Dear Neighbors:
The City Council meeting on Wednesday, May 13 will be an important one, as the Council will take our “first reading” votes on the Fiscal Year 2021 municipal budget, property tax rate, and stormwater fee. The second and final round of votes is scheduled for the May 20 meeting. Here’s a link to the agenda information for May 13: https://takomaparkmd.gov/meeting_agendas/city-council-meeting-agenda-wednesday-may-13-2020/. This agenda also includes a public hearing and work session on two traffic calming measures for Wildwood Drive. To testify at the hearing or to make comments on other topics, please register by 5:00 PM on Wednesday via the links in the above agenda material. See below for more details on Wednesday’s agenda items.
ANNOUNCEMENTS
Ward One Virtual Community Discussion -- Tuesday, May 12 at 7:00 PM. I’ll be hosting another virtual discussion using Zoom technology. As with the previous online get-togethers, I anticipate an emphasis on budget issues, but any topics are welcome. You’ll need to register in advance in order to participate, which you can do through this link: https://us02web.zoom.us/meeting/register/tZckc-2vpjIpE92A0j2MjdveBxK4VUCvGV09. After registering, you’ll receive a confirmation email with information about joining the meeting.
Takoma Park Covid-19 Resources Webpage. This information is updated on an ongoing basis: https://takomaparkmd.gov/initiatives/project-directory/information-and-resources-covid-19/
May 6 City Manager comments. https://takomaparkmd.gov/government/city-manager/. Through this link you can see Ms. Ludlow’s comments from last week’s Council meeting, plus a list of the actions she’s taken under the pandemic emergency authority approved by the Council.
UPDATE FROM LAST WEEK’S COUNCIL MEETING -- Public Information Act Issues
Based on advice from the City Attorney, the State association of municipal attorneys, and the Governor’s office, in late April the City Manager issued a notice stating that -- because of the Coronavirus pandemic -- the City would be suspending the normal 30-day response time for records requested under Maryland’s Public Information Act (PIA). This action was taken out of concern that for some PIA requests the records might not be readily retrievable with staff working from home during the pandemic, in particular if the records weren’t in electronic form. In addition, some of the relevant staff might have less time to devote to record searches because they are spending time responding to Covid-19 needs in the community.
Unfortunately, due to staff error, the notice was posted before it was brought to the attention of Councilmembers. In addition, its language was interpreted by some in the community as suspending all responses to PIA requests. I would be adamantly opposed to a blanket suspension of the PIA, which would seriously compromise Takoma Park’s commitment to transparency in government. It would also be illegal. The purpose of the notice was not to suspend all PIA responses, but rather to announce that in some cases the 30-day deadline might not be able to be met. Without a notice explaining this situation, the City could be in violation of the PIA. If staff had taken additional time to consider the details of the notice and confer with Councilmembers, I think at least some of the concerns about this matter could have been mitigated.
To gain a better understanding of what happened with the issuance of the notice and its legal background, and to help determine the best path forward, Mayor Stewart called for a special Council session on this topic this past Wednesday. Based on our discussion, I’m convinced the staff’s premature posting of the notice, though careless, was not intentional. It’s also clear to me that the intent of the notice was not to suspend all PIA responses, but instead to have staff continue trying to respond within 30 days, with the understanding that in some cases that may not be feasible. If staff may be unable to respond to PIA requests within the normal timeframe because of the pandemic, I think it makes sense to alert the public in advance that a delay could occur. But any notice along those lines has to be more thoughtfully drafted.
In the Council discussion on Wednesday with City staff and the City Attorney, there was agreement to amend the notice to clarify its purpose, to reaffirm staff’s intent to use their best efforts to respond within the 30-day period, and to require periodic reporting to the Council on the number of PIA requests the City has received, whether any have not been able to be responded to within the normal deadline, and the reasons for the delays. It’s my hope that an approach along these lines will enable us to appropriately maintain our commitment to transparency within the context of the daily challenges posed by the virus.
Finally, given the concerns over how questions on the PIA order intersect with reservations that have been expressed about the City Manager’s pandemic-related emergency powers approved by the Council, the Mayor has scheduled a Council discussion on the emergency powers resolution in our June 3 Council meeting. This session will be an opportunity for residents and the Council to comment on and consider how the authority has been used and if we want to continue it.
MAY 13 CITY COUNCIL MEETING
Wildwood Drive Traffic Calming: https://documents.takomaparkmd.gov/government/city-council/agendas/2020/council-20200513-1-2-6.pdf
Fiscal Year 2021 City Budget, Property Tax Rate, and Stormwater Fee.
