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City planning to spend $32.8 million on projects

March 31, 2005|by GREGORY T. SIMMONS

gregs@herald-mail.com

HAGERSTOWN - The first public glimpses into the City of Hagerstown's spending plans for next year and following years reveal marked increases in capital spending.

Those increases are due both to a better financial climate and a heightened expectation of more residential and commercial activity in the city, city officials said.

For the fiscal year beginning July 1 and ending June 30, 2006, officials plan to spend $32.8 million on capital projects, which include road projects, sewer system upgrades and heavy equipment and vehicles purchases, according to the budget documents.

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That is an $11.5 million, or 54 percent, increase over last year's projection for the same period.

The city's new estimates for spending in subsequent years also exceeds spending projections that were developed at this time last year.

The city's Capital Improvements Program, which is part of the overall budget, was issued to the Hagerstown Planning Commission on Tuesday, and set for discussion at its Wednesday meeting. The commission, however, chose not to discuss the document until a later date.

The full budget is to be released today, although city officials said some portions were still being touched up Wednesday and they did not expect it to be distributed until late this afternoon or into the evening.

City Finance Director Alfred Martin and City Administrator Bruce Zimmerman said Wednesday the spending increases in the CIP are a result of several factors.

"We're talking about playing a bit of catch up" for the first few years of the six-year spending plan, Martin said.

Zimmerman said that the revenue sources - including borrowing - didn't keep up with capital project needs, including road projects. Last year, he and Martin encouraged the council to borrow more money because the city has a good bond rating and can increase its expenditures.

The CIP is broken into two main portions, so-called general fund items and enterprise fund sections.

The general fund is the portion of the budget that is supported by city property taxes, and covers a range of items from mayor and council salaries to snow removal.

Among the city's enterprise funds are the light, water and sewer department budgets, which are supported in large part by customer bill payments. The city maintains separate enterprise funds for parking and the city's golf course.

Zimmerman said the entire general fund, a portion of which includes CIP projects, is projected to cost $30.5 million in the 2005-06 fiscal year, an increase of about $3 million over the current fiscal year.

Within the general fund, the capital costs are expected to be about $10.2 million, according to the budget documents, $776,000 more than last year's projection for the 2005-06 fiscal year. The money represents planned street repairs, parks and recreation upgrades and debt repayment expenses.

The largest increases for the coming fiscal year are in the enterprise fund sections. The city projects $22.6 million in spending for the five sections, about $11.8 million more than projected last year for the 2005-06 fiscal year.

Martin said some of the increase is due to stepped-up spending on the city's sewer system, which has suffered multiple failures in recent years.

The city must repair the sewer system more quickly now that there is a binding legal agreement between the city and the Maryland Department of the Environment.

For instance, the city's projection last year for sewer system spending in the 2005-06 fiscal year was $7.9 million. This year's projection for the same time frame is $10.2 million.

Martin said future years will be affected by population increases.

"Over the full six-year program, I think new development had a significant impact" on the projected capital expenses, Martin said.

Martin said one example is a two-year, $20 million project starting in 2007 and ending in 2009 that would build the so-called Southern Boulevard - sometimes called the Funkstown Bypass.

Once the proposed budget is released, it goes through several discussions before the City Council, which can add, delete and change budget items, including setting property tax rates.

The budget is scheduled to be adopted in late May.

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