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Category: Budget Page 1 of 11

City Council Set To Adopt Budget with Amendments for FY2025

At tomorrow’s City Council meeting, the Council will consider approving the FY25 City budget.

On April 23, 2024, the City Council introduced Budget Ordinance 24-O-02 during a public meeting, signaling the commencement of the fiscal planning process for the upcoming year. The ordinance encompasses the proposed FY2025 budgets for the City’s General Fund, ARPA Allocation Fund, Capital Projects Fund, and Debt Service Fund. Following the initial introduction, the City held mandatory public hearings on May 7, 2024, to discuss the ordinance and proposed property tax rate increases for both residential and commercial properties.

Key Budget Changes and Tax Rate Adjustments
The proposed ordinance incorporated feedback and modifications from budget work sessions held on March 23 and April 2, 2024. Notably, after the public hearing, the City Council supported an amendment to reduce the proposed real estate property tax rates. The initial proposal of 34.18 cents per $100 assessed value for residential property and 40 cents per $100 assessed value for commercial, industrial, and apartment properties was reduced to 33.5 cents and 38.5 cents, respectively. This adjustment results in a decrease in general property tax revenues by $424,080.

To accommodate this reduction and ensure a balanced budget, the following adjustments were made:

  • Property Tax Revenue Reduction:
    • Residential: $106,080
    • Commercial: $318,000
    • Total Reduction: $424,080
  • Offsetting Adjustments:
    • Reduce contingency savings: $151,500
    • Spread NCPCC (North College Park Community Center) funds to three years (reduce transfer to CIP): $125,000
    • Restore funding for Big 10 Friday Night Live event: $12,500
    • Restore funding to print Resident Guide twice a year: $26,000
    • Increase Contingency line: $3,920
    • Appropriate fund balance (from FY2024 surplus) for FY2025: $190,000

Summary of Proposed Budgets

The ordinance details the allocation of funds across various departments and projects for the fiscal year beginning July 1, 2024, and ending June 30, 2025. Highlights include:

General Fund

Total Revenue: $27,174,702

Major Revenue Sources:

  • General Property Taxes: $14,632,680
  • Other Taxes: $5,675,807
  • Licenses & Permits: $1,370,250

Key Expenditures:

  • General Government and Administration: $8,060,408
  • Public Services: $5,882,899
  • Public Works: $7,364,209

ARPA Allocation Fund

Total Revenue: $582,500

Key Expenditures:

  • Housing retrofits for aging-in-place: $250,000
  • Public health expenses: $82,500

Capital Projects Fund

Total Revenue: $17,083,237

Key Expenditures: $10,971,342

Debt Service Fund

Total Revenue: $1,474,233

Key Expenditures:

  • Debt Service (Parking Garage and Public Improvement Bonds): $1,474,233

Ordinance Provisions and Implementation

The ordinance sets the tax levy at:

  • Residential Property: 33.5 cents per $100 assessed value
  • Commercial Property: 38.5 cents per $100 assessed value
  • Personal Property: 83.8 cents per $100 assessed value

Net speed enforcement camera revenues will be allocated solely for public safety purposes. Additionally, the ordinance outlines the adoption of the FY2025 Pavement Management Plan, the FY2025 Pay Plan, and the inclusion of City employees in the Maryland State Retirement and Pension System.

Conclusion and Next Steps

The City Charter allows for the adoption of the budget with amendments without further public hearings, provided it is completed by May 31, 2024. The ordinance will become effective on July 1, 2024. Residents are encouraged to review the FY2025 proposed budget document available on the City’s website for more detailed information.

The mayor and the City Council remain committed to fiscal responsibility and transparency. They ensure that the budget reflects the community’s priorities and needs while maintaining financial stability.

Public Hearing on New Budget Tonight

The Council will host a public hearing on proposed property tax rate increases and Ordinance 24-O-2 for FY2025 budgets and CIP. Introduced on April 23, 2024, Ordinance 24-O-02 integrates FY2025 budgets for various funds, reflecting changes from budget worksessions.

Proposed tax rate increases, advertised on April 25, 2024, include raising residential rates from 30.18 cents to 34.18 cents per $100 of assessment and commercial rates from 33.18 cents to 40 cents.

Following the public hearing, there will be a discussion about the proposed real estate property tax rates and how any proposed budget amendments will be handled to prepare for budget adoption scheduled for May 21, 2024, when the Council will formally approve the FY25 budget.

To view the proposed FY25 budget and previously adopted budgets, visit https://www.collegeparkmd.gov/172/City-Budget.

If you cannot speak at the public hearing, please send your comments on the budget to cpmc@collegeparkmd.gov by 5 pm today. You can also join the public hearing virtually at https://zoom.us/j/92398574069 at 7:30 pm this evening.

