Charles County Finance Director David Eicholtz, right, talks with Charles County Commissioner Debra Davis, left, while Charles County Administrator Michael Mallnoff looks on.

La Plata, MD – There are some things in local government perhaps not considered glamorous.

The annual budget may be among them, but it is one of the most important aspects of county government.

In Charles County, the annual budget process in recent years was a struggle, at times exasperating, but there appears to be a brighter aspect to The Fiscal Year 2017 budget, beginning with Capital Improvement Projects which came before the Charles County Commissioners during their regular weekly meeting.

County Finance Director David Eicholtz and Budget Chief Jenifer Ellin laid out debt options the county might consider for the upcoming budget session Tuesday, March 15.

Eicholtz predicted many more meetings before the May 3 deadline of approving the final budget.

“This isn’t a one and done,” he noted.

Eicholtz’s presentation focused on the 2017-2021 CIP Budget with total requests of $428.5 million over five years, which included all sources of revenue including state funding and federal grants.

“This is a five-year planning tool planning infrastructure, schools, roads, parks, etc.,” he stated. “Water and sewer, the landfill, storm water management, those projects have their own funding source. All agencies submit requests for the next five years.”

The big pie chart Eicholtz presented to the commissioners showed 68 percent of projects approved from last year’s CIP that carry forward into the next fiscal year representing $290,296,100 of Capital Improvement Projects.

“Sometimes it takes two or three years to design and construct these projects,” he said.

The other 32 percent covers $132.2 million in projects new to the CIP.

“Those may be projects you decided were not affordable last year, and unfortunately are not affordable this year either,” Eicholtz noted. “We do have a debt ceiling. It would be nice to build what everybody asks for.”

On that note, Charles County Commissioner Ken Robinson [D-District 1] suggested, “There are projects we need to prioritize.

“We just had a meeting on the animal shelter,” he said. “Would this be the time to vote if we wanted to move the animal shelter into the CIP?”

“If we add something to the CIP, we need to remove something else,” Robinson suggested.

“You’re right on track,” Eichholtz said.

“In the $290 million green slice, even though there is $294 million available funding there is a positive balance of $3.7 million,” Ellin said. “You could add $3.7 million and still be within CIP limits.”

“She delivered the good news,” Eicholtz said. “I get to deliver the bad news. The projects in the CIP exceed our affordability debt. Our debt service ratio is 8 percent.

“It’s sort of like buying a house. You don’t want to spend all of your money on the house because you will need some of that money for furniture, food and other things.

“Unfortunately, the projects are exceeding our limit. That represents the red slice of the pie,” he explained.

He suggested three options, including stretching bond term limits from 15 to 20 years for certain school projects.

“Using the house scenario, you could stretch out your bond term limits instead of a 15-year, you do a 30-year option,” he suggested. “You could build a bigger house.

“It might be good to stretch your affordability ,” he said. “We could pick up an additional $5 million. That translates to, you could add more projects to the CIP program. We get very high ratings about how fast we could pay down our debt. This is a good market time in rates. We don’t want to issue long term debt for short term projects. You can get nicked on bond rating if you go too far left or too far right.”

“Would this have a negative effect on our bond rating?” Robinson asked.

“There’s a potential,” EIcholtz admitted. “It would include income stream keeping up with the infrastructure. There are many things involved.”

“But what you’re saying is, we could reasonably increase our funding balance more so than at any other time in recent history,” Robinson said.

“It’s something we would want to monitor very closely,” Eicholtz stressed. “You don’t want to jeopardize your bond rating status.”

Another option is to add general revenue [i.e., raise property taxes],” he added, “but last year that wasn’t the direction the board wanted to go.”

Charles County Commissioner Debra Davis [D- District 2] said she wanted to make sure that funding was included for fiber optic cable in Indian Head, something that expressed to them as a critical need for the town.

Contact Joseph Norris at joe.norris@thebaynet.com