The Capital Improvement Plan (CIP) is the topic of discussion on the January 12 edition of OPEN AGENDA (S3 E3). Updated annually, the CIP is the “blueprint” for capital expenditures over the forthcoming 5-year period. However, the process by which the Administration develops the CIP is deeply flawed, thus producing an unreliable financial planning document of limited practical value. The Council must take the Administration's cost estimates shown in the CIP largely on faith because insufficient supporting documentation is provided to verify the projected costs. Documentation is sometimes even intentionally withheld by the Administration in violation of the Charter. Additionally, the Administration has failed over the past three years to submit the annual budget audit by the established deadline. Consequently, the accuracy of financial projections is impaired without verified performance data from the prior year being available during the planning process. Certain line items in the CIP are clearly over-estimated or are simply lumped into the “Miscellaneous” category, which enables the Executive to reallocate funds to “pet projects” at her discretion without public scrutiny. Astonishingly, the Administration completely omitted the critical public safety needs identified in last year's SWOT Analysis, thus leaving our security at risk. Shouldn't public safety be the very highest priority? To a large extent, sources of funding are unidentified, ambiguous or uncommitted, making it uncertain how projects will actually be paid for. How do you make any financial plan when you don't know where the money will come from? Let's face it--no private sector business could survive with the poor financial planning practices and lack of oversight by which the county operates. When our elected and appointed officials fail to adequately plan for our financial future, their default solution is always to raise taxes. This is OUR money, so why do we tolerate the inefficiency, incompetence and even deception embodied in the CIP? We must do better if Wicomico County is ever to thrive again. Tune in and be informed.
Open Agenda TV: S3 E3 What's Left in Our Wallet CIP Finance Concerns
Show Transcript
Disclaimer: The following transcript was auto-generated and may contain spelling or contextual errors.
You're watching Open Agenda. Here's our
host, Joe Venosa.
>> Welcome back to Open Agenda. This week,
I'm your host, Joe Venosa.
>> Good job.
>> Thank you. It's a little intimidating
sitting in this particular chair.
>> At least you know who you are.
>> Yeah, usually. Usually. Yeah. Um could
have had a better face, but I'll I'll
take the name. Um so this week we have I
think a pretty important set of issues
that came up in the county council
meeting which is of course the CIP the
capital improvement plan that's been a
major source of concern and contention
usually is uh but this year uh I think
there are some outstanding questions and
concerns that residents have raised
>> council requested a um for
public works which I'm assuming is the
public works page which is page six
which includes engineering, water and
sewer, roads and um solid waste.
These projects are based on meetings
that we had with all four of those um
with the department to talk about all
four of those areas. Um as you're aware,
as I always say, this is a plan. This is
our best estimates. uh you both are are
quite um the local experts in sort of
past CIPs and uh some of the current
concerns. Uh we also have our old friend
Mr. Mike Goldberg uh from Delmare who's
here. And um what I'd like to do, Joe
and and Jim, if if it's okay, is I'd
like to bring in Mike and talk a little
bit about what his analysis has been of
the CIP. What are some of the concerns
about what's in it as well as what's not
in it? And then after that, uh, bring
you back in, uh, Joe, and then Jim,
myself, and you can maybe talk a little
bit about what that means specifically
to some of the communities, uh, that are
going to be most impacted by these
policies. Is that is that
>> Absolutely.
>> Awesome. Great. Jim, you go with that?
>> We're good.
>> Thank you, sir. All right, stick around
and we'll be right back with Open
Agenda.
>> Welcome back to Open Agenda. With us in
the house again is Mr. Jim Atkins.
Thanks for sticking around, sir. And
from Delmar, Mr. Mike Goldberg. Hey.
Hey. Hello.
So, uh, again, quite a quite a meeting.
Uh, a lot of things discussed at at the
January 6th council meeting, and one of
the big ones, of course, was the CIP.
