Council reviews budget process

(2/26) The Burgess and Town Council met in February to begin discussing the 2025/2026 Fiscal Year budget. Walkersville has two main categories, also known as funds, in its budget. The General Fund is where day-to-day Town operating expenses such as office salaries, insurance, vehicle maintenance, etc. are found and the Water Fund, which pays for operation of the water plant. This workshop focused specifically on the General Fund revenues and was intended to be informational only for the newest Commissioners to begin to understand how the Town determines its annual budget.

One of the largest sources of revenue for the Town is property taxes. When the Fiscal Year 2024/2025 budget was passed last year, property taxes were 14 cents per $100 of assessed value, making Walkersville the lowest tax rate for a municipality of its size in the State. Town Manager Sean Williams pointed out that property assessments are increasing, which directly increases these taxes. He explained to the Commissioners that if they choose to raise or lower these taxes by a penny, they could see a decrease or increase of $83,000. "It's not a phenomenal amount but it’s something," he said.

With the recent increase in water fees anything that can help the Town pay back the loan from the General Fund to decrease the Water Fund deficit will help. Williams pointed out that although the General Fund has millions in it, it cannot be used to pay off the Water Fund debt. "Essentially you are not allowed to pay a utility bill (the Water Fund) with tax money (the General Fund’s revenue is generated through taxes)," he said.

Williams also explained that the Town is not required to charge any interest as long as the loan is registered as a loan and not as a gift. This is why a previous Commission voted to change the interest on the loan from a variable rate to a fixed one percent, which changed the interest from $77,000 to $17,000. This change was made because the higher interest was hurting the Water Fund during the payback process. Burgess Chad Weddle pointed out that the percentage could be made zero percent since it is considered a loan and will be paid back.

The Council will review the official numbers next month, however, Williams said most were "guestimates" based on averages from previous years or last year’s audited totals. He also pointed out that the Council doesn’t have much say in some of the totals because of where they come from. These include the Business Personal Property Tax, (a tax on businesses with personal property, not to include real estate), penalties and fees on real estate, late payments and income taxes from the State (this includes a portion of County taxes that is passed to the Town). "Most of these numbers are not going to be numbers you all have a direct say over," he said. "For the most part these are numbers given to us by the County and the State."

Since the Town is estimating most of the numbers at this time and the amounts are sent from County and State, it is likely they will receive more money than was actually budgeted for. "We tend to receive more money than we sometimes budget," he explained. Williams mentioned that previous Councils tried to get the estimated number as close to the real numbers as possible, however it is hard to do.

The Council intends on reviewing General Fund expenditures in March, as well as looking at the actual figures. They will review the Water Fund in April.