Mayor Margo G. Bailey called the meeting to order at 7:30 p.m. In attendance were Councilmembers Harrison C. Bristoll, Jr., Thomas A. Gross, Sr., Mabel Mumford-Pautz and J. Brian Kirby, Police Chief Wayne Bradley, W. S. Ingersoll, Town Manager W. S. Ingersoll, Joan Merryman, Stenographer, and guests.
Mayor Bailey asked if there were any additions or corrections to the minutes of the previous meeting or executive session. Mr. Bristoll said he had a question with reference to the addition of the history channel to cable TV. He said it was not clear whether that was a charge channel or not and he had discussed this with Mr. Ingersoll who will check on this. Mr. Bristoll said other than that, he would move that the minutes be approved as distributed, was seconded by Mrs. Mumford-Pautz and carried unanimously.
Mayor Bailey stated that an executive session was held on Monday, March 16, 1998 at 9:30 p.m. pursuant to Sec. 10-508 of the Annotated Code of Maryland. The entire Mayor and Council was present and voted to go into executive session. The meeting was held to discuss a matter of property a acquisition on Cannon Street to complete the parking lot project. The Council authorized the Town Manager to proceed with the property acquisition by unanimous vote. Minutes were taken and are part of the record.
Mayor Bailey said we had representatives from Heron Point who wished to make a presentation. She asked Mr. Ingersoll to introduce the speakers. He stated that Stewart Diana of Piper and Marbury, bond counsel for the Town of Chestertown, would explain the Town's position with regard to the request by Heron Point. He said the Council would just listen to the presentation at this meeting and make a determination at another meeting as to whether they wanted to proceed further after hearing all the information. He asked the Rev. Richard Stazesky to proceed for Heron Point.
Mr. Stazesky stated the PUMH was attempting a major refinancing of the Heron Point project. He said the project was opened in 1991. They have 192 living units occupied by 275 residents and are 93% occupied. He said they have 144 employees with an annual payroll of $2.1 million, and an annual operating budget of $9.5 million. He said residents spend about $1.5 million a year locally and Heron Point pays $218,000 in County real estate taxes and $77,000 in Town real estate taxes. He asked Don Persinski to explain the financial aspects of the refinancing.
Mr. Persinski said PUMH intends to issue nonrated 30 year bonds. He said the security for the bonds will be a gross revenue pledge and mortgage of the facility. He said the purpose was to refinance the outstanding 1989 bonds on the project, refinance an intercompany loan, and to finance the cost of issue of certain capital projects. He said the savings from the current bonds would be $3.8 million and the benefit to PUMH of MD in 1999 would be approximately $900,000. He said interest rate would be reduced from 8.5% to 6%.
Mr. Ingersoll said that Stewart Diana from Piper and Marbury was present. He said Mr. Diana was bond counsel for the Town as he was for the Washington College bond issue. Mr. Ingersoll said he had asked the County to come and explain their role but no one was present. He said the County Commissioners had written letters recently which said that Kent County issued the original series of bonds in 1989 and would gladly do that again except that they are going into the market this year for their own capital financing. Therefore, the County could not do this for Heron Point.
Mr. Diana explained that under the IRS code a local government can issue under $10,000,000 in tax exempt bonds during a calendar year and those bonds can be purchased by banks. He said the County wants to sell some of its tax-exempt debt or at least have the ability to do so in order to finance their own capital projects. He said bonds they might issue for Heron Point would count toward that $10 million limit.
Mr. Diana said that same rule would apply to the Town but he understood that the Town does not plan to issue any of its tax exempt debt to banks for 1998. He said that would not preclude the Town from issuing tax exempt bonds that would be purchased by other purchasers. Mr. Ingersoll asked Mr. Diana to reiterate to the Council the limit of the Town's exposure on the bonds.
