Dear Neighbors:
This week the City Council will have two meetings, first another Monday budget work session tonight (April 27) at 7:30 PM, and then a regular Council meeting on Wednesday at 7:30. There’s no public comment period tonight. Wednesday’s meeting will focus exclusively on budget matters, and will include two public hearings, one on the budget and one on the property tax rate. There’s information on the meeting agenda and how to sign up to testify here: https://takomaparkmd.gov/meeting_agendas/city-council-meeting-agenda-wednesday-april-29-2020/.
Next week we’ll have our last Monday budget session on May 4. Prior to the meeting there will be a virtual resident Q & A session with the City Manager from 5:00 -- 6:30 PM. During the meeting that night, Councilmembers --- in the process called reconciliation -- will indicate our preliminary positions on ideas for reductions or increases in spending, and other changes to the budget. We won’t meet on Wednesday, May 6 to give staff time to pull together all the necessary revisions based on the Council’s deliberations on Monday. We’ll have debate and formal votes on the full budget and tax package at the May 13 and May 20 Council meetings.
You can see the proposed budget through this link: https://documents.takomaparkmd.gov/government/finance/budgets-and-financial-documents/proposed-budget/FY2021_ProposedBudget.pdf, and last week’s presentation on capital expenditures here: https://documents.takomaparkmd.gov/government/city-council/agendas/2020/FY21-recommended-budget-2nd-work-session-2020-04-20-revised.pdf. See below also for an outline of my current thinking on the budget and property tax rate.
UPDATE FROM LAST WEEK’S COUNCIL MEETING (agenda information here: https://takomaparkmd.gov/meeting_agendas/city-council-meeting-agenda-wednesday-april-22-2020/)
Council Compensation Task Force. Every four years the Council appoints a group of residents to a Council task force to advise us on Council compensation and related matters. The task force presented its report and recommendations last week. I was one of the Councilmembers who suggested the task force this year look at the extent to which the part-time compensation for Council positions is a barrier to residents who don’t have flexible employment or who can’t take on a job that often has full-time hours and part-time pay.
The task force recommended a little more than a doubling of Councilmember pay. If approved by the Council such an increase wouldn’t apply until after the next Council election in November. I agree with the concept of raising pay to encourage a wider range of residents to run for local office. However, I don’t think an increase is appropriate in the current situation when, with the pandemic we’re seeking ways of economizing throughout the budget. So I won’t be supporting the pay increase at this time. Separately, we may vote on the revised Council compensation principles developed by the task force. If adopted, the principles could help lay the groundwork for a future Council to look at a pay increase of this type.
Stormwater Fee Structure. We’ve had several discussions over the last year about revising our stormwater fee structure to take into account the new data we have on impervious surfaces on each City property. Using that data could mean a majority of single family homeowners would pay higher stormwater fees. I think we should develop a system to better reflect how much properties contribute to untreated stormwater flows. But because of the virus and other scheduling challenges, we haven’t sufficiently reviewed the options or had the robust community engagement I’d like to see on this issue. So my preference is to leave the current system in place for the coming budget year and return to this subject later when we can give it more attention.
City Manager Comments. You can see Suzanne Ludlow’s official comments from last week’s meeting through this link: https://documents.takomaparkmd.gov/government/city-manager/city-manager-comments/2020/CityManagerComments_04.22.2020.pdf.
ANNOUNCEMENTS
Ward One Virtual Meeting. I’ll be hosting a virtual Ward One community meeting on Thursday, April 30, from 7:00 - 8:30 PM. I’ll circulate the sign-on information a day or so in advance. Any topics are welcome, but I anticipate participants may want to focus on the budget.
Public Information Act Requests. On Friday, the City Manager issued a notice suspending the requirement for the City to provide documents requested by residents under the State PIA within the standard 30 day period. This action was taken to address potential challenges City staff may face during the pandemic in being able to respond timely to PIA requests. It was recommended by Maryland’s Municipal Attorneys' Association, which worked on the issue with the Governor’s Office. The City’s notice was submitted to the Governor’s Office of Legal Counsel, which approved it before it was issued. You can see the notice here: https://takomaparkmd.gov/public-notices/status-of-responding-to-records-requests-under-the-maryland-public-information-act/
Staff posted a statement on the City website yesterday (https://takomaparkmd.gov/public-notices/status-of-responding-to-records-requests-under-the-maryland-public-information-act/) confirming the notice doesn’t constitute a suspension of PIA requests. They will still be responded to during the crisis, but it may take more than 30 days. There’s only one pending PIA, so the impact may be minimal for now. But there are important questions about the decision to issue the notice and its implementation that I look forward to having answered this week.
MORE THOUGHTS ON THE BUDGET
I’ll be providing more detailed information on the budget and property tax rate in the coming days as the Council considers reconciliation options. Overall, I don’t believe we should be thinking about the budget the way we do in a typical year, or for that matter considering a property tax increase. While the bulk of the work on the budget was done by City staff before the extent of the Covid-19 crisis was clear, I wouldn't have supported the tax increase in any case. With the pandemic, there’s less justification for it. I don't speak for my colleagues, but I'd be surprised if there is support on the City Council for any tax increase.
My hope is that we'll end up keeping the property tax rate we currently have or possibly going with the Constant Yield rate (the State's calculation of the rate that would enable the City to bring in the same total revenue next fiscal year from the property tax as we received this year). If the Council approves sticking with the current rate, most taxpayers would owe the same amount for their City property tax as they paid last year. With Constant Yield rate, it would mean a small reduction in the City property tax bill for most Takoma Park homeowners.
There could be an exception for residents who saw more than a 10 percent increase in their property assessments last year. They could have slightly higher tax bills under either rate. The difference between the two rates in terms of the City property tax a homeowner would pay is relatively small. For a property assessed at $500,000, the difference is $53.
Because there’s uncertainty about funds we may receive from the County, State and Federal governments; potential changes in the real estate market; and projections of how the pandemic may develop, I’m convinced we need a more flexible approach to the budget this year. I'm proposing that we hold off for now on sidewalk and street repair and other lower priority capital projects, along with newly proposed staff positions and currently unfilled non-critical staff slots, contributions to the Equipment Replacement Reserve, and other smaller expenditures like the community survey, the aforementioned Councilmember pay increases, and funding for festivals. These actions could free up as much as $2.5 million.
That amount would help lower the tax rate and also enable us to set aside $1.5 - 2 million, which we could tap into over the course of the fiscal year to provide Covid-19 assistance to residents and small businesses as needs continue to emerge. In addition, we could use some monies from the Housing Reserve for Covid-19 relief, and direct most City grant funding to the same purpose. If we take those steps, depending on how the year unfolds and what the Covid-19 needs are, we could still end up using some of the set-aside funds for their original purposes or to plug gaps if we receive less funding from other levels of government.
We’d be able to make those decisions at the appropriate time over the course of the fiscal year instead of having to lock in our plans now. I think we'll need that type of flexibility since again it will only be sometime after passing the budget that we'll find out about other sources of funding, not to mention getting a better idea of the longer term economic and public health outlook connected to the pandemic. This is the overall approach I'll be pursuing as we work on the budget in the coming weeks.
I generally close these messages by suggesting residents contact me with questions or comments. Given the restrictions we’re operating under because of the pandemic, the best way to talk one-on-one these days is by phone, so please feel free to call me at the number listed below.
Peter Kovar; Takoma Park City Council; Ward One
240-319-6281; www.councilmemberkovar.com
(He, Him, His)
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