Montgomery County Taxpayers League

The Voice of Taxpayers of Montgomery County, Maryland
Montgomery County Taxpayers League

The Voice of Taxpayers of Montgomery County, Maryland

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Questions for meeting of October 17, 2018

Presentation:   “Department of Liquor Control:

                               Are Major Improvements Making a Difference?”

Speaker:         Robert Dorfman, Director

                             Department of Liquor Control

                             Montgomery County

1.  A few years ago, Montgomery County was dead last in the state for liquor and beer per capita sales?  Has the situation changed since your tenure and by how much?

2.  How has the DLC improved its service to the restaurant business?  Would privatization of the DLC help or hurt this business?

3.  How has/will investments in truck fleet and warehouse upgrades improve productivity, and how much will be saved annually?

4.  How big were inventory losses last year and how does this compare to the prior year and to industry averages?

5.  Why did general fund transfers for purposes other than debt service drop to $10M last year?

6.  Has there been an increase in alcohol use, especially by teens, and do you have a program educating the public on excessive alcohol use?

7.  There are many reasons for and against privatizing the liquor business in Montgomery County?  The reasons against privatization include:  loss of a $30 million revenue stream; preservation of 350 union jobs, and State law constraints.  Some of the reasons for privatization include the legacy costs associated with DLC’s county government jobs, and the view that selling liquor is not an inherently governmental function.  Can you give us all the reasons against privatization with facts and figures to support your case? 

Next meeting: TBA

“More misguided spending will not fix Maryland schools”

Something to think about when you vote.   From the Baltimore Sun of June 24, 2018:

Maryland ranks 6th in the nation in teacher salaries and 10th in the nation in per-pupil spending, according to EdBuild. From 1998 to 2014, our research reveals Maryland increased education operating expenses by $3.8 billion in inflation adjusted dollars — a 45 percent increase. Yet the Kirwan Commission laments how poorly Maryland schools have performed over that time.

 

Why Progressives Need Economic Growth

From The Seventh State June 11, 2018:

Some on the County Council would like to expand pre-k education, a huge progressive priority and a great idea.  The problem is that it would cost – at minimum – tens of millions of dollars to be meaningful.  And when the county is already relying on tens of millions of dollars in employee and retiree health insurance money just to fund its current budget, there is no way that’s going to happen.

Irresponsible budgeting?

Posted  May 23, 2018, on Seventh State:

And next year is already projected to see a $76.8 million shortfall after this year’s shortfall, which was over $100 million.

Suppose you were an elected official reading that information.  What would you do?  Perhaps you might say, “Wow, things are kind of tight.  We need to cut back a little because if there is a downturn, we are going to have a problem.”

That’s not what happened.  Instead, the council tapped a total of $77.7 million in one-time fund transfers to finance ongoing spending both this year and next year.

The County Council continues to increase the budget in the face of falling revenues.  How long will this behavior go on?.

 

 

 

Questions for meeting of May 16, 2018

Topic:  “WSSC and its Financial Future”

Speaker:  Joe Beach, Chief Financial Officer, WSSC

                         Free and open to the public

The following questions have been sent to the speaker in advance of the meeting:

1.  What criteria does WSSC use in its decision-making process given the need for new pipes, old pipe repair and replacement, processing facilities, IT investments, etc. especially as WSSC is reaching its debt limit and thus must carefully set priorities for capital spending while maintaining quality and service levels?

2.  We understand the approved capital budget for WSSC includes a $250 million project to build a new anaerobic sewage treatment plant at Piscataway for bio energy.  While WSSC policy does not require that a return on investment justification be provided for projects, do the economics of this project justify this large expenditure of $250 million?  Or could the sewage be more economically transported to Blue Plains for processing.  The documented business case dt. 6/21/12 does not address this option.  Alternatively, are there other projects with a higher return on investment that have not been approved?

3.  Debt service is the largest driver of WSSC’s budget and is projected to hit 40% of its total expenditures in 2023.  We also note that the “new debt” projections for FY 2019, 2020, and 2021 jumped from:
In fall of 2014 (FY 16 budget): $327 million, $278 million, and $219 million for a total of $824million
In fall of 2016 (FY 18 budget): $505 million, $510 million, and $429 million for a total of $1.44 billion
In fall of 2017 (FY 19 budget): $558 million, $562 million, and $545 million for a total of $1.67 billion
New debt projections for the next three years have doubled. Could you address this?
4.  Debt shows big drops in FY 22 and 23 for new water and sewer debt issues.  Is this realistic?  Are the projections based on current known costs with no contingencies for unknowns.  Does this assume that there will be no change to the water loss rate which was 17.9% in 2016 and for sewer line infiltration of 40%?

