Mayor and Council



   For the meeting on:

  February 27, 2017
   Department:   Finance
   Responsible staff:  Stacey Webster, Deputy Director of Finance
  phone: (240) 314 - 8407
  SWebster@rockvillemd.gov


Subject
Presentation of the Fiscal Year 2018 Proposed Operating Budget and Capital Improvements Program (CIP)

Recommendation
Staff recommends that the Mayor and Council receive the presentation on the Fiscal Year 2018 Proposed Operating Budget and Capital Improvements Program.

Discussion
FY 2018 Budget Overview
The Fiscal Year 2018 Proposed Operating Budget and Capital Improvements Program utilizes available resources in an effective and responsible manner, and is consistent with the policy direction set forth by the Mayor and Council. The budget focuses on the health and safety of our residents, business owners, and employees; critical infrastructure improvements; and City programs and services.

The total operating budget for all funds equals $129.4 million, an increase of 2.5 percent over last year’s total operating budget. The General Fund budget, which is balanced without the use of reserves, equals $79.2 million, an increase of 2.6 percent over FY 2017. The property tax rates of $0.292 for real property and $0.805 for personal property will remain the same for FY 2018.

Attachment A and Attachment B describe some of the major items that are funded in the FY 2018 budget. Highlights or major enhancements include:

  • Three Full-Time Police Officers ($315,210; of which $40,200 is one-time for uniforms, academy training, and equipment)
  • Dedicated School Resource Officers in all three Rockville High Schools (cost neutral)
  • Additional Police Overtime ($40,470)
  • Cell Phone Stipends for Police Officers ($23,760)
  • Water Treatment Plant, Filter Press Repair ($192,280)
  • Water Backflow Inspection Program ($36,000)
  • Sewer Cleanout Installation and Lateral Replacement ($78,000)
  • Rockville Swim and Fitness Center, Filter Tanks and Pool Pumps ($61,000)
  • Water Barricades for public events ($9,920)
  • Senior Needs Assessment Action Plan Items ($42,600)
  • ADA Program Requirements ($27,460)
  • Additional Contract Tree Maintenance ($47,000)
  • Purchase of WSSC Water ($92,780)
  • Maintenance of 175 Watts Branch Parkway ($11,020)
  • Consultant Services for Streetscape, Planning, and Urban Design ($175,000)
  • Upgraded Timekeeping System ($25,200)
  • Rocktobierfest ($37,710)
  • International Night ($4,950)
  • House Bar Lights for the F. Scott Fitzgerald Theatre ($95,000)
  • Extended Summer Camps ($49,090)
  • Additional Fitness Pool Hours ($11,500)

City Staffing
The total number of full time equivalent (FTE) positions in the FY 2018 operating budget remains relatively flat, only increasing by 0.2 FTEs to 609.5 FTEs. For regular positions, FTEs increased by 0.5 to 517.9 FTEs, which is the net change from the addition of 3.0 FTE Police Officers and the elimination of 1.0 FTE Assistant to the City Manager, 1.0 FTE Television Production Specialist, and 0.5 FTE Video Technician. All the eliminated positions were vacant.

During FY 2017, two Police Officers were reallocated from the Speed Camera Fund to the General Fund via a mid-year budget amendment. In addition, one Photo Enforcement Technician was reallocated from the Speed Camera Fund to the General Fund in the FY 2018 budget. Given the reduction in the number of speed camera citations since the inception of the program, and the consequent reduction in speed camera revenues and related workload, there is no longer sufficient funds available to support these positions. These reallocations did not change the total FTE count for all funds.

