Rockville City Manager Matthews Presents Budget

Rockville City Manager Barb Matthews presented her first City budget to the Mayor and Council March 18, in which she recommended a  flat property tax rate and a 4.5 percent increase in the operating budget.

Matthews’ proposed budget includes $950,000 in additional property tax revenue that the City expects to gain in fiscal year 2014 after January property assessments came in higher than anticipated.

There also is potential for additional revenue from the state in the form of increased Highway User Revenue and Police Protection aid, Matthews told the Mayor and Council last night.

Matthews took over as City Manager in October, and said her budget proposal is in line with both the City’s established financial management policies and the service priorities set forth by Mayor Phyllis Marcuccio and Councilmembers John F. Hall Jr., Tom Moore, Bridget Donnell Newton and Mark Pierzchala.

“My budget focuses on maintaining City services and improving our aging infrastructure while providing financial stability for the coming years,” Matthews said.

Matthews proposed a $112 million fiscal year 2014 operating budget, which is a 4.5 percent increase over FY13. The General Fund budget, the fund that supports the largest portion of the operating budget, is proposed to be $67.4 million, an increase of 3.2 percent. The 2014 fiscal year begins July 1 and ends June 30, 2014.

The proposed FY14 property tax rate of $0.292 per $100 of assessed value is the same as the current fiscal year – a rate that has remained constant since it was  set in fiscal year 2009.

Matthews’ proposed budget essentially holds the line on personnel expenses, which comprise 62.5 percent of all City expenses. Personnel costs in the General Fund decrease by 0.2 percent in her proposed FY14 budget. That slight decrease is achieved in part by the elimination of 7.5 vacant full-time equivalent (FTE) positions, a  move that would set the City’s FTE personnel level at its lowest since 2002.

The budget proposal includes a 1.25 percent cost of living adjustment for all full-time City employees and a 1.9 percent increase in employee benefit costs.

An increase in red light camera fine revenues is expected due to upgraded camera  technology, but this increase is not expected to continue after FY14 because the program has shown success in changing driver behavior, Matthews told City leaders.

Properties reassessed in January 2012 decreased in value by approximately four percent, significantly impacting the current year budget. Based on the January 2013 reassessments, the City’s total taxable assessment will increase by approximately three percent  in FY14. The result is more property tax revenue to fund City expenses.

“The positive change in Rockville’s economy is evidenced by increased property assessed values, the City’s growing reserve levels, the uptick in economic development and building activities, and the recent increase in income tax revenues,” Matthews told the Mayor and Council in her letter presenting the budget.

These factors, combined with the recent confirmation of the City’s AAA/Aaa bond rating, helped frame the proposed FY14 budget, Matthews added.

The City’s refuse rate remains flat from FY13 in the proposed FY14 budget, while  water, sewer, and stormwater management rates would each see increases. Based on the FY 2014 proposed rates, the average resident will pay $81.67 more per year during FY 2014, or an increase of $6.81 each month for water, sewer, refuse and stormwater management services.

The proposed $67.5 million Capital Improvements Program (CIP), the five-year plan for funding capital expenses, focuses on maintaining the City’s aging infrastructure.

Forty-seven CIP projects that are vital to maintaining the City’s infrastructure  will be supported in FY14, with $24.1 million in new funding proposed for the coming fiscal year and a carryover of $43.4 million from previous years.

The money will support infrastructure improvements including:

• Short- and long-span bridge repairs
• Pedestrian safety initiatives
• Improvements to the water treatment and water distributions systems
• Rehabilitations and upgrades to the sewer and storm water management systems
• Maintenance of playgrounds and athletic fields
• Infrastructure repair and replacement for existing City facilities
• Asphalt and concrete repair and replacement
• Continuation of the City’s annual contribution to the Blue Plains Advanced Wastewater Treatment Plant capital program.

The proposed budget includes issuance of new taxpayer supported debt for infrastructure improvements at the Swim and Fitness Center and the Civic Center Complex.

The City asks the public to stay engaged with the budget process by watching Mayor and Council meetings, attending and/or speaking at budget public hearings, and sending comments to the Mayor and Council.

The public can share their thoughts on the budget:

• In person at a public hearing (see dates below)
• In writing to the Mayor and Council at City Hall, 111 Maryland Ave., Rockville, MD 20850
• Via email to mayorcouncil@rockvillemd.gov

The Mayor and Council are scheduled to make final decisions and vote to adopt the FY14 budget at their May 20 meeting.

Other important budget dates include:

• April 1: Budget public hearing #1
• April 8: Mayor and Council budget work session #1; Constant Yield Tax Rate public hearing
• April 15: Public hearing #2; work session #2
• April 29: Public hearing #3; work session #3
• May 6: Work session #4 – final direction to City staff
• May 20: Mayor and Council adoption of the budget

Budget work actually began in 2012 with a series of staff briefings for the Mayor and Council on a variety of budget topics facing the City. Topics covered included cost cutting, City contracting and costs and revenues associated with new development, among others.

The proposed FY14 budget is available on the City’s website at www.rockvillemd.gov/budget

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