Last week, in a Monday night session lasting until nearly 1:00 AM, the Council -- in a series of initial budget votes -- made a range of spending reductions to the proposed budget through the reconciliation process; established a Covid fund to help Takoma Park assist residents and small businesses facing financial and health related challenges connected to the Coronavirus; put a number of proposed expenditures on hold pending further review of the pandemic’s impact and its effects on City finances; decided to keep the 2021 Fiscal Year stormwater fee for single family homeowners the same as last year; and agreed to set this year’s property tax rate at the same level as last year. At this week’s and next week’s Council meetings we’ll be voting on three separate ordinances to effectuate the actions we took on Monday night. City staff are compiling the relevant documents, but they weren’t yet finalized at the time I prepared this write-up.
Budget Cuts/Covid-19 Fund
In the reconciliation process we cut approximately $1.2 million from the City Manager’s proposed budget; allocated $440,000 of those cuts to establish a Covid-19 fund for residents and small businesses; added about $195,000 in unused Fiscal Year 2020 funds into the Covid-19 fund; and put on hold $1.3 million of proposed expenditures pending further review. Those “held” funds will be deposited into our unassigned reserves account, and depending on the future path of the pandemic, can be used for additional financial assistance to residents and businesses, to help fill gaps in funding from the Federal, State or County governments, for their originally intended purposes, or simply held in the unassigned reserves. This year’s budget ordinance will have specific language requiring us to review our fiscal condition on a quarterly basis to determine whether or how to make use of these on-hold funds.
The $1.2 million in reductions mentioned above included over $500,000 in salaries and other personnel costs achieved in part by not filling some open staff positions, plus the following additional cuts: not going forward with the Council pay increase recommended by the Council Compensation Task Force; cancelling the residents survey; eliminating funds for large public festivals and events; withholding more funds for the Housing Reserve; removing extra stormwater dollars; deleting excess money for the Police Pension; and smaller cuts in the budgets for Sustainability, public art, and public lands. I voted for all these cuts, plus a few others that didn’t pass. The one successful budget cut I didn’t support was the proposal to remove $50,000 from the $500,000 allocation for street re-surfacing. I voted against that motion because I was planning to propose shifting that entire $500,000 into our hold list for deposit into the unassigned reserves (in the end, as noted below, we moved the remaining $450,000 into the hold category).
Other items in the hold category included $500,000 in sidewalk resurfacing (which I proposed), plus another $320,000 in staff cuts, and $30,000 in tree canopy funds. When these three items are added to the $450,000 in street resurfacing funds, it produces a total of $1.3 million that was placed on hold. I voted unsuccessfully to move another $1.3 million onto the hold list through three other proposals: Councilmember Dyballa’s motion covering $400,000 in staff compensation; and my own to put this year’s $600,000 contribution to the Equipment Replacement Reserve on hold, along with another $300,000 to further restrict new or unfilled staff positions. These three motions weren’t approved by the Council.
So my preference was that we put on hold a larger amount of funds than we ultimately agreed to. That said, when the $1.3 million we’ve placed for now in the unassigned reserves is added to the estimated $1.8 million already in that reserve, along with around $650,000 in other emergency and contingency reserves, plus over $1 million in the Housing Reserve (which could be re-programmed for other non-housing purposes by a Council vote), we have around $4.8 million on hold or otherwise available under the budget plans we’ve tentatively agreed to on Monday.
Property Tax Rate
As I’ve mentioned in previous blogs and public statements there was no appreciable Council support for the increased tax rate in the proposed budget. I thought we should start with last year’s rate (53.97 cents per $100 of assessed property value), and then explore reducing it once we had a clearer sense of our Coronavirus response needs. I was hopeful we would be able to get to Constant Yield (52.91 cents per $100 of value, the rate estimated by the State to enable the City to bring in the same overall amount of revenue from the property tax this year as last year).
On Monday once we had voted on the reconciliation cuts, we turned our attention to the tax rate. With the $1.2 million in agreed-upon cuts, it was possible to keep the tax rate at .5397 and allocate the remaining $440,000 in cuts to the Covid-19 fund. To get from the current rate to Constant Yield required another $265,000 in cuts. So I proposed that we lower the rate to Constant Yield and then tap $200,000 or more from the Housing Reserve, possibly combined with some funding to be shifted from our City grants program, to produce the same $440,000 for the Covid-19 fund. My proposal was voted down, and the Council decided to stick with .5397.
The impact for homeowners depends largely on how their property assessments changed in last year’s re-assessments. For those whose assessments went down, they will most likely pay the same amount in City property taxes as last year. Those who saw increased assessments -- which are generally phased in over three years until the next re-assessment -- may pay more. Even under Constant Yield, some taxpayers would pay more. Overall, the two rates are relatively close in terms of the amount homeowners would pay. For a property assessed at $500,000, the .5397 rate means a tax bill about $53 higher than .5291 ($2,698 vs. $2,645).
