June 4, 2019
Mayor & City Council and Citizens of Gaithersburg:
We are pleased to submit the adopted Fiscal Year 2020 (FY20) City of Gaithersburg budget. As the annual budget guides the provision of City services and reflects priorities identified by the Mayor and City Council, public input plays a prominent role in its development. As was done last year, staff used a virtual budget forum to facilitate participation in the budget process. The forum helped us gather detailed information on funding priorities important to our residents. Comments and feedback from the forum are reflected in the priorities addressed in this adopted budget. In the past, the draft Strategic Plan was presented at the Mayor and City Council Retreat. This year a Visioning Exercise was held in its place. The draft Strategic Plan was presented to the Mayor and Council at its April 1, 2019 meeting. Mayor and Council input is reflected in the final Strategic Plan.
We are happy to report that, once again, no tax increase was proposed. The rate remains at $0.262 per $100 of assessed value. Having only raised the real property tax rate once in more than forty years, the City continues to enjoy what is arguably the best overall financial position of any municipality in the state, while still having one of the lowest property tax rates.
The total adopted expenditure budget for FY20 is $68.3 million, representing a 3.4 percent decrease from FY19. Some material changes include:
- Reduction of $4.5 million from FY19 to FY20 in the transfer to the City’s Capital Improvement Plan
- Anticipated employee and retiree health insurance rate increases of only 5.1 percent which are mainly attributable to favorable data related to a reduction in overall City employees’ healthcare claims
- Funding for only four new full-time equivalent positions to address pressing operational and service delivery needs
- Increase in the transfer to the Other Post-Employment Benefits (OPEB) Trust to bring the City closer to the actuarially estimated annual OPEB cost
Revenues, excluding the use of funds on hand, are expected to grow by about 4.6 percent. The City is anticipating a slight increase in its real property revenue and a more positive outlook in the income tax base due to moderate growth in the local economy. In contrast to this trend, the City anticipates a slowing of permit revenue in the next few years, as the City is reaching a point
where there may be fewer new, large developments. This will lead to a plateauing of future revenue growth from that source.
The FY20 Adopted Budget uses $2.1 million of funds on hand to balance revenues with expenditures. This is a decrease of $5.3 million from FY19. The City recognizes the need to be thoughtful and strategic about the long-term sustainability of using reserves for the operating budget. As such, we remain cognizant of the need to be proactive to maintain our healthy financial position. Long-term changes that began during FY19 include adjustments to OPEB for new employees. The impact of savings from this modification will not be felt by budgets in the near-term, but will substantially decrease the cost for this obligation over the long-term.
Lastly, the City has shifted towards a more data-driven approach to capital planning. During FY17, the City introduced pavement management condition assessments in order to determine the best allocation of funding for maintaining road conditions at the most cost effective levels. The FY20 budget and CIP continues this trend of asset and facility assessments and includes funding for needs analyses to improve long range capital planning.
For a pay-as-you-go community, long-range budgeting practices are integral to maintaining financial health. The FY20 budget continues to put changes into practice that should allow the City to maintain its low tax rate and debt-free status.
In developing the FY20 Adopted Budget, we were guided by the priorities established by the Mayor and City Council during the annual Strategic Planning process, as well as insight from residents acquired through the virtual budget forum. Highlighted below (in alphabetical order) are select items from both the operating and capital components of the adopted FY20 budget:
- Work with MCPS to determine a proposed new elementary school for the Gaithersburg cluster
- Expand outreach to residents regarding recycling
- Maximize the use of the City drone within established guidelines to provide images for marketing, planning, mapping, and other operational purposes
- Conduct a biennial Citizen Survey in the fall of 2019
- Develop and implement a communication campaign to encourage voter turnout for 2019 municipal elections
- With Montgomery County, conduct education and outreach to promote participation in the 2020 Census, especially amongst historically undercounted populations
- Review areas that are within the City’s Maximum Expansion Limits (MEL) to determine which parcels may have near-term potential for growth in housing, population and jobs
- Implement and monitor proposed changes to the parking plan and fee schedule at the Olde Towne garage. Execute a new joint use agreement with current partners
- Educate stakeholders/promote benefits of the new Opportunity Zone program as it relates to new investment within the City’s designated census tracts
- Complete work with HOAs to become compliant with the current FHA eligibility requirements
- Determine potential infill sites for affordable housing in conjunction with Economic Development
Planning & Development
- Transfer the City’s permitting software from Energov’s Citizen’s Access Port (CAP) to the Customer Self-Service (CSS) account
- In preparation for the planned occupancy of the new station, develop the applicable policies and procedures to ensure CALEA compliance to enable reaccreditation in 2020
- Hire three police officers to reach the authorized staffing level of 59 officers
Recreation & Environment
- Design and construct the synthetic turf field at Robertson Park Field #3
- Develop an Arts Enterprise Tool Kit and workshops
- Sustain focus on stormwater facility inspections and provide adequate funding for stormwater infrastructure maintenance and replacement
- Develop and present the new rate model for the Stormwater Program Fee
Transportation & Infrastructure
- Begin construction of the new Police Station and the Mayor and City Council Chambers
- Complete park design and begin construction of the park at the former Consumer Product Safety Commission (CPSC) site
We would like to express our appreciation to those who were involved in developing the budget and participating in the virtual budget forum. The Mayor and City Council, our resourceful and dedicated staff and, of course, our residents all have a role in continuing the City’s reputation for excellence.
Our City is growing, with an estimated population approaching 70,000 and substantial new development expected to resume in the coming years. This adopted budget encourages the professional development of our staff, puts people in place to provide enhanced services, preserves infrastructure, maintains facilities, and lays the groundwork for future growth, all with the ultimate goal of ensuring that the residents of our growing City enjoy the highest possible quality of life.