Uh, we got some information, it would
seem, about the CIP and potential
projects, but a lot of questions as
well. Um, I'd like to start, Mr. Jim,
what was your overall impression of what
was presented and any outstanding
questions that you still have? Well, I
have a lot of outstanding questions and
I I the CIP just amazes me because it's
been referred to as a planning document.
Uh numbers are put in there as a
placeholders.
Uh I don't know how we even know how
much money we're planning on spending
out in the future.
>> We move things. If we don't get them
done this year, we move them till next
year. If it doesn't suit next year, we
move them to the year before. Mhm.
>> The numbers just don't ever add up to me
on on what exactly needs to happen. When
you listen to what the council and the
executive says the prior year and you
expect to see things in the CIP and then
you get the CIP and those things are
never listed or talked about.
>> So, it's not really a plan as much as a
vague list that is subject to change
anyway. Well, you know, the finance
director took exception to uh I think
your comment about cut and paste.
>> I readily admit I don't rewrite
the descriptions if a project got listed
last year and it moved or stayed the
same or moved to a different year.
>> But I've used that comment many times
and uh it it doesn't seem to be a whole
lot of updating. It seems to be a
excuse for why things didn't happen. Uh
it'll it'll say this project is a
continuation from the previous year
because
Fruit Primary needed to be funded and
then you get to the next subject and it
was postponed because Fruitland Primary
didn't get funded and [snorts] so
everything that's not going to get done
this year is going to be because
Fruitland Primary didn't get funded.
Right.
>> So, Mr. Goldberg.
>> Yeah. I I take a look at the CIP process
from a banker's perspective. You know,
as you all know, I spent most of my life
as a commercial real estate construction
lender dealing with multi-million dollar
construction budgets for high-rise
buildings, malls, you name it. I take a
look at this process and I it's it's the
most loosey goosey process I've ever
financial process I've ever seen in my
life. And in order to really understand
what's in the CIP,
it it requires an enormous amount of
study. It's not going to be something
that you're just going to flip through
and and and and understand. The the
devil is always in the details. And
there's so many details that without
having an onboard financial
[clears throat] analyst representing the
council,
>> I don't know how you go through this and
have it be meaningful in in any way.
>> But but do you think that's kind of the
point as to why it's always shaping up
to be, as you said, you know, this kind
of cut and paste?
>> Well, I think it it is. And look, let's
face it. If the private sector, any
private center sector company, whether
it's a bank, whether it's IBM,
Microsoft, if they operated as this
county government does, using these
types of financial practices, including
the way uh the way things are audited,
the way budgets are uh are created,
>> they'd be out of business. This is
>> so this is not what they would teach at
the Wharton School of Business.
>> I I don't think so. If you could explain
to the public what your but again to the
lay person who's not going to read the
CIP or even maybe watch all of the
videos and go to the meetings, what's
the big takeaway that you would hope
that the public understands about sort
of why they should care about the CIP?
Like if you met somebody in Food Line or
Walmart and you said to them, you know,
here's why you have to be concerned or
at least um pay attention, what's what's
the big thing you would tell them? Well,
you have you have to look at the
Department of Education
is the highest expense that this county
has.
Public safety is right behind that. And
then the CIP and the budget will show
the third highest category
of expense for this county is going to
be miscellaneous.
that that's going to be the third
highest thing, miscellaneous,
which will encompass
whatever they decide to put in there at
that point in time.
>> So So you're telling me, and let's for
the moment pretend that I'm a typically
below average Joe out on the street,
that the third highest expenditure we
put in our county government is other or
miscellaneous that we You're telling me
that we have millions of dollars that
the executive's office is funneling into
a a vague account that can go anywhere.
It makes it entire entirely
discretionary. And again, talking as a
banker, I would never allow a line item
for miscellaneous. I may have a line
item for contingency. And if a project
were 30% complete, then I might I might
disperse 30% of the contingency funds,
but it certainly was just not an endless
well that that you could stick your
hands into and and start drawing water
out of. But that's how this CIP is being
used. It is not above boards. It is not
transparent. It lacks the detail
necessary for it to be a cogent coherent
document.
