Dear Neighbors:
As we enter into May, the City Council is moving toward finalizing the budget and property tax rate for Fiscal Year 2021, which starts on July 1. We have a very important budget session tomorrow (Monday, May 4) at 7:30 PM, at which the Council will indicate its support for or opposition to a series of proposed spending reductions and increases in the process known as reconciliation, and also agree on a local property tax rate.
Prior to tomorrow night’s session -- which doesn’t include public comment -- there will be a budget Q & A session for residents with the City Manager from 5:00 - 6:30 PM. Those who wish to participate will need to sign up by 3:00 PM tomorrow. You can see the sign-up details, information about tomorrow evening’s Council session, plus a chart showing reconciliation items the Council will be considering, through this link: https://takomaparkmd.gov/meeting_agendas/city-council-budget-work-session-agenda-monday-may-4-2020/.
At the Council meeting this coming Wednesday (May 6), the agenda will be limited to discussion of issues relating to the City Manager’s recent notice regarding suspension of the timeline for responding to Public Information Act (PIA) requests. You can see details on that meeting agenda here: https://takomaparkmd.gov/meeting_agendas/city-council-meeting-agenda-wednesday-may-6-2020/. I’ll offer my thoughts on that topic in a separate message prior to Wednesday’s meeting.
FISCAL YEAR 2021 BUDGET PROCESS
Changes that Councilmembers propose through the reconciliation process are based on the initial proposed budget put forward by the City Manager in April. This means we will offer spending increases to, or reductions from, expenditure levels that are contained in that proposed budget (which you can see here: https://takomaparkmd.gov/meeting_agendas/city-managers-budget-presentation-monday-april-6-2020/).
All the decisions the Council makes on budget and tax issues tomorrow night will technically still be tentative until the staff is able to compile all the changes into several formal resolutions, on which the Council will officially vote at our May 13 and May 20 meetings. But, while nothing is final until we vote on May 13 and May 20, the decisions we make in tomorrow’s session are likely by and large to end up in the ultimate version of the budget.
Of course, reconciliation will be somewhat more complicated this year owing to the Coronavirus crisis. Given the uncertainties about the pandemic’s future path; its impact on residents, local businesses and the broader economy; and the potential for drop-offs in funding from other levels of government, we need a much more flexible budget this year. So I anticipate that we’ll also spend a fair amount of time tomorrow night talking about the structure of the budget and how to ensure we have the ability to make adjustments in spending over the course of the Fiscal Year as needs connected to the pandemic continue to emerge.
MY THOUGHTS AND PRIORITIES ON THE BUDGET
I’m grateful that more than 20 Ward One residents participated in the virtual community discussion I hosted this past Thursday. I thought it was an excellent exchange of views on budget and tax issues, along with a few other topics. I intend to hold another meeting of this type prior to our final budget votes later this month. And even when the social distancing requirements are relaxed enough to permit in-person meetings again, I’ll continue hosting virtual meetings as well. I’d add that I’m hopeful we’ll also bring in the virtual option for public comments when live Council meetings return.
In addition to the two virtual discussions, I’ve had numerous exchanges with residents via email, telephone and in other ways about the budget and tax rate. Taking into account all of those interactions, plus my review of the budget, and the presentations and answers my colleagues and I have gotten from City staff, I thought I would summarize my thoughts and describe my plans for tomorrow night’s session.
· I’ll be supporting roughly $1.1 million in spending cuts from the reconciliation list. That will be more than enough to reduce spending to at least the current property tax rate (53.97 cents per $100 of assessed property value), and potentially bring the rate to the Constant Yield level of 52.91 cents. I’ve noted previously that there wasn’t any significant Council support for the tax increase that was in the City Manager’s initial budget proposal, and there’s little question in my mind that the Council will reduce the rate at least to its current level. I’d like to see if we can bring it down to Constant Yield, but if there isn’t support for a rate lower than the current rate, any additional savings from reconciliation cuts can be added to our unassigned reserves.
· I’m proposing that the funding for sidewalk and street resurfacing along with the annual contribution into the Equipment Replacement Reserve (ERR) -- a total of $1.6 million --be put on hold and placed into the unassigned reserve account. Depending on the needs that emerge in Fiscal Year 2021 connected to the pandemic, we could use some of those funds for Covid-19 relief for City residents and small businesses; to plug gaps from revenue shortfalls or cuts in funding from the Federal, State and County governments; for their original purposes (sidewalk and street resurfacing, etc.); or keep them in the unassigned reserves, which we need to build up. I’m also exploring potential reductions in personnel costs, and there may be other areas of funding in the budget that could be put on hold and shifted into the reserves.
· I’m suggesting that we build flexibility into the budget by requiring that we revisit the projections for the pandemic, its impact on the economy and the needs of our residents and businesses at regular 2 - 3 month intervals throughout the fiscal year. Of course we always have the ability to amend the budget at any time. But given the many uncertainties this year, I think it’s essential that we build in this type of flexibility in a more specific way as part of the budget.
· We’ve already begun providing vital Covid-19 relief to residents and small businesses through our Emergency Assistance Fund and our Mini-grant program. However, those monies are mostly exhausted and I don’t think we should wait for the start of the fiscal year on July 1 to begin providing additional aid. I’ve proposed that we tap our Housing Reserve (which currently has over $1 million in it) and withdraw $200,000 for assistance to residents, primarily renters, but lower income homeowners could also benefit. We’ll have to get more feedback from our staff on how best to use the funds. And it may make sense to use some of the money for a more coordinated program of outreach to multi-family properties of all sizes to assess their needs, taking into account the County efforts along those lines that are beginning to ramp up. But since the Housing Reserve monies are already in place, tapping into them has no effect on the budget or tax rate. I’m also proposing something similar in terms of immediate financial help for small businesses through our mini-grant program or a similar vehicle -- we have about $195,000 in unused fiscal year 2020 funds that could be made available right away. Finally, I’m proposing that all or most of our City grant programs be shifted into efforts that are aimed at helping those who are facing financial, medical or other challenges connected to the virus.
That’s an overall summary of the approach I plan to take on Monday night. You can see a video of my remarks along these lines from last week’s Council meeting through the following link, if you scroll ahead to the 3:22:40 mark: https://takomaparkmd.gov/government/city-council/meetings-and-documents/city-council-video/
Before closing, I wanted to include here a link to the City Manager’s official comments from last week’s Council meeting: https://documents.takomaparkmd.gov/government/city-manager/city-manager-comments/2020/City%20Manager%20Comments%20_%20%2004.29.2020.pdf. As you can see these comments include an acknowledgement of a County award received by our wonderful activist neighbor Wolfgang Mergner (congratulations Wolfgang!); along with Coronavirus safety steps that have been put in place for City staff including Police officers and sanitation workers; an update on how the former Washington Adventist Hospital may be used to help respond to the Covid-19 crisis; and some information on the PIA issue that will be the subject of Wednesday’s Council meeting.
Please stay safe, and feel free to be in touch with questions or comments about any of these matters.
Peter Kovar; Takoma Park City Council; Ward One
240-319-6281; www.councilmemberkovar.com
(He, Him, His)
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