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FY 2021 Proposed Budget

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For the Fiscal Year July 1, 2020 to June 30, 2021

Budget Cover

March 31, 2020
Mayor and City Council and Citizens of Gaithersburg:

We are pleased to submit the proposed Fiscal Year 2021 (FY21) 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. Following the virtual budget forum, the Mayor and City Council this year held their annual retreat to address the long term community priorities. Comments and feedback from both the forum and the retreat are reflected in the priorities addressed in this proposed budget.

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.

Budget Summary

The total proposed expenditure budget for FY21 is $72.0 million, representing a 5.4 percent increase from FY20. This increase is composed of the following factors:

  • Increase of $1.8 million from FY20 to FY21 in the transfer to the City’s Capital Improvement Plan

  • Funding for six 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 5.9 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 FY21 Proposed Budget uses $1.9 million of funds on hand to balance revenues with expenditures. This is a decrease of $0.2 million from FY20. 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 nearterm, but will substantially decrease the cost for this obligation over the long‐term.

The CIP structure was modified in FY19 to reflect individual capital project identification and funding. This move from budgeting only by category of capital spending to individual capital projects allows for better identification of recurring versus one‐time capital needs.

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 FY21 budget and CIP continue this trend of asset and facility assessments and include 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 FY21 budget continues to put changes into practice that should allow the City to maintain its low tax rate and debt‐free status.

Highlights

In developing the proposed budget, we are 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 proposed FY21 budget:

City Administration

  • Work with MCPS to finalize agreement for proposed new elementary school for the Gaithersburg Cluster and present to M&CC for consideration

  • Determine areas where the work of the Racial Equity Learning Cohort may be applied within City programs, processes and services

Community and Public Relations

  • Conduct campaign to increase resident engagement by highlighting City employees and volunteers through social media and newsletter features

  • Explore the establishment of a Gaithersburg area Coalition of Addiction Prevention and  Treatment organizations to address substance use.

Economic Development

  • Support repositioning and/or redevelopment of Lakeforest Mall properties

  • Review areas within the City’s Maximum Expansion Limits (MEL) to determine which parcels may have near‐term potential for growth in housing, population and jobs

  • Educate stakeholders/promote benefits of new Opportunity Zone program as it relates to new investment within City’s designated census tracts

Housing

  • Determine potential infill sites for affordable housing in conjunction with Economic Development

  • Work with Neighborhood Services and Community Services to reduce the number of households receiving “writs of eviction” and the subsequent loss of their housing

Planning and Development

  • Transition from Energov’s (City’s permitting software) Citizen’s Access Port (CAP) to Customer Self‐Service (CSS) account

  • Facilitate next steps in the Lakeforest Mall redevelopment

Police

  • Implement Focused Enforcement Area initiatives focused on specific geographical areas within the City to strengthen the working relationships between the department, citizens and businesses in those areas

Recreation and Environment

  • Partner with Gaithersburg Giants to introduce and implement a baseball youth initiative pilot program

  • Develop and present new rate model for Stormwater Program Fee

  • Track and develop a plan to reduce community recycling contamination levels

  • Expand compost drop off program

Transportation and Infrastructure

  • Complete evaluations of three school sites within the City for school zone effectiveness and capacity to support the Safe Routes to School program

  • Begin construction of the park at the former CPSC site

  • Complete the construction of the new Police Station and Mayor & City Council Chambers

Conclusion

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 now over 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.