Spending Affordability Committee presents report
CENTREVILLE — The Queen Anne’s County Commissioners will review and make a decision at its next meeting whether or not to accept the Spending Affordability Committee’s recommendations for the upcoming budget cycle.
During the board’s Tuesday, Nov. 22, meeting, the Spending Affordability Committee, made up of Anne McKinnon, Joe Zimmerman and John Wilson, presented 10 recommendations. The committee was charged with making recommendations on spending levels for the upcoming years and looked at sustainable levels of debt, the six-year Capital Improvement Program, the financial forecast and the county’s fund balance, said Jon Seeman, director of budget and finance.
The recommendations are as follows: perform a realistic out-year budget projection for capital projects with detailed forecasts; rename the “Special Fund” to “Revenue Stabilization Fund” and add $1 million per year until 5 percent of the prior year’s operating budget is obtained; use the fund balance for nonrecurring expenditures; unassigned balance to be used for infrastructure needs and onetime capital expenses budgeted in the Capital Improvement Program; change the measure of debt as a percentage of General Fund revenues to an average of 10 percent of operating budget over a threeyear period with a maximum of 12 percent in any one year; operating budget expenditure growth not to exceed revenue estimates; use per capita debt per capital income with an 8 percent cap; only one debt measure may be broken in any given year; and increase the Rainy Day Fund to 8 percent from 7 percent.
If the recommendations are accepted and are not followed during the passing of the fiscal budget, the commissioners would be required to state in their annual budget resolution why they did not follow a specific recommendation.
Seeman, who made the presentation on behalf of the committee, said since the Recession the county’s fund balance has made progress, adding a few million dollars every year. Though the fund balance has seen increases the last five years, Seeman cautioned that of the county’s two main sources to generate revenue — income and property tax — only income tax has increased.
Seeman said that property values have been “essentially flat” and that the county is relying on income tax. Seeman said that “both the operating and capital budgets are probably not sustainable under the assumptions and practices of recent years.” He said income tax is an “admittedly volatile revenue source.”
Because of that, the committee recommended lowering expectations for more expensive expenditures, which Seeman said are usually employee salaries and benefits, as well as funding of the Board of Education.
For the capital budget, Seeman said the county is nearing the maximum allowable debt of $150 million. A focus on priorities and “core service levels” needs to be established in both the operating and capital budgets and needs to be “mindful” of the debt measures.
“Do long range planning. Do an effective CIP. Not what you think you can afford, what you think you need,” Zimmerman said, “because you’re all about delivering services to the public that the public require and demand. You can’t just ignore that or you end up with a mess.”
Commissioner Steve Wilson echoed the committee’s report in that he expressed caution for “future outlays, particularly big expense items.” He said commitments should be made with care.
“W’re in good shape but we are in good shape as long as we don’t spend a lot more, get involved with a lot more big ticket items,” Wilson said.
The Spending Affordability Committee was created by the passage of Ordinance 1511 in 2015.
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The Queen Anne’s County Board of Commissioners listen to the Spending Affordability Committee present budget recommendations during its Tuesday, Nov. 22, meeting.
From left: Jon Seeman, director of budget and finance, and Spending Affordability Committee members John Wilson, Anne McKinnon and Joe Zimmerman.