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Berlin budget work session reviews utility fund monies

By Greg Ellison

(April 21, 2022) Town of Berlin officials reviewed FY23 projected health insurance costs, along with utility fund revenues and expenditures during a budget work session on Monday.

The evening session opened with a presentation on insurance renewal options from Kelsey Jensen with One Digital.

Jensen recommended the town retain current provider CareFirst for the next fiscal year, while also nothing that United Healthcare offered nearly identical price points.

“The maximum out-of-pocket and co-insurance is slightly higher,” she said. “We’re taking a little bit more risk there.”

Although CareFirst initially proposed a rate hike of more than 12 percent for FY23, Jensen said that figure was negotiated down to a 3.7 percent increase.

“That was quite a jump there,” she said.

The overall cost increase for FY23 would be roughly $39,000.

Town Administrator Jeff Fleetwood said staff issues with CareFirst were nonexistent.

“I haven’t heard any complaints,” he said.

Jensen said CareFirst is holding open enrollment between May 17-19.

Mayor Zack Tyndall said if council members did not object, the town should retain CareFirst for FY23.

“I can safely say based off this presentation that CareFirst is very competitive,” he said.

Turning to the water fund, Finance Director Natalie Saleh said the principal source of revenues are user fees.

Saleh said special connection fees from sales of EDUs are estimated at $442,000 for FY23.

Water service revenues are estimated at $725,000 in FY23, which reflects a $55,000, or 8 percent, increase over the $670,000 anticipated to be collected during the current year.

Saleh also noted $150,000 from FY22 special connection fees would be earmarked for capital projects in FY23.

Looking at water fund expenditures, Water Resources Superintendent Jamey Latchum said vehicle upgrades are being requested for FY23.

Latchum is working in conjunction with Public Works Director Jimmy Charles to acquire a mutual-use Ford F550 dump truck, in addition to three F250s.

Overall, this would replace a trio of high mileage trucks currently in use.

“We use each other’s equipment,” he said. “We’re a group here and we work for the Town of Berlin.”

Tyndall noted the Maryland Energy Administration just announced expanded timeframes to apply for grants to purchase vehicles not powered by fossil fuels.

“This morning MEA has issued an extension for grant funding for alternative fuel vehicles,” he said.

Tyndall said grants could cover the cost of acquiring all four trucks.

“If we’re successful, the town could potentially have to cover the costs for a fueling station,” he said.

Despite the extra costs for an alternative fuel source, Tyndall said the price tag would likely be lower than the vehicle costs.

Switching to the water treatment plant, Latchum said updates are slated in FY23 for well houses on Franklin Avenue and Powellton Avenue.

Latchum said the Franklin Avenue site needs new water flow meters to be in accordance with the updated meter reading system.

Costs for building replacement at the Powellton Avenue location, which were quoted at $175,00 three years ago, are now estimated at $300,000. Latchum said the price spike was mainly tied to higher costs for materials.

Looking at the wastewater fund, Saleh said the main source of revenues were service fees, while also noting $1.23 million is anticipated to be collected from special connection fees in FY23.

“We estimate $3.5 million for FY23 in sewer fund revenues,” she said.

In terms of wastewater expenditures, Latchum said replacing a SCADA (supervisory control and data acquisition) system is estimated at $17,500 in FY23.

“SCADA is what controls the treatment plant,” he said.

The control system provides alerts for malfunctions and if not operational would require staff to be onsite at the treatment plant 24 hours daily.

Latchum also highlighted a roughly $1 million outlay to replace the Broad Street Lift Station, which was last updated in 1970.

“It’s just a waiting time bomb,” he said.

Latchum also noted higher costs are anticipated to operate the treatment plant in FY23.

“Some of our materials doubled or tripled in price,” he said.

Flipping to the electric fund, Saleh said total revenue estimates for FY23 are roughly $6.4 million.

“We are past due on a rate study,” she said.

Saleh said the associated cost for a rate study would be roughly $140,000, while also noting $70,000 would be required to cover FY22 purchase orders for transformers.

Saleh said both sums are anticipated to be covered by transferring $210,000 from reserves.

Electric Utility Director Tim Lawrence said costs for fuel and materials have skyrocketed.

“Everything has risen 20-40 percent,” he said.

In terms of capital outlays for equipment, Lawrence said his department is requesting a Ford F250 4×4 truck at a cost of $55,000, which would replace two trucks dating to the 1990s.

In closing, Tyndall highlighted the importance of reviewing planned designations of American Rescue Plan Act funds for FY23.

FY23 budget introduction is scheduled on May 9 with adoption slated on May 23.