Mr. Diana said these bonds would be issued under the Maryland Economic Development Revenue Act which was written about 20 years ago to allow towns and counties in Maryland to issue tax exempt bonds for purposes other than their own public purposes. He said they may be issued for health care facilities, institutions, etc. and it was not unusual for local businesses to ask the local government to make available the issuance of tax exempt debt. He said only local governments can issue tax exempt debt under the IRS code. The Act provides that the issuer of those bonds will bear no financial obligation or liability for the bonds. The bonds are structured in the issuing document so that bonds are only payable by the borrower (beneficiary) of the money. The issuer (Town or County) will bear no pecuniary liability and the documents are drafted so that is clear. He said there are two areas or events that occur that an issuer should consider. The first is that bonds are tax exempt and the Town would be the issuer. For IRS purposes the Town is the issuer. If something happens to the bonds, the facility is not operated in the way it should or some requirement that makes the bonds tax exempt is not followed by the borrower, it is possible but unlikely that the bonds may become taxable. If the bonds become taxable the Town would most likely be involved in why and who would pay the resulting interest, penalties, etc. This was a remote possibility but it has happened. The way the risks are dealt with is to have a capable bond counsel give tax opinions to begin with. He said he thought Venable, Baetjer and Howard was being discussed as the bond counsel and proper attention should be given to how the money will be used. He said that has an affect on how tax-exempt bonds might become taxable.
Mr. Diana said the second risk was that there would be a default on the bonds by PUMH. He said that was not important for the Town of Chestertown because the documents are clear that the Town is not responsible. He said there would be a large financial institution who would be taking the risk on the bonds. He said he believed these bonds also would be sold to investors at a public offering. He said in a situation where bonds are sold to the public, there is a risk that in the event of something going wrong, the purchasers may not understand that the Town is not behind the debt and the Town would have to defend their position. He said that action would ultimately be dismissed but legal costs could be involved. He said the Town would be indemnified for these costs by the institution. He said the difference between this bond issue and the Washington College bond issue was that the bonds were sold directly to NationsBank. Mr. Diana said the indemnification should be from both the local agency (Heron Point) and the parent organization (PUMH of Delaware).
Mr. Ingersoll asked Mr. Diana if there was such a thing as an issuer's fee and if so what was it for and would he discuss that. Mr. Diana said it was not unheard of on this type of bond that an issuer would ask for an receive an issuer's fee. He said this was very customary and those fees are used by the local government for a variety of purposes, other economic development initiatives and have no restrictions on their use. He said the amounts vary.
Mr. Kirby asked if we had the same $10 million limit. Mr. Diana said we have that limit per calendar year on bonds that are sold to banks. The bond issue would only affect one calendar year and these bonds would be sold publicly so the $10 million limit would not apply. Mr. Kirby said an issuer's fee never came up on the Washington College bond issue and he asked the reason for that. Mr. Ingersoll said that question was never raised and in all the bonds where Kent County was the issuer, a fee was never discussed. He said it was not mandatory. He said he was asked whether there was something that could be done to help the Town such as parks. He said that was what raised the question about issuer fees.
Mr. Ingersoll asked what the small capital projects would be for Heron Point. Mr. Persinski said for the next few years, PUMH of Maryland expects to spend about $200,000 annually on routine renovations and updating the existing facilities. Mr. Ingersoll said Stewart Diana was from Piper and Marbury in Baltimore, is the Town's bond counsel for this matter and his fees are being paid by PUMH for the Town.
Mayor Bailey asked the Council to consider the request, think of any questions they may have and we could have them clarified. She asked that the Council be ready to give Heron Point a decision on whether we will consider this proposal. Mr. Ingersoll said that a TEFRA (public hearing) must be held on this proposal that the Town be a conduit for the bond issue. He said the hearing would be early in the evening and then the regular meeting where a decision would be made. Mr. Stazesky said they were hoping to get on the Town's agenda for the first meeting in May because market conditions are good at this time. He said they would like to close the deal by the end of May. The Council will consider the proposal and give Heron Point an answer at the next meeting.
Mayor Bailey called on Police Chief Wayne Bradley for his report. Chief Bradley stated that Officer Michael Nickerson had resigned effective April 2, 1998, and taken a job with the Kent County Sheriff's Department. He read the letter of resignation.
Chief Bradley said the second order of business was another officer who was leaving the Department. He called on Jim Quinn who began working for the Town in May of 1977 and after he left full time employ with the Department in 1980 he remained as a reserve officer. Chief Bradley presented Mr. Quinn with a plaque containing his original 1977 badge and his current badge expressing appreciation for his 21 years of service to the Town.
