Monthly Archives: April 2020

Adam Pagnucco, Casa de Maryland, MoCo Most Influential, Rich Madaleno, Robin Ficker

MoCo’s Most Influential, Part Six

By Adam Pagnucco.

Part One of this series laid out the rules and methodology for how we determined MoCo’s most influential people. These lists were developed by adding together the nominations of 85 people who are themselves extremely knowledgeable and influential. Today, we continue the list of the most influential non-elected people in MoCo.

12. Steve Hull, Editor-in-Chief and Publisher, Bethesda Magazine/Bethesda Beat – 9 votes

Source: While Bethesda Magazine / Bethesda Beat is not a political publication it has become one of the main local sources of news which means which stories are run and what information they present have influence. Just avoid the comment section!

AP: Let’s just state the obvious. Without Steve, MoCo would be close to a news desert. Steve would do just fine if all he had was Bethesda Magazine, but thank God he also runs Bethesda Beat. It is essential reading for anyone who cares about the community.

11. Josh Kurtz, Co-Founder and Editor, Maryland Matters – 10 votes

AP: As if being the best political writer in the state wasn’t enough, Josh had to go and found Maryland Matters, which is now the single best place to read about state politics. Political junkies all over the state are grateful!

10. Gustavo Torres, Founder and Executive Director, CASA – 11 votes

Source: Head of CASA only grows as a force to reckon with.

AP: From a church basement to the pinnacle of state and local politics, Gustavo is arguably the most powerful immigrant advocate in the entire Mid-Atlantic region. As CASA gets bigger along with the immigrant population, there is no end in sight to its influence.

9. Robin Ficker, Attorney, Former Delegate and Political Heckler – 12 votes

Source: His ballot measures have passed and upended things. He’s a fool of great consequence.

Source: Ficker knows how to craft winning ballot petitions and campaigns behind them. Ficker’s smarts are masked by his nutty personality, which causes people to underestimate him.

Source: Has accomplished more than some elected officials.

Source: May be obnoxious and annoying but his referendum drives influence the county.

Source: Crazy, but holds outsized influence.

AP: Ficker doesn’t get much love from my sources but one could make the case that he is actually the most influential non-elected person in the county. Who else has nearly single-handedly passed two charter amendments in the last twelve years with another possibly on the way? He has far more influence now than he ever did in his one term as a Delegate, and if his new anti-tax charter amendment passes, it will have a huge impact on county government for a loooooooong time.

7 (tied). Diana Conway, President, Women’s Democratic Club – 14 votes

Source: President of the Women’s Democratic Club, energizer bunny energy, often found walking the halls of Annapolis or e-mailing Councilmembers, throws a who’s who holiday party.

Source: Extremely connected, a force. Strong voice and everyone knows where she stands. Unafraid to go against the tide.

Source: Diana Conway is the president of the Women’s Democratic Club which was a pretty sleepy affair until Linda Kolko’s presidency and continuing through the presidency of Fran Rothstein. Now, they co-sponsor all sorts of events with “Do the Most Good,” and “J Walkers” and “Resist” and some others who I hope would forgive me for not having their names on the tip of my keyboard.

AP: Her nickname is Madam Kickass and that is the double truth, Ruth! Few people in the county can match Diana’s brains, tenacity and sheer capacity to do anything she decides to do. Her presidency of WDC is only the latest sign of her growing influence. PS – I feel sorry for the bureaucrats who have to answer her emails about artificial turf fields!

7 (tied). Rich Madaleno, Director, Montgomery County Office of Management and Budget and Former State Senator – 14 votes

Source: The budget whisperer. He plays a critical role in explaining how the county budget works to, well, everybody but especially Marc Elrich. Retains great Annapolis contacts.

Source: He’s become one of the county executive’s top defenders and surrogates while continuing to be an idea machine.

AP: The budget director is always important, but Rich’s experience at the state level and his status as a long-time (and effective!) former elected official make him even more influential than his position warrants. The budget crisis resulting from COVID-19 makes his role more critical than ever.

Part Seven will contain the much-awaited, soul-searing conclusion!

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Adam Pagnucco, budget

Magic Asterisk in Elrich Budget Blows Open $10 Million Hole

By Adam Pagnucco.

