Final budget lowers tax increase, retains staff salary adjustment

City property tax will increase slightly less than originally proposed, the city will make an additional contribution to the police pension fund and there will no money for a proposed management position in the city manager’s office, or for a $50,000 boundary survey in the recently adopted city budget.

These are among the changes City Council made before approving the $29.5 million fiscal year 2016 budget on May 11.

Over two months of public hearings and biweekly budget meetings, City Council knocked off a half a cent from the original tax hike proposed by City Manager Suzanne Ludlow. She proposed a 59 cent per $100 of assessed property value, up from 57 cents in FY2015. The increase, the first that has been implemented in 13 years, will address several fiscal challenges the city faces: stalled municipal tax duplication funds from Montgomery County; a three-year property tax assessment cycle that reflects recession-level property values (and correspondingly low tax revenue); and staff compensation that requires significant increases in order to reach market levels. Those staff salary increases will be phased in over three years.

“I’ve never worked with a budget this tight,” Ludlow told the council just before it voted on the tax rate, near midnight at a particularly long budget reconciliation meeting April 27. “I would not have proposed a tax rate increase if I did not think it was the appropriate thing.”

The vote on the tax rate decision came after long negotiations and discussions over how much the city’s reserve fund should maintain and when – and by how much — city officials can anticipate property taxes rising with the rise in property values expected with new assessments this year.

Other changes made to the city manager’s proposed budget, which was described in the April 2015 Takoma Park Newsletter, included:

• A contribution of $100,000 to the Police Retirement Plan over the amount required to meet minimum obligations
• $10,000 for a consultant for police/ community engagement, reflecting a proactive concern among city council members sensitive to recent turmoil over the deaths of unarmed black men in police custody elsewhere in the country
• $30,000 for Maple Avenue crosswalk improvements, where “stamped” crosswalk markings are fading and in need of repair
• $30,000 for the MANUP program, which works with African American youth
• An increase of $10,000 for the Lunch and Learn program, which provides food and tutoring over the summer months to children who normally rely on subsidized school lunches
• Elimination of a $174,000 proposed management position in the city manager’s office
• Reduction of $25,000 in proposed funding for City TV part time and consultant staff
• Elimination of a proposed $50,000 survey of the city’s boundaries
• Reduce by $7,000 proposed funding for the Takoma–Langley Crossroads Development Authority – funds that were offered unsolicited and for which there were no immediate plans
• Elimination of a 50 percent discount parking permit fee for hybrid cars

In a lively and thorough treatment of the budget process, city councilmembers wrangled over many suggested changes, and their close votes on several items meant lengthy discussions over the minutiae of city services. Among the more controversial issues were funding a $200,000 library renovation initiative – the detailed design passed on a vote of 4 to 3. A move to cut $50,000 from the police budget for expenditures to be determined by the police department was thwarted on a vote of 4 to 3. Reducing City TV’s budget by $25,000 passed on a vote of 5 to 2.

Members were more in agreement and voted 6 to 1 to retain $80,000 for renovation of the police station on the lower floor of the Community Center. Describing the offices as “a maze” and “a nightmare,” most agreed they were in need of improvement as soon as possible.

Other aspects of the budget remained as proposed. Staff salaries were a big focus this year after a staff compensation and classification study last year showed Takoma Park lagging behind market rates, with many staff members being underpaid. The new budget will give a partial increase to staff being paid more than 14 percent below market level, so that their salary is only 7 percent lower than it should be for FY17. Staff will get raised half-way to what they should be paid in FY17 during the FY16 year, with the remaining increase scheduled to take place in FY17. Total cost of bringing staff salaries up to market level is about $2 million, over three years.

“I’ve never worked with a budget this tight”

The city will also continue to make infrastructure and facility improvements on roads, sidewalks and stormwater management. Projects include the Flower Avenue Green Street Project, improvements at the New Hampshire/Ethan Allen intersection, and detailed design and engineering work for renovation of the Library. Two park projects will be underway: playground construction at Sligo Mill Overlook Park and a dog park on city-owned land near the Darwin Avenue parking lot.

Planning for future improvements in the Police Department, at the Public Works complex and of the Heffner Community Center are on a multi-year schedule, with some planning work regarding the Police Department scheduled for FY16. Renovation of the Library could begin as early as FY17.

This article appeared in the June 2015 edition of the Takoma Park Newsletter. The Takoma Park Newsletter is available for download here.