Chief Bradley gave the police report for the month of March 1998. He reported that Davera Johnson had been hired as a parking meter monitor and had started to work on March 16, 1998. Mr. Gross asked whether parking tickets were being issued downtown with the Cannon Street lots under construction. Chief Bradley said they have not written many tickets downtown because of the parking lot work. Mr. Ingersoll said people who always parked in those lots now have to park on the street and he asked that the Chief back off on the ticketing while the work is being done. Mayor Bailey asked if there were any questions. Mr. Gross asked how much money was spent on maintenance of vehicles. Chief Bradley said the budget was $9,000 for vehicle maintenance, but maintenance increases considerably after a car reaches 3 years of age. He said they keep a log on all cars.
Mr. Kirby asked when the new dog would be out working. Chief Bradley said Ricky Strong and the dog just finished the training course and they are beginning work.
Mrs. Mumford-Pautz said Poplar Street was a public road which dead ends. She said there are owners on that street now that park anywhere, block the street and also drive the wrong way on the one-way street. She said there are residents on Lynchburg and Poplar who park in that road. She said on the side of the yard by the small house on the corner of Poplar there was a bicycle which has been laying there for days. She said she reprimanded an officer on the way into the meeting because she does not understand how an officer can see something wrong and drive by. She said at 537 High Street there was wallboard blocking the sidewalk at the work project. She said she looks for a town officer to see the same things she sees and correct them. Mayor Bailey asked Chief Bradley to look into those matters.
Mayor Bailey said there was a request for a street revival from Natalie Duphanny. Mr. Ingersoll said no one was present. Mr. John Blackiston said he was to meet her there but she had no arrived. He said they were getting a permit to hold it on Garnett school property. Mr. Ingersoll said he had asked her to come because she was not clear where she wanted to hold the event.
Mayor Bailey asked the Town Manager for his report. Mr. Ingersoll asked Rev. Ellie Laws to discuss her permit request for an Easter Sunrise Service. Rev. Laws said the service would begin at 6:30 a.m. in front of First Methodist and the participants would then cross High Street to the front of Christ Methodist Church. There would be musical instruments to accompany the hymns and readings and the service would last half an hour. She requested that parking be blocked in front of First Church on Saturday night through the service on Sunday morning. Mr. Gross moved that the permit be granted, was seconded by Mrs. Mumford-Pautz and carried unanimously.
Mr. Ingersoll read a Proclamation declaring the month of April as Fair Housing Month and Mayor Bailey signed the proclamation.
Mr. Ingersoll said that the lease for the Sultana project on the Cannon Street yard property had been reviewed by the Town Attorney. He asked if the Council had any comments on that agreement. Mr. Bristoll asked about the fencing in of the lumber storage area, that the overall fenced area include the extra lumber storage area. Mr. McMullan said that he would like to discuss that with the builder for the moving of that lumber. He said that was rough lumber and would probably only be needed about twice a week. The finished lumber would be inside the yard. Mr. Ingersoll said that they had discussed the separation of the two entities and they had discussed a gate on Mill Street so they could only go into their area in the front.
Mr. Gross asked about the hours of operation and the reference to fund raising events. Mr. McMullan said hours of operation are 8 to 6 Monday to Friday and Saturday. The special fund raising events might be a dinner once every other week ending at 8:30 p.m. and two or three big fund raising events for an evening. Mr. Gross asked if there would be alcoholic beverages. Mr. McMullan said they had not discussed. Mr. Gross said he wanted to be sure that group's liability insurance would cover events with alcoholic beverages. Mr. Bristoll said that any special events would require an individual special permit. Mr. Ingersoll said they would have to get a one day special liquor license for any of those events. Mr. Kirby asked if the Sultana group was picking up the legal expenses the Town was incurring on the contract. Mr. Ingersoll said that he hoped the attorney would not spend a lot of time on it but it had not been discussed. Mr. Kirby said he thought they would pay those expenses. Mr. Ingersoll said he will ask the attorney to separate those expenses.
Mr. Ingersoll said that Mr. McMullan went before the Historic District Commission to present their plans for the temporary pole building they will have on the property and made assurances that the building will be removed when the project is completed. Mrs. Hornaday asked who would be doing the Betty Anne Connolley garden at the site. Mayor Bailey said the County was still using the yard and as soon as they move out, we will get together with the Sultana committee and work on the park.
