Cecil County to Get $9.9 million Biden Windfall; County Exec Budget Cuts First Responders Pension $; Capital Budget Fudge

NEWS ANALYSIS

Cecil County is about to receive a $9.9 million windfall under the new American Rescue Plan signed into law in March by President Biden but some of County Executive Danielle Hornberger’s budget actions could limit how, and how much, money could be spent to help the county recover from the impacts of the COVID pandemic.

At the same time, Hornberger’s proposed Fiscal 2022 budget would reduce allocations to pension funds for first responders, violate budget rules for how capital budget construction costs are allocated, and mislead local residents about her proposals and errors by some of her new political appointees as department heads.

Several weeks ago, the National Association of Counties (NACO) did a county-by-county analysis of the American Rescue Plan’s impact on counties around the nation. And those calculations were confirmed in documents released on Monday by the White House, showing that Cecil County will receive a total of $19,948,094 over two years, with the first installment of $9.9 million to be paid this month and the balance paid next year. The state of Maryland will receive $3.7 billion as a one-time payment, plus a special pool of nearly $529,000 that will be available for distribution to smaller towns and cities in the state.

But the money cannot be used in certain ways: shoring up pension funds, or for spending that would “either directly or indirectly offset a reduction” in local taxes.

The new county Finance Director, James Appel, an Annapolis political consultant hired by Hornberger despite a lack of local government financial management experience, has told some county business owners that he thinks the county can skirt the federal rules because the proposed budget heeds the “constant yield” property tax calculations, sources told CECIL TIMES. The state Department of Assessments and Taxation, which sets property values upon which the local tax rate is applied, calculated the “constant yield” tax rate for the new budget year at $1.0279 per $100 of assessed property value. And Hornberger used that figure in her budget—which actually amounted to slightly over a penny (about 0.0135-cents) decrease from the Fiscal 2021 budget year.

But Hornberger also proposed a significant, over three-cent cut in the “personal property tax” rate, which amounts to an inventory tax on business equipment and supplies. That business tax cut will result in a revenue loss of $1.16 million in Fiscal 2022 in comparison with the current budget year. That business tax calculation is not included in the “constant yield” property tax calculation, and it is uncertain how the federal regulations on “Rescue” act funds could penalize the county for that action.

The County Council is currently holding budget worksessions to review the proposed Hornberger budget before a public hearing for citizen input at the end of this month before final Council action in early June.

Thus far, the budget worksessions have yielded some interesting, and inexplicable, assertions by Hornberger administration officials as well as pointed questions by some County Council members.

At the most recent worksession on Tuesday 5/11/2021, the new Information Technology director Dave Warnick claimed credit for obtaining grants to expand broadband Internet services to 387 properties in the county. (Actually, David Black, a Department of Land Use Services/Planning employee has been a pioneer of work to bring broadband services to the county for several years, working assiduously to obtain state, federal and regional grants for such services.) Warnick plans to hire his own broadband co-ordinator under the new budget, removing Black from the effort.

Warnick, a political campaign donor to Mrs. Hornberger’s husband, Del. Kevin Hornberger, and now county administrator Dan Schneckenburger, did not exactly inspire confidence when he mis-stated the Federal Communications Commission (FCC) definition of broadband/highspeed Internet services. He told the County Council the standard was “20” mbps when in fact the FCC set a standard of 25 mbps for data downloads in 2015.

Warnick claimed broadband victory for getting satellite and wireless internet services, which are notoriously unreliable especially in southern Cecil County, in some areas of the south county. He counted it as a major breakthrough when one south county resident was able to conduct a Zoom call.

In other Council budget worksessions, Councilor Al Miller (R-3) questioned reduced pension contributions in the new budget for Sheriff’s deputies, citing an unexplained significant cut in the “public safety pension plan”– a 17.3 percent reduction in the “monthly and lump sum” pension costs in Fiscal 2022 and a $496,352 reduction from the current Fiscal 2021 budget. .That is even before current collective bargaining negotiations are concluded, and pensions are usually an issue in those negotiations. Miller did not get a clear answer, only the suggestion that pension allocations are variable.

Sheriff Scott Adams told the Council that he is having problems keeping and hiring deputies due to the current national policing environment and active recruitment campaigns by Delaware police agencies that pay higher salaries. But even if deputies leave Cecil County, as long as they are ‘vested’ in their pensions due to their length of service, the county is still liable for future benefits. (Federal law specifies that pension rights are vested after five years of service.)

Councilor Bill Coutz (R-2) questioned a reduction of $250,000 in the retirement program for volunteer firefighters. During the administration of former County Executive Alan McCarthy, the county moved to fully fund, as a dedicated pension fund, the Volunteer Length of Service Award Program (VLSAP) instead of treating it as an annual appropriation that could be cut by a future County Council or Executive. The shift to a funded pension program was designed as a way to give volunteer firefighters assurance of future retirement income, especially for those injured in the line of duty.

Wayne Tome, the new head of the Department of Emergency Services, defended the cut, saying, “We’re still in the infancy of that” and suggesting that his agency was reviewing eligibility of some retirees. When he was the president of the county’s volunteer Firemen’s Association as recently as last year, he supported the full funding of the volunteer firefighters retirement program as a full pension fund.

Under rules of the new Biden Recovery Act, federal aid could not be used to replenish public employee pension funds that were cut by local government actions.

Meanwhile, county administrator Dan Schneckenburger donned a new hat as a real estate expert when he claimed to the County Council that the McCarthy Administration “paid too much” for the vacant Cecil Bank building, adjacent to the courthouse parking lot in Elkton, to be used for relocation of the overcrowded State’s Attorney office now located in the county courthouse in Elkton. The bank building was selected because it would last well into the future, equipped with elevators and facilities fully compliant with the rules of the Americans with Disabilities Act (ADA).

Now Hornberger wants to spend $700,000 to “renovate” the existing State’s Attorney offices on the third floor of the Courthouse, work that the budget admits would only meet the office’s needs for five years—which violates the procedures for capital budget spending which is supposed to be used only for projects with a “useful life” of over ten years.:

The County purchased the vacant Cecil Bank property, adjacent to the Courthouse parking lot, last October for $1.3 million. The two-parcel property,114 and 120 North Street which includes additional parking spaces, was originally purchased by the previous owner for $1.9 million in 2005, according to state land records

So the county got the property for $600,000 less than was paid for it 15 years ago, and over the years the bank had made improvements to the property.

Schneckenburger offered no appraisal documents or evidence from a qualified real estate professional to support his claim of overpayment or what he personally thought the property was worth, or what the county might do with the property now.

Keith Baynes, the chief administrative judge for the Cecil County Circuit Court, was clearly frustrated by the Hornberger/Schneckenbuger plan to abandon the bank building project to free up space in the courthouse for judicial functions. “We had a plan and everything was good to go,” he told the County Council.