There are many reasons to read government budgets. They illuminate the structure, function and priority of governments. They reflect what politicians actually do vs what they say. They lend themselves to making marvelous spreadsheets. And once in a while, you find something a little odd. Maybe something weird. And on rare occasions, something wilder than a jungle full of battling predators.

This is one of those rare occasions!

The item at hand is a non-departmental account (NDA) buried on page 70-28 in the county executive’s recommended budget. NDAs are expenditures that fall outside individual departments or apply across multiple departments. (Here’s a secret: these are some of the most fascinating items in the entire budget!) One new NDA recommended by the executive is called “Productivity Improvements.” Here is how the executive’s budget describes it.

This NDA recognizes cost efficiencies identified by Montgomery County Government staff through the evaluation of service delivery models, supervisory/management and workforce structures, relevant tools, equipment, and technologies, operating budgets, and contracts with outside vendors. The critical assessment of these factors and formulation of strategies to maintain, increase, or improve service delivery at a lower cost is a pillar of good government, especially in a fiscally challenging environment. The productivity and performance improvement effort is a collaborative initiative that involves County leadership, management, and represented employees.

The appropriation amount for this NDA is negative $10 million. You read that correctly. It’s not $10 million. It’s negative $10 million. That’s because the administration thinks it can save $10 million through “cost efficiencies.” What are these efficiencies exactly?

It’s not clear.

These “cost efficiencies” are definitely not achieved through government restructuring that saves a lot of money, a major campaign promise by the executive that has not been kept. Neither are they achieved through trimming employees since the executive’s budget adds 184 full-time-equivalent positions.

Council Member Hans Riemer called it a “$10 million magic asterisk funding item” and compared it to the deficit-exploding budget chicanery of the Reagan administration. Council Member Andrew Friedson called it a “phantom negative appropriation” and added, “Hoping for cuts is not a strategy. Asking for cuts to be made at a later date, for efficiencies to be found at a future time is not an appropriate way to pass a budget… We can’t just rhetoric our way out of this. We need results to get our way out of this. And we need reality to be part of this. And a $10 million phantom possibility to be named at a later date is not reality. It’s fantasy.”

When asked what this “magic asterisk” actually was, Council Staff Director Marlene Michaelson replied that it was “anticipated efficiencies that may be identified.” Michaelson added, “So from our perspective it means that there is a $10 million hole that the council needs to now fill either through additional reductions or additional resources. And given the signal that the council has already sent us about not wanting to try and increase taxes, it really is going to be additional reductions that need to be identified.”

Why does the magic asterisk create a $10 million hole? It turns out that it violates the county’s charter. Back in May 2008, the council resolved a disagreement over a property tax hike by reducing its size and passing a budget resolution calling on the executive to trim $13 million through unspecified efficiencies. Council staff uncovered a 2009 memo from County Attorney Marc Hansen concluding that such a negative appropriation violated the county’s charter. Hansen wrote:

A negative appropriation is not consistent with the Charter. A negative appropriation acts as a general command to the Executive to reduce appropriations made elsewhere in the budget. This is not consistent with the Charter, because the Charter requires the Council to adopt a budget that includes appropriations of specific amounts for specific purposes for the ensuing fiscal year.

Hansen remains the County Attorney today. It is unknown why the executive branch apparently did not know of this legal determination when formulating its budget.

Productivity improvements are great things when they are REAL. And when they are real, they can be booked inside departmental budgets. Is there new technology in the libraries that increases productivity? Great, then you can ask for $42 million for the libraries instead of $43 million. Is there new scheduling software in the fire department that can control overtime? Great, then you can ask for $227 million for fire services instead of $229 million. (OK, maybe we should not discuss fire department overtime.) The point is that there is a big difference between REAL productivity improvements and “anticipated efficiencies that may be identified.”

And so the magic asterisk has created a $10 million hole in the budget that the council must now close. The coronavirus crisis ensured that this year’s budget was going to be very tough. Now it’s a little bit tougher.

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Adam Pagnucco, COVID-19, Economy

Huge Demand for COVID-19 Applications

By Adam Pagnucco.

Montgomery County’s COVID-19 assistance application went live today around 3 PM and demand was both immediate and heavy.

One applicant who completed the county’s form described the process to me as lasting less than 10 minutes. She encountered no problems and said she was “very impressed.”

