2026-03-12-approved budget-work-session-minutes.pdf

Town Council of Centreville Budget Work Session March 12, 2026 5:30 p.m.

M I N U T E S

The March 12, 2026, Town Council budget work session was called to order at 5:30 p.m. by President Ashley H. Kaiser at the Liberty Building, located at 107 N. Liberty Street, 2nd floor meeting room. The following members and staff were present: Ashley H. Kaiser, President; Jeffrey D. Kiel, Vice President; Frederick E.

Beau, Fred M. McNeil, and Sandra L. Huffer, Members; Carolyn Brinkley, Town Manager; Karen Luffman, Finance Officer; Chief Robert Hobbs, Centreville Police Department; Gary Phillips, Operations Manager;

Clifford “Kip” Matthews, Director of Public Works; Krystel Ebaugh, Human Resource Manager; Jacki Payne, Administrative Assistant; Peter Flint, Zoning Administrator; Jenial Turner, Project Manager; and Gaye Adams, Town Clerk.

Citizens Forum No citizens provided comments.

Discussion

• At the outset, Ms. Luffman requested that the Paypoint compensation and salary study be moved to the top

of the agenda before the operating budget review. It was clarified that the broader salary study recommendations are already incorporated into the proposed FY27 budget, but staff wanted Council to consider implementing one portion of the study in the current fiscal year, effective April 1, 2026.

• Ms. Ebaugh explained that last year the Council authorized a third-party compensation and classification

study, which was completed by Paypoint HR.

• The study recommended a revised salary scale, continued use of a merit-based system, more consistent

step increases, improved alignment for promotions and grade changes, and additional future adjustments to bring compensation closer to market levels.

• For the current fiscal year, Ms. Ebaugh proposed implementing only the revised salary scale portion

beginning April 1, 2026. The estimated cost of that partial implementation is approximately $22,000.

• Ms. Luffman stated that this cost can be covered using surplus interest earnings in the General Fund. The

Town had budgeted approximately $75,000 in interest earnings but has already received about $150,000, leaving roughly $77,000–$80,000 above budgeted estimates with five months of the fiscal year remaining.

• Council discussed reviewing the detailed salary grid with Ms. Ebaugh before the next meeting because the

data is extensive and includes every employee individually. Formal consideration of the current year’s implementation is expected at the March 19, 2026, Council meeting.

• Council also discussed whether other current-year expenditures might need to be funded before FY27

begins.

• Ms. Luffman stated that the previously discussed Mobile Data Terminals purchase for the Centreville

Police Department would also use surplus funding, the Public Works truck approved previously would be covered within the department’s current operating budget, and no other major current-year requests were identified at that time.

• Chief Hobbs raised concerns that the price of new police computers could rise if the purchase is delayed.

He also noted the quote is good for about two months and could increase by as much as $5,000 after July depending on economic conditions. Ms. Luffman later discussed possibly moving that purchase into the current fiscal year using surplus interest funds.

• Ms. Luffman stated that the property tax rate is $0.535 per $100 in assessed value, which is unchanged

from last year.

• The General Fund is projected to remain positive by approximately $47,647, and the Enterprise Fund is

projected to remain positive by approximately $10,018.

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• There are a few updates not in the budget due to the absence of final figures.

• Department Budgets

o A10-Legislative Budget

▪ Council discussed two main issues to be addressed in the next budget:

▪ The Volunteer Appreciation Dinner line may need to be increased slightly; Ms. Adams will

provide the cost of the last appreciation dinner to the Finance Office.

▪ The donation and appropriations line require further discussion. Council expressed interest in

increasing the donations line but tabled the discussion until the next meeting. Council asked staff for historical information showing donations over the past 10 years, a clearer philosophy on what types of nonprofit requests the Town should fund, and invitations to the nonprofit applicants to appear before Council.

▪ At the time of discussion, requests have been received from the Queen Anne’s County Arts

Council and the Queen Anne’s County Historical Society.

▪ Council members specifically stated they wanted applicants to present and answer questions before

any decisions are made.

• General Fund Revenues

▪ Although staff usually reviews expenses first, Council returned to discuss revenues. Key

explanations included:

▪ Highway User Revenue increased because the State notified the Town of a higher allocation for

road-related funding.

▪ Landfill tipping fee revenue increased because it reflects the amount billed to residents to cover

trash services. Mr. Matthews explained this is essentially a pass-through account and does not generate profit.

▪ The term “tipping fee” was clarified as industry terminology related to landfill disposal costs.

