‘Tis the Season for… Property Tax Assessments!

OC Today reported last week that Worcester County’s assessable base has grown from $14.8 billion to $15.2 billion, and is expected to grow to $15.4 billion by the beginning of fiscal 2019 –  meaning about 2 percent more tax revenue to the county.

Wait a minute. Isn’t it a bit early to receive these numbers? Last year, the State Department of Assessments & Taxation (SDAT) released information a few weeks later.

It is early. The article is based on preliminary numbers released annually around this time on SDAT’s website. But those numbers are subject to change. SDAT plans to issue its annual press release in a few weeks, after it has done a bit more due diligence.

Still, the County expects to see slow and steady growth. This year, Worcester’s assessment is limited to Ocean City. From the article:

[County Treasurer Phil] Thompson said the measured growth reached between 1.4-1.5 percent during the last year, and that’s what county residents should expect for the foreseeable future. During the peak boom years between 2004-2006, cumulative county property values exceeded $20 billion.

“We’re trending the way we were 10 years prior to the boom time of 2003-2006,” he said. …

Traditionally, [Ocean City] has been the major driver of property value assessments in the county. However, with the growth and development in West Ocean City, Thompson said the playing field might be leveling off.

“With Tanger Outlets coming to town and the recent hotel development there, we’re seeing steady growth,” he said.

Taxes are responsible for two-thirds of the county’s revenue, Thompson said.

 

 

What NG911 Means For County Purchasers & Purse Strings

At the MACo Winter Conference special session, Next Gen 911: What It Means Forimg_0612 Purchasers, PSAPs & Purse Strings, State and local experts provided a thorough overview of the anticipated costs and procurement opportunities accompanying the requirement for county call centers to advance to Next Generation 9-1-1.

Next Generation 9-1-1 (NG911) issues are of top concern for county governments officials seeking to improve and enhance their handling of emergency calls from cell phone users. New technologies will increase response times, location accuracy, and allow traditional callers to text and send photo and video data directly to first responders.

As Maryland and its counties move toward implementing an NG911 network, one key issue that must be addressed is how to fill the void left by Verizon and its vast communication infrastructure. And, while the technology to implement NG911 is available now, there are many issues that local governments must work through, including uniform specifications, the process of transition, governance, and funding.

At the presentation, Scott Roper, Executive Director of the Emergency Number Systems Board provided introductory remarks, followed by his office’s consultant, Walt Kaplan, MPH, Enterprise Client Manager, Mission Critical Partners, Inc. Ross Coates, Harford County Government Public Safety Manager rounded out the presentation by offering the local government perspective, providing observations informed by his county’s procurement officer and fiscal experts. The Honorable Cheryl Kagan, State Senator with a vested, proven interested in NG911 issues, enthusiastically moderated the panel.

#MACoCon Attendees Can Now Save Money & Stay Out of Trouble

They can do more than just buy pencils! County procurement officers from across the State gathered at the MACo Winter Conference to deliver the session, Buying Into Your Buyers: How to Save Money, Stay Out of Trouble, and Keep Your Procurement Officer Happy, on Wednesday, December 6.

Cherri Branson, Director of the Montgomery County

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Cherri Branson distributed the unintimidating Pocket Guide to Doing Business with Montgomery County, MD

Office of Procurement emphasized the importance of pre-purchase planning, and how planning ahead, with your buyer in the mix early and often, can save your county time and money. She also discussed how purchasing decisions can further other goals, such as the encouraging growth of small businesses, and minority-, women- and disabled-owned businesses.

Nicholas Rice, Purchasing Agent for Wicomico County discussed the pros and cons of local preferences in public procurement. A local preference is a bid preference which may be given to suppliers doing business within a purchasing jurisdiction. It can help keep money within a county – but it can also increase project costs, limit competition, and fail to meet the intended goal, if not implemented appropriately.