Changes to the Proposed FY25 Budget

The City Council spent almost the entire day of Saturday, March 23rd, discussing the proposed FY 25 budget and making the following changes.

  • Reduce proposed residential property tax rate to 34.18 cents – this is 1 cent reduction from the proposed 35.18 cents ($156,000)
  • Cut (opposed) Income Tax Offset Credit (ITOC) ($50,000)
  • Additional per new YFS estimate for MNCPPC Summer Camp Grant ($10,500)
  • Additional Investment Earnings projected ($5,5000)
  • Reduce Mayor and Council travel and training expenses ($7,000)
  • Add grants to for neighborhood /civic associations to assist with Spanish language translation ($15,000)
  • Cut funding from the proposed Student Housing subsidy program ($200,000)
  • Add to Business Retention assistance ($100,000)
  • Defund College Park parade ($33,000)
  • Cut Shot Spotter expenses ($50,000)
  • Add hiring a staff lead to oversee the AARP Livable Communities Action Plan (salaries and benefits) ($85,000)

The Council plans to discuss the budget further at tomorrow’s second budget work session and may consider making further changes.

College Park’s FY25 Budget Proposal: Key Highlights and Changes Ahead

The City recently published the City Manager’s proposed FY25 budget. The draft budget can be found here online.

Here are the key facts about the proposed budget:

  • There was a total budget expenditure of $27.5 million, representing an additional $2.7 million from last year’s budget.
  • A residential property tax rate of $0.3518 (a 5-cent increase) and a commercial, industrial, and apartment property tax rate of $0.40 (a 6.82-cent increase) will increase property taxes by $195 annually or $16 per month on the average-value residence in College Park of $390,000.
  • The budget proposes three news staff : (a) Bilingual Communications Coordinator – $54k (b) Code Enforcement Manager – $115k (c) Youth and Family Services  – Admin. Asst/ Receptionist – $45k. Benefits are probably around $30k to $40k for all 3, depending on healthcare coverage.
  • The project end of FY24 surplus is $1.04 million. The surplus will be added to the reserve if not used in the new budget. The City has a healthy reserve pf nearly $9 million, which makes 37% of the total expenditures. The City charter requires a reserve balance of 25%.
  • The Homestead Cap is left at 0%, in keeping with Council priorities, and I am also recommending a $50 increase to the Elderly Property Tax Credit to $200.
    As a reminder, with the Homestead Cap at 0% for the last six years, residential taxpayers with Homestead have not seen any increases in their tax bills, but reductions in the three fiscal years the property tax rate was reduced to the CYTR.
  • Various credits, including the homestead credit, homeowner’s credit, and elderly property tax credit adopted for FY2024, reduce residential real estate property tax. The proposed increase in the Elderly Tax credit to $200 would offset the projected property tax increase on the average residential value of $195.

 

The following graphic can help explain the rationale behind the tax increase proposal.

The City Manager presents the proposed budget to the City Council at a Saturday budget work session scheduled for this Saturday (March 23rd) to review and discuss it. Following this meeting, the proposed budget will be revised as needed, and a budget ordinance will be introduced at a City Council meeting in late April. At a City Council meeting, a public hearing on the budget ordinance is held in May. In adherence to City Charter requirements, the budget ordinance is adopted for the upcoming fiscal year by May 31.

We’re also working on a budget listening session soon. Details are coming soon.

 

City to Hear from Residents on New Budget, and Tax Rates

At tonight’s meeting, the City Council will hold a public hearing on the property tax rate and the new budget for fiscal year 2024. The new budget incorporates the FY2024 Proposed Budgets for the City’s General Fund, ARPA Allocation Fund, Capital Projects Fund and Debt Service Fund, and other changes approved at the subsequent budget meetings.

The FY24 Proposed Budget is balanced on the existing property tax rate of 30.18 cents, not reducing to the Constant Yield Rate. The residential property tax rate of College Park is the lowest among all municipalities.

In the FY24 budget, the City plans to increase the commercial property tax rate by 3 cents.

The commercial property tax rate increase will help generate more tax revenue to provide more services to our residents. Other regional towns have similar tax differential rates, a lower rate for residential properties and a higher rate for commercial properties.

City May Raise Commercial Property Tax Rate

In the upcoming FY24 budget, the City wants to keep the residential property tax rate at 30.18 cents; however, it proposes increasing the property tax rate of commercial properties (including apartments and industrial) to 33.18 cents.

The commercial property tax rate increase will help generate more tax revenue to provide more services to our residents.

Other regional towns have similar tax differential rates, a lower rate for residential properties and a higher rate for commercial properties.

