Salisbury budget facing challenges brought by virus

Salisbury’s cash flow is expected to take a hit from the Covid-19 pandemic, but it isn’t likely to bring city operations to a halt, Mayor Jake Day said during a presentation of his proposed $64.7 million budget for fiscal 2021.

“I don’t think we’ll be in crisis mode,” he said.

Since the start of the statewide stay-home order, city parking lots and the Downtown Parking Garage have stopped collecting hourly parking fees, although it still collects money for monthly permits. The city also has stopped issuing most parking citations.

The revenue loss is expected to have a significant impact on the Parking Authority enterprise fund, which could require the transfer of funds from elsewhere in the budget, Day said.

The city is projecting $831,747 in FY21 parking revenues compared to $946,919 this year, which is a $115,172 difference.

The city also could have a cash flow problem if people wait to pay their water and sewer bills. Gov. Larry Hogan’s executive order on March 16 prohibits utility shut-offs and late fees, and allows delayed payments during the crisis since many residents have lost income.

But Day said the expected shortfall will be short-lived.

“I think we’ll be fine,” he said. “Those water bills do have to be paid eventually.”

The proposed FY21 budget keeps water and sewer rates the same as the current year even though small rate increases had been planned over several years, Day said. Those rate increases are now on hold.

As a result, revenues from water and sewer services are expected to be $18.1 million in FY21, which is $1 million less than the current year.

The city also will maintain the current property tax rate of 98.32 cents per $100 of assessed value and a personal property tax rate of $2.40. Revenue generated by both taxes is $26.6 million. Taxes account for 66 percent of the city’s revenue.

Charges for services, such as various permits, licenses, fines and fees, is expected to be the second largest revenue source at 17 percent.

Other sources of revenue include $111,542 from the marina, and $3.1 million from intergovernmental sources, including $1.38 million in state highway user revenue, $597,629 in police grants and $260,000 in room taxes.

Day said his funding priorities in the budget include neighborhood services, Police Department staffing, arts, culture, recreation, homeless services and youth programs.

General government accounts for the biggest expenditure at $17.2 million, or 38 percent of the budget, followed by public safety at $14.8 million at 33 percent. Other department expenditures include $4.5 million in public works, $2 million in recreation and culture, $3.8 in debt service and $2.3 million in other categories.

In the Police Department, $12.9 million is budgeted, including $11.6 million in personnel services and $1.2 million in operating expenses. The department also will get $963,654 for police communications and $215,000 for animal control.

The Fire Department is budgeted to receive $9.7 million, including $7 million for personnel services and $1.4 million for operating services. The volunteer side of the department will get $327,483 in personnel services and $62,088 in operating expenses.

Day also included money for capital projects to the budget including three new ambulances, five new police vehicles, replacement of the Field Operations building, an overhaul of the city zoning code, street paving, new sidewalks, the rail trail, water and sewer projects and a Waste Shark to pick up trash in the Wicomico River.

The proposed budget has been sent to the City Council which is expected to hold work sessions before final adoption. The new budget will take effect on July 1, the start of the new fiscal year.

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