Wicomico council looking to move, cut $2.9 million

The cover of the Fiscal 2021 Wicomico County budget features an aerial photo of Whitehaven.

Budget time annually brings out the best and the worst in elected leaders.

During a roughly 75-day period extending between April and July each year, taxpayers get to see who wants to spend what and who wants to cut which — all while being reminded of where the revenues originate.

In Wicomico County, this year’s budget debate appears on course to bring out the worst in everyone. Charter disputes over various personnel have rekindled grievances. Staffing shortages are creating havoc.

Mostly, however, a continuing gulf between the County Council and County Executive is creating one complication after another in a process that, even in the easiest of times, can be grueling.

The Fiscal Year 2021 budget takes effect July 1; the council has a drop-dead date of June 15 to approve a budget.

Under the County Executive form of government implemented 14 years ago, the executive crafts and submits the budget. The council can cut the budget, but cannot add spending.

County Executive Bob Culver has submitted a proposed budget of $153.25 million, with $68.78 million of that total generated by property taxes.

In public meetings that have been occurring periodically since late April, tensions have overflowed  as council members have obviously struggled to embrace Culver’s plan. Assorted complications have stressed the process in ways not seen since the county grappled with fallout from the Great Recession a decade ago. 

Pandemic

Complication No. 1 is the current health crisis gripping the nation. The economic collective that is Sussex, Wicomico, Worcester, Somerset and Dorchester counties has been especially hard hit with Coronavirus cases.

For Wicomico County, the pandemic brings tremendous fiscal uncertainty. While most county revenues come from property taxes, the better-growing revenue category in recent years has been in payroll taxes collected by the state and shared with the county.

With a local economy that relies deeply on service sector jobs, high unemployment is likely to hit revenues hard. But calculating payroll tax revenues is a slow process, and the state doesn’t dispense those dollars until months after they’ve been collected.

Calculating the impact on the upcoming spending plan, therefore, is nearly impossible. Still, county budget officials have pegged those revenues at $54 million.

Other revenues have been hit, from sources such as the Youth & Civic Center, the landfill and recreation programs.

The county has strong reserves and contingency funds — should they be needed. Nonetheless, the revenue uncertainties have the elected leaders on edge. 

Challenging Culver

A profound lack of cross-branch communication is the source of Complication No. 2.

The council seems to relish its annual opportunity to slash Culver’s funding requests, and many times those cuts are made because Culver hasn’t either built a consensus for the spending or effectively articulated the need.

Council members repeatedly complain of being left out of the loop, while Culver maintains executive oversight is completely his responsibility.

The executive also has said frequently that council members make budget cutting decisions without even asking questions, so their decisions are made in an informational vacuum.

The visible distrust and disrespect between the branches is abundant.

In a budget work session held this past Thursday, council members took a first run through the spending plan and came up with a whopping $2.9 million in cuts. Their preliminary list included abolishing money earmarked for several unfilled county positions, cutting proposed raises for county employees, and restructuring pay grades and salary rates for some key leadership posts.

Council members devoted a lot of time proposing cuts to the County Executive’s personal office, whose request came in this year at nearly $900,000.

In its first discussions on the executive’s office in specific, the council listed a desire to:

  • Slash some discretionary funds Culver proposed keeping on hand to deal with constituent needs.
  • Take $1.76 million in cuts and roll them into the county’s contingency fund.
  • Reduce the county Finance Director’s annual salary by almost half, from the budgeted $128,520 to $66,845.
  • Cut funding for the currently vacant Assistant Director of Administration position.
  • Outright reject Culver’s proposal to hire a Budget Officer to serve directly under him.
  • Cut the annual salary of the County Executive’s top deputy, the Director of Administration.

The Assistant Director’s post is open because Weston Young departed in March for a similar post in Worcester County’s government.

The Budget Officer is a position touted by Culver as a real need, one he has said would pay for itself by providing better spending oversight.

Regarding the Director of Administration, the man who holds that post — Wayne Strausburg — is slated to retire this summer. The council would not only eliminate a proposed raise for Strausburg’s position, it would also cut the salary for his successor.

In Culver’s budget, Strausburg’s post would be paid $142,866, but the council would roll it back by $22,866 to an annual rate of $120,000. Strausburg is currently paid $136,063, so if he were to stay in his job beyond July 1, he would possibly face a $308 per week pay cut.

A council power grab?

Left unsaid in Thursday’s budget discussion — but definitely implied by the group’s actions — is that by cutting $1.29 million in funding for open positions, the council would appear to gain never-anticipated powers in the county’s departmental hiring processes.

Establishing and managing the county’s workforce is a power well within the realm of the County Executive.

The budget adjustments, technically, aren’t cuts — they are funding transfers that direct the funds to the reserves. Still, if the monies are indeed moved, each department head would conceivably have to seek the council’s permission for the cash to make a hire.

That could mean that positions ranging from school-crossing guards to correctional officers and equipment operators, and extending all the way up to engineers and finance managers, would need to be presented to council members for approval.

Complication No. 3, then, would be an interpretation of whether the council is possibly violating the spirit of the charter.

While Section 705 of the charter makes it clear the council can’t change the form of government in cutting the budget, there is nothing written about funding unfilled posts.

Under Section 402’s Paragraph E, the charter states the executive ensures that county funds “in excess of immediate needs are invested in the best interest of the county.”

Council President Larry Dodd sought to explain the cuts.

“Some of these positions have been vacant for years and years and we’ve been funding the salaries for year after year,” Dodd said. “Some council members believe it’s time to make a reduction to that.”

Obviously, under Section 402-E, the unspent money remains in the county’s coffers.