However, I don’t think those figures tell the whole story. In last year’s re-assessments, out of our 3,459 single family dwellings, 1,162 properties’ assessments went down, while 1,426 saw increases of between 0 and 10 percent, with another 871 experiencing increases of 10 percent or more. That means that 2/3 has their assessments go up. And while some of those may have been by relatively small amounts, and there are no doubt some residents for whom the higher tax payment won’t be a substantial burden, the increased assessments are spread around the City, including in areas that tend to have lower incomes. While the City has credit programs to help those who may struggle to pay their property taxes, and we’re looking at expanding those initiatives, I think it would have been better to go with Constant Yield, especially given that we could have still ended up with the same amount of money in the Covid-19 fund.
Next Steps
From the beginning of our Council discussions of the budget, I’ve argued that this year we have to take a much more flexible approach. In particular, because there’s so much uncertainty now about the longer term impact of the pandemic -- right at the time we’re putting together our budget -- I’ve pushed for us to put a substantial amount of funds on hold with the ability to consider over the course of the fiscal year whether we’ll need to shift them into responding to Covid-19. And while, as described above, I would have preferred that we put more money on hold, I think we’ve made some important strides in that direction.
With the principle of being prepared to shift dollars to help with the pandemic now being a key part of the budget, I think we’re reasonably well positioned to expand the amount of funds we’ve designated for that treatment should it become necessary. And we’ll be monitoring our fiscal status carefully on a quarterly or more frequent basis. As an example, because the deadline for the labor negotiations with the two unions covering most Takoma Park employees was delayed until at least the end of August, the pay for City staff will stay flat for now. But that will be one of the budgetary points on which action will need to be taken in the coming months. when the negotiations become active again.
Meanwhile, having over $600,000 in the Covid-19 fund will be very helpful in continuing to respond to the ongoing Coronavirus needs of our community. In addition, I’m glad there will be no change for the coming year on the single family home stormwater fee, which will stay at $92. We will have to revisit the fee structure later this year to better take into account our updated information on impervious surfaces on individual properties. With that updated data the single family fee can stay flat, even with a slight drop for some commercial and multi-family buildings, because we’re be tapping into surplus stormwater funds. That’s not an ideal solution in my opinion, but I think it’s an acceptable move for this coming year.
Some residents had raised the idea of approving the property tax rate, and leaving budget decisions for later. That’s not an approach I agree with. First, the two are too closely entwined in my opinion for that to work. Second, as an elected official I don’t think it would be responsible for me to support adoption of a tax rate without offering an indication of what the revenues would be paying for. Third, in order to ensure City staff have ample time to prepare for the start of our 2021 fiscal year on July 1, the longest we could delay action on the budget would be a few weeks. I don’t think that extra time would give us enough information about the pandemic and its impact on our residents, small businesses and City finances to justify a delay. Those things will become clear over the course of many months, not in just a few weeks.
On Wednesday, we’ll vote on three ordinances: on the tax rate, the budget, and the stormwater fee. With staff still crunching the numbers, I expect they will be posting all the relevant documents tomorrow. I will want to have an opportunity to review everything, but assuming all the details match my understanding of all we agreed to on Monday night, my inclination is to vote for the budget and stormwater ordinances and against the property tax ordinance. Based on my understanding of where the Council is on all of these issues, I don’t anticipate any significant modifications being made at the two voting sessions on May 13 and 20.
There are two changes I’m exploring, which don’t directly impact the budget. First, I’d like us to require all or most funds we make available through the City’s community grant programs to be focused on efforts relating to Covid-19 response. That change can probably be made most easily when the Council considers the parameters for the next grant cycle later this year.
Second -- and this idea has been suggested by several residents -- I think it may be helpful in understanding how best to use the monies in the Covid-19 fund to establish a task force or other group composed of residents, businesspersons, and tenant associations, plus religious, cultural and non-profit groups and other entities that can help us gauge the needs in the community and understand how best to target assistance. I don’t see this idea as being a criticism of our staff who have been focused on Covid-19 relief -- they’re doing an amazing job! Rather, it’s more a question of ensuring that we cast a wider net in understanding the challenges. Pulling in some key community representatives can help augment the excellent work of the staff. I’m not sure at this point whether it would be preferable to create a formal structure for this group (which could end up meaning more scarce staff time would have to be devoted to helping manage it) or whether a less formal advisory panel would make more sense.
I’ll provide more updates on all of these issues as developments continue. Meanwhile, I recognize that even with this longer than usual blog, there will be questions. So I encourage folks to either contact me directly to follow up on any of the issues covered in this blog and/or to join the Ward One discussion on Tuesday evening.
Peter Kovar, Takoma Park City Council, Ward One
240-319-6281; www.councilmemberkovar.com
(He, Him, His)
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