State

Budget

Governor Martin O’Malley’s proposed FY 2013 state operating budget, along with the related Budget Reconciliation and Financing Act (BRFA) that will implement the finance and tax law changes he would utilize to fund the budget, are now before the General Assembly. Although the State is facing a $1.8 billion structural deficit, the Governor’s proposals, if passed, would grow the total state budget by about 2%, to $35.5 billion. Read more

Legislative Session

As of February 1, the bill count has reached 477 in the Senate and 488 in the House.  Deadlines for regular submission of legislation are February 3 for the Senate and February 10 for the House. AOBA is anticipating a number of high priority bills to be submitted that relate to the State’s lead-based paint poisoning prevention program and its regulation of energy utilities. Read more

AOBA Maryland Legislative and Regulatory Issues Committee (LRIC)

All members are encouraged to participate in the LRIC meetings, held each Monday during Session. To be added to the Committee, contact Lesa Hoover lhoover@aoba-metro.org. The 2012 LRIC meeting schedule is:

February 06, February 13, February 20, February 27, March 05, March 12. Read more

Bi-County

WSSC Budget

The Washington Suburban Sanitary Commission budget process is currently underway. Each year, before January 15, WSSC must prepare a capital and operating budget for the next fiscal year and make it available to the public. The FY13 Preliminary Proposed Budget includes a request for a 7.5% rate increase, which is one percent below the spending affordability limit approved by both Montgomery and Prince George's County Councils. Read more

Prince George's County

Budget

Prince George’s County Executive Rushern Baker has begun the process of formulating the second budget of his first term in office. The Executive’s focus will be on economic development, K-12 education, public safety, health care access and neighborhood revitalization. The proposed budget of $2.5 billion is in the face of a projected $126 million deficit for 2013. Read more

Montgomery County

AOBA Raises Energy Tax, HOC "Reasonableness" Denials with County Executive

In AOBA’s quarterly meeting with County Executive Isiah Leggett, a roomful of commercial and multifamily members made sure that the County Executive understood that AOBA will strongly oppose any effort to repeal the “sunset” of the staggering energy tax rate hike that he and the County Council adopted in 2010. Members will recall that, in 2010, the County increased this tax by an astonishing 85%-- an effective doubling, in one stroke, of the tax that you pay on your properties’ utility bills-- which brought in $110 million dollars. Read more

Apartment Managers Urged to Attend East County Meeting

Miti Figueredo, the new Regional Director of Montgomery County's East County Regional Service Center, is urging rental housing providers in the County to send their property managers to the Center's upcoming Open House. It will be held on Thursday, February 9 from 3:00pm - 4:30pm. Read more

Streamlining the Development Process

As a part of an ongoing multi-agency effort to streamline the development approval process, the County will hold two public forums to solicit input. Agencies hope to eliminate bottlenecks, duplication of reviews, inconsistent positions and process inefficiencies in order to make the approval process more user-friendly, understandable, reliable, consistent and efficient. Read more

Council Endorses Bus Rapid Transit for Corridor Cities Transitway

The following information is provided by County Council President Roger Berliner:

The Council unanimously endorsed bus rapid transit (BRT) as our preferred mode for the Corridor Cities Transitway (CCT) in light of a study showing a greater economic benefit to the County if the project is built sooner. This marks a change from our earlier decision to support light rail transit (LRT). Read more

Leggett's Proposed Capital Budget Includes Three New Road Projects

County Executive Isiah Leggett has proposed the following projects in his recommended FY 2013 capital budget:

• East Gude Drive improvements will increase roadway capacity and enhance vehicular and pedestrian safety from Crabbs Branch Way to Southlawn Lane

Read more

County Seeks Candidates for Seats on Boards Affecting AOBA Members

County Executive Leggett is seeking candidates for appointment to the following:

• Property Tax Assessment Appeal Board -- deadline for application is February 20, 2012
• Commission on Landlord-Tenant Affairs -- deadline for application is February 17, 2012
• Solid Waste Advisory Committee -- deadline for application is February 17, 2012.

Read more

State

Budget

Governor Martin O’Malley’s proposed FY 2013 state operating budget, along with the related Budget Reconciliation and Financing Act (BRFA) that will implement the finance and tax law changes he would utilize to fund the budget, are now before the General Assembly. Although the State is facing a $1.8 billion structural deficit, the Governor’s proposals, if passed, would grow the total state budget by about 2%, to $35.5 billion. The Governor’s budget anticipates more than $650 million in cuts, $311 million in new general fund revenue, $104 million in redirected revenue, and $78 million in revenue from the anticipated extension of the federal payroll tax cut.

