Mayor Margo G. Bailey called the meeting to order at 7:34 p.m. In attendance were Councilmembers Harrison C. Bristoll, Jr., Whaland Clark, Mabel Mumford-Pautz and J. Brian Kirby , W. S. Ingersoll, Town Manager, Jennifer Stead, Stenographer, and guests.

Mayor Bailey asked if there were any additions or corrections to the minutes of the meeting of December 2, 2002. Mr. Kirby moved that the minutes be accepted as presented, was seconded by Mrs. Mumford-Pautz and carried unanimously.

Mayor Bailey stated that cash on hand and in banks was $566,385.75.

Mayor Bailey stated that an executive session was held on Monday, December 2, 2002 at 7:45 p.m., directly following the Mayor and Council meeting to discuss personnel matters under section 10.508 of the annotated code of Maryland. The entire Mayor and Council was present and decided unanimously to go into executive session. A single motion was made, concerning employee bonuses, which passed unanimously. The meeting was adjourned at 8:35 p.m. Minutes were taken and were part of the record.

Mayor Bailey introduced Delegate Mary Roe Walkup and congratulated her on her recent election. Ms. Walkup was at the meeting to present Mrs. Mumford-Pautz with a citation for her 20 years of service from the MML.

Mr. Mickey Elsburg was present along with Rev. Gonzalee Matthews, Mary Ellen Williams, and Leslie Raimond. Mr. Elsburg was planning the celebration for Martin Luther King Day on January 20th. He announced a breakfast at Heron Point from 7-9 a.m., and a pizza party for the youth of the county at 4:00 p.m. Two hundred tickets were available at $12.00 a piece. Tickets could be purchased at Scottie's Shoe Store, First United Methodist Church, Rock Hall Town Office, Millington Pharmacy, and Heron Point.

Mr. Elsburg stated that nomination forms for the two Humanitarian Awards could be found in the Town Office, Library, and First United Methodist Church. The last day to file nominations was December 20th.

Mr. Ingersoll stated that he received the Petition for Annexation of the Quaker Neck area from Alger Oil to Tri Gas. He said the Petition had 100% of signatures of the registered voters in it. Pages 3A through 3F, showed 80% of the owners of real property signed the Petition. Mr. Ingersoll stated that the first order of business would be to authorize Mayor Bailey to sign the Certification Form on the Petition of Annexation, which acknowledges that the 25% thresholds had been met.

Mrs. Mumford-Pautz made a motion for Mayor Bailey to sign the Certification Form of the Petition, was seconded by Mr. Bristoll and carried unanimously.

Mr. Ingersoll stated that the Resolution described the metes and bounds in the area and that the Petition was signed by 25% of registered voters in the area and more than 25% of the owners of the assessed value of the area. Mr. Ingersoll said that the zoning of the County and the Town were almost exactly parallel in that they were both Commercial Marine, with the exception of the obvious residential properties that were on Rt. 289. There were no special considerations being made by the Town as far as water and sewer extension. Mr. Ingersoll reviewed the Outline for the Extension of Services and Public Facilities. It was clear in the Resolution that the developers would extend the water and sewer lines and the property be developed in accordance with the utility plans that would be approved by the Utilities Commission.

Mr. Ingersoll stated that the Council was introducing the Resolution and the Outline of Public Services. He said the current zoning for County Annexation for 1-2002 was Intense Marine for all waterfront properties and Critical Areas Residential for one roadside residential property at the extreme southern limit of the annexation. The recently enacted County zoning for all properties was Intense Village Critical Areas with Critical Areas concurrence and approval. The proposed zoning was Commercial Marine and Multiple Family Residential (R4). There were three maps; one of the area to be annexed, one of the location of water and sewer, and one with existing land use.

Mr. Ingersoll recommended that the Town proceed with the introduction of the Resolution, with advertisements on December 19th, 26th, January 2nd and 9th for a public hearing on annexation to be held on February 3, 2003. At that time the Council could enact the Annexation Resolution. After a 45-day referendum period, it would become effective on March 20, 2003. Mr. Ingersoll stated that if there were any objections, he would like to hear about them. Mayor Bailey stated that the public hearing would have to be February 10, 2003, due to her schedule. Mr. Ingersoll said the referendum period would thus end on March 27, 2003.