Another applicant tweeted that he applied roughly 45 minutes after the application went live and was assigned application number 721.

That’s important because, according to the county’s regulations, the first tranche of $10 million will include individual awards of $10,000 each. That implies that only the first qualifying 1,000 applicants will get initial assistance awards. Conceivably, the county could get 1,000 qualifying applications in just a couple hours – or less.

One glitch in the rollout involved an email signup shown on an earlier version of the website. (It’s no longer available.) I signed up a couple days ago and received notification of the application at 4:30 PM. By that point, the queue may have filled up.

Intense interest in assistance will result in the county’s initial funding being claimed RAPIDLY. Those who waited for email notification or other official notice from the county will no doubt raise process protests if they indeed lose out because of application timing.

The process has been far from perfect as I have previously written. But let’s also acknowledge that even with a perfect process, this was going to be very tough sledding.

Expect more of the same!

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Adam Pagnucco, Marc Elrich, planning

Elrich Requests That Planning Board Limit Work to “Noncontroversial” Issues

By Adam Pagnucco.

In a letter to Council President Sidney Katz, County Executive Marc Elrich has asked the council to limit the work of the Planning Board to “noncontroversial” issues during the COVID-19 crisis.

Elrich begins his letter by noting that the council has delayed some hearings on non-budget issues due to problems of public participation stemming from social distancing. Elrich contrasts that with the planning board’s policies. He writes:

The Planning Board continues to meet, have substantive presentations, and take action on controversial matters important to the public. While its meetings are available on the website and the Planning Board has provided a form for public participation, the new process is complicated and subject to ‘technical difficulties,’ as happened on Thursday, April 2nd. The result is little, if any, participation by a distracted public.

After noting two issues of public interest before the board – an amendment to environmental overlay zones in Ten Mile Creek and ongoing work on the Subdivision Staging Policy – Elrich writes:

I ask that the Council give direction to the Planning Board consistent with its own decision to delay certain public hearings until such time as the public can more fully participate. Because sensitive environmental and major policy decisions require full public participation, I recommend that the Board limit its actions to those agenda items that are noncontroversial, necessary for the administrative functioning of the agency, and unrelated to major policy decisions that will come before the Council.

It’s unclear whether the council has the specific authority to direct the Planning Board in how to perform its work. The council does fund the agency and it appoints Planning Board Members. Complicating the issue is Elrich’s barely veiled contempt for Planning Board Chair Casey Anderson. Last year, Elrich told Bethesda Beat that he was “not a fan” of Anderson but the council unanimously reappointed him as chair anyway.

We reprint Elrich’s letter below.

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Adam Pagnucco, COVID-19, Economy

Elrich Administration Releases COVID-19 Small Business Assistance Regs

By Adam Pagnucco.

At 9:09 PM last night, I published a post on the county’s $20 million COVID-19 small business assistance program noting that no regulations governing its disbursements had yet been sent to the county council or published for the public. Roughly 20 minutes later, the regulations were sent to the council and forwarded to me by multiple sources almost immediately. The regulations appear below.

There are many details of interest to applicants, who should read every word of these regulations. The provisions that stand out to me are the ones setting aside $10 million for near-term disbursement and reserving $10 million for later. Consider these specific provisions.

Section 4 (b). $10,000,000.00 of funds appropriated for this Program are reserved for businesses or nonprofit organizations that demonstrate Significant Financial Loss. The initial grant award disbursed under this component of the Program is $10,000. The remaining amount of Significant Financial Loss demonstrated by these businesses and non-profit organizations may be disbursed subsequently, subject to the availability of funds.

Section 5(e)(B)(6). Business that have suffered Significant Financial Loss will be eligible for an immediate disbursement of up to $10,000. If the Percentage Decline is 50% or greater, Subtract the Adjusted PHE Revenue from the relevant historical average (Monthly Historical Average for monthly Adjusted PHE Revenue, Quarterly Historical Average for quarterly Adjusted PHE Revenue) to get the Recommended Grant Amount, up to a maximum of $10,000.

Section 5(e)(B)(7). Subtract the Adjusted PHE Revenue from the relevant historical average (Monthly Historical Average for monthly Adjusted PHE Revenue, Quarterly Historical Average for quarterly Adjusted PHE Revenue) to get the Recommended Grant Amount, up to a maximum of $75,000.