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Erin  Sher Smyth, Purchasing Agent, Baltimore City

Erin Sher Smyth, City Purchasing Agent, Baltimore City spoke about how to engage with your procurement office. The complicated web of public purchasing often leaves many dazed, confused, and baffled by why procurement officers seem like they are always saying “no.” However, “no” probably means you are trying to circumvent the law, or asking to do something you are not authorized to do. Getting to know your procurement officers, and engaging them early and often, can shorten your project timeline, save you money, and keep you out of trouble. img_0595

The session was moderated by the Honorable Laura Price, Talbot County Council Member.

 

Professing Importance of Pitching & Patching Pensions At #MACoCon

On Wednesday, December 6 at the MACo Winter Conference, county administrators, budgets officers, government relations officials and a number of other government professionals dug deep into the challenges of executing successful pension plans in light of funding difficulties and a workforce with evolving priorities.img_0603

Public pensions can provide a reliable and robust benefit for government employees. At the same time, some public pension systems are facing funding difficulties. To address these difficulties, organizations look to reduced payment packages for new hires, delays to employee eligibility, and improving investment income. For county governments who are members of the Maryland Pension System and those who offer their own pension plan, there are also challenges in marketing the merits of this traditional form of benefit to a millennial and generation Z workforce who are looking for portable investments such as 401(k)s.

Kristopher E. Seets, FSA, EA, Actuary, Bolton Partners, Inc. provided a very robust and detailed look into the future of pension plans and pros and cons of defined benefit plans versus defined contribution plans. Robert Goff, Retirement Benefits Manager for Montgomery County Employee Retirement Plans discussed his county’s plans, and Jim Harkins, Trustee for the Maryland State Retirement & Pension System discussed the details of the State’s system.

During the question and answer portion, discussion centered around Anne Arundel’s proposal to offer its employees the option to participate in a defined contribution plan – offering employees faster vesting with less risk to the County than its existing Employee Retirement Plan.

The Honorable Barry Glassman, Harford County Executive moderated the session.

MDOT Unveils Proposed Scorecard Model, Counties Have Questions

On Thursday, December 7 at MACo’s Winter Conference, Maryland Department of Transportation (MDOT) Secretary Pete Rahn presented the latest chapter on Chapters 36 of 2016 and 30 of 2017 – aka, the Maryland Open Transportation Investment Decision Act of 2016, “Scorecard Bill,” “Transportation Transparency Bill,” or the “Roadkill Bill,” as amended.

Secretary Rahn presented the Department’s proposed methodology for scoring major transportation projects under the amended law. MDOT must finalize the scoring system by January 1, 2018. 

This law of many names was significantly changed during the 2017 session to be non-binding and to give MDOT more flexibility in how it scores major highway and transit projects in its capital program. Read our previous coverage for the law’s history.  Since then, MDOT has developed its new scoring model.

What’s The Score?

MDOT must attach project scores to certain large-scale State projects if it will include them in its Consolidated Transportation Program (CTP). The scores will be attached to the CTP, as an appendix. However, MDOT is not required to make funding decisions based upon those scores.

MDOT need only score “Major Transportation Projects,” which are highway and transit projects that cost $5 million or more and that are designed to increase capacity or relieve congestion. All other projects, including safety and system preservation highway and transit projects, port and airport projects, and all projects under $5 million, are excluded from the scoring requirement.

The proposed Chapter 30 Scoring Model evaluates projects against nine statutory-required goals, by weights assigned under the model:

goal weights

Who’s Keeping Score?

In order for a State Transportation Project to receive a score and be eligible for inclusion in the CTP, some entity – a county, municipality or state government agency – must apply for the project’s inclusion.

Each entity may propose up to 10 projects, through the online Chapter 30 Web Application Portal, by March 1 of each year. Counties’ proposed Major Transportation Projects must also be included in that county’s priority letter. (MDOT, obviously, is excluded from the 10-project limitation.)