>> So it's not even a capital improvement
plan as much as it is capital
improvement pondering.
>> Oh, it's a wish list. It is
[clears throat] it's a wish list. But I
think the CIP this year and it needs to
be addressed the same as last year. Now,
we've talked about the the fiscal audit
for the year, and hopefully uh by the
end of January, we're going to have a
fiscal audit, but
>> it'll still it'll still be late, though.
>> It'll be it'll be a month late, but
it'll be two months ahead of last year.
So, we are making progress.
>> So, we're less late than we were last
year.
>> But it's still late. It still violates
the charter.
>> Yeah. But let me go back to the audit.
Last year, the CIP
was moved back
to the budget process
>> and combined because we didn't have an
audit.
>> Now, although we're going to have an
audit two months earlier this year, the
CIP needs to be moved back into the
budget process for one reason.
Even if you already had an audit, it
still needs to be moved back.
You have a collective bargaining
agreement this year with the sheriff's
department.
>> Mhm. [clears throat]
>> Nobody has a clue what the expense of
that is going to be.
>> I think some people have a clue.
>> Well, no, they don't. They've made a lot
of educated guesses, but they don't
know. And to even think that you can
come up with a CIP or a budget for the
county when you don't know what this
major expense is going to be,
>> you're just throwing darts at a wall.
Yeah. That that that's that's all you're
doing.
>> But isn't that But isn't the chaos sort
of the point as far as putting all this
money and these deadlines at the same
point and then pushing it through? like
do if I'm looking at this because I
think we've seen this in past years. It
seems to me that that mode is how
certain interests get what they want. Am
I wrong in in thinking that?
>> Well, you you get the executives branch
to come in there and say we have to have
this money immediately.
>> Yeah. And I mean, you know, we can sit
here today and we can we can put our
wagers on what day in July the first
department will come back in after the
budget is signed and say we need more
money.
>> This wasn't in the budget. This wasn't
in the budget. You hear that so many
times throughout the year. It's like,
why do we have a budget? Because we have
a balanced budget. We have to have a
balanced budget. But then a week after
we balanced the budget, people come back
in and say, "Well, I forgot to put this
million dollars in."
>> Yeah.
>> I need this million dollars. Well, as
far as I'm concerned, a week into the
budget, your budget's worthless at that
point in time.
>> So, their feet are not being held to the
fire when they're developing the budget.
It's just, well, we we'll just do a
budget amendment. We'll just take, you
know, we'll move some money around. And
I can tell you this just from looking at
again from a construction lenders um you
know point of view when you start moving
money around between line items to me
that's a big red flag. You know was this
original construction budget accurate.
Uh obviously it wasn't if they have to
things will happen from time to time.
You know the the world's not perfect.
Well, the classic example this year is
going to be the the school
[clears throat] security system.
>> When you have the board of education
come in and present to the council about
weapons detection systems
>> and they sit there and they tell you
that they've done all the research,
it's going to cost $1.6 million.
>> [clears throat]
>> Then they put the caveat on that that we
have overestimated the expense because
we don't want to have to come back here
and say we were wrong. We need more
money. Okay, bless you. $1.6 million.
>> Tier three would be every school, every
program, and we're talking at a total of
29 buildings. 52 entrances that would
need weapons detection. 67 total units
would be needed. 57 additional staff SSE
staff would be needed to operate those
units across the district. So we're
talking about the onetime cost of 1.6
million for the units themselves. And
and I will say the these estimates are
the top level estimates because we don't
want to underestimate and then have to
come back later and ask for additional.
So we we really are [clears throat] make
making sure that this is the top level
of what we're thinking we might need.
>> Yeah, no kidding.
>> Then when you get to CIP, the county
executive has put in for the weapons
detection system $2 million.