Mr. Bristoll moved to proceed with Annexation Resolution 1-2002, was seconded by Mr. Kirby and carried unanimously.

Mayor Bailey stated that she wanted to clarify the pension issue. She said that six months ago, during the budget workshop, the Council decided to enroll all employees into the State Pension System. It was also decided to look at LEOPS mid-year to see if Town finances were holding and could support the additional costs.

Mayor Bailey stated that if all employees were enrolled in the State Pension and then the police were pulled out mid-year, there were penalties that the Town would have incurred. Further, the State plan would not allow a mid-year change to LEOPS, in fact, nor move could be made until July 2003. The Council decided that they would wait until action was taken in December to enroll. She said that the employees did not lose anything by waiting because the Town was going to buy their liability from day one and their old pension was funded during that time.

Mayor Bailey stated many strides were taken to improve the salaries of the police officers to make them more competitive with departments around the State. She presented graphs demonstrating the salary changes the police had received over a three-year period. She said comments had been made that the police should be looked at differently than other Town employees. Over a three-year period police salaries had gone up 36.2% and other Town employees had gone up 11.4%.

Mayor Bailey stated there were misunderstandings over why police officers have left Chestertown. She said since 1986, 25 officers left; 8 left police work, 4 were asked to resign, 2 went to DNR, 6 went to the Sheriff's Department, 1 went to Anne Arundel County, 1 went to Fairfax County, 1 went to Upper Shore Mental Health, one went to Annapolis and then to Rock Hall, and 1 went to the State Police.

Mayor Bailey stated that in anticipation of trying to get the employees into a pension plan the departments were asked to trim their budget as much as possible and she went over figures cut from the budget. However, she said some of what was cut were capital items and would have to go into the budget next year.

Mayor Bailey stated that over 40% of the Town of Chestertown could not be taxed. She said the County had reimbursed the Town a tax differential of $53,000.00 per year, but pulled that funding over a year ago.

Mayor Bailey stated that during the budget meetings it was determined that the Town could fund LEOPS and the State Pension at a cost of $171,378.00 per year, which left a $19,000.00 cushion for 2003. The Council was uncomfortable only allowing $19,000.00 for an entire year, which is why it was decided to wait until mid-year to reevaluate. Mayor Bailey stated that since then, State revenues were down, the Highway User Fund decreased $10,000.00, Worker's Compensation costs increased from $33,000.00 to $64.000.00, and the Police Department's Liability Insurance increased by $10,000.00 and the $19,000.00 cushion was gone.

Mayor Bailey stated to enroll all of the employees into the State plan it would cost $136,000.00 per year. In order to put non-police employees in the State plan and police employees into LEOPS, the cost to the Town could be as high as $270,000.00 per year. The Town would have to borrow between $1.3 and $1.8 million dollars in order to buy the employees back years of service.

Mayor Bailey stated that the money was available for all employees to enter into the State pension, but there was not money for LEOPS this year. Mayor Bailey stated that LEOPS would be revisited next year at budget time.

Chief Coryell read a letter into the record. He said there were many people in support of LEOPS and asked the Council to reconsider. Many of the officers were present and also appealed to the Council for the LEOPS plan. Chief Coryell stated that there was no objection to other Town employees being included in the State Employee's Contributory

Pension System; however, it was not the original intent for the pension change effort. He said the ECPS was not a good pension for the police and would not serve as an incentive for officers to stay in Chestertown and may have the opposite effect and increase their exodus. He suggested if all of the data required to consider entering both plans at the same time, action be postponed for the police, to gather the cost figures and any other information bearing on the decision.

Ms. Jenkins asked if there was any way the police could contribute to relieve some of the financial pressure. Mr. Ingersoll stated that the best help would be if there could be financial help with the actuarial studies, so the Town could get a better handle on the costs of the unfunded liability. Chief Coryell stated that the FOP said they would help to offset the cost of the study. Mr. Ingersoll stated that the Town would want that information in writing.