The Administration’s proposed budget reductions include shifting a substantial share of teacher retirement costs to local governments, capping Medicaid rate increases, funding debt service costs with bond premiums, and “level funding” of aid to localities. Related bills have been introduced that would more than double the “Flush Tax” and put a new charge on utility rate payers to fund an off-shore wind farm. O’Malley has proposed extending the State’s sales tax to gasoline as a way to increase transportation funding revenue, but has not yet introduced a bill to do so.

Language in the BRFA would impose the state sales and use tax on the sale of “digital products,” and also authorizes applying the recordation tax to “indemnity mortgages,” in the same manner as if the guarantor were primarily liable for the guaranteed loan, as a means that counties can use to fund the teachers’ pension burden the Governor is seeking to shift to them. An indemnity mortgage is the legal instrument manifesting a pledge of property used when a lender agrees to loan money to a borrower on two conditions: (1) that a third party guarantees repayment of the loan; and (2) that the guarantor executes a mortgage on real property to secure the guarantee. An indemnity mortgage is recorded so as to establish a lien on the property, but has not been subject to the recordation tax. AOBA and other groups have successfully opposed bills in prior Sessions that have sought to do so.

Links to relevant documents:

The Governor’s “Budget Highlights”

SB 150 Crossfiled with: HOUSE BILL 85 Administration Budget Bill (Fiscal Year 2013)

SB 152 Crossfiled with: HOUSE BILL 87 Budget Reconciliation and Financing Act of 2012

Legislative Session

As of February 1, the bill count has reached 477 in the Senate and 488 in the House.  Deadlines for regular submission of legislation are February 3 for the Senate and February 10 for the House. AOBA is anticipating a number of high priority bills to be submitted that relate to the State’s lead-based paint poisoning prevention program and its regulation of energy utilities.

AOBA is currently tracking the following Bills:

SB 196 Public Safety - Building Codes - Balcony Inspections ("Jonathan's Law") Sponsored By: Senators Young, Klausmeier, Madaleno, Montgomery, and Robey
Requires a political subdivision to conduct inspections of multifamily dwellings with balconies at least once every 5 years to ensure that each balcony meets the requirements of the applicable local housing code or the Minimum Livability Code. A political subdivision can authorize a third party to conduct the periodic inspections and charge a fee for the periodic inspection.

HB 1 Environment - Recycling - Apartment Buildings and Condominiums Sponsored By: Delegate Lafferty
This Bill requires owners or managers of apartment buildings or condominiums that contain 10 or more units to provide residents with the opportunity for recycling on or before October 1, 2013. The Bill also requires owners or managers, beginning on March 1, 2014, to report annually on recycling activities to the county in which the property is located. AOBA opposed this bill in 2011; the bill passed the House, but failed in the Senate. AOBA testified in opposition to the bill on 1-31-2012 before the House Environmental Matters Committee where it now is pending a vote by the Real Property Sub-committee.

HB 22 Cross-file – SB 194 Real Property - Residential Leases - Interest on Security Deposits Sponsored By: Delegate McMillan This bill alters the interest rate paid on a security deposit under a residential lease, from the current 3 percent per annum to the daily U.S. Treasury yield curve rate for one year, as of the first business day of each year, or 1.5%, whichever is greater, and applies the Act prospectively.
This bill was supported by AOBA in 2011 (HB 917/11 - ENV) and it passed the House with amendments (that are now reflected in the current bill) but was never voted on in the Senate. AOBA testified in support of the bill on February 2 in the House Environmental Matters Committee.

HB 83 Property Tax - Charter Counties – Limits Sponsored By: Delegates Hixson, Barve, and McIntosh
This Bill grants authority to the county council of a charter county, by a two-thirds vote of the full membership of the council, to set a property tax rate that is higher than the rate authorized under the county's charter or collect more property tax revenues than the revenues authorized under the county's charter, notwithstanding any provision of a county charter that places a limit on that county's property tax rate or revenues. Both Montgomery and Prince George’s Counties are charter counties. AOBA will be opposing this Bill.

PG 413-12 Real Property - Dwellings Rented to Individuals at Least 55 Years Old - Residential Leases
This Bill requires property owners to offer a lease of not more than 36 months to individuals living in a 55-plus community if the community is constructed or improved after October 1, 2012 with funding wholly or partially from the State. At AOBA’s request, the sponsor has agreed to amend the bill to state that the extension of the lease will be offered only as long as it does not conflict with the terms of the mortgage on the property.

