $114,947 in capital equipment and includes 10 replacement patrol vehicles and 2 animal control pickup trucks; all of which total $404,862
  • Jail increased by $244,980
    • Increased by $202,100 in salaries and includes a new position for the Pre-Trial Release Program mandated by the State
    • Increased by $18,415 in uniforms for optional lighter summer wear
    • Increased by $31,041 for the medical contract renewal
    • Increased by $67,875 in capital equipment for a tractor and $45,000 for a transport van
    • Decreased by $18,000 for kitchen equipment in the current year
  • Volunteer Fire and Ambulance decreased by $86,145
    • Increased by $20,000 based on the Volunteer Fire Companies request to supplement companies not in town limits. The base grant for each volunteer fire company is level funded at $250,000 each; a total budget of $2,520,000
    • Ambulance Grants decreased by $5,770 based on the current funding formulas, which results in a total budget of $3,849,145
    • Decreased by $81,303 due to savings for the workman’s compensation plan
  • Public Works - Roads Division increased by $725,340
    • Increased by $142,074 in salaries and includes two new Roads Workers
    • Increased by $319,942 from the State Highway User Transportation Grant for road repairs
    • Increased by $213,651 in capital equipment and includes 2 dump trucks with snow plows, a grader, a trailer with hydraulic gate and 2 utility pickup trucks; all total $783,422
    • Level funded $1,000,000 for blacktop materials for local road paving
  • Public Works – Mosquito Control Division increased by $62,582
    • Increased by $36,712 in salaries and includes a new Foreman Trainee
    • Increased by $24,838 in capital equipment for 3 compact pickup trucks and a replacement office trailer
  • Social Services Groups decreased by $112,391
    • Decreased by $175,542 for transfer of grants to the Lower Shore Continuum of Care
    • Increased by $57,151 for matching funds to the Joan Jenkins Foundation for additional building space at the Worcester Addictions Cooperative Services (WACS) Center
  • Wor-Wic Community College increased by $58,420
    • Increased by $58,420; Worcester County local funding allocation is 29.21% 
  • Recreation increased by $144,705
    • Increased by $44,695 in salaries due to personnel changes
    • Increased by $20,650 in equipment to replace concession equipment and a floor scrubber
    • Increased by $66,000 for 3 replacement vehicles
  • Parks increased by $784,178
    • Increased by $25,471 in salaries
    • Increased by $732,945 for Park improvements from the State Program Open Space funds over the current year budget
    • Increased by $26,000 and includes budget for 2 replacement vehicles
  • Library increased by $134,501
    • Increased by $135,203 in salaries and includes salaries for 2 positions for the new Berlin Library effective in June 2018
    • Increased by $53,975 for building expenses for the new Berlin library
    • Decreased by $50,885 in capital equipment for the new Berlin library fiber/data connection.
  • Taxes shared with Towns decreased by $15,000,000
    • Decreased by $1,100,000 for food tax passed through to Ocean City to be accounted for in an agency fund beginning July 1, 2018 in accordance with GASB 84
    • Decreased by $13,900,000 for room tax passed through to the Municipalities to be accounted for in an agency fund beginning July 1, 2018 in accordance with GASB 84
  • Grants to Towns decreased by $98,031
    • Increased by $3,000 for pass through fire grants to Municipalities and Ocean Pines Association based on actual credit runs
    • Decreased by $101,031 in grants to Towns and Ocean Pines Association
  • Insurance & Benefits increased by $1,690,302
    • Increased by $156,879 based on an estimated increase of 4.6% for health benefits
    • Decreased by $121,434 for Retirement contributions based upon State rates
    • Increased by $40,026 for Workers Compensation insurance
    • Increased by $3,399 in property & liability insurance due to a 1% increase in premium
    • Increased by $14,935 for the State’s retirement administration fee
    • Increased by $1,071,000 for Other Post Employment Benefits for total funding of $5,071,000
  • Debt Service decreased by $690,045
    • Decreased due to refunding of prior bonds in 2015 resulting in lower interest rates
  • Interfund Charges increased by $32,000
    • Decreased by $8,916 for Transfers Out to Recycling for the Solid Waste Enterprise Fund
    • Increased by $40,916 for Transfers Out to Homeowner Convenience Centers for the Solid Waste Enterprise Fund
  • Salary accounts increased to include a 1.0% cost of living adjustment (COLA) for County employees, a step increment of 2.5% and longevity pay for those eligible.