>> So you've already got $400,000
>> kind of out there in La La Land. What
are we going to do with it? Where's it
going to end up?
>> That's the source of money that they
can, you know, move around and
reallocate to another line item. So I
guess the real question if you're if
we're going to use that as just an
example of the problem with this whole
vague CIP is that the county executive
Jordano is basically giving herself an
extra 400 grand on that issue to
possibly move somewhere else away from
our kids away from our
>> one of her problems potentially that
maybe the taxpayers and the voters don't
agree with. So, I think what we're
getting at more broadly here is that not
only is the CIP as a planning document,
not really much of a planning document,
it's just a very vague placeholder to
move money on a whole bunch of things
that the public will never really fully
know about until after the fact and then
we're on the hook for it.
>> Exactly. And we've been only looking at
one side of this equation though, this
how is the money going to be spent. But
we also have to look at what the sources
of funds are. We talked about this on
one of our prior shows and a full 48%
of the sources of funds is coming from
uh sources that are not committed. You
we don't know how much the state grants
are going to be. We don't know what a
source of fund called funds called other
what is that you know is that just
manufactured on a printing press or to
be determined. You don't have you
haven't tied down where the money is
going to come from. If you don't know
where it's coming from, how do you know
how much you can spend?
>> I will readily admit I'm a public school
kid. I went to Ramipo College. I didn't
go to the Wharton School of Business.
But I would be very worried if we're
relying on other N to be determined as
major sources of revenue, especially
given that we're looking at a state
budget situation, which as Councilman
Hastings and others have said is really
going to be a very difficult situation
to say the least. We're very worried
about losing our disparity grant. Um, so
it it is kind of frightening that you
have the highest uh levels of of
budgetary analysis relying literally on
things that we don't even know of.
>> You've got only a couple of people in
the administration. You know, you have
the director of finance and the, you
know, deputy director of finance, both
of whom work for the county executive.
Who does the county council who's
supposed to have some oversight
authority here, they have to make
decisions on approving or disapproving
the budget, [clears throat] are they
given a financial analyst? No, they're
not. All they have is the internal
auditor. But otherwise, they are forced
into the position if they don't have the
expertise themselves of having to rely
on whatever they are told by the
director of finance. That is not the
check and balance here. This is very
very problematic.
>> Well, it definitely leaves a lot of
questions that hopefully some of which
we can get the answers in the future.
Well, thanks for that, Mike. We're going
to definitely uh hopefully revisit these
issues and these concerns uh in very
short order as the budget season ripens.
Um Jim, would you stick around for a few
more minutes? Um, I'd like to bring uh
our friend Joe White back on and uh
we're going to sort of get his thoughts
on on this issue and maybe we can uh
come to a better sense of of where
things currently stand. Would you do
that?
>> Yep. I'm here.
>> Thank you, sir. Stick around. We'll be
right back with Joe White.
>> Welcome back to Open Agenda. Uh back in
the house with us is our friend Joe
White
>> sitting again in a in a kind of a
strange position more than usual. How
does
>> you're doing all right?
>> I'm getting there. Not as handsome, but
you know, you can't have it all. So, we
had uh I think quite a good analysis
from Mike Goldberg about the CIP and of
course Jim Jim gave his um list of
concerns too. Uh what do you make of all
this cuz you were at the meeting as
well. Um are are these genuine points of
of concern? My main concern as a as a
fiscal conservative is we are spending
the money faster than it's coming in and
and and Mike Goldberg, he mentioned this
about the the other sources of funding
and some of those are in the out years.
They're they're further down. I mean,
we're we're working on the fiscal year
27. I know that seems weird. We just
started 2026 and we're already starting
on 2027's uh capital budget. But because
of Fruitland primary and and also
because of some of the other operational
cost and because the state has such a
structural deficit, I feel like this is
a very uh it's not an ambitious plan. I
wouldn't call it ambitious. I would say
that it's it's overextending us and
we're not going to be able to hit all of
our priorities. Um for instance, and
Jim, you brought it up overfunding the
uh the weapons detection system.