PG 414-12 Real Property - Dwellings Rented to Individuals at Least 55 Years Old - Air-Conditioning Systems
This bill also applies only to 55-plus rental housing using State funding received after October 1, 2012 for the construction, improvement or alteration of the HVAC system, and would require that the HVAC system be capable of maintaining 78 degrees throughout the rental unit. At AOBA’s request, the sponsor has agreed to amend the bill by striking “78 degrees” and inserting “15 degrees below the outside temperature at the supply register.”

SB 237 Maryland Offshore Wind Energy Act of 2012 Sponsored By: Administration Request and Senators Ferguson, Forehand, Frosh, Garagiola, King, Madaleno, Manno, McFadden, Montgomery, Ramirez, Robey and Rosapepe
This bill is one of the Governor’s priority bills. It alters the Maryland renewable energy portfolio standard program to include a specified amount of energy derived from offshore wind energy. The funding for the program will come from the ratepayers: $2 per residential bill per month, and 2.5% of a commercial bill per month. This bill will significantly increase AOBA members' electric bills. AOBA is developing its position on this bill, which is scheduled for a hearing 2/14 at 1:00 pm before the Senate Finance Committee.

SB 240 Environment - Bay Restoration Fund - Fees Sponsored By: – Administration Request and Senators Frosh, King, Madaleno, Manno, Montgomery, Pinsky, and Raskin
This Bill is also one of the Governor’s priority bills. It increases the Bay Restoration Fees paid by users of specified wastewater facilities, onsite sewage disposal systems, and sewage holding systems, starting on July 1, 2012. The proposed fee structure is based on consumption. All Marylanders will see an equivalent fee increase. To calculate the new fee under the Bill:

SB 271 Real Property - Security Deposits - Interest Sponsored By: Senator Brochin
This bill will eliminate payment of interest on residential security deposits by requiring that the security deposit be placed in a non-interest bearing account. AOBA’s legislative committee voted to support this bill.  No hearing has been scheduled.

SB 277 Crossfiled with: HB 168 Human Relations - Housing Discrimination - Source of Income Sponsored By: Senators Raskin, Ramirez, Benson, Conway, Currie, Ferguson, Forehand, Gladden, Kelley, King, Madaleno, Manno, McFadden, Montgomery, Peters, Pinsky, Pugh, Robey and Young
This bill would expand the State’s housing discrimination law by making “source of income” a prohibited basis for decisions regarding real estate-related transactions. AOBA has opposed this bill in prior years and will continue to do so, due to the administrative burdens it would create. The bill is set for a hearing on February 9 in the House Environmental Matters Committee.

HB 235 Criminal Justice Information System - Prohibited Dissemination Sponsored By: Delegates Stukes, Anderson, Carter, Conaway, Glenn, Harrison, Haynes, Howard, McConkey, A. Miller, Mitchell, Oaks, B. Robinson, Tarrant and Walker
This bill prohibits the dissemination of criminal history information to a person other than a criminal justice unit, if the information relates to a charge or conviction for a nonviolent crime that was allegedly committed more than 10 years previously; and provides that this prohibition may not be abrogated by waiver or consent. AOBA will testify in opposition to this bill at a hearing on February 14 at the House Judiciary Committee.

AOBA Maryland Legislative and Regulatory Issues Committee (LRIC)

All members are encouraged to participate in the LRIC meetings, held each Monday during Session. To be added to the Committee, contact Lesa Hoover lhoover@aoba-metro.org. The 2012 LRIC meeting schedule is:

February 06, February 13, February 20, February 27, March 05, March 12

All meetings are at 2:00 P.M. in the community room located in the lower level of
Georgia West Apartments (Located behind Georgian Towers)
8708 First Avenue
Silver Spring, Maryland 20910
(301) 588 1774 (for directions)
(Parking is available in the county garage or on the street in metered spaces)

Each Friday, participants are e-mailed a reminder of the upcoming Monday meeting, along with a list of bills to be discussed. If there are an insufficient number of bills to warrant a meeting, the meeting is cancelled and members are e-mailed a summary of the bills and requested to submit comments by the close of business on the Monday on which the meeting was scheduled.

Members attending the January 30 meeting

Bi-County

WSSC Budget

The Washington Suburban Sanitary Commission budget process is currently underway. Each year, before January 15, WSSC must prepare a capital and operating budget for the next fiscal year and make it available to the public. The FY13 Preliminary Proposed Budget includes a request for a 7.5% rate increase, which is one percent below the spending affordability limit approved by both Montgomery and Prince George’s County Councils. The increased revenues would provide funding for water and sewer reconstruction programs and inspection and repair of infrastructure, along with a 2% cost-of-living adjustment and merit increases for all employees and union-represented employees. The proposed FY 2013 budget is 22.3% higher than the FY 2012 approved budget, with the main reason for the increase being attributed to debt service connected to the increased Capital Budget.