When Councilman Josh Hastings asked what the procedures would be when department heads wanted to hire for the zeroed-out posts, Dodd referred to Council Administrator Laura Hurley.

“They could make a request for a contingency transfer,” she said, “and that would come before council.” 

Revenue Cap

Under the county’s November 2000 voter-approved revenue cap, the amount of revenue generated by property taxes may only increase by 2 percent year over year. With state assessments on the rise in Wicomico, the estimate is that — under the current tax rate — property tax revenues will increase by about $1.65 million. That would require the county to lower its current tax rate only a minuscule amount, from 0.9347 cents per $100 of assessed value to 0.9286 cents.

A single-family home in Wicomico County assessed at $100,000 would see its property tax bill drop from $934.70 to $928.60, or a difference of about $6.

Thursday night’s discussion of the extra revenues prompted Councilman Joe Holloway to raise — and then quickly discount — the possibility of a tax cut.

Holloway said he would normally support a cut, given previous revenues and the council’s plans to further cut the budget. But with the economic uncertainties ahead, he said a tax cut wouldn’t be wise.

Still, the council’s four-member Republican majority routinely faces political pressure to reduce taxes, so Complication No. 4 would be a public call for a tax cut.

The council cut the 2017 tax rate by a penny, which saved the average homeowner about $21 a year.

Pay raise for Sheriff

While the council can’t add to the total budget, they can divert their cuts to new areas of spending. One place council members seemed to want to spend more money is in the Wicomico County Sheriff’s Office — they want to give the elected Sheriff a $15,000 annual raise.

Mike Lewis, who currently holds the post, is scheduled to make $95,000 next year, so the raise would boost his annual rate to $110,000. It is often pointed out that Lewis supervises six employees who make more than he does in their base salaries alone.

Complication No. 5 was created when Councilman Bill McCain said he wouldn’t support a raise for the sheriff unless the council also considered an identical raise for the County Executive.

Culver is paid $85,000 annually. Under the charter, a County Executive can only receive a raise in the fourth year of his or her term, and it is supposed to come as a recommendation from an independent Compensation Commission. Pay for the executive has remained unchanged since 2006.

Council members agreed to discuss the raises again at their June 2 meeting, but by early this week the council was researching whether a raise could be granted now, or would have to wait until after the next election cycle. It seemed unlikely to advance.

Roads vs. airport

On the council’s preliminary cuts list is rerouting $783,810 destined for the Salisbury-Wicomico Regional Airport to the county’s Roads Department.

While council members didn’t say it aloud, they are likely counting on a multi-million-dollar federal pandemic-impacts grant to fund airport needs.

The Executive’s Office has said the $9.14 million it has budgeted is sufficient for Roads Department needs, but that figure is $1.2 million less than this year — so the council is skeptical.

It’s unclear what the federal grant money can be used for, so it’s also not clear whether the spending cut will hamper airport growth plans.

Meanwhile, after years of funding shortages that curtailed roads repairs, the county’s Public Works Department has undertaken an aggressive repair program over the past three years, and says money for building and repairs is not a problem.

Public Works Director Dallas Baker, who left the county’s employ this year, previously said the lack of available labor has been the Roads Department’s top problem.

Complication No. 6, therefore, is whether the right decision is being made concerning roads vs. the airport.

Capital spending

The council will vote on the Capital Improvement Plan budget at the same June 2 meeting in which the budget will become final.

The big question with the five-year plan for the county’s big-ticket items surrounds a proposed new Mardela Middle and High School.

The projects has been complicated for more than a year — Culver is wary of the school board’s idea for an entirely new building, Wicomico leaders have been unable to meet with bond firms to borrow for the project, and there is no certainty the state will be willing to fund its share of the project anytime soon.

The Mardela school project had been in the 2021 budget for some preliminary funding, but was later removed. 

Given the revenue estimates and pandemic fallout, Culver and Strausburg have said it will be at least January — when the Maryland General Assembly returns to business — before Wicomico knows it is positioned to begin borrowing the millions needed to finance the school.

Complication No. 7 concerns process. The council can’t add spending to the capital budget — only the executive can do that.

“It’s very important that it be in the CIP,” McCain said about Mardela, “because of monies that might come forward (from the state). None of that will happen if it’s not in the CIP.”

While there is a strong belief Culver will at least place some holding money in the budget. If he doesn’t, the council will have just a handful of days to get Culver to agree. 

Information void

Just as poor communication has contributed to Complication No. 2, a lack of even fundamental information plagued the council’s decision-making on May 21.  

Several times, members offered conjecture and engaged in “spitballing” while talking through the nearly $3 million in cuts and $1.14 million in spending additions.

In an email sent to council members on Friday, Strausburg was harshly critical.

“I’m not sure who is advising council, but these cuts demonstrate a clear lack of understanding on the part of council as to the operation of our various departments, made without any discussion with the people in each department who are responsible for providing needed services to citizens,” Strausburg wrote.

Culver has often declined to make his department heads available for council questioning, citing what he has called “council grandstanding” when confronting them at the council table.

Council members have responded they need to act that way, as the executive has been secretive on multiple issues and they’re often embarrassed to be so far out of the loop.

The cuts list discussed last week is a working document,which means the situation is in flux. It is likely that when council members walk into their meeting room on Tuesday, plans will have altered from when they left last Thursday.

For the first time in weeks, the Tuesday, June 2, meeting will be open to the public. Anyone entering the council chambers will be required to wear a face mask and all those entering will have their temperatures screened upon entry. Social distancing will be practiced.

The meeting begins at 6 p.m. in Room 301 of the Government Office Building in Downtown Salisbury. 

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