Dear Neighbors: Below please find: I. Highlights of May 1 Council Meeting, II. Highlights of May 3 Council Meeting, III. Budget Process Analysis and IV. Agenda for May 10 Council Meeting
I. Highlights of May 1 Council Meeting
#1 Public Hearing
Public Comments on the Tax Rate:
– 17 people (3 from Ward 3) provided comments.
-The vast majority were critical of the tax rate increase with comments as follows: 1) The issue is getting good value for our taxes, 2) Plea to not vote a tax increase due to harmful personal impact, 3) Noted approval of proposed Capital Improvement Projects (CIP) deferrals and reductions, 4) Applauded proposed hiring freeze and provided 10 suggested cuts and reductions, 5) Noted burden on fixed income residents with both City and County increases, 6) Noted higher poverty rate for seniors and wondered if only young professionals we be able to live here, 7) Noted people will be forced to leave if taxes continue to rise, 8) Noted 10.68% increase is not sustainable and we should shift more of burden to businesses and raise utility taxes, 8) Asked don’t we have a right to live here too, 9) Noted budget creep and TKPK most highly taxed city in MD, 10) Recommended program shifts to the County, and 11) Noted she can’t take advantage of increased value of home.
– Supporting comments included: 1) Noted an anti-govt. perspective, preferring support for collective well-being, 2) Supported tax rate increase to rebuild for most vulnerable, 3) Supported tax rate increase but change the burden on long-term residents, 4) Supported tax rate increase and suggested more multi-family housing, and 5) Commented that safety requires funding and concern for fair wages.
Public Comments on the Budget:
– 9 people (2 from Ward 3) provided comments.
– Comments included: 1) Described budget debate as one about spending not definition of progressive, 2) Advocated for earlier start in budget process and use of schools for Cash Assistance outreach, 3) Concerned on proposed hiring freeze impact on employees and described lack of conversation, 4) Concerned at proposed cut in cyber security, 5) Expressed support for several positions including Eco. Development, 6) Concerned that Council is penny-wise and pound foolish notably Sustainability and hiring freeze, 7) Asked to get more bang for buck and not cut Sustainability due to available external funding, 8) Concerned about proposed cuts including Sustainability and noted seniors need education to access dollars, and 9) Said we were leaders so concerned about proposed cuts in several programs.
– Council members were asked to review for errors or questions the previously proposed line item reductions and additions but no vote would be taken.
– Many proposals were modified or withdrawn. These included: 1) Withdrawal of Code Enforcement reduction (w/agreement to review policy), 2) Several Capital Improvement Projects (CIP) matching programs moved to ARPA, 3) Withdrawal of most of the hiring freeze positions, including Sustainability, and 4) Withdrawal of several CIP items. In addition, considerable discussion took place around several positions and programs including Sustainability and Economic Development.
– Among other actions, I lowered the amount that I had proposed for Property Tax Credit program, and proposed the addition of a Stormwater Pilot project.
II. Highlights of May 3 Council Meeting
Item 1: Proclamation for Bike to Work Day
General Public Comments
– Ten residents (2 from Ward 3) commented primarily about the budget and proposed tax increase. These included: 1) Start next year’s budget sooner and use city-owned “Balancing Act” software to engage the public, 2) Suggested several cost reduction areas such as external contracts and dumpster fees, 3) Noted areas for reductions such as Public works vehicles and full-time Arts Coordinator, 4) Advocated for full Sustainability funding to access funding, 5) Noted confusion in Council’s withdrawal of many proposed reductions, 6) Noted that proposed 2% employee salary increase is hardly enough to pay car mechanic, 7) Noted avg. increase of 2 FTEs/yr. over last 10 years and tax burden, 8) Supported proposed tax rate and values city services, 9) Advocated to get off fossil fuels and supported Sustainability program, 10) Recommended cuts to City Mgr. salary and shift of Police functions.