 

Board of Education

The County allocation for the Board of Education’s operating budget is $87,199,775, an increase of $2,286,999 over the current year adopted budget as shown below.

School Construction debt is paid by the County on behalf of the Board of Education. It is not reflected in the Board’s budget; however, it is included in the County’s operating budget.  The Board’s approved Operating budget of $87,199,775 plus debt service of $10,396,581 totals $97,596,356 or 51% of the County’s total estimated revenue.

 

 

FY2019 Approved Budget

FY2018 Approved Budget

Dollar Variance

+/- FY2018

County Appropriation

$86,385,293*

$83,570,125

+2,815,168

County Appropriation: Technology + Capital Outlay

300,000*

300,000

+0

County Appropriation: Retirement for Non Teachers

514,482

476,551

+37,931

School Construction Projects

0

566,100

-566,100

Sub-Total County Appropriation

$87,199,775

$84,912,776

+2,286,999

State and Other Funding Sources                                

19,888,092

19,854,725

+33,367

Sub-Total Unrestricted Budget

$107,087,867

$104,767,501

+2,320,366

Restricted: State and Federal Programs

County Programs

State funded Teachers Retirement

4,901,798

262,000

6,680,664

5,652,731

0

6,708,241

-750,933

+262,000

-27,577

Sub-Total Restricted Budget

11,844,462

12,360,972

-778,248

Total

$118,982,329

$117,128,473

+1,853,856

*Fiscal 2019 Maintenance of Effort (MOE) level of $83,870,125 is affected by the escalator provision:

  1. An MOE escalator provision will take effect in FY19 for 1.3%. This provision was enacted as part of Senate Bill 848 of 2012, Section 5-202(d)(ii)2 and became effective FY15. A negative statewide average did not affect FY15 and FY16, the escalator effects FY17, FY18 and FY19.
  2. MOE requires an increase of $1,252,347 in FY19.

Board of Education Budget Increases:

  • The salary package for the Board of Education reflects a payroll increase of  $1,752,315, which includes a step, longevity step for those eligible and salary scale adjustments as negotiated with a 1% COLA for Teachers and a 1.5% COLA for support staff employees. Beginning July 1, 2018 an additional $85,000 to support a new position for school safety is included.
  • The bus contracts account increase over FY18 is $135,664 and reflects a 1% increase to bus contractor’s hourly rate and mileage rate effective July 1, 2018 for $42,000. Included is funding to several contractors to purchase new buses for $48,664 and $45,000 for High School athletic transportation.
  • Starting Teacher pay increased 1.0% from $44,257 to $44,700.
  • Fixed Charges increased by $975,556 over the current year budget
    • Level funding requested for the Board of Education’s Local Share of Teacher Pension now included in the MOE calculation for $2,137,159
    • Increased by $100,000 to assist in Other Post Employment Benefits
    • Increased by $875,556 for health insurance and social security
  • Restricted County Programs increased by $262,000:
    • Increased by $200,000 for new elementary school books, year 1 of 2
    • Increased by $62,000 for new band uniforms for the 3 high schools

 

The total FY2019 Worcester County Education funding per student based on the estimated student population of 6,741 equates to $19,185 per student. Due to an increase in student population, the increase equates to $58 per student more than the current year budget.

County Funding          $87,199,775

State & Other              $19,888,092                $129,328,910 or $19,185.41 per student

Restricted                    $11,844,462

School Debt                $10,396,581