Panel urges caution, then approves borrowing $100 million

political notebook

March 15, 2009|By Larry Carson | Larry Carson,larry.carson@baltsun.com

After weeks of debate, the county's Spending Affordability Committee agreed that government borrowing for projects such as schools, libraries and parks should continue at the $100 million level set over the past several years, despite the recession.

But that doesn't mean the members of the committee - 14 volunteers, including lawyers, bankers, financial advisers, school board and PTA leaders, accountants and business people, plus seven county officials - aren't worried.

They debated how low county income tax revenues might go and what effect state budget cuts could have. They also approved strongly worded cautions about spending in fiscal year 2010.

But in the end, it came down to one thing. Since it takes the county several years to sell authorized bonds and use the proceeds, changing the recommended amount does nothing. If the county can't afford to borrow in future years, the bonds won't be sold.

"Lowering it to $70 million or $80 million would have no impact on next year's budget," county budget director Raymond S. Wacks told the committee at its final meeting Thursday.

The county is preparing to sell $100 million in bonds in two weeks, Wacks said, and those bonds were authorized two years ago. Howard County just won a reaffirmation of its coveted AAA bond rating from three New York rating agencies. That means the county can borrow at the lowest possible interest rate.

"The AAA rating on the general obligation bonds reflects Howard County's deep and diverse economy, strong financial management, high wealth indicators and a moderate debt burden," Fitch Ratings, one of the agencies, said in news release read at the meeting.

Wacks said the committee's task is to "set the tone" for consideration of next fiscal year's budget by the county executive and County Council. The warnings about unstable economic times in the report would achieve that, Wacks said. County Executive Ken Ulman is to announce his budget in April, and the council will deliberate changes through May. The fiscal year begins July 1.

The draft report's language reflected that tone.

One recommendation said: "The committee members are clear that they are concerned about the operating expenses facing the county."

Another admonished: "The committee wishes to make a strong statement that the county needs to keep average overall spending increases within the parameters of these revenues."

"I think it's a fair analysis. I think the message is there," said Arnold Holz, a veteran committee member and retired chief financial officer for NASA, who urged a conservative fiscal approach.

Late filings a concern

Should volunteers serving on county boards and commissions have to pay a small late fee if they miss deadlines for filing 10-page financial disclosure forms?

That's a question raised by county auditor Haskell Arnold after his office reviewed the results from 2007, when 32 people were found to have failed to file the proper disclosures within two months of the May 1 deadline.

But much of the problem might be the administration of the reports, the audit suggested.

The county manually administers the paper forms without one person in charge. The audit suggested copying the State Ethics Commission's lead by using an electronic, automated system for filing and tracking the reports.

The county audit showed that 447 people, including all elected officials, filed their forms on time by May 1, 2007. The 32 listed as delinquent had not filed by July 1, and seven still hadn't filed through the middle of last month, though several offered explanations.

Kevin Doyle of Elkridge is a member of the county Board of Appeals, the Board of Library Trustees and the Howard Community College Board. He said he thought filing his disclosure with the college satisfied the requirement for the other two bodies.

"Now that I know, I'll do it for all three," he said.

Former Councilman Christopher J. Merdon, now a member of the county Revenue Authority, also was on the auditor's list of delinquent filers. But Merdon said he submitted his form at the required time.

"I sent it in [on time] 10 years in a row," Merdon said.

He recently submitted a second copy, this time by registered mail, he said.

County economic authority member Victor Broccolino, who is president of Howard County General Hospital, also said his form had been submitted on time and that he sent a replacement when notified.

The audit also found that only 16 boards and commissions are listed in county law as requiring financial disclosure filings, but the auditor found that 39 such bodies now exist, prompting a recommendation for an annual review to keep the list current.

For those with bad memories, the audit suggested consideration of the state's $2-per-day late fee up to a maximum of $250. But that idea was rejected by the Ulman administration and the county's Ethics Commission on grounds that it might make it even harder to attract volunteers for boards and commissions.

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