Prince George's County

Budget

Prince George’s County Executive Rushern Baker has begun the process of formulating the second budget of his first term in office. The Executive’s focus will be on economic development, K-12 education, public safety, health care access and neighborhood revitalization. The proposed budget of $2.5 billion is in the face of a projected $126 million deficit for 2013. General Fund expenditures are expected to increase 1.7% above FY 2112, while revenues have remained stagnant, primarily due to the sluggish real estate market. The assessable base is down 36.5% and 3.6% for residential and commercial properties, respectively. The increase in spending is due to higher compensation costs, higher fringe benefit costs, additional public safety classes and rising debts, but his FY 2012 budget is unlikely to include COLAs or merit raises for County employees.

Balancing the budget has additional challenges this year. The Governor‘s FY 2013 budget contains a $34.1 million cost shift to Prince George’s for teachers’ retirement, along with the need to back-fill reductions in federal and or state programs, and foreclosures and unemployment rates remain high. The County Executive is required to present his proposed budget by March 15.

Montgomery County

AOBA Raises Energy Tax, HOC "Reasonableness" Denials with County Executive

In AOBA’s quarterly meeting with County Executive Isiah Leggett, a roomful of commercial and multifamily members made sure that the County Executive understood that AOBA will strongly oppose any effort to repeal the “sunset” of the staggering energy tax rate hike that he and the County Council adopted in 2010. Members will recall that, in 2010, the County increased this tax by an astonishing 85%-- an effective doubling, in one stroke, of the tax that you pay on your properties’ utility bills-- which brought in $110 million dollars. Leggett had proposed a 100% increase. The Council knocked his request down 15%, but still grudgingly went along. Commercial utility customers (AOBA members) pay almost two-thirds of the total take, because of a rate disparity that favors homeowners. However: the Council also refused to make the enormous hike permanent— it put a sunset date on the 85% rate increase, so that it is set to expire in mid-2012. After that, the energy tax continues to exist, but the rates are to revert back to their pre-FY 2011 levels.

The County Executive told the assembled members “No decisions on any revenue measures have been made yet.” Thereafter, however, he wanted to make sure we understood 1) the full extent of budget cuts-- $2.2 billion in the last two fiscal years-- he has enacted; 2) that there is still presently a $100 million shortfall on the County’s current fiscal year $4.5 billion budget; and 3) the unknown, yet certain, fiscal pressures Montgomery and other counties face in the General Assembly this year—the County is asking for a waiver equating to $26 million from the State’s education-maintenance-of-effort law, while the Governor is proposing to shift $40 million or more of the State’s teacher pension obligations to the County.

Fair is fair, of course, and credit should be given where credit is due. We, in turn, pointed out that the MoCo energy tax portion is approximately 60% of a property’s bill, and exceeds the charges for the energy actual used by a property; for a typical office building, the MoCo tax, alone, is $8,000-$12,000 a month! We also noted that the County’s most recent, revised revenue estimate is showing some $100 million higher than what was originally projected.

Our second major agenda item was to express our concerns about the increasing practice of the Housing Opportunities Commission (HOC) to deny housing providers’ requested rent increases for units occupied by Housing Assistance Program (HAP) voucher holders. The HOC is citing “reasonableness“ analyses using comparisons with “comparable properties” identified by an outside contractor. We pointed out that, as far as we know, additional details/information are being provided by HOC only when a housing provider is demanding them after receiving a denial/reduction.

The fact is, the HOC started utilizing this new approach to “reasonableness” without publicizing anything about the details of it to the universe of County housing providers that take HAP voucher holders—not the base of information they are using in determining “comparable” properties to yours when issuing a denial/reduction; not the fact that you might minimize the chance of such a decision by speaking to such factors in your initial request; or that some kind of reconsideration was even possible, much less how to request same.

We know that the HOC is an independent entity—it’s not under the direct control of the County Executive, but its board members are appointed by him. We acknowledged this fact, but also let Mr. Leggett know that, irrespective, we wanted to talk with him about it, because of the adverse implications the HOC actions could have on his/the County’s housing policies.

The County Executive asked his housing director, Rick Nelson, to raise our concerns with the new executive director of HOC, who is supposed to start soon, and to also facilitate a meeting on it with him and concerned AOBA members. That meeting, we hope, will take place in the next month. In the meantime, we certainly think affected housing providers should be assertive in challenging any reasonableness determinations by HOC that they think are not valid.