Section 5(e)(B)(8). Subject to the availability of funds, once the initial $10,000,000 reserve has been committed, applicants who qualified for more than an initial disbursement of $10,000 and applicants who qualify for a grant that have not received funding will be evaluated and the remaining balance will be disbursed.

And so $10 million will be disbursed sooner and $10 million will be disbursed later. Instead of the full $75,000 maximum grant provided in the legislation passed by the council, applicants will get a maximum of $10,000 in the first round and may get a chance for more money later. When will the second $10 million go out? That’s not clear, but the caveat of “subject to the availability of funds” in Sections 4(b) and 5(e)(B)(8) is not encouraging. Given the volume of paperwork required in the application process, it could take a while.

None of this appears in the legislation creating the program. The council prioritized speed in disbursing the full $20 million it allocated for assistance. The executive branch took twice as long as the District of Columbia to get its assistance program going and now plans to hold back half the money. The council just introduced a new appropriation of $5 million for restaurants and retailers. Given these regulations, what will happen to that money?

The executive branch is not implementing this program in accordance with the legislative intent of the council. The council must take additional action to enforce its will. NOW.

The regulations appear below.

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Adam Pagnucco, COVID-19, Economy

Fact, Rumor and Chaos on COVID-19 Assistance

By Adam Pagnucco.

The county has announced via press release that COVID-19 assistance for small businesses will be open for application tomorrow (April 15). But questions arise both from the release and what is not in the release.

1. The application process is supposed to open in the “mid-afternoon.” No exact time is given in the press release. Will business owners be refreshing their browsers for hours waiting for the application to go live?

2. According to the press release, “The County will host webinars to answer questions and provide updates on the PHEG program starting at 9 a.m. Mondays through Saturdays. The first webinar will be held on Thursday, April 16.” In other words, the first Q&A webinar will not take place until THE DAY AFTER applications open.

3. As of this writing, multiple sources in the council building report that the council does not have final regulations governing the disbursement of the money. How is the administration going to make decisions on who gets the money? Why have these criteria, in the form of a regulation or otherwise, not been publicly released – or at least sent to the council – prior to the start of applications?

4. The legislation passed by the council authorized grants of up to $75,000. At the time of passage, council members stressed their interest in rapid disbursement. Today, a phone call was held by representatives of the executive branch with representatives of the business community in which some details were shared about the administration’s plans. According to an individual present on the call, “We heard that the 1st wave was the first 1,000 qualified recipients would receive $10,000 as a start. They may receive more later TBD.” Furthermore, only losses in March will be considered and priority will go to businesses with losses of more than $50,000. An earlier requirement that applicants apply for federal and state assistance first has been dropped. So it appears that $10 million will be disbursed first and that $10 million will wait for later – at least as of this writing. If there is indeed a hold on part of the money, why is that? What will happen to it and when will it get released?

This would be a lot easier to figure out if the administration simply released its regulations on how they are making these decisions, or even a simple guidance document. Instead, in the absence of published documentation, rumor rules the day.

Let’s be clear: the executive branch is in a tough spot here. They had to stand up a $20 million assistance program on short notice (although D.C. did the same in half the time). If they disburse small checks to lots of businesses, the money may not be enough to help any of them. If they disburse large checks that might be helpful, MANY businesses will be left out. So there are choices to make.

The problems are that the executive branch is diverging widely from the intent for speed of the legislation passed by the council, is forcing applicants to sit next to a browser and refresh it potentially for hours, is not offering aid for completing the application until the day after it goes live and has not published details of how it intends to spend $20 million.

This process is in need of improvement.

The press release is reprinted below.

For Immediate Release: Tuesday, April 14, 2020

Montgomery County Public Health Emergency Grant (PHEG) Program Applications Will Be Accepted Starting Mid-Afternoon on Wednesday, April 15

Montgomery County will begin accepting applications to its Public Health Emergency Grant (PHEG) program beginning mid-afternoon on Wednesday, April 15. The PHEG initiative is designed to help for profit and nonprofit businesses with 100 employees or fewer during the current public health crisis.

A sample of the application is now available in English and Spanish on the PHEG program web page. The website provides information for businesses on how to prepare their grant applications. The sample applications will guide businesses in pulling together the information and documents required to file their applications.

