April 1, 2019
Mayor & City Council and Citizens of Gaithersburg:
We are pleased to submit the proposed 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 & 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 proposed budget. In the past, the draft Strategic Plan was presented at the Mayor & City Council Retreat. However, a Visioning Exercise was held in its place. This year, the draft Strategic Plan was presented to the Mayor & City Council at its April 1, 2019 meeting. Mayor & Council input will be reflected in the final Strategic Plan.
We are happy to report that, once again, no tax increase is being proposed. The rate would remain 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 proposed expenditure budget for FY20 is $68.4 million, representing a 3.3 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
- Funding for four new full-time equivalent positions to address pressing operational and service delivery needs
- Anticipated employee and retiree health insurance increases of 10 percent (mainly attributable to healthcare inflation)
- 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 4.9 percent. The City is continuing to experience growth in its real property and income tax bases, demonstrating strength in the local economy. In contrast to this trend, the City anticipates a slowing of permit revenue in the next few fiscal years. 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 Proposed Budget uses $2.0 million of funds on hand to balance revenues with expenditures. This is a decrease of $5.5 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 Proposed Budget, we are guided by the priorities established by the Mayor & 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 proposed 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 the 2019 municipal election
- 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 & City Council Chambers
- Complete park design and begin construction of the park at the former Consumer Product Safety Commission (CPSC) site
ConclusionWe would like to express our appreciation to those who were involved in developing the budget and participating in the virtual budget forum. The Mayor & 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 proposed 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.