St. Mary’s County Names Cudmore as MACo OPEB Trustee

The St. Mary’s County Commissioners this week formally named CFO Jeanett Cudmore to serve as the county’s representative Trustee on the MACo OPEB Investment Trust. Ms. Cudmore was appointed to the CFO position for the county in May, following the death of longtime CFO Elaine Kramer.

The MACo Pooled OPEB Investment Trust is a vehicle designed to help local governments invest current funds toward future obligations for retiree health insurance, a.k.a. “other post-employment benefits.” Recent accounting rule changes have highlighted these liabilities on government balance sheets, and many counties are amidst plans to save toward these future costs.

Counties, county-funded agencies (like libraries and community colleges), and municipal governments are welcome to join the MACo OPEB Investment Trust to make long-term plans for assets dedicated to these obligations. Interested county officials are invited to contact MACo Executive Director Michael Sanderson for more details.

State’s $500M Bond Sale Finds Low, Competitive Rates

The State of Maryland’s recent sale of $500 million in top-rated general obligation bonds yielded low interest rates – a function of the state’s highly respected fiscal reputation, and the generally low-yield marketplace for high quality investments.

The main sale of $450 million in tax-exempt municipal bonds was awarded at 2.825% interest (true interest cost) with an immediate bond premium of over $44 million, and an additional $50 million in taxable bonds were let at 1.345% interest.

From Treasurer Nancy Kopp’s press release:

Treasurer Kopp commented “This was a great bond sale with high participation by outstanding investors. This is truly a win-win situation. Maryland’s taxpayers benefit from the low interest rates associated with a very competitive sale of a triple AAA-rated instrument while investors take advantage of a safe place to invest their money.”

Read the Treasurer’s press release online.

Baltimore City Considers Sale of Parking Garages to Fund Recreation Centers

To raise revenue for recreation center improvements, Mayor Stephanie Rawlings-Blake has proposed selling four city-owned parking garages. However, some are questioning whether this plan makes sense in the long-term.

As reported by the Baltimore Business Journal,

The mayor’s office estimates the garages could be sold for $40 to $60 million. Such a sale price would be much larger than the amount of money they make for the city each year — together, the four garages generated net income of $2.8 million in 2014.

That’s not counting taxes, but the mayor’s office doesn’t anticipate tax revenue changing with the sale. The garages actually pulled in $8.7 million in gross revenue, only to have operating expenses and debt payments eat into that.

Rawlings-Blake anticipates the city would have to sink more money into the garages if it continues to own them, she said Wednesday.

City Council President Jack Young has expressed concern with this plan,

City Council President Bernard C. “Jack” Young has been among those questioning the long-term financial wisdom of the plan. He has not changed his stance, said spokesman Lester Davis.

“It’s still a concern,” Davis said. “He’s certainly not in any rush to unload property that is, by all accounts and all parties involved, an absolute asset.”

Young doesn’t dispute that investments should be made in recreation centers, Davis said. But he’d rather see the money come from other places in Baltimore’s budget.

Watershed Assistance Grant Program RFP Deadline For Local WIP Projects Is September 3

The Watershed Assistance Grant Program is seeking request for proposals (RFPs) from county governments seeking grants to assist with design funding for projects outlined in a county’s Watershed Implementation Plan (WIP).  The deadline for submitting an RFP is September 3, 2015, at 4:00 PM.

Funding awards are generally for less than $75,000 and matches are encouraged but not required.  Both local governments and nonprofit organizations may apply for the grants.  Total available grant funding for FY 2016 is approximately $1.5 million.

Watershed Assistance Grant Program – Milestone Support Grant Information

From the support grant information document:

The Chesapeake Bay Trust and the Maryland Departments of Natural Resources and Environment welcome requests from local governments and non-profit organizations for assistance with the earliest phases of watershed restoration projects.  Support is available for watershed restoration project designs and for watershed planning and programmatic development. The ultimate goal of the projects funded through this opportunity will be improved water quality in the Maryland portion of the Chesapeake Bay watershed, the Maryland portion of the Youghiogheny watershed, and the Maryland Coastal Bays and, specifically, progress towards goals of the Watershed Implementation Plan (WIP) process.  This opportunity is intended to enhance local engagement in near-term WIP goals. …

Applicants must submit proposals using the online grants system by 4:00 pm on September 3, 2015.   Late applications will not be accepted, and the online funding opportunity will close promptly at 5:00 pm. Applicants are strongly encouraged to submit at least a few days prior to the deadline given potential for high website traffic on the due date.  The Trust cannot guarantee availability of technical assistance for our online grants system on the deadline date.

