City Manager Presents FY2013 Budget

In the midst of what City Manager Michael McLaughlin called a difficult economic climate, he presented Greenbelt City Council with his budget proposal for fiscal year (FY) 2013, at council's meeting Monday.

In an interview on Thursday, McLaughlin said it was his sense that the overall economy was improving, but that the city may not realize the benefits right away because of the way Maryland assesses property in a three year cycle.

"It may be slow to make its way to the local government," McLaughlin said.

The proposal McLaughlin presented council on Monday covers the city's budget from July 1, 2012 through June 30, 2013. Below are highlights, focusing on changes since the FY2012 budget.

Council will hold ten worksessions on the budget, including two public meetings, before it is scheduled to adopt a new budget on June 4.

FY2013 BUDGET PROPOSAL HIGHLIGHTS

Budget and Revenue Projection

• The proposed FY2013 expenditure budget is $25,010,500, a decrease of $461,700 or 1.8 percent from the adopted FY2012 budget.

• The budget projects FY2013 revenues of $25,542,700, which is $261,100 or 1 percent lower than FY2012.

Challenges as Presented by City Manager

• Recession in the overall economy, housing market problems, and severe reduction in state revenues.

• There will likely be limited or no growth in the city’s main revenue source, the property tax, for the next four years as the city is being assessed this year at a low point in the real estate market.

Savings

• Debt Refinancing: The city refinanced its debt in 2012, reducing its debt payment by $460,000.

• Retirement and Pension: The city expects to save money on its retirement and pension payment. For FY2013, the Maryland State Retirement Agency has indicated the city’s premium will be approximately $1.5 million, about $400,000 lower than budgeted in FY2012.

• Staffing Transitions: As a result of retirements in the police department and other departments, some salary budgets are lower than prior years.  Although city staff does not have the total on all the salary line items, they should have it in about a week, McLaughlin stated on Thursday.

New Sources of Revenue and Revenue Increases

• Speed Cameras: Placing speed cameras in school zones is expected to generate $500,000 in revenue to the city.

• Pass Fees at Aquatic Center: The new budget proposes to increase pass fees at the by 3 percent. There was no increase last year. On Thursday, McLaughlin projected the increase would generate $8,000 in revenue.

New Expenditure

• Employee Pay Adjustments: The budget includes a $200,000 set aside for pay adjustment increases for all employees.

Capital Projects Fund, 2001 Bond Fund & Building Capital Reserve Fund

• Capital Projects Fund: Projects totaling $1,219,600 are proposed for FY2013, some of this funding is coming from outside sources including federal, state and local. McLaughlin explained on Thursday that $474,400 will come from the city through a transfer from the general fund and from the city's fund balance, including interest earned on the fund balance. In FY2012 the budget was adopted to include projects totaling $1,898,000, with $482,800 coming from the city, McLaughlin explained.

• 2001 Bond Fund: The FY2013 budget includes $800,000 for Phase I of the renovation, which involves work on the bathrooms and some systems. The systems to be renovated will not be determined until city staff has the chance to brief city council on the plans and options, McLaughlin stated on Thursday. McLaughlin also explained that no bond funds were included in the FY2012 budget approved by the city.

• Building Capital Reserve Fund: This fund is used to set money aside to cover large ticket expenses to city facilities and to build reserves for future costs. The FY2013 budget proposes a $150,000 contribution. Proposed work to be done includes: replacing the gym floor at the Youth Center, an initial phase of HVAC improvements at the Community Center, and $10,000 for energy efficiency improvements. In FY2012, the budget included a $100,000 contribution to the fund.