The Berlin Mayor and Council is pictured in a file photo.

Tara Fischer

Staff Writer

Berlin officials unanimously agreed to reallocate $2.7 million from the town’s unassigned general fund balance to act as a cushion for potential new projects and financial challenges.

The transfer of funds will bolster the capital reserve, the debt reduction reserve, the police Law Enforcement Officers’ Pension (LEOPS) reserve, and the stabilization reserve.

At its Monday, Jan. 13 meeting, the Berlin Mayor and Council voted to dip into the municipality’s unassigned general fund, which currently holds around $4.8 million, and put more money into certain reserves to act as a cushion for potential new projects and financial challenges.

Of the changes, the town will add $1.6 million to the capital reserve, bringing the total from approximately $1.1 million in fiscal year 2024 to $2.7 million for FY25.

“The recommendation for that is covering the remaining balance that we need for the town hall renovations,” Berlin Mayor Zack Tyndall said. “This is going to close that gap and bring this project to fruition.”

The mayor added that, unlike the upcoming community center project, an initiative planned for the construction of a neighborhood facility with public amenities on Flower Street, the town hall renovations do not qualify for much grant funding.

Reassigning these funds will help get the upgrades off the ground. According to Tyndall, the current town hall building is “subpar,” does not meet Berlin’s needs, and is negatively impacting recruiting, retention and overall operations.

The town will also transfer $200,000 to the debt reduction reserve. For FY24, the fund’s balance came in at $298,017. The adjustment will bring this figure up to $498,017. Tyndall said that this recommendation comes from the town’s intake of a “new level of debt with the public works facility” as Berlin works to create the new complex at Heron Park.

The improved structure will be funded through a $3.8 million bond from the Maryland Department of Housing and Community Development. Of this, approximately $2.8 million is earmarked for the construction of a public works facility, while $1 million is for electric meter replacement and upgrades.

“The Mayor and Council’s goal of establishing the [debt reduction] fund is to carry at least one year’s debt service balance in this reserve,” Tyndall said. “It just gives us that ability to handle any fluctuations we may have. In a time of distress or challenge fiscally, we want to have some levers we can pull to bolster and not cause the public or the employees to feel the burden of a big shift. We want to be able to weather that storm if we have to.”

Berlin will also increase the LEOPS balance, bringing the total from $429,938 to $829,938. Tyndall said the decision to pad this fund comes from a recommendation from the Local Development Council of Worcester County, which has been hesitant to approve casino funds for the reserve due to potential fluctuations. In 2023, the Berlin Town Council voted to use Local Impact Grant funds from Ocean Downs Casino revenue for the LEOPS program.

“This comes in part from the recommendations and feedback we have received from the local development council and their reluctance to use casino funds because they could fluctuate in a given year toward the repayment of LEOPS,” the mayor noted.

“There is $429,938 in that account and that came from shifting in our multi-year plan some of those funds over to a stabilization fund for LEOPS. We want to bolster that fund a little bit more. Not that we see anything on that horizon, but just to really insulate us. That should cover at least two years of the LEOPS if we had to.”

Additionally, Berlin will add $500,000 to the stabilization reserve, from $1.68 million to around $2.18 million. The stabilization reserve is used for disaster and/or debt recovery. Tyndall said increasing the amount of money in the fund is “not a bad idea.”

“If things go bad, we want to have our unassigned fund balance, but really, the last resort that we have is this stabilization resort,” he said. “It is designed to say, ‘Okay, our first stop-gap hasn’t worked; now we have another one in place.’”

With the reallocations, the unassigned fund balance will drop from $4.8 million in FY24 to $2.2 million in FY25.