A fact sheet describing eligibility and document requirements also will be available in Spanish, Amharic, French, Korean, Mandarin and Vietnamese.

The $20 million PHEG initiative is a collaborative effort between County Executive Marc Elrich and the Montgomery County Council. In addition to for-profit and nonprofit businesses, the program is open to businesses with no employees including sole proprietors and independent contractors.

Montgomery County’s PHEG program is intended to provide financial assistance to establishments that have experienced a significant reduction in revenue as a result of the current public health emergency. The County is encouraging businesses and nonprofit organizations to review other assistance programs and apply to those for which they are eligible.

The County will host webinars to answer questions and provide updates on the PHEG program starting at 9 a.m. Mondays through Saturdays. The first webinar will be held on Thursday, April 16. For links and instructions, visit www.montgomerycountymd.gov/biz-resources/pheg.

More information on the PHEG program is available at www.montgomerycountymd.gov/Biz Resources/pheg/. Questions about the program should be directed to BizinfoCovid19@montgomerycountymd.gov.

For the latest updates, visit the County’s COVID-19 website and follow Montgomery County on Facebook @MontgomeryCountyInfo and Twitter @MontgomeryCoMD.

#

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Montgomery County Council

Mais Oui, You Can Testify on the Budget! Insta Council Irony

From the Montgomery County Council Instagram Account on April 14th.

Yesterday, the Montgomery County Council gave notice of budget hearings on Instagram. Ironically, though first posted in English at 6pm, residents who wanted to testify needed to have signed up by 3pm.

Good news, however. They posted it in French on April 9th!

From the Montgomery County Council Instagram on April 9th.

If you follow Council actions but don’t speak the language of Voltaire yet wanted to testify, you better have followed them on Twitter where the same graphic was posted last week.

Or maybe Council President Sidney Katz made a TikTok. But I’m too old to know.

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Adam Pagnucco

Commercial Property Removed from Rent Control Bill

By Adam Pagnucco.

In another twist to MoCo’s rent control saga, commercial property has been removed from Council Member Will Jawando’s rent control bill.

The original draft of the bill posted on the council’s website did not distinguish between property types, but because it added language to a section of law covering housing, it did not cover commercial property.

Yesterday, a new draft of the bill showed up online explicitly including commercial property. I took a screenshot of that version proving commercial property’s inclusion.

Today, a third version of the bill now excludes commercial property. It also narrows the definition of public emergency to just a “catastrophic health emergency,” a change sought by Council Member Nancy Navarro and made in the second version of the bill. The third version language below has removed all mentions of commercial property. In his verbal comments on introduction, Jawando confirmed that it now applies only to residential property.

So what happened? After the second version showed explicit coverage of commercial property, the business community erupted in outrage. The chambers of commerce representing the county, Silver Spring and Bethesda sent the letter below regarding statements made by Jawando about the bill.

Bruce Lee, President and CEO of commercial property owner Lee Development Group, made the statement on Facebook below. Lee is a member of the boards of the county and Silver Spring chambers.

What has the chambers, Lee and others in the business community upset are Jawando’s claims made in this video that he has received multiple reports of rent increases of 20%, 30% and 40%. In his remarks at the bill’s introduction, Jawando alleged that tenants in the following properties had been notified of the following increases.

The Gallery in Bethesda: 35% rent increase
Quebec Terrace in Long Branch: 9% rent increase plus late fees
The Grand in North Bethesda: 14-60% rent increases

Jawando will no doubt be called on to prove the existence of these increases.

Jawando said the Department of Housing and Community Affairs is hearing about this “every day.” He also offered praise for other landlords such as Southern Management and Wilco for working with tenants rather than imposing large rent increases.

It’s typical for bills to go through multiple drafts before introduction. That’s the result of feedback and the gathering of co-sponsors and is a normal part of the legislative process. But that usually goes on before a bill is published on the council’s website. In this case, because the bill addresses an issue that the lead sponsor believes is urgent, the bill has been changed in real-time online. I have been writing about county politics off and on for 14 years and I don’t remember the last time I saw the same hyperlink leading to three different versions of the same bill over three days prior to formal introduction. That means that, depending on when one viewed the council’s website, a person could have seen one of three versions of the bill and drawn very different conclusions about it. That confusion has stirred even more controversy than this bill might normally generate.

