Takoma Park Newsletter: Council Adopts the Fiscal Year 2025 Budget
The Takoma Park City Council last month voted to adopt the 2025 fiscal budget—beginning on July 1, 2024.
“I’m very pleased to announce that on May 15, the city council approved the fiscal year 2025 budget,” said Takoma Park Finance Director Susan Cheung. “The city will maintain the real property tax rate at 0.5522.”
The theme of the upcoming budget is “A Bridge Forward” to recognize “transitioning and evolving forward as we contend with challenges and with an eye to the future,” according to the proposed budget proposal released by City Manager Robert DiSpirito in early April.
In the Fiscal Year 25 budget, the General Fund revenue is $30.6 million, with the remainder of other fund revenue being $7.8 million, for a total revenue of $38.4 million. That total is also supplemented by the use of $206,997 in bond reserve, $1.4 million from the other reserves, and $2.6 million other fund balances, for a consolidated total revenue of $42.7 million.
The total General Fund expenditure is $32.2 million, and all other funds expenditure is $10.4 million for a total expenditure of $42.7 million. As a result, the total consolidated revenue and total consolidated expenditure maintain the same balance of $42.7 million. Department expenditures with be $4,797,487 or 1.5% less than in 2024 due to a $287,003 decrease in operating expenses.
Some of the financial challenges the city faces in the coming year are related to higher inflationary expenses, the dwindling balance remaining in the city’s account containing the federal American Rescue Plan Act (ARPA) funds, and increased costs of employee compensation.
Staffing in the city should remain level, as no additional full-time positions have been proposed.
While the majority of the city’s $17.5 million in ARPA funds have been allocated, DiSpirito has proposed using the remainder as a bridge to address ongoing mayor and council priorities. The city manager proposed using $6,980,140 in remaining ARPA funds for projects including street rehabilitation, sidewalk design and construction, continuing support for library construction, the community center atrium renovation project, mental health crisis counselors, expanding public safety critical police dispatch, a food insecurity program, and a community connectors program.
Other mayor and council initiatives that will be addressed with the General Fund include
• Funding for emergency rental assistance
• Funding for small business grants
• Increased funding of the Equipment Replacement Reserve by $900,000 (compared to $550,000 in FY2024)
• Continued funding of $142,000 for the City’s local supplement to State Homeowner Property Tax Credit Program
• Contribution of $600,000 to fund the Library Construction Contingency Reserve
• Contribution for Community Events Grants of $60,000
• Various Quality of Life grants
• Recreational scholarships
• The Housing Reserve Fund
• Emergency Tree Removal
• Summer Enrichment program, Community Play, and Farmers Market grants
• Stormwater Capital Improvement expenditures
Funds will also be used for police funding for bike patrol unit equipment, field radio equipment, mobile computers, and overtime for designated and additional patrols, as well as funding for a traffic study.
There is also $4.2 million in Special Reserve Funds for projects including grants for the New Hampshire Avenue Bikeway ($350,000), the Maple Avenue Connectivity Project ($240,000), the Metropolitan Branch Trail Project ($425,000), Program Open Space to add to the Capital Acquisition Fund ($60,000), and CDBG Neighborhood Improvements for the Houston Court Biofiltration Project ($91,000). Those funds will also be allocated for CityTV equipment and temporary relocation.
“Despite the fiscal restraints that we face, this FY2025 proposed budget intends to continue programs and services that help renters, small business owners, immigrants, young people, and seniors as we strive to create a livable community for all,” DiSpirito said.
The fully adopted budget book will be available in mid-August as the city’s finance department works to compile numbers and coordinate with the city’s various departments. The city will then send the budget to the Government Finance Officers Association for consideration for its Distinguished Budget Presentation Award, which it has won over the past five years.
Cheung said there are four main highlights in next year’s budget, including keeping the real property tax rate level.
“We were able to reach the unassigned reserve balance targets,” Cheung said, in reference to city funds that have not been assigned to other areas. “This is one of the most significant achievements in the budget with the city reaching our target in the General Fund at $5.2 million, which represents 17% of the total revenue. This is important to our city’s financial health and future stability.”
The city was also able to reduce its expenditures from $36.4 million in 2024 to $32 million in 2025.
“Our ability to meet the reserve target is largely due to the strategic expenditure reductions,” Cheung said. “Under the guidance of city manager and senior leadership team, we conducted several rounds of expenditure reviews and reductions before the proposed budget was announced. That significant reduction is mainly due to decreases in capital improvement expenditures that were budgeted at $1.4 million for 2025 down from $6.3 million in 2024. There’s a lot of reduction giving us excess funds to put into the reserve.”
These budget goals will help the city significantly as its long-term financial needs continue to be met, said Cheung.
“Maintaining the tax rate and reaching the 17% reserve were the key objectives in our long-term financial forecast,” she said. “Achieving these goals demonstrates the city’s adherence to prudent financial management.”
A new source of funding for the city’s police department, according to the budget documents, is a Red Light Camera Fund that is set to begin in July of this year. The anticipated revenue for the fiscal year beginning July 1, 2024 is about $1.3 million. The funds will go to a special revenue reserve fund in the police department—rather than the general fund— since the purpose is to address public safety.The funds are supplementing declining speed camera funds the resulted from improved driving behavior. DiSpirito hopes to eventually use the money to fund a new transit planner position to address pedestrian and traffic safety.
Takoma Park’s budget process is a months-long endeavor involving every department in the city.
“I want to acknowledge and thank the city manager and two deputy city managers [Andrew Bolduc and David Eubanks] and all the city leadership team members,” Cheung said. “The city manager’s budget planning—together with the effective coordination of the council—has significantly enhanced the efficiency of the budget process. A special thanks goes to my team members, particularly our Budget & Accounting Manager, who managed to complete the budget book within a very tight timeline.”
DiSpirito also recognized the finance team in his budget proposal, writing: “I wish to thank the dedicated, hard-working, and professional City of Takoma Park staff who continue to deliver quality services to our residents. Special recognition goes to Finance Director Susan Cheung, Budget & Accounting Manager Ron Kawaley, and the rest of the award-winning Finance Department team, for all of their leadership, talent, and hard work.”
For continued updates on the city’s budget, visit takomaparkmd.gov/government/finance.
This article appeared in the June Edition of the Takoma Park Newsletter. Check out this article and more on the City webpage.
