Still, nearly a decade after the Chestertown Marina became publicly owned there’s a common complaint among some residents that the marina has become a money pit at the expense of roads and other services, and there’s been an expectation in the last few years that the facility “should be turning a profit by now.”
But the expectation is flawed because it ignores the reason us townies bought the marina in the first place.
We had a choice nine years ago to let the last major parcel of waterfront go to condo development—or entrust it to the public. Thankfully, our elected officials chose the latter. And the annual bond expense of around $145,000 is simply the cost of doing business through 2032, when the last payment is made. We also need to acknowledge that Town Manager Bill Ingersoll has been successful in securing grants and raising private donations—mitigating the costs to taxpayers.
We could find ourselves in perpetual disappointment if we measure the marina’s success as a stand-alone entity based on gas and slip fee revenue. The marina, like our other venues, is simply an integral part of our parks and recreation system that requires tax dollars to maintain.
Wilmer Park and Fountain Park also provide a place for tourists and locals to recreate and do commerce, but no one ever questions whether they’re turning a profit because the ancillary social and economic benefits are obvious.
Currently there is no way to fully quantify the economic spinoff from the marina. But try to imagine the marina still languishing in decay and the negative effects on the local economy. Then try to imagine a monolith of condos eliminating all public access to the Chester, or even a decent view of the water. You could argue that either scenario would cost the town more than $145,000 in economic opportunities.
But a looming bond payment is again at the center of another budget shortfall and is forcing the town to consider cuts to public safety and termination of the recycling program—just a year after a property tax hike of 5 cents.
The news of a budget shortfall this close to a new budget year caught Ward 1 Councilman David Foster by surprise and he blamed himself for not staying on top last year’s budget.
“After passing a 5-cent increase I was shocked to learn just a few weeks ago that we would be facing serious budgetary problems again this year,” Foster said in an email on Saturday. “Having to choose between tax increases and cuts in services is bad enough without having to resolve those problems within just a few short weeks. I’ve been kicking myself ever since for not asking every few months for an update on last year’s budget projections.”
Foster was also adamant that he would not support any measure to eliminate the recycling program. But he did not indicate his position on new taxes.
Ward 3 Councilman Ellsworth Tolliver said he too felt like the budget shortfall caught him off guard so close to the new budget year.
“I came into this year’s budget session with the expectation of having extra revenue from the tax increase we passed last year,” Tolliver said. “I was very disappointed and surprised to find out that we were again facing a budget dilemma.”
Ward 4 Councilman Marty Stetson said he would not support a tax increase.
“We have to live within our means, and if we can keep recycling without raising taxes I’ll support it,” Stetson said in a brief call on Friday.
Marina blamed for poor road conditions
Last year’s tax increase was estimated to raise $280,000 in new revenue and $150,000 was budgeted for street paving. Around $90,000 went to the principal on the bond payment. (The town makes two bond payments a year; an interest payment of around $55,000 and principal comes to roughly $90,000; the payments are made May 1 and November 1).
“We started our budget with no capital improvements whatsoever; we have streets that need work; it’s been a main concern of us,” Ingersoll said at the May 21, 2018 meeting. “We have commitments and services that we do not want to diminish…we have $150,000 for the beginning of our street repair program.”
It was a pittance compared to what is needed to restore our roads. Anyone who thought it would have a significant impact on streets is unaware that $150,000 would barely pave a half-mile. Ingersoll reported at the March 4 meeting that a $4.5 million grant he sought to pave 13 miles of roads — a cost per mile of $350,000 — was unsuccessful.
Ingersoll also said that highway user revenue (HUR) would be flowing back to local government, and it will.
In 2018 Gov. Larry Hogan restored the local share of HUR to 85 percent of pre-recession levels for fiscal years 2020-2024. In the early days of the Great Recession the state raided the Transportation Trust Fund to balance a large structural deficit. HUR literally came to half a trickle.
So no real progress on roads for now until the revenue returns. Until then the town will do its best to fill potholes.
New Taxes Are Needed
The 1-cent increase, if passed, may not be enough to avoid another budget shortfall next year. Clearly it’s time to consider an adequate property tax increase to maintain the same service levels and fully fund the marina debt.
Easton and St. Michaels currently pay a municipal tax rate of 52 cents, compared to Chestertown’s current 42 cents. We can certainly nudge the rate up another nickel to meet all of our obligations and still remain competitive on property taxes.
It is certainly the responsibility of town leaders to always evaluate services like recycling and public safety, but the reflex to make these cuts with a pending bond payment piles on to perception that the marina is sacrosanct.
To avoid further discontent and maintain current service levels the town should raise the property tax to 47 cents.