Proposing entities are responsible for providing some, but not all, of the data required to score the projects. From MDOT’s Draft Chapter 30 Scoring Technical Guide:

Various data elements are required to score each project through the evaluation criteria. In addition to general project information, proposing entities are responsible for completing some of the evaluation checklists used for several measures. MDOT is responsible for providing the technical and modeling data following the submittal of applications.

Applicants will have to provide data on the following:

  • Project details, including cost estimates and geographical limits
  • Bike and pedestrian demand in the area
  • Promotion of bike, pedestrian and transit use
  • Community assets
  • Community revitalization plans
  • Economic development impact on all areas, and specifically low-income areas
  • Funds available from other sources
  • Local priority of the project

MDOT will provide guidance throughout the process, and applicants are encouraged to work with the State Highway Administration and Maryland Transit Administration, as applicable, on their proposals.

In order to enable an appropriately sophisticated review, each project must have completed preliminary planning or a feasibility study. From the Draft Technical Guide:

To conduct an evaluation of projects through the Chapter 30 scoring methodology, projects need to have a clearly defined scope that identifies project alignment/area and the type of improvements that are included in the proposed project. This information is obtained through the completion of preliminary planning or a feasibility study. …. Proposing entities must either coordinate with MDOT SHA or MDOT MTA to fund preliminary planning of the project in the Development & Evaluation Program of the CTP or conduct their own feasibility study.

In addition, projects must have a reasonable and updated cost estimate. This is necessary for calculating many of the measures defined in the statute. …. Proposing entities must either coordinate with MDOT SHA or MDOT MTA to identify the cost estimate through the preliminary planning of the project or as part of the proposing entities’ own feasibility study effort establish a cost estimate as well.

Local Priority: Balancing County & Municipality Needs

To measure local priority of a project, MDOT is proposing a point system.

Each county receives 100 points to assign to its priority projects – but can lose up to 50 of these points if municipalities within its borders submit alternative priorities.

On the other hand, counties can receive bonus points if both the county and a municipality prioritize the same project.

From the draft Technical Guide:

To determine local priorities in the Chaper [sic] 30 methodology, each proposing entity has 100 points to distribute across their project applications. Proposing entities can choose to put all of their points on one project application or distribute their points across multiple projects.

Municipalities and counties should coordinate on applicable project priorities. To encourage this, any project with joint support from the county and municipality, as evidenced in a joint letter of support accompanying the project application, receives twice the number of points assigned to the project.

However, if a county and municipality(s) submit separate project applications, the points assigned to all projects submitted by the county are normalized to total 75 points (rather than 100 points) and the points assigned to all projects submitted by the municipality are normalized to total 25 points. Furthermore, if more than one municipality within a county submits a project application, the points assigned to all projects submitted by the county are normalized to total 50 points and the points assigned to all projects submitted by the municipalities in the county are normalized to together total 50 points. This approach is intended to incentivize counties and municipalities to work together to best identify priority needs.

This proposal received significant pushback from elected officials from Montgomery and Prince George’s counties at the Winter Conference session.

What Happens Next?

MDOT is currently seeking feedback and comments on the proposed scoring system, before finalizing its proposal by January 1, 2018. Any feedback may be provided by email to ProjectScore@mdot.state.md.us. If you represent a county, please consider including MACo Associate Director Barbara Zektick at bzektick@mdcounties.org on any comments submitted.

MDOT must implement the scoring system in its next CTP. Therefore, counties must submit their applications for consideration by March 1, 2018.

Chapter 30, passed last year, also establishes a workgroup of primarily state legislators and the Secretary of Transportation or his designee, which is tasked with evaluating MDOT’s scoring model and general implementation of the law. It must issue its findings by January 1, 2020. Neither MDOT nor MACo staff have received any notice of any activity occurring to date.

Helpful Links

Shooter Defense “Deep Dive” Enthralls 70+ at #MACoCon

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DFC Thomas Wehrle

At the MACo Winter Conference session, Active Shooter Defense: What You Need to Know, on Wednesday, December 6 at 10 am, a packed room of early conference attendees sat on the edges of their seats as Deputy First Class Thomas Wehrle of the Harford County Sheriff’s Office taught them the ropes of how to respond in an active shooter crisis. The take-away: run, hide, or, if you must, fight.