Apartment Managers Urged to Attend East County Meeting

Miti Figueredo, the new Regional Director of Montgomery County’s East County Regional Service Center, is urging rental housing providers in the County to send their property managers to the Center’s upcoming Open House. It will be held on Thursday, February 9 from 3:00pm - 4:30pm. The purpose of the meeting is to allow you to voice your concerns and ask questions about the issues currently affecting East County, as well as to let your property staff meet and build relationships with the new Director and other County staff. Representatives from HHS, HOC, DHCA, the police department and the sheriff’s office will be present to provide brief updates and answer any questions you may have.

The East County Regional Service Center is located at 3300 Briggs Chaney Road, Silver Spring, MD 20904. Those who may have RSVP’d previously and anyone else who would like to attend are asked to please do so again, to allow for an accurate head count, by responding to Yonelle Moore at: yonelle.moore@montgomerycountymd.gov or on: (240) 777-8411. Refreshments will be served. The Center’s website is at: www.montgomerycountymd.gov/eastco

Streamlining the Development Process

As a part of an ongoing multi-agency effort to streamline the development approval process, the County will hold two public forums to solicit input. Agencies hope to eliminate bottlenecks, duplication of reviews, inconsistent positions and process inefficiencies in order to make the approval process more user-friendly, understandable, reliable, consistent and efficient. Advanced registration is requested. By registering for the public forum you will be given 3 minutes to present your comments, if you would like to, on the development process in Montgomery County. If so, please bring a written copy of your comments. Registration for the forum you wish to attend may be done by clicking on the appropriate link below:
February 14, 2:30-4:30 in the Executive Office Building Lobby Auditorium
March 9, 1:30-3:30 in the Executive Office Building Lobby Auditorium

Council Endorses Bus Rapid Transit for Corridor Cities Transitway

The following information is provided by County Council President Roger Berliner:

The Council unanimously endorsed bus rapid transit (BRT) as our preferred mode for the Corridor Cities Transitway (CCT) in light of a study showing a greater economic benefit to the County if the project is built sooner. This marks a change from our earlier decision to support light rail transit (LRT).

The study, which was commissioned by the Maryland Department of Transportation, assumes that the first segment of BRT (to Metropolitan Grove) could begin construction in 2018 and be completed in 2020 and that the second segment (to COMSAT in Clarksburg) could begin in 2026 and be completed in 2028. On the other hand, LRT could begin in 2028 and be completed in 2031—11 years later than BRT—and the second segment could begin in 2038 and be completed in 2040—12 years later than BRT.

The study found that the present value economic impact in the Life Sciences Corridor would be 74 percent higher, employment would be 54 percent higher, and present value tax impact would be 76 percent higher if the CCT could be build sooner.

Given the huge boost to our economy, I see this as a no-brainer, and I fully support changing our recommendation to BRT. We need the CCT, and we need it sooner rather than later.

The Council joins the County Executive and the Corridor Cities Transitway Coalition in supporting the BRT option. The Governor will make the final determination about which mode the State will submit to the U.S. Department of Transportation for funding.

For more information, see the analysis we used for our discussion.

Leggett's Proposed Capital Budget Includes Three New Road Projects

County Executive Isiah Leggett has proposed the following projects in his recommended FY 2013 capital budget:

• East Gude Drive improvements will increase roadway capacity and enhance vehicular and pedestrian safety from Crabbs Branch Way to Southlawn Lane
• Planning funds have been included for the Seminary Road intersection at Brookeville Road, Seminary Place, Linden Lane and Second Avenue and roadway improvements that will enhance traffic flow and improve safety for drivers, bikers and pedestrians
• A new Clarksburg Transportation Connections project to fund roadway and intersection improvements to increase capacity and reduce congestion. Agreements have been reached to implement this public-private partnership
• Other road improvements that will be completed include Travilah Road, Thompson Road connection and Redland Road from Crabbs Branch Way to Baederwood Lane
• Progress will continue on the Century Boulevard, Chapman Avenue Extended, Goshen Road South, Platt Ridge Drive Extended, Montrose Parkway East, Snouffer School Road, Snouffer School North and Wapakoneta Road improvement projects

Improvements on roads in the White Flint area will continue as part of larger redevelopment efforts.

County Seeks Candidates for Seats on Boards Affecting AOBA Members

County Executive Leggett is seeking candidates for appointment to the following:

• Property Tax Assessment Appeal Board -- deadline for application is February 20, 2012
• Commission on Landlord-Tenant Affairs -- deadline for application is February 17, 2012
• Solid Waste Advisory Committee -- deadline for application is February 17, 2012.

Anyone who may be interested may access vacancy announcements for boards, committees, and commissions through the following link:  http://www.montgomerycountymd.gov/apps/exec/vacancies/pr_list.asp.