[RP TownTalk] Town's Financial Situation/Executive Order Freezing Hires/Expenditures

Tue Apr 26 18:50:18 UTC 2016

Hi Heather and all,

Please rest assured that there is no lack of funding or commitment to be
able to continue the 7-11 court review.

My report in a brief was the following:

1) there was approximately a $400,000 loss of revenue due to the Department
of Agriculture building be purchased by the Federal Government from the
private interest that had previously leased the building to the Feds.

2) in order to address this significant, but certainly not catastrophic
loss,  each department head will have to review purchases or new
encumbrances with me prior to purchase if the items are not safety or
health related. Any item that the department wishes, but I do not approve
will be reported to the council. The council may then either agree the
spending should not occur, or overrule me and the items/services will be
purchases.

3) Because this loss is ongoing it will have a significant impact on the FY
2017 budget I am preparing for submission to the council May 2.  The first,
and so far only, budget hearing is scheduled for 10:00 AM Saturday May 21.
This meeting welcomes public attendance and comment.

Regarding changes in the agenda it was town tradition long before my
administration to always do presentations first, but Mayor's report is by
tradition listed first. My apologies for the confusion on that point.

Glad you found the Purple Line presentation worthwhile, lots to anticipate,
but yes we must push back on the design.

Best wishes,

Vernon

On Tue, Apr 26, 2016 at 12:09 PM, Heather Cronk <heather.cronk at gmail.com>
wrote:

> Thanks for raising this issue, Jonathan.
>
> I went to last night's meeting hoping to hear more conversation about this
> (especially about the impact of a freeze on the town's ability to continue
> engaging in a legal battle over the plans for ANOTHER 7-11 on Route 1), but
> was sorely disappointed when the agenda was shuffled and a Purple Line
> discussion was moved to the front of the agenda.  I actually really
> appreciated the conversation (and was horrified by the new design that the
> Governor's office is shopping around), and I stayed for 90 minutes before
> having to head home -- without the conversation about the town budget even
> having begun yet.
>
> So a few things:
>
> 1) Please make sure that revisions to the agenda are announced beforehand,
> so that residents can adjust schedules as needed.
>
> 2) What was discussed last night? I'd love to hear a report from the
> Mayor, given that there were no minutes being taken of the meeting.
>
> 3) As an aside, I asked the Town Clerk to consider live-streaming meetings
> in the future (which can be done for free) so that those residents without
> local cable (myself included) can participate in these meetings from home
> or while traveling.
>
> -Heather
>
>
>
> On Saturday, April 23, 2016, Jonathan Ebbeler <
> jebbeler at efusionconsulting.com> wrote:
>
>> All –
>>
>>
>>
>> The agenda was re-posted late yesterday with an item under the Mayor’s
>> report that deserves some clarification in advance of the Worksession.
>>
>> In response to the Mayor issuing an executive order this week freezing
>> all hiring and all spending requiring direct authorization unless it
>> directly impacts the health, safety, and welfare of the town, a request was
>> made and honored to modify the agenda so that the public was made aware of
>> what will be discussed at Monday’s meeting.
>>
>>
>>
>> In 2010 GSA indicated that the lease-purchase option they had on the USDA
>> building on River Road made economic sense to purchase.  Their current
>> lease was at ~$8.5mil/year with anticipated increases of an additional
>> ~$2.5mil.  They had an option to purchase upon the lease expiration in
>> February 2015 for ~$30.6mil.  Clearly it shouldn’t surprise anyone that the
>> federal government realized that they would break even in 3 years on a
>> building that has a Fair Market Value of $60-75mil.
>>
>>
>>
>> The 112th Congresses in 2012/13 authorized the appropriation for the
>> purchase.  In 2015 the GSA purchase of the USDA facility was the single
>> largest real estate acquisition (as measured by money) the agency did all
>> year.
>>
>>
>>
>> The original Purchase and Sales Agreement dated June 14, 2010 between Hub
>> Realty College Park I, LLC and Government Properties Income Trust (GSA) was
>> duly filed and public via the Securities and Exchange Commission (SEC) Form
>> 8-K filed June 18, 2010.
>>
>>
>>
>> The sale of property from a non-government entity to a government entity
>> takes the property off the tax rolls.  The potential impact of the sale was
>> effective 2015 so it impacts our current fiscal year with a little over 2
>> months left and in perpetuity.  This equates to an approximate $400,000
>> shortfall this year and going forward.  On our current budget that is
>> roughly 5.7%.
>>
>>
>>
>> I do not have additional information to report and requests for current
>> up-to-date income/expense/budget statements have not been provided so I and
>> the rest of Council are left looking at the information provided as of a
>> month ago.  The town uses Quickbooks for accounting and the requested
>> reports take a few minutes to produce; I am unsure as to why the request to
>> see updated financial information in advance of Monday’s meeting has not
>> been satisfied.  I fully realize the reports may not be reconciled or
>> balanced but having to look a month back to make choices is frustrating and
>> counterproductive.
>>
>>
>>
>> In looking at the FY16 budget I am confused why a 5.7% shortfall that is
>> normally a non-event for any business or organization has a significant
>> enough impact that an Executive Order was issued freezing all hiring and
>> signifying mayoral pre-approval over all expenditures.  This year’s budget
>> did include balancing the revenue with $552,055 (to be offset with capital
>> costs of constructing a new town hall for $5.5+million). This isn’t the
>> first time the town has had lost revenue issues.  In my time on Council the
>> town additionally lost a six-figure Community Development Block Grant and
>> also a $500,000 state grant towards the construction of the new town hall
>> due to non-performance and forgetting monies have expiration dates and time
>> out back to the state coffers.
>>
>>
>>
>> I am personally upset by the recent turn of events because I have been
>> working almost a year on Economic Development projects that have come to
>> fruition (dependent upon having Committee money for town grants remain
>> unencumbered).  We currently have 4 requests by local businesses equating
>> to around $1mil in new and expanded development projects.  I sincerely hope
>> this does not impact any of those:
>>
>> -Ernie’s Lock façade improvements (unsolicited request from the owner
>> aware of our grant program)
>>
>> -Bikram Yoga 2nd Floor Expansion to offer a new Wellness Center (so
>> happy to see new businesses doing well enough to expand within a couple
>> years of opening)
>>
>> -Town Center Market Patio Expansion (they are bursting at the seams
>> Th/Fri nights)
>>
>> -New Beverage/Food establishment at the corner and second bay of the
>> first floor at Town Center (this is almost a year in the making)
>>
>>
>>
>> The issue to be discussed on Monday has a very real, and very immediate
>> impact to every constituent in town and I hope everyone understands the
>> seriousness of the issue and the community comes out to ask some tough
>> questions.  The Mayor and Council have direct  accountability (at least
>> under our current structure and form of government) on financial matters to
>> the residents and we owe a complete and clear explanation of what happened,
>> what impacts there will be in the immediate and projected future, what
>> mitigation will be done now and in the future.
>>
>>
>>
>> In any organization things happen, but when they do, I believe it
>> imperative that screw-ups aren’t swept under the rug, or otherwise hidden
>> or obfuscated, and problems get discussed and solved rather than focusing
>> on finger pointing.  Please come out Monday night at 8PM to Town Hall to
>> listen, opine, and question the financial health and stability of our
>> town.
>>
>>
>>
>> Respectfully
>>
>>
>>
>> Jonathan
>>
>>
>>
>> Jonathan W. Ebbeler
>>
>> Councilman – Ward 1
>>
>> Chair, Economic Development Committee
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>> Actual vs. Budget Prorated as of 2/29/2016
>>
>>
>> https://www.dropbox.com/sh/inrbh8tw0kdwdqb/AACMuhlBfclEuRQTJ1oYZ15Ga/FINAL%20Budget%20vs%20Actual%202-29-16.pdf?dl=0
>>
>>
>>
>>
>>
>>
>>
>>
>>
>
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-- 
Vernon Archer, Mayor
Town of Riverdale Park, Maryland
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