Active shooter situations are unpredictable and evolve quickly. While an active shooter scenario may unfold in various locations, public and government settings are particular targets. These terrifying events are often over within 10 to 15 minutes, so individuals must be prepared both mentally and physically to survive the situation before law enforcement arrives.

 

The Honorable James “Capt Jim” McMahan, Jr., Council Member, Harford County moderated the session – which began with his eloquent introduction, interrupted by two loud bangs and Capt Jim collapsing to the ground. The role play ensured that the 70-plus attendees paid attention throughout the rest of the deep dive session.

 

 

‘Tis the Season For… Emergency Refunding Bonds

With advance refunding bonds on the chopping block in both the U.S. House- and Senate-approved tax reform proposals, and “all but dead” according to Bond Buyerno one should be surprised to see a litany of expedited county bond sales in the next few weeks.

Advance refunding bonds allow counties to refinance tax-exempt municipal bonds to save taxpayer money on outstanding debt. Currently, counties can issue one advance refunding bond per municipal bond – saving taxpayers billions nationwide on public infrastructure. All signs point to that ending on December 31.

Queen Anne’s County had planned to do its sale early next year, saving the County’s taxpayers approximately $2 million a year. That no longer looks likely.

Wicomico County posted Tuesday that it plans to hold a special session of the County Council to consider a resolution next week to award up to $24.8 million of Public Improvement and Refunding Bonds for County projects.

Also on Tuesday, Moody’s assigned Howard County’s Consolidated Improvement Refunding Bonds an Aaa rating.  Those bonds – $159.4 million – are expected to go to sale next week. Frederick County plans to sell $29.6 million in General Obligation Public Facilities Refunding Bonds next week, too. (Those may have been planned in advance, but even if so, they were planned with foresight.)

Local infrastructure is about to get even more expensive.

 

Montgomery Experiences Revenue Shortfall, Acts Quickly

Montgomery revenues came in short of forecasts – causing, in part, an operating budget gap of $120 million, reports Bethesda MagazineCounty Executive Ike Leggett has already proposed cuts to the County Council balance the $5.4 billion budget.

The shortfall results in part from the November distribution of local income tax revenues coming in “significantly below expectations.” Annual income tax revenue fell $64 million short, and total revenues fell short by $95 million. The rest of the shortfall results from the County’s general fund closing $25 million below expectations for fiscal 2017.

From Bethesda Magazine:

The County Council will have to approve a savings plan to address the shortfall.

Leggett said he expects to send a plan to the council that includes spending cuts and hiring freezes in about 10 days. He noted that the county has approved measures such as reducing its workforce and raising taxes in previous years to deal with declining revenues during and after the recession, which has left officials with few politically palatable options to address the revenue shortfall other than cuts.

“We’ll work our way through this quickly and adopt a savings plan that will address the shortfall and keep moving forward,” Council Vice President Hans Riemer said Monday.

Senate Continues Tax Reform Tinkering, Vote Expected Friday

On Thursday, the Senate tax reform proposal hit a procedural snag on the chamber floor, delaying action on its final floor vote. The vote is expected to take place on Friday. However, as CNN reports:

Even Republican senators remained unclear about the future of their bill. While most were optimistic the bill would still pass, members acknowledged the uncertainty, joking that they still weren’t set on travel plans to head home for the weekend.

In an effort to assuage Senator Bob Corker’s concerns that the bill would increase the country’s deficit, Senate leadership proposed including a “trigger” in the bill which would automatically increase taxes if the bill failed to generate the economic growth anticipated. However, Thursday evening, the Senate parliamentarian indicated that the proposal violated certain rules and could not be included in the bill as it was. The Senate voted not to recommit the bill to the Finance Committee, but the trigger concept was removed from consideration, placing Senator Corker’s favorable vote in question.