▪ Opening graves revenue increased, but Ms. Luffman noted cemetery revenues are difficult to

budget because they depend entirely on actual burials.

▪ Cannabis sales tax revenue was removed because the retail cannabis business that had been

generating the revenue has moved out of town. Ms. Luffman said there may be one final small payment, but no ongoing FY27 revenue is expected unless a new retail location opens.

▪ The increase in property tax revenue is due to growth in the assessable tax base, not an increase in

the tax rate.

o A70- Planning Commission

▪ Council reviewed Planning and Zoning and discussed the increase in legal fees, which Ms.

Luffman attributed largely to TND-related work and broader planning and zoning activity. Mr.

Flint explained that outside legal counsel is now more often reviewing language and providing support, while more drafting work is being completed in-house.

▪ Council also asked about MDIA contracted services, which Ms. Luffman explained are passthrough inspection fees associated with building permits and inspections.

o A81-105 N. Liberty Building

▪ There were no significant increases in the municipal buildings budget. Recent major work has

already been completed, including: the generator, roof work, power washing, laundry room upgrades, and doors.

o A92- Administration

▪ Ms. Luffman reviewed the Administration budget and explained increases tied to salary scale

adjustments, merit/COLA/promotion assumptions, pension costs, FAMLI employer contributions, overtime trends, and increased travel/conference costs.

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▪ Council asked about the community grant pass-through line, and Ms. Luffman explained that it

remains in the budget in case the Town again serves as a pass-through agency for nonprofit grant funding.

▪ Council asked for a breakdown of salaries, and Ms. Adams and Ms. Ebaugh were also asked to

provide headcount details anywhere new personnel positions are proposed, especially to help inform anticipated discussions about economic development staffing.

▪ Ms. Luffman noted that the grant writer's line item will be removed because the grant writer

recently passed away.

▪ Council asked about the special events line, and Ms. Luffman explained that current year’s actuals

appear low only because the fireworks deposit had not yet been paid at the time the budget was printed.

o B10- Police Department

▪ The police budget noted the usual salary, FAMLI, pension, and health insurance adjustments. It

was also explained that YMCA fees, previously budgeted in Administration, have now been spread among departments where they apply.

▪ The main discussion centered on police computers. Chief Hobbs stated the Centreville Police

Department has approximately 14 computers, of which only 12 are in use and two are used for spares. Several frequently fail or require rebooting, and the computers are used for reporting, registration checks, and tag-reader-related functions.

▪ Chief Hobbs stated that waiting until July would not endanger public safety, but the systems are

clearly at the end of their useful life. Council ultimately signaled support for using FY26 interest surplus to purchase the computers sooner rather than keeping them in FY27 capital. Chief Hobbs planned to prepare a memo for the next meeting.

▪ Ms. Luffman will amend the budget accordingly and remove the computers from the FY27 Capital

Improvement Plan (CIP) and show those numbers resulting in an improved FY27 General Fund balance.

▪ Chief Hobbs explained the reduction in the K-9 line, noting the department had considered adding

a third K-9 but is no longer pursuing that at this time.

o B22- Goodwill Fire Department

▪ No increases were noted.

o C11- Street Department

▪ Ms. Luffman noted the routine salary-related changes plus increases in uniforms and clothing due

to vendor cost increases, repairs and maintenance based on historical trends, as well as snow removal.

▪ The Council discussed the snow removal line at length. Mr. Matthews noted that several mild

winters had kept spending low in past years, but this year’s storms exhausted the budget quickly.

Even though the line had previously been made encumbered, actual winter events consumed the funds.

▪ Ms. Kaiser stated the broader challenge of balancing the budget in a rising-cost environment, with

one member remarking that the Town is “barely in the black” even though the budget is largely just maintaining existing services rather than adding major initiatives.

▪ Council discussed the potential addition of two full-time Utility Workers. Mr. Matthews explained

the department is working with a very lean crew, but when staff are pulled into emergencies, other routine work such as mowing or snow operations falls behind.

▪ Existing employees are increasingly capable of handling repairs in-house.

▪ Staff also plan to fill two part-time seasonal worker positions.

▪ Council discussed sidewalk repairs, including how repair priorities are determined. Mr. Matthews

stated he has a list of all sidewalks in order of importance.

▪ Ms. Kaiser mentioned the newly damaged sidewalk area on Vincent Street that appears to have

been improperly treated by the County, and Mr. Matthews agreed to inspect the area.