Mr. Ingersoll said that this should be the last week when Cannon Street will be a mess from the work. He said the curb and gutter will show the layout of the parking lot and people are able to see how the lots will work. He said we are allowing parking in there and the base coat of asphalt will be put down next week.
Mr. Ingersoll said the Town was awarded a State "Plant" community designation. There will be an award ceremony in Ocean City on April 18, 1998.
Mr. Ingersoll requested an executive session following the meeting on a personnel matter, the hiring of a bookkeeper. Mr. Bristoll moved that an executive session be held pursuant to Sec. 10-508 of the Annotated Code to discuss a personnel matter, was seconded by Mrs. Mumford-Pautz and carried unanimously.
Mr. Ingersoll said he worked on the petition for candidacy forms and had given them to the Council to review. He said he had added the charter residency information onto the petition. The new petition form has all of that information on the one form. He said he will send the forms to the Supervisors of Elections and get their comments and approval. He said if any Councilmember has comments or suggestions, please get them to him. He said he would like to finalize the forms well before time for the next election.
Mr. Ingersoll said he gave everyone a copy of the letter about using the Farmer's Market for arts and crafts. He said the farm market manager has said that the market was full and that it provides locally grown produce rather than arts and crafts. The arts and crafts items are available at some of the stores downtown whereas the food is not. He said we get a lot of requests for things to be done at the farmer's market because it draws a crowd, and we allow tables for fund raising events in the other areas of the park. Mayor Bailey said Owen McCoy has done a wonderful job of managing the market and he had valid points and we need to pay attention to this opinion. Mrs. Mumford-Pautz said she thought the market had expanded beyond what the Town envisioned and it should be closed at noon as originally planned. She said gift items are available in the stores which are operated by people paying taxes and rent and crafts in the park would harm their business. The Council agreed to support the farm market manager's decision.
Mr. Gross asked about the traffic monitoring and the question of closing the street. Mr. Ingersoll said he checked the traffic last year and talked to the vendors and they are happy with the way it is working. They thought it would have a detrimental effect to close the street.
Mr. Ingersoll said for the last couple of years, the County has been collecting taxes for other towns and he felt it was time for Chestertown to consider this. He said at this time, when we will be hiring a new bookkeeper, the Town should consider this service. He said it is also time to consider the printing of the bills for the upcoming year. He said the taxes would be collected by the County and they would remit to us once a month. He said there was no charge by the County to do this. He said the only problem he had with it was our cash flow. Most people pay the taxes in the month or September or in December. He said we would lose the interest that we now accrue daily because the County will send us what comes in each month. Mr. Ingersoll said he would find out what other towns do this now and how it works. The Council will make a decision on this at the next meeting.
Mayor Bailey read a thank you letter from Betty Anne Connolley. She said Betty Anne died days after receiving the Town's recognition for her efforts and we must all remember to do our best for her.
Mayor Bailey said the Kent County Drug and Alcohol Prevention Council has requested that we again help with the after prom party. She said we have given either $50 or $100 for this event. Mrs. Mumford-Pautz moved that we donate the same amount as we have in the past, was seconded by Mr. Bristoll and the vote was 4 in favor. Mr. Kirby abstained since he wrote the letter of request for the Committee as its president.
Mayor Bailey read a letter from the Recreation Commission requesting that the Town spend $646.25 from the recreation budget for repairs to the Garnett playground. She said there was a particular wood sealant to be used on the wood to maintain its integrity. The cost of a 55 gallon drum of this sealant costs $646.25. The Recreation Commission had voted to do this. Mrs. Mumford-Pautz moved that the Town support the recreation commission's vote on this, was seconded by Mr. Bristoll and carried unanimously. Mrs. Mumford-Pautz said that the fence has been torn loose on the Shore Distributors side of the school yard. Mr. Ingersoll said he will call the Board of Education. Mayor Bailey said starting next month there will be supervision on the playground during certain hours of the week.
Mayor Bailey said the Town has received the bond funding of $150,000 for the Visitor's Center. She said we will now pursue the State Revitalization money for this project.
Mayor Bailey read a notice of a hearing for a transfer of a liquor license at the Super Soda II store on Flatland Road. It will be the same off sale license. There were no comments from the Council on this name change request.