5.  With the new rate structure, will the highest tier (the rate paid for practically all of the water used by the largest accounts – hotels, NIH, UMd students), meet the Public Service Service Commission’s (PSC) criteria for non-discrimination? Also would let’s say anything over $17.00 per kgal be unjustifiably high and thus not meet the PSC criteria?

6.  We also note a rate increase jump to 6% from 2020 to 2023.  Since presumably this will be determined by the size of the CIP, the operating budget, weather events, interest rate for debt issued and change in the number of customers, it is also obvious that the first two are well within the control of the WSSC.  Will the PSC weigh in as to whether such an increase is reasonable?  How often has the PSC done so in the past?

7.  The negative expenditure adjustments that begin in 2020 appear to be an artifice to make the debt service coverage ratio work. Is there a more rational explanation for this?

8.  The expenditure increases in the fiscal plan assume no new hires (except for attrition).  Are the collective bargaining agreements negotiated by the union affordable?  By how much will these increase the budget?  Also are the health and retirement benefits of WSSC employees similar to those of Montgomery County Government employees?

Next meeting:  TBA

County Council gives preliminary approval to 4.5 % WSSC rate increase

From the Bethesda Beat article posted May 7, 2018:

“On Monday, the Montgomery County Council gave preliminary approval to a 4.5 percent rate increase requested by the Washington Suburban Sanitary Commission in its proposed fiscal 2019 budget.  If the budget is formally approved Thursday during a joint meeting of the councils of Montgomery and Prince George’s counties, it will mark the 15th straight year of rate increases for the utility.”

Md. Pension Fund Lost Out on $8.8 Billion in Retiree Income

From a new report by the Maryland Public Policy Institute:

“Maryland state pension managers lost out on nearly $9 billion in income over the past decade by paying higher-than-average investment fees to Wall Street managers in exchange for lower-than-average investment returns,…Compared to its peer group states, Maryland lost out on an estimated $5 billion in income, an amount sufficient to replace every public school in Baltimore City with a brand-new facility.”

 

Economic Underperformance in Montgomery County

From a new report on the health of Montgomery County’s economy:

“Between January 2001 (the beginning of the data series) to September 2017 (the most recent month for which data are available), Montgomery County added 26,459 jobs. That translates into 6.0 percent growth in  the number of jobs supported by the county’s economy.  Over that same period, Maryland’s total employment expanded 12.2 percent and the nation added 10.7 percent to its job totals. In other words, despite representing approximately one-sixth of Maryland’s population and a quarter of its household income, Montgomery County created fewer than 1 in 10 net new Maryland jobs between early-2001 and the fall 2017.”

The report—“The Coming Storm: How Years of Economic Underperformance are
Catching up with Montgomery County”—was done by the
Sage Policy Group for Empower Montgomery and is available here.

 

Testimony before the County Council on the Proposed FY 2019 Budget

Testimony before the County Council on the Proposed FY 2019 Budget

April 11, 2018

Thank you for the opportunity to testify on the proposed FY 2019 budget. I am Joan Fidler, president of the Montgomery County Taxpayers League.

I’d like to note that this is very definitely a $5.56 billion election year budget – no property tax increases and a decrease in the property tax rate. And kudos to the County Executive for increasing the county’s reserve fund to $492 million.

And now a cautionary note: income taxes continue to be volatile. We ask that despite pleas from many for “more money, more money, more money” that the only exceptions be for the most vulnerable in the county – the working poor, the homeless, veterans and the developmentally disabled.

Next, we believe it is extremely short-sighted and somewhat reckless to reduce the county’s contribution to the employee retirement fund by $21 million – let us not mortgage our future.

Regarding our public schools where funding has been proposed at $19 million over the mandated what we call the Maintenance of Emolument level, we ask that you require the school system to provide you with the specific goals that they plan to achieve along with performance measures and timelines. If they are unable to do so, then taxpayers are funding a budget of $2.59 billion with results of which we are unaware. The school system does have a strategic plan that I would describe as more poetry than prose.

And here are two ideas: (1) that MCPS establish at least one charter school, perhaps in easy county, focused entirely on innovation – perhaps one that attempts new ways to narrow the achievement gap, and (2) that MCPS establish an Inspector General position reporting directly to the Board of Education – MCPS is too large a system to be run by bureaucrats with no “lean, mean junkyard dog” overseeing its operations, and more important, its performance. The Board alone cannot do it.

And now to job creation. Our increase in job growth has been, let me understate this, abysmal. According to BLS, the growth of establishments in Montgomery County between 2011 and 2016 was SIX! We were dead last in the Washington region. Is the Montgomery County Economic Development Corporation really succeeding?

I end on a somewhat nostalgic note as this is the last time I will be testifying on the budget before this particular County Council. Four of you will not have to sit through such hearings again. And so we at the Taxpayers League wish council members Berliner, Elrich, Floreen and Leventhal the very best as you move on to other pursuits.

Thank you.