The Senate can afford to lose Senator Corker’s vote – the bill can still pass the Senate even if two Republicans vote against it. It is unclear, however, whether the concern over the deficit will compromise other Republican votes.

Concerns over the costs of the tax cuts further piqued as a new analysis by the nonpartisan Joint Committee on Taxation released Thursday revealed that the tax package would generate significant economic growth, but add $1 trillion to the budget deficit.

From NACo’s Legislative Update from Thursday evening:

The [House and Senate tax reform proposal] versions share broad similarities: both reduce individual and corporate tax rates, revamp the international tax code and eliminate deductions throughout the tax code. Both bills also add between $1.4 and $1.5 trillion to the U.S. deficit, which Republican leadership insists will be offset by economic growth created by the bill and through entitlement reform next year. There are also difference between the bills: the Senate bill sunsets the individual rate cuts, delays implementation of the lower corporate tax rate and has a larger child tax credit.

Following Senate passage, the two chambers will either enter negotiations to address differences between the two packages, or the House will vote on the final Senate package. Final votes could happen as soon as December 6 or 7.

Although negotiations continue, several county priorities are impacted by both bills:

State and local tax (SALT) deduction: The SALT deduction has existed since the federal tax code was founded in 1913, and is a vital tool protecting state and local tax autonomy.

In the House, H.R. 1 eliminated deductibility of state and local income and sales taxes, but retained a capped property tax deduction of up to $10,000.

In the Senate, initial drafts fully eliminated the SALT deduction. This issue remains under consideration, and the final Senate text could mirror the House bill.

Municipal bonds: Tax-exempt municipal bonds are largely unchanged in each bill. However, both bills could impact advance refunding bonds and private activity bonds.

Advance refunding bonds: Advance refunding bonds allow counties to refinance tax-exempt municipal bonds to save taxpayer money on outstanding debt. Currently, counties can issue one advance refunding bond per municipal bond, which saved local taxpayers $12 billion from 2012 to 2016. Both the House and Senate bills would eliminate advance refunding bonds, increasing infrastructure costs for local governments.

Private activity bonds (PABs): Under current law, PABs are tax-exempt and support major infrastructure projects, including hospitals, universities, seaports and airports. The House bill eliminates the tax-exempt status of PABs, while the Senate bill does not make changes to PABs.

 

 

 

 

MDOT Awards $20.4 Million For Bicycle/Pedestrian Projects

The Maryland Department of Transportation (MDOT) is awarding $20.4 million in state and federal money to local governments and others to support improvements for bicycle and pedestrian safety and connectivity. Awards are made through the Maryland Bikeways Program ($2.1 million), and federal Recreational Trails Program ($478,000) and Transportation Alternatives Program ($17.8 million).

Awards made to counties include:

  • $269,834 to Montgomery for four bikeshare stations
  • $188,765 to Prince George’s for four bikeshare stations at National Harbor
  • approximately $4.95 million to Somerset to construct hiker-biker trails
  • $70,000 to Baltimore City to design 1.7 miles of separated bike lanes
  • $240,000 to Howard to design 3.3 miles of shared-use paths
  • approximately $4.7 million to Anne Arundel to construct a bridge along the Washington, Baltimore and Annapolis Trail
  • $737,362.50 to Prince George’s to construct Phase 1 of its County Bike Share Program
  • $257,777 to Baltimore City for Safe Routes to School at Pimlico Elementary School
  • 640,000 to Prince George’s for design of the Central Avenue Connector Trail
  • $46,840 to Montgomery for Safe Routes to School

The full list of awards is here.

The announcement comes the same day that the Task Force to Study Bicycle Safety on Maryland Highways issued a draft of its final report recommending, among other things, that MDOT:

 consider expanding and consistently funding state discretionary programs such as the Bikeways Program to better assist local jurisdictions in planning and building infrastructure that improves bike safety and increases bike mode share.