Mayor Bailey said that Ernie Robinson was present with his request for the parade discussed at an earlier meeting. Mr. Robinson said they would like to hold the parade on Saturday, August 8, 1998 and have found an alternate site to Wilmer Park. He said they have been given permission by Mr. Strong to use the property next to the Police Station. The parade will begin at Dixon Valve at 1 p.m., will take about three hours, and the followup activities for the children participating will end at 6 p.m. He said they will have other activities for the adults at the Armory. He said they will use the fire police for traffic control. Mr. Bristoll asked if that would spill over onto the Town parking lot. Mr. Ingersoll said the Town could give them permission to use the lot because it is not really used on Saturday. Mr. Robinson said he had discussed parking busses on the KRM property. He asked if the Town would help by supplying the port-a-johns for the event. He will supply the Town with all the details and numbers of people to be expected and parade route. It was suggested that the parade go down High Street to Queen Street and then up Cannon rather than tying up Cross Street. Mrs. Mumford-Pautz suggested that the areas to be used be roped off to make a distinction between the public events and the private property.
Mayor Bailey asked Mr. Robinson to come into the office during the day and fill out the permit request and submit all the details for the day. Kirby asked whether there would be motorcycles included in the parade. He said a couple of years ago there was a parade with motorcycles which were not obeying the traffic laws. He said if they are to be included they should be obeying the helmet and noise laws. Mr. Kirby will give a copy of those laws to Mr. Robinson and he will give it to any motorcyclist participating.
Mr. Ingersoll asked about the theme of the parade, what organization was involved so people would know who the Town was donating to in providing the port-a-johns. He said Town costs are traffic control, trash pickup plus the port-a-johns they are requesting. Mr. Robinson said it would be military units, stepping units, State Police motorcycles, and they will honor fallen soldiers in Kent County. Mrs. Mumford-Pautz said that the Tea Party Committee pays for all of those items themselves. Mr. Robinson said no charge will be made for the food served to the children who participate but the adult events and open house at the armory will cost $10 a person. He said the money they raise provides transportation for the kids stepping groups to attend other parades. Mr. Ingersoll said port-a-johns are about $100 a pair. He asked them to provide some numbers to the Town.
Mr. Blackiston came back to the meeting and said that Mrs. Duffany had permission to use the Garnett School property and she thanked the Town Council.
Mayor Bailey said she had received a petition from the Vickers Park neighborhood citizens requesting that the 700 High Street building be torn down and a permanent police substation be built at that location. Sandy Leonard said they had 94 signatures on the petitions and the property was in the hot spots area. Mayor Bailey said the house has always been inadequate for use. In the beginning there was a police presence there. She said Mrs. Hornaday and her group work on the building and garden but the building has never been inadequate to use as a substation. Mr. Ingersoll said the Town bought the property to eliminate the slum hoping someone would buy it and turn it into a home. He said the community garden was great and we have gotten more use than he thought we would. He said we had discussed marketing it. Mrs. Mumford-Pautz said as a Councilmember she felt it was a disgrace that the Town has allowed that building to be open and deteriorate as it has. Mr. Ingersoll asked if he had permission to remove the building. Mrs. Mumford-Pautz said she did not want it removed she wanted it renovated for a residential building. Mr. Ingersoll said he would market it as is. He said we paid $18,000 for it 5 years ago and the building was not fit for renovation. He said it was not a building that he had an end user for. Mayor Bailey said the Council needs to review what the options are and decide what disposition will be make of the property. Mr. Ingersoll said he will get out the minutes from the discussions regarding marketing the property and report to the Council. Mr. Kirby said the problem with having a substation anywhere was that unless you have enough police officers to man a police station, you still have an empty building. He said none of the police offices in the county or towns now have staff enough to have their buildings occupied or manned at all times.
Mayor Bailey asked the Council to review the bills. Mr. Bristoll moved that the bills be paid, was seconded by Mrs. Mumford-Pautz and carried unanimously.
Mr. Kirby moved that the moving be adjourned at 9:40 p.m., was seconded by Mrs. Mumford-Pautz and carried unanimously.
Submitted by:
Joan Merryman
Stenographer
Approved by:
Margo G. Bailey
Mayor
RETURN to 1998 Minutes