For every penny, the special rate is increased – for commercial property and apartments – an additional $170,000 of revenue is generated.

So, an additional rate of:
2 cents (32.18 cents) = $340,000 more revenue
4 cents (34.18 cents) = $680,000 more revenue
6 cents (36.18 cents) = $1,020,000

In the FY24 budget, the City plans to increase the commercial property tax rate by 3 cents.

The FY24 Proposed Budget is balanced on the existing property tax rate of 30.18 cents, not reducing to the Constant Yield Rate.

The residential property tax rate of College Park is the lowest among all municipalities.

The City will hold a public hearing on the proposed budget and Constant Yield Tax Rate (CYTR) for the residential property on May 9, 2023. The State required advertisement for the noncommercial CYTR public hearing will be published in the Washington Post on April 27, 2023, before the public hearing. The City is exempt from a required public hearing on commercial property.

City Budget Proposes to Keep Tax Rate Steady, Increase Services for Residents

This past Saturday, the City Council reviewed and discussed the Proposed Budget with the City Manager and directors.

The City operates on a fiscal year, from July 1 to June 30. The budget process begins in January, with guidelines issued to department directors by the City Manager. Departmental requests are prepared and submitted in February. The City Manager met with each department director to discuss their requests. Changes and revisions to the requests and revenue projections are incorporated into the Proposed Budget, which was submitted to the Council last week.

Here are a few highlights of the proposed City budget:

Funding Sources:

The FY2024 budgeted revenue and other financing sources of $24.1 million is a 20.8% decrease, or $6.3 million, compared to the FY2023 budget. The primary reason for this decrease was the inclusion in the FY2023 budget of $7.3 million of funding from lost revenue recovery to support CIP projects, which was not available for FY2024; combined with increases in property tax revenues of $449,000, mainly a result of increased assessed values; and a $1.1 million increase in Other Taxes (Income Tax, Admission & Amusement Tax, Highway User Tax and Hotel/ Motel Tax) anticipated as visitors and other drivers of those revenue sources continue increasing to pre-pandemic levels. Please see the breakdowns of different sources below:

Property Tax Rate: The FY24 budget proposes maintaining the existing property tax rate for FY2024 at 30.18 cents. For more queries about taxes, you may want to head out to sites like Tax Robot.

Expenditures:

The FY2024 budget proposes total expenditures, transfers, and contingency of $24.1 million, which is a 20.8% decrease, or $6.3 million, compared to the FY2023 budget. Like revenue, the primary reason for the decrease is related to the transfer to the Capital Projects Fund from lost revenue recovery sources in FY2023. That decrease netted against various increases in departmental expenditures, primarily salary and benefits related (added positions, merit and cost-of-living increases, and increased contributions to the Maryland State Retirement System) are the primary factors in the net decrease. The budget also includes a transfer to the Capital Projects Fund of $116,000 and the Debt Service Fund for $1,228,162. Budgeted expenditures are increasing almost 11% or $2.2 million. That increase is primarily attributable to almost $1 million in General Government and Administration expenditures, $456,000 in Public Services, and another $592,000 in Public Works. In addition to the salary and benefits increases mentioned above, $200,000 was added to the Economic Development budget for business assistance grants and retention efforts.

Staff Changes: The proposed budget suggests adding the following positions

  • Additional 0.5 FTE Contract Police Officer
    • During the worksession, I requested another 0.5 FTE contract police officer. In the recent City survey, residents have identified crime prevention and contract police programs as the top priority that the Council should focus on in the next two years.
  • Code Supervisor
    • To enhance code enforcement
  • Part-time Education Support Specialist
    • to support a new tutoring school program for College Park students
  • Video/Television Production Specialist
  • Event Assistant/Volunteer Coordinator
  • Part-time Animal Control Officer
    • To provide complete coverage on weekends and during leave time of the full-time Animal Control Officer
  • Part-time Emergency Assistance Case Manager
  • Facilities Maintenance Worker
  • Maintenance Worker (2)

Capital Improvement Project (CIP) Fund:

This fund is used for capital outlay exceeding $10,000. This fund summarizes the more detailed 5-year Capital Improvements Program (CIP). The CIP includes one-time capital expenditures referred to as “departmental capital,” and significant capital projects that span more than one fiscal year for completion, typically referred to as “CIP.” Some CIP projects, such as Facilities Capital Reserve, were initially created to accumulate funds for future expenditures on a project. Please see below the major CIP projects in the City:

Council Budget Requests:

City Council members also asked several requests to be included in the new budget