Mayor Bailey stated that there would be a representative from the Employee's Contributory Pension System on Thursday.

Mr. Ingersoll read from the May minutes, "The Council agreed to enter all employees into the State Pension System immediately after a vote from employees was taken, and a loan was secured, and at the end of the year, December 31st, there would be a six-month evaluation of the budget, and if the monies were holding LEOPS would be reevaluated". He said there was a general misinterpretation of what that meant. He further said the State Pension System had to have a positive vote of 60% of the employees, or they could not enter into it. Therefore, all the discussion could be moot.

Mr. Ingersoll stated that a loan had to be secured because the $134,000.00 was based on the Town borrowing money at less than the 8% that LEOPS and the State charged for the funding of the unfunded balance. He said local banks had been contacted to see if they could get a lower interest loan, due to the tax-free status of the Town.

Mayor Bailey stated that LEOPS would be reevaluated at budget times. Ms. Edler asked if taxes could be raised to fund LEOPS. Mayor Bailey stated that there would have to be a 10% tax increase in order to fund LEOPS, but the State was also discussing a tax increase. Mr. Ingersoll stated that if State revenues continued to fall, taxes would have to be increased regardless.

Mayor Bailey stated that the Proclamation of Official Status for C-300, Inc. and the MML, "If I were Mayor, I would…" essay contest would be addressed at the first meeting in January.

Mayor Bailey stated that the Christmas Decoration winners were as follows:

1st Ward:
First Place: 12 Byford Court
Second Place: 10 Byford Court

2nd Ward:
First Place: 200 Washington Avenue
Second Place: 202 Philosopher's Terrace

3rd Ward:
First Place: 631 High Street
Second Place: 308 Lincoln Drive

4th Ward:
First Place: 199 Rolling Road
Second Place: 111 Pine Street

The winner of the best daytime decoration was 204 Washington Avenue (Mr. and Mrs. Woodrow Loller). The Commercial prize first place went to Ferguson's Oriental Rugs at 241 High and the second place prize was to Ellen Walmsley at Pride-n-Joy at 321 High Street.

Mayor Bailey stated that the Mayor and Council meetings for January would have to be changed. The first meeting was to take place on January 6th, but would be held on Monday, January 13th instead. The second meeting of the month was Martin Luther King Day, and the Council decided to hold the meeting on Wednesday, January 22nd. The February 3rd meeting would be held on February 10th.

Mayor Bailey stated that there needed to be an executive session to discuss Mr. Kirby's replacement. The Council decided to hold that meeting on Thursday, January 9th at 4:15 p.m.

Mayor Bailey requested an executive session for a personnel matter. Mr. Bristoll moved for an executive session directly following the meeting under section 10.508 of the annotated code of Maryland. The motion was seconded by Mr. Bristoll and carried unanimously.

Mayor Bailey read Resolution No. 5-02 Program Open Space into the record. Mr. Clark moved to approve Resolution No. 5-02 Program Open Space, was seconded by Mr. Bristoll and carried unanimously.

Mayor Bailey read Mr. Kirby's resignation letter into the record. Mr. Steve Atkinson, a 4th ward resident, thanked Mr. Kirby for his service to the Council.

Mr. Ingersoll stated that the Visitor's Center was essentially finished and the Chamber of Commerce would be moving in at the end of the week. Mr. Ingersoll asked if the Council would pick a date for the ribbon-cutting ceremony. The Council agreed to schedule the ribbon-cutting ceremony on January 9th at noon. Mr. Ingersoll stated that he would contact the other agencies to see if that date worked for them.

There being no further business, Mr. Bristoll made a motion to pay bills. The motion was seconded by Mr. Clark and carried unanimously.

Mr. Clark moved to adjourn the meeting at 9:10 p.m. was seconded by Mr. Bristoll and carried unanimously.

Submitted by:
Jennifer Stead
Stenographer

Approved by:
Margo G. Bailey
Mayor