By Greg Ellison

(April 29, 2021) The Berlin Town Council vetted the town’s utility funds and health care renewal costs for the pending FY22 budget during a work session on Monday.

Town Administrator Jeff Fleetwood said the preliminary FY22 budgets for the separate utilities, whose budgets are referred to as enterprise funds, involve water, electric, sewer and storm water.

“This is revenue-driven, expense-driven and based on what they provide,” he said.

Mayor Zack Tyndall highlighted changes within utility funds from the current budget year and FY22.

Berlin Mayor Zack Tyndall

Tyndall said despite an increased investment in capital equipment, with the electric fund phasing out a roughly $184,000 expenditure for real estate taxes over the next two fiscal years, needs still exist.

“There isn’t enough to truly invest in the capital needs of the electric fund,” he said.

Tyndall said a more sustainable long-term plan would need to be evaluated.

Because setting electric rates in Maryland is the purview of the Public Service Commission, Tyndall said any consideration of a rate change by Berlin would have to be preceded by an updated fee study. The last such study was conducted in 2013.

“There is no funding for this in FY22 but we’ll explore costs in FY23,” he said.

Turing to the water and sewer funds, Tyndall keyed on a pair of concerns.

“Two of our major issues at this time include accurate billing and the tremendous amount of debt on the books within the sewer fund,” he said.

Tyndall said a water fund rate study is underway by Jean Holloway, from Southeast Rural Community Assistance Project Inc. (SERCAP) in Delaware and eastern Maryland.

In December, Holloway presented financial predictions for the water and sewer funds to the mayor and Town Council.

At that time, Holloway reviewed financial projections and offered recommendations to sustain utilities in the town.

Tyndall said the town is pursuing one of Holloway’s recommendations: replacing 200 water meters that are not reading properly or under-registering.

Looking at the big picture, Tyndall said water and stormwater funds lack revenues to invest in capital projects.

“During FY22, there will be an increased focus on maintenance and smaller projects as we attempt to build up our revenues and attract more grant opportunities,” he said.

Berlin Finance Director Natalie Saleh said the stormwater fund is the newest entry among utility accounts, with associated fees collected from Berlin residents and businesses used to maintain drains and ditches.

Saleh said the no capital expenses are budgeted for the stormwater fund currently, but that could change in the years ahead.

“We will look at establishing a stormwater reserve fund to pursue grant funding and complete future projects,” she said.

Berlin Administrative Manager Kelsey Jensen and Chris Carroll, with One Digital Health and Benefits, previewed health care costs for FY22.

Jensen said initial cost estimates for medical insurance renewal options with current provider CareFirst were excessive but the percentage was eventually brought down to a reasonable figure.

“When we started the process, it was a 29 percent increase to the health care,” she said.

Carroll said after exploring more than a dozen health care plan alternatives, multiple discounts were negotiated with CareFirst.

“Essentially a rate hold was obtained,” he said.

Carroll estimated current cost totals of $758,000 would hover around $756,000 for FY22.

Jensen said the final recommendation was to renew with CareFirst.

In closing, Saleh said during a year filled with challenges, budget woes also abounded.

“The general fund is struggling,” she said.

Saleh said the water and sewer funds are facing capital shortages to tackle infrastructure repairs.

“There has to be a plan in place as soon as possible for the next budget year,” she said. “Right now we’re just hoping nothing breaks.”

Tyndall also highlighted the need for all departments to develop future objectives.

“We have some departments that have had capital plans in place for five years,” he said. “When we start looking at our strategic plan and … fiscal years further down the line we [need to] have these capital needs in front of us on a five-year rolling basis.”