$400,000 is a lot of money.
[clears throat]
>> Now, if there's a reason why it went
from 1.6 million to 2 million,
>> it has a chance to be in the CIP and
it's not there. I was there when Dr.
Abarski and and Dr. Stafford did their
presentations. Their presentations was
was were really wellrounded.
>> Uh whether you agree with spending this
money or not.
>> Sure.
>> But then that's the number 1.6.
>> Additionally, two other things in there
that stuck out to me. There's there's
nothing in there that addresses the SWAT
analysis for emergency services. And
this is a big deal. I mean, I I spend a
lot of time uh with with my local fire
department helping to raise funds. The
these folks, they're they're having to
go out just to to make money, barbecue
chicken, as it's been said,
>> to afford to put fuel in the in the
trucks and buy tires for the trucks, buy
gear for their for their crew. Uh
there's nothing in there that helps
alleviate the the the paramedics side of
this. Uh and that's going to be a big
deal.
>> Well,
and I'll push you on this then because I
mean from your analysis and what from
we've looked at that's all factually
true. uh we're putting $400,000
extra essentially way beyond what even
the the school board asks for while
we're not really giving our first
responders what they need. Why is that
money being put there, do you think?
>> I I I don't know. But I also know from
that presentation that there was three
different tiers that were given tier and
that the top tier cost 1.6 million. Um,
I I'm not sure I'm not been I've not
seen where there's there is a reason.
And maybe the fact that there's not a
reason. It's definitely not listed in
the CIP is what concerns me.
>> Yeah.
>> Uh I I've I've run businesses. I've
helped run charities.
>> Uh you have to spend every dollar like
it like it might be your last.
>> Yeah.
>> Uh you have to work hard to continue to
earn more and and and but you have to be
a good steward of those dollars. So, for
whatever the reason, there's no
explanation in the CIP.
>> No, there's a lot of vagaries that are
that are really shocking to me.
>> There's one other one uh and it's in an
out year, but you see $15 million set
aside towards going towards the water
and sewer projects and they're in areas
uh and and I think a lot of folks aren't
really aware of this, but they're in
areas that don't have representation. Uh
you could talk about Parsonsburg,
Allen, um even to some degree Delmare.
Uh, I think a lot of folks don't
understand that in Delmare their their
water comes from Delmare, Delaware,
their sewer for both sides of the state
are treated in Delmare, Maryland.
>> So, if we're doing water projects and
we're setting up a water and sewer
commission and places like that are not
represented,
>> but yet they may one, they're going to
be asked to put in their property taxes
towards this infrastructure for other
folks. And if it does come to them,
they're going to be asked to pay for it,
hookup fees and and rates.
>> I'll give a a little bit more insight on
Parsonsburg since we're up to so we're
up to date. The Parsonsburg project's
not necessarily a new project. We've
already done the peer for it. What it
would look like, and the reason I think
it got typed this way is the only way
Parsonsburg exists from a septic
elimination standpoint is to connect it
to the town of Pittsville's wastewater
treatment plant.
>> You agreed to that? Yes, they have up to
50,000 gallons of capacity that they
could accommodate the town of Pittsville
with or excuse me, how I'm getting
messed up. The Royal Village of
Parsonsburg can be accommodated by the
municipality of Pittsville at 50,000
GPD. Those things have already been laid
out. That's what we did the preliminary
engineering report for. Now, with that
being said, Pittsville has to upgrade
its wastewater treatment plant
regardless of whether or not they ever
take on Parsonsburg.
that's years and years if not close to a
decade out before that ever comes to
fruition. Um,
>> but they can you can go ahead with this
project before they upgrade your system.