  1. A spring tour for the City residents to showcase the native plants at a local park. A small budget will be required to mark / label / tag the plants. Estimated cost – $2-$4K.
  2. Flashing Stops will be ordered in FY23 for 51st and 52nd Avenue. Would require in FY24=$15K for purchase and installation at 49th and 53rd.
  3. The proposed CIP includes four new camera locations in North College Park. This location would be included.
  4. The bus shelters (a) Route 1 (near the Dunkin store) and (b) on westbound Edgewood Rd, near Rhode Island Ave.-Estimated cost – $36K.
  5. $10,000 for two internship projects. This includes an interactive Online College Park’s History Internship Project ($5,000)
  6. Additional Street Lighting in Lakeland on Lakeland Road Between Rhode Island Ave. and Baltimore Ave. One wood pole available for an additional streetlight. . Estimated cost – $5K.
  7. Mural to beautify the entrance to Lake Artemesia from Lakeland and acknowledge the history of the Lakeland Community. A minimum of $30,000 is needed to work with an artist and paint a mural, but costs can vary widely depending on the design and location. The City has $75,000 in an annual fund to incentivize public art in private projects, which might also be used for this. The proposed Art and Culture Plan to be completed in FY 2024, will address the process, themes, location, and budget for public art citywide. This could be a pilot project recommended in the plan.
  8. Improvements to the walking path on the east side of Rhode Island Ave along Duvall Field (Cherokee to Blackfoot Place. Estimated cost $25-$30K.
  9. Bus Shelter for Cherry Hill Road across from Shoppers. FY23-Shelter ordered and will be installed this fiscal year.
  10. Planting more trees at the dead end of Bridgewater to provide protection from the noise on Metzerott Road. Unknown parties are walking through the debris and coming into the neighborhood. Will check property ownership. Estimated tree planting – $3-5K.
  11. Little Free Library Box Exchange is at the Community Center’s top in CPW. A box needs to be built; DPW can install it.
  12. Senior and Social Sports League Plan/Pilot: This would require establishing a recreation program/dept and hiring a recreation coordinator $50K + benefits.

Next Steps: A budget ordinance will be introduced at a regular meeting of the City Council in late April and a public hearing on that ordinance is held in early May. A budget ordinance is required by the Charter to be adopted by May 31.

 

Tomorrow is Deadline to Submit Your Budget Requests

City is seeking your ideas about how your tax dollars could be used in the most effective way.

To get your feedback, the City has introduced a budgeting tool called “A Balancing Act”.

A Balancing Act is a new online budgeting tool that the City is incorporating to make the process of getting budget feedback from you, our community, even easier.

The City is in the early stages of preparing the proposed budget for fiscal year 2024, which begins July 1st of 2023.

The City wants to hear from you what you think are the most important initiatives for the City to invest in.

To accomplish this, we have set up a survey of nine core initiatives, plus a suggestion box.

You can take the survey at www.collegeparkmd.gov/budgetfeedback.

The deadline to submit your request is tomorrow.

City Publishes FY2024 Budget Calendar

City staff has recently published the draft FY24 budget calendar. You can see the calendar below.

The key dates include (a) January 27 – Mayor & Council requests/ resident suggestions for the FY24 Proposed Budget due. (b) March 10 – FY2024 Proposed Budget & CIP published and posted on the City’s website. (c) March 25 – Saturday Budget Worksession. (plus March 28 if necessary). (d) May 9 – Public Hearings on the Budget and Constant Yield Rate. ( e ) May 23 – FY2024 Budget adoption.

Staff is not aware of any significant shortfalls in revenue nor any significant over-expenditures of budgeted amounts in the current FY 23 fiscal year. We expect departmental expenditures, in total, to be under budget by the end of the fiscal year. For FY 24, staff anticipates a significant increase in assessed value – this will need to be confirmed by the State by next month.

Salaries in the proposed budget will include a 2.5% cost of living adjustment, as negotiated with the union plus estimates for merit increases where applicable. The City Council has maintained a cap of 0% for the last several years. This provides the maximum property tax relief for homeowners. By taking no action, the cap will remain at 0% for FY2024. Each percentage point of cap reduction represents about $15,000 of property tax revenue to the City.

City is expected to adopt a balanced FY 24 budget.

On the Seniors’ tax credit, staff said further research be done to estimate the costs of a similar City program for eligible seniors. This could be included for consideration in the FY2024 Proposed Budget.

Let us Know About Next Year’s City Budget

Preparation is beginning on the FY2024 Proposed Budget, which will be published in March 2023. The Mayor & Council invite residents to submit suggestions, requests and/or recommendations before January 31 to assist the City in fulfilling its mission. Complete the application at https://www.collegeparkmd.gov/FormCenter/Budget-17/FY2023-Proposed-Budget-Request-for-Resid-80

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