Carroll County Considers Solar Energy Options

A July 13, 2015, Carroll County Times article reported that the Carroll County Board of Commissioners is considering a variety of options to take advantage of solar energy rates that are cheaper than what the county currently pays to its primary energy provider, BGE.  The Commissioners expect to make a final decision on Thursday, July 16.  The article noted that one option which received a lot of discussion was leasing land at the Hood Mills Landfill and Carroll Community College to a private energy company who would install the solar arrays:

These [two] properties — as well as sites at the other county landfills and its water treatment facilities — are large enough to make it worthwhile for a solar energy company to install panels at no charge to the county, [Carroll County Deputy Director of Public Works Scott Moser] said.

The electrical cost savings associated with installing solar arrays at these sites would be $225,000 a year, Moser said. If the county were also to purchase electricity generated at an out-of-county energy provider, this would increase the savings by another $50,000 a year, he said.

The article also noted several other options that were discussed by the commissioners and Moser:

The rate to purchase solar energy from an out-of-county solar grid would be 8.7 cents per kilowatt hour, also cheaper than Carroll government’s current rate, [Moser] said. …

An alternative to leasing land for the construction of solar arrays would be to construct them with county money, thus paying upfront for the cost but saving by not paying monthly bills, Moser said. Another possibility, suggested by Commissioner Richard Rothschild, R-District 4, would be to purchase all of Carroll government’s energy from a outside solar energy grid. …

Moser said such an option would be a possibility, although one advantage of leasing land to private companies is the county would then be eligible for a 30 percent tax credit on the county’s electric rate. The credit expires Dec. 31, 2016, and the project or projects must be fully constructed and operational by that date, Moser said.

Frederick News-Post Op-Ed Supports Regulatory Reform Commission

A July 15 , 2015, Frederick News-Post editorial expressed its support for the Regulatory Reform Commission that was recently created by Governor Larry Hogan.  As previously reported on Conduit Street, Hogan created the Commission to review every single state regulation and where appropriate make recommendations to repeal or improve them.  Despite noting concerns from the environmental, labor and nonprofit communities about the composition of the Commission’s membership, the New-Post editorial  was supportive of the Commission’s goal of making Maryland more business-friendly:

If this committee operates openly and fairly, we support its mission. It can’t do any harm to revisit these regulations and take a fresh look at them. Things change, and regulations shouldn’t be left on the books without periodic reviews of their necessity, appropriateness and impact. …

 

Environmental, labor and nonprofit interests are not represented at all on the commission, which has generated some concern among those groups. Hogan, however, is being upfront about the commission’s charter. …

[Hogan said] that the commission would be looking at rules involving a wide range of areas, including, [a Washington] Post story said, “the environment, transportation, health, labor standards, occupational licensing, banking and finance, land use and insurance.” The goal is to address excessive regulation, high taxes and anti-business sentiment, which the governor called the three “deadly self-inflicted wounds” that are stymieing business success in Maryland.

Anxiety among those interest groups that have no seat at the table is understandable, but if the commission’s work is open and accessible to them and the general public, everyone’s voice can be heard.

Allegany County Seeks Solar Generating Facility

Allegany County is seeking a company to build a solar generating facility to reduce costs of running the county’s wastewater treatment plants. The electricity to run these plants costs the county approximately $200,000 a year. As reported by the Cumberland Times-News,

The cost of building the solar array would be borne by the winning bidder. The county would not offer financing or compensation for the creation of the generating facility. …The winning bidder would be compensated since the county would enter into a 25-year agreement to purchase power from the facility. The solar panels would be mounted on the ground and not on a building, according to the July 14 advertisement in the Times-News. “The county and solar system owner shall come to an agreement on a Payment In Lieu of Taxes (PILOT) program for personal property tax on the solar equipment,” according to the request for proposals. The RFP allows for renewal of the contract and gives the county an option to purchase the system at the end of the 25-year term and at the end of each renewal period.

