St. Mary's County commissioners and staff met May 19 at the Potomac building to review changes in the county's draft 2009 operating budget, including revised revenue estimates, reserves and one commissioner’s proposal to shift fund balance into retiree benefits and public safety hiring.

The discussion centered on revenue revisions and reserves that leave the county with a public hearing reserve of $591,049 and an audited but undesignated 2007 fund balance of $10,554,561. Commissioner Richard Raley proposed allocating portions of those balances to the county's retiree health liabilities and to immediate staffing needs at the detention center.

The work session matters mattered because the commissioners must present a balanced budget for public hearings while deciding how much of limited, sometimes volatile revenue to use for one‑time needs versus recurring obligations.

County staff walked commissioners through the revenue and expenditure reconciliation for the draft approved budget. Elaine Kramer, a staff member, described the approach to interest income forecasting: "For the past couple of years, this is where ... we've generated more interest income than we've budgeted," and noted rates and available investable balances had fallen since 2007, making near-term income estimates uncertain.

Key revenue adjustments staff described included a proposed $800,000 reduction to recordation tax receipts based on recent collections and volatility, and a matching $800,000 increase in energy tax estimates tied to actual receipts to date. Investment income was revised upward by $250,000 in the draft because of temporary cash balances, though Kramer warned the realized amount depends on how much of the unexpended capital project funds are spent.

The commissioners also discussed income tax receipts and state distributions used to estimate county income tax revenue. Staff said May 2008 distributions were higher than the same month in 2007 but cautioned that final annual totals are affected by later summer state distributions.

The session included questions about specific departmental items: sheriff's office fee revenue (process server fees), which staff said had risen due to a legislated fee change and that the 2009 budget retained a $120,200 sheriff's‑fees line; and the Center for Family Advocacy's requested additional $32,000, which staff reported was not removed and remained at $108,089 in the draft. Staff noted some human services grant amounts had been reclassified and reconciled to avoid duplication.

Commissioner Raley proposed a fund‑allocation plan that would: move $6,000,000 of the unapplied fund balance to the county's OPEB (other post‑employment benefits) liability, $4,000,000 to the Board of Education's OPEB, and add $500,000 to PAYGO (bringing PAYGO to $1,000,000 when combined with prior allocations); cut the energy tax in half (freeing roughly $1.5 million); use $225,000 of the public hearing reserve to fund hiring of four correctional officers (estimated at about $56,000 each) and set aside $100,000 for a non‑county line item to support the newly formed human services department. Raley said the intent was to fund immediate personnel needs and reduce future debt service pressure by adding cash PAYGO now.

Other commissioners expressed support for maintaining reserves to meet upcoming known obligations — a new school, jail staffing and debt service after a planned 2009 bond sale — and for preserving the county's bond‑rating reserve. Several commissioners emphasized caution, saying fund balance should not be used for recurring operating costs.

Enterprise and special funds were reviewed: solid waste and recycling required an increased county subsidy and was projected to have zero fund equity at June 30, 2009; medical adult day care’s subsidy increased and staff said enrollment efforts are under way to improve its revenue; recreation and parks enterprise and the golf course enterprise both showed positive fund equity under the draft.

No formal votes were recorded at the meeting; staff said the commission could take the proposals forward into the approved budget package for the May 27 public hearing.

Looking ahead, staff recommended keeping a conservative stance on volatile revenues (recordation and investment income) and preserving the county's budget stabilization and bond‑rating reserves while finalizing the operating package for public hearing.

The commissioners planned to continue capital budget discussion after a short break.