Pa g e 3 | 5 o C22- Landfill Waste Removal

▪ Trash contract costs are currently shown with a modest increase pending the next bid process. The

account is structured as a pass-through to match resident charges with the actual cost of waste services.

o D10- Parks Department

▪ The only major increase was in contract services, mainly for landscape maintenance, mulching,

trail work, and upkeep of parks and beds throughout the Town. Council generally supported the expense as worthwhile.

o H40 Centreville Main Street

▪ Ms. Kaiser requested that the Main Street budget be revisited in conjunction with the

Administration budget. Council would like to see a clearer breakdown showing what money comes in from grants, what comes in from events, what is a pass-through, and how these funds are spent.

▪ Ms. Kaiser indicated that the Main Street budget has been difficult to interpret in past years and

wants a more understandable presentation before making decisions.

o H60- Cemetery Budget

▪ The only increase is in contract services.

▪ Council noted that the cemetery budget is difficult and frequently unpredictable.

o H90- Watershed

▪ The main increase was in repairs and maintenance, primarily related to anticipated upkeep for the

street sweeper. There was little additional discussion.

o The Enterprise Fund Revenue

▪ Ms. Luffman explained that the proposed revenue side includes the standard 5% water and sewer

rate increase already built into prior policy. However, a utility rate study is nearing completion, and Mr. Matthews expects to meet with consultants on March 19 before bringing the findings to Council in April. That study could ultimately change the projected figures.

▪ Council was reminded that these annual increases are part of a longer effort to recover from earlier

failures to implement recommended utility rate increases from prior studies.

o C21- Sewer

▪ Ms. Luffman noted that the increases are the ordinary salary-related changes in the budget plus a

large increase in contract services. Ms. Luffman explained the contract services line covers the wastewater plant operations contract, lab fees, drying bed cleanout, water tower-related maintenance where applicable, engineering and maintenance support, and other specialized outside services.

▪ Mr. Matthews noted that contracting these services is cheaper than operating them entirely inhouse.

▪ Ms. Luffman also explained that some engineering work from firms such as Whitman, Requardt &

Associates, and others is related to plant design and future wastewater plant work, holding pond expansion, and I&I (inflow and infiltration) studies to identify system weaknesses.

▪ Council discussed whether some of these costs could eventually be treated as capitalized expenses

associated with plant construction rather than simply operating expenses.

o C24-Water

▪ Ms. Luffman noted a large increase in chemicals and supplies, which is attributed to sharply rising

chemical prices and higher contract services, which reflect shared increases like those discussed on the sewer side.

▪ Ms. Luffman also explained that the increase in the salary line on the water side is tied to ARPA

funding ending on December 31, after which the program manager’s cost would shift from contract/ARPA coverage into the operating budget as an employee-related expense.

o C25-Reuse Farm

▪ Council noted that the Farm budget overall decreased and did not raise significant concerns or

questions.

Pa g e 4 | 5 Capital/General Fund

▪ Council did not complete a full capital budget review during this work session. The capital portion

was largely tabled until the following week, in part so that a full Council would be present, and newer members would have a fuller opportunity to participate.

▪ Council also discussed a proposed parking study that had been shown in capital. Ms. Luffman

clarified that it is not truly a capital item; it would be better treated as an operating expense if pursued however, she listed it under capital to highlight it for the Council.

▪ Mr. Flint stated it may not be necessary because useful parking analysis is already being carried

out through other efforts.

▪ A GIS-based parking study is currently being completed through a Salisbury-based

nonprofit/university-affiliated group in conjunction with accessory dwelling unit work.

▪ There was already a 2011 Central Business District (CBD) parking study, and parking conditions

in the CBD have not materially changed since then.

▪ Based on that discussion, it appeared likely that the proposed $65,000 parking study would not

move forward.

▪ Council also reviewed a list of potential grant applications and reaffirmed the Town’s policy that

grant applications should come before Council when they could create a new policy or commit the Town to a new course of action.

▪ Chief Hobbs stated he was looking into grants to help offset the costs of portable radios.

▪ Enterprise-side grants discussed would help the wastewater treatment plant needs, including I&I

(inflow and infiltration) work estimated around $900,000.

▪ Council gave consensus that the listed grants were reasonable to pursue, understanding that many

grant award amounts and matching requirements remain unknown until later in the process.

Citizens Forum No citizens provided comments.

Motion to Adjourn Mr. Kiel made a motion to adjourn the March 12,2026, Town Council budget work session. The meeting adjourned at 6:45 p.m.

Respectfully submitted, Gaye Adams Town Clerk Pa g e 5 | 5