To learn more about how to leverage private sector investments to save on energy costs attend the MACo Summer Conference session titled “Leveraging Private Investment to Capitalize Energy Improvements.” Information about the session is below. Description: Savvy leaders across the country are learning how to leverage private sector investments to “green” facilities and save on energy costs. Find out how your county can successfully use “green bank” lending programs and take advantage of public private partnerships to retain local debt capacity. Speakers will discuss Energy Performance Contracting and Power Purchase Agreements, examine innovative approaches to finance school renovations, and showcase model projects that use Commercial Property Assessed Clean Energy (CPACE) lending. Speakers:

  • Wyatt Shifflet, Director of Finance Programs, Maryland Clean Energy Center
  • David Lever, Executive Director, Public School Construction Program
  • Laura Franke, Managing Director, Public Financial Management, Inc.
  • Mike Dow, Esq.; Womble Carlyle Sandridge & Rice LLP

Moderator: The Honorable Sallie Jameson, Maryland House of Delegates Date/Time: Wednesday, August 12, 2015; 12:00 pm – 1:00 pm Learn more about MACo’s Summer Conference:

For a schedule of educational sessions at MACo’s Summer Conference, please view the Registration Brochure. Questions? Contact Meetings & Events Director Virginia White.

Queen Anne’s Reforms Procurement Process to Benefit Local Businesses

To stimulate the local economy, Queen Anne’s County Commissioners recently approved a procurement preference for local vendors. As reported by MyEasternShoreMD,

Businesses based in the county will have a 10-percent easement on county contracted bids. The 10 percent allowance is only allowed for contracts less than $50,000 for all solicitations exclusively funded with local dollars but allows local vendors to bid more than outside competitors and still be in consideration.

A vendors must designate Queen Anne’s County as its principal place of business through the State Department of Assessments and Taxation (SDAT). For sole proprietorships, vendors must identify Queen Anne’s County as their area of residence on their most recent Maryland Income tax return. Local vendor bids must be at least 50 percent of the overall contract value to be considered.

This change and others were suggested by a workgroup tasked with assessing ways to help local businesses succeed. Another change recommended is the creation of a bid review committee to review solicitations where the lowest bid is not the only factor for awarding a contract.

The county will also establish a website for local businesses to provide information about their company to be notified of solicitations.

Maryland Maintains AAA Bond Rating

State Treasurer Nancy K. Kopp recently announced that Maryland has maintained its AAA bond rating from all three rating agencies. As reported by MarylandReporter.com,

Maryland is one 11 states with the highest bond rating. It has held the top rating from Standard & Poor’s for 54 years, from Moody’s for 42 years and from Fitch for 23.

There was nothing unusual in the reports. All three cite Maryland’s prudent fiscal management, its flexibility in reacting to revenue downturns, its forecasting process, its limit on debt and the short 15-year term of its bond. Fitch and Standard & Poor’s call Maryland’s $12 billion in tax-supported debt moderate, while Moody’s calls it “high” among the states. But the raters have been making similar judgments for years.

All three note Maryland’s wealth, high incomes and highly educated populace.

The State is preparing for a bond sale to be held next week.

Regional Council Developing Plan for Federal Broadband and Transportation Grants

The Executive Director of the Upper Shore Regional Council (USRC), Doris Mason, met with Cecil County council members earlier this week to discuss the need for an economic plan to bring in federal grant funding for broadband and transportation projects. The USRC is a planning council for Cecil, Kent, and Queen Anne’s Counties.

As reported by the Cecil Whig,

A Comprehensive Economic Development Strategy (CEDS) is needed before this three-county region can be considered for any funding from the U.S. Department of Commerce, Mason explained.

Mason laid out a timetable, which includes creating a strategy committee, developing a CEDS plan, getting that plan reviewed by the public and submitting it for approval.

The USRC could begin applying for grants next spring if the plan is approved.