Capital Improvements Program Overview
The FY 2018 CIP budget includes new funding of $19.9 million to address the priorities of the Mayor and Council and residents of Rockville. This new funding combined with prior year carryover funding of $47.2 million, will support a total of 47 projects in FY 2018. There are eight newly-funded projects, which include:
  • Lincoln Park Community Center Parking Lot Expansion (RB18)
  • Potomac Woods Community Center concept design and outreach (RD18)
  • Senior Center ADA Improvements (RE18)
  • Traffic Signal Communication System (TA18)
  • Stream Restoration: Anderson Park (SA18)
  • Water Treatment Plant Concrete Roof Repairs (UA18)
  • Water Treatment Plant Electrical System Upgrades (UA17)
  • I-Net Security Enhancements (GA18)

Financial Outlook
The City is able to fund the Mayor and Council’s priority initiatives and new capital projects due to Rockville’s stable revenue base and conservative financial management policies. Based on current data from the State of Maryland and Montgomery County, Rockville projects a total combined increase of $2.5 million in property tax and income tax revenues from what was adopted in FY 2017. The increases in these revenue sources are evidence of our region’s strong housing market, low unemployment rates, gradual wage growth, and general state of the economy. Property tax and income tax revenues make up over 68 percent of the General Fund budget. We are projecting that the General Fund unassigned fund balance will continue to exceed the City’s policy target of 20 percent of proposed FY 2018 revenues.

Although the City’s financial outlook is positive, we, along with many other jurisdictions in the Washington DC metro area, remain cautious about changes that might result from the new federal administration. Staff will continue to monitor the local environment and adjust for any factors that might impact the City’s key resources.

Mayor and Council History
Past Mayor and Council actions related to the FY 2018 budget include:

Date
Action Item
September 12, 2016 Discussion of Operating Budget Process
September 19, 2016 Discussion of Capital Improvements Program (CIP) Budget Process
October 11, 2016 Distribution of Mayor and Council Budget Surveys
November 1, 2016 Budget Public Hearing
November 10, 2016 Mayor and Council Budget Surveys Due
December 12, 2016 FY 2018 Budget Survey Results and Discussion of Budget Priorities
January 9, 2017 FY 2018 Cost Allocation Plan (CAP) Presentation
February 13, 2017 Distribution of FY 2018 Proposed Budget

Public Notification and Engagement
The City held the first public hearing related to the FY 2018 budget on November 1, 2016. The remaining public hearings are scheduled for March and April 2017.

In addition to the budget public hearings, the public can submit written comments about the budget via an online form located on the City's website at www.rockvillemd.gov/budget. These comments will be distributed to the Mayor and Council at the close of the public comment period and will be included with the agenda materials for the final budget worksession.

The public comment period closes on April 7, 2017.

Boards and Commissions Review
The Financial Advisory Board will meet several times during the FY 2018 budget process to review the FY 2018 operating budget and CIP, and develop recommendations for the Mayor and Council. One or more members from the Financial Advisory Board will be available for at least one of the Mayor and Council's budget worksessions to present and discuss the Board's recommendations for FY 2018.

Next Steps
Future Mayor and Council actions related to the FY 2018 budget include:

Date *
Action Item
February 27, 2017 City Manager's Presentation of FY 2018 Proposed Budget;
Introduction of FY 2018 Budget Ordinance;
Introduction of FY 2018 Refuse Fee Resolution;
Introduction of FY 2018 Stormwater Management Fee Resolution
March 2, 2017 Mayor and Council Worksession
March 6, 2017 Public Hearing
April 3, 2017 Public Hearing;
Constant Yield Tax Rate Public Hearing;
Mayor and Council Worksession
April 7, 2017 Close of Budget Public Record
April 17, 2017 Mayor and Council Worksession
May 1, 2017 Adoption of FY 2018 Budget Ordinance;
Adoption of FY 2018 Refuse Fee Resolution;
Adoption of FY 2018 Stormwater Management Fee Resolution
* All dates are subject to adjustment by the Mayor and Council during the budget process.

Attachments
Attachment A - Letter from the City Manager
AttachA_CMLetter.pdfAttachA_CMLetter.pdf

Attachment B - Budget Highlights
AttachB_BudgetHighlights.pdfAttachB_BudgetHighlights.pdf

Department Head:



Gavin Cohen, Chief Financial Officer
Approved on: 02/22/2017

City Manager:

Robert DiSpirito, City Manager
Approved on: 02/22/2017