>> You can do a couple of things and and
what you can do with this money is you
can perform your your formal evaluations
after your PR and you can actually get a
design put together. That way it's
sitting on the books, sitting on the
shelf. And then then over the next 5 to
8 years, you engage with the community,
Pittsville, the state, and say, "What's
our funding sources look like? Is this
the right move?" And then if it all
links up.
>> So you're saying you want to spend
$500,000 to do this plan that it would
take a decade to even hook up to
Pittsville.
>> Decade would be the long time out. Yeah.
right now these the Parsonsburg Old
Ocean City Road this is ad hoc uh
decision-m that you know the team we
work on every 2 weeks myself Amanda Py
>> if you don't get a say
>> then that to me is a problem
>> yeah it's really disturbing that you
have communities of taxpayers in places
like Delmare and Parsonsburg and
Pittsville that aren't getting the basic
representation on major multi-million
dollar projects and policies that affect
them like I it's like that's just
stunning to me
>> we have uh an area down in Allen and and
a lot of folks I I you know I've lived
here almost my entire life just except
for a couple years and and I'm tied into
the farming community. Uh I my degree is
in agriculture but 20 years ago the the
the area down around Allen had a lot of
wells dry out [clears throat]
>> uh and the farming community got blamed
for that unjustly. It was we were going
through several years of drought. We had
a lot of homes that had 2in wells and
not 4in wells. they weren't very deep.
>> Uh, from a hydraological standpoint, it
was bound to happen at some point. It
wasn't, in my mind, the farmer's fault.
The farmer should be allowed to go out
there and farm. We We need That's the
biggest
>> economic driver in this county.
>> But now we're going to set up a water
and sewer district and we're going to
tell the folks down in Allen who have
restrictions put on them now from the
MDE, from the state,
>> you're not represented on this either.
Well, if you're a farmer down there and
and I'm friends with farmers. I do
business with farmers down there. I buy
corn and sod from farmers down there and
you're you don't have a say in your
state government is coming back with
mandates.
>> They're going to run you out of business
and your countyy's going to sit there
and
>> well, it seems like the county is
working handinhand with Annapolis based
on some of the people that they're also
trying to get sort of in these.
>> Well, I I don't know if they're working
hand in hand. So much more of this is
being pushed down from the state level
that the county doesn't have any any say
in it. You know, the development uh
things that are going on, the
>> percentage of
>> solar land that you have to have in the
county. I mean, the county
can say we don't want this, but the
state's basically saying
>> this is what you're going to have and
and this is exactly where Joe is that uh
this water and sewer thing, you know,
right now the county may be planning it
and looking forward to it, but who's to
say that a few years down the road the
state just doesn't say, "No, this is how
it's going to be. Here it is." Seems
like we get to pay for it but not have
any voice in what actually gets
implemented.
>> Pay for a lot of things in the state of
Maryland that you never use. There's a
lot of highways and expressways and all
on the western shore
>> that you you never ride on but you've
paid for them.
>> Sure.
>> And and and and that frustration happens
from the state and there's not sometimes
there's not a whole lot that you can do
about that. But we most certainly can do
something about it here in this county.
Yeah.
>> And and I don't want to see farmers and
I don't want to see towns like Delmare,
Parsonsburg, Allen. uh get left out.
>> Well, and I think that gives us all the
more reason to focus on things like the
CIP and the kind of people that are put
on these various boards and commissions
cuz it really does have a huge impact
locally.
>> As I was said earlier, the devil's in
the details.
>> Devil's in the details.
>> Give the details.
>> Yeah.
>> Well, thank you for your time. I
appreciate the analysis. We're
definitely going to be coming back to
this issue more and more as budget
season, you know, heats up, but um we we
shall always venture to say that uh when
things are known to us, we will try our
best to inform the public. So, thank you
for your time.
>> Thank you for watching Open Agenda this
week. Thanks for letting me sit in this
chair also. And uh we will be back next
week with a new episode. Take care.
Shut up there in the peanut gallery.