– Council considered and debated a wide range of line item reductions and a few additions. Please see before and final reconciliation spreadsheets below. The proposed FY24 tax rate increase of 57.05 was reduced to 55.12 which is a $1.83 decrease per $100 assessed value. The reduction in General Fund expenditures was $511,456.
-Reconciliation Document before Meeting:
III. Budget Process Analysis
– A majority new Council meant a steep learning curve. Notwithstanding this, the full Council undertook real efforts to find cost savings and maintain valued services. The results, in my opinion, were only moderately successful in terms of reductions. Current programs were maintained, including Sustainability. However, I remain concerned about the increasing tax burden on some, including low- and fixed-income residents who may be “house-burdened”. Looking forward It should be noted that funds received from the American Rescue Plan Act (ARPA) are being used by the City to pay general government expenses, but the remaining funds must be expended by 2026. Long term fiscal challenges will likely increase. Therefore, I believe we must develop the discipline to reprioritize our spending based on need, effectiveness and value.
– Recognizing my newness to the Council, I have been challenged by several aspects of the budget process. A few observations include: 1) A truncated budget schedule seriously limits informed decision making, 2) Council is highly dependent on City staff for timely program and policy data, 3) A lack of performance metrics prevents review of program effectiveness and efficiency, 4) Prior policy and operational decisions frame current decision-making options, and 5) An absence of alternative budget scenarios limit the Council to narrow line-item decisions. I believe these structural and operational issues need serious attention.
My perspective on the FY24 proposed tax rate and budget was communicated in Council Comments on May 3 as follows:
The budget Debate:
· Competing values: Affordability and desired services/programs, forcing trade offs
1) Eroding affordability options for many current residents and those who would like to come here. (An increasingly bifurcated City)
2) And, we have valuable programs and services that continue to grow in cost and number
We are at a decision point with regard to both our fiscal and demographic trajectories
Time for a course correction thru balance and value.
1. Keep proven programming and services
2. But increase program efficiencies and effectiveness
3. Reduce spending & save more as business norm
4. Protect residents most affected by high taxes
5. Reduce General Fund expenditures by at least $720,000 which is Constant Yield plus inflation (CPI)
6. Maintain and build up Reserves as much as practical
We need to look beyond this budget to address longer term structural and policy challenges:
1. improve/lengthen our truncated budget review process
2. Review and update various operational policies
3. Develop and monitor performance metrics across all programs
4. Review strategies to revise property tax credit programs.
5. Review possible transition of services to Montgomery Count
6. Survey residents on program/service priorities to keep and reduce
IV. May 10 Council Agenda
City Council meetings usually take place in the Community Center Auditorium. Meetings are hybrid. The public may attend the meeting or view the meeting as always: on City TV (RCN – 13, HD 1060; Comcast/xfinity – 13, HD 997; Verizon Fios – 28), on the City Council Video Page of the City Website; on YouTube, or on Facebook. Meetings may also be viewed on Zoom.
7:30 PM CALL TO ORDER/ROLL CALL
CHANGES TO THE AGENDA / AGENDA SCHEDULING UPDATE
PUBLIC COMMENTS ON VOTING ITEMS
· Comment in person or via Zoom.*
GENERAL PUBLIC COMMENTS
· Comment in person or via Zoom.*
*To comment on Zoom, registration is required by 5 pm on the day of the meeting. There is no registration requirement to comment in person.
CITY MANAGER COMMENTS
1. First Reading Ordinance Adopting the FY 2024 Tax Rates
Council Vote to Convene as the Stormwater Management Board
2. First Reading Ordinance Adopting the FY 2024 Stormwater Management Budget
3. First Reading Ordinance Adopting the FY 2024 Budget
FY2024 Proposed Budget
4. Grants Review Committee Recommendations
BUDGET WORK SESSION
5. Maple Avenue Connectivity Project Contract Award Recommendation and Draft Ordinance
6. Resolution Regarding Policy Options Concerning Long Term Fiscal Health of the City and Exploration of Additional Revenue Sources