With four council members listed as sponsors (Jawando, Navarro, Craig Rice and Sidney Katz), only one more vote will be required for passage. Expect amendments to be considered.

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Department of Liquor Control, Montgomery County

Elrich Says Riemer Alcohol Proposal Unsound and Unlawful

County Executive Marc Elrich has written Councilmember Hans Riemer to explain why Riemer’s proposal to allow restaurants to defer payments to ABS, the county alcohol monopoly, would violate the law and is a bad idea:

After reviewing your suggestion, we have determined that your proposal would violate federal law. The TTB, formerly the Department of Alcohol, Tobacco and Firearms, would consider the payment terms as a consignment sale, which is prohibited. Even providing different payment terms to different classes of customers is discriminatory. This is not to say that we can’t look at some reasonable extended terms for all of our licensees that may, in the shot term, be acceptable to the county, and meets all allowable legal criteria. As we consider these terms, we will balance that with the higher risk of potential payment defaults by those businesses that may have to close permanently.

Even if the proposal were legal, it would not be sound business or fiscal practice and could jeopardize county revenues and projects. ABS is run as a business, which means that it needs continued revenues to continue operating. If payments were deferred for 12 months, that could create a cash-flow problem for ABS, which needs to pay for inventory, supplies, wages, and leases on retail stores. Without sufficient revenue, the county would have to supplement ABS, reversing the current situation where ABS generates significant revenue for the county and remains self-funding, allowing it to pay for its own operating expenses. Those revenues are used to bond certain county projects. Deferring payments for many licensees for a year would cause a default on loans and would make it difficult – if not impossible – for ABS to operate in the black and continue to produce the surplus funds that go to the county treasury.

Much of the rest of the letter, printed in full below, explains how the county is otherwise working to aid restaurants and thanking the county council for their efforts during the COVID-19 crisis.

Elrich and Riemer have clashed frequently, so the disagreement here isn’t exactly surprising. It’s well known that Riemer plans to challenge Elrich for county executive and attacks him at every opportunity. Riemer’s proposal make him look like he worked fast to help businesses and forces Elrich to play the bad guy and shoot it down.

At the same time, that his idea is illegal and unworkable reinforces the perception that Riemer simply doesn’t think his ideas through and is looking to score quick political points rather than accomplish anything, even in a time of crisis.

Riemer’s lack of attention to the bond issue is especially strange. Defenders of the liquor monopoly, like both Elrich and Riemer, have repeatedly used the link between the bonds and alcohol revenues as a reason that the county liquor monopoly cannot be abolished.

It’s especially damning since Riemer prides himself on being an expert on the alcohol issue and having chaired the Council’s Ad Hoc Committee on Liquor Control back in 2015. Even the long-term politics are questionable as progressive Elrich has now positioned himself as the fiscally responsible alternative to Riemer–quite a feat.

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Adam Pagnucco, COVID-19, Economy

D.C. Leads MoCo on COVID-19 Grants

By Adam Pagnucco.

As complaints mount on MoCo’s not-yet-functioning process for distributing COVID-19 grants to small businesses, let’s contrast our performance to the District of Columbia.

The D.C. City Council passed a bill creating a $25 million grant program for small businesses impacted by the COVID-19 crisis on March 17. The bill also contains a number of delays on taxes and regulations that were not part of Montgomery County’s relief package, although some similar measures have been adopted by other counties in Maryland.

The D.C. government opened the applications process for the grants on March 24. The applications were closed on April 1.

That means 7 days elapsed between the creation of the program and the start of applications. The total time between creation of the program and the closing of applications was 15 days.

The Montgomery County Council passed a bill creating a $20 million grant program on March 31. On April 8, 8 days later, 7 council members wrote a letter complaining to the county executive that the grant process was nowhere close to being ready. That same day, the county published a document list for the grant process but had no application available.

Today is April 14. D.C. opened its applications within 7 days of its council creating its grant fund. MoCo has gone 14 days since creating its fund and, as of this writing, no applications are online. It has been almost two weeks since D.C. closed its application process and we don’t even have one yet. Small businesses in D.C. had a chance to apply for assistance in time to pay rent and bills due on April 1. Small businesses in MoCo did not have that chance.

What is going on, MoCo government?

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