GOVERNMENT GEARS: City manager proposes tight budget, slight tax increase, fair salaries

GOVERNMENT GEARS • BY NAOMI EIDE

Takoma Park city manager proposed next year’s budget to city council on Monday, April 6, balancing spending on departments, infrastructure and employee salaries.

The city is proposing a 2-cent tax rate increase to make room in the budget to raise Takoma Park employee salaries up to market rate, said Suzanne Ludlow, newly appointed Takoma Park city manager.

“They’re fair salaries,” Ludlow said. “They’re not extravagant salaries, but at least they’re fair.”

The current Takoma Park property tax rate is 57-cents for every $100 of taxable property. On July 1, the city plans on raising the property tax rate to 59-cents, Ludlow said. As an example of costs, with a 2-cent increase a property owner with $500,000 worth of taxable property will pay an extra $100 per year to the city.

“What I tried to do is to make sure that ongoing revenue, like tax revenue, is tied to ongoing expenses, such as salaries, as opposed to one-time projects,” said Ludlow.

 

Fund Revenues Percent Change from FY15 Expenditures Percent Change from FY15
General Fund $22,366,179 3.7 $24,600,220 3.1
Stormwater Management $588,750 -0.4 $684,750 -4.7
Special Revenue $2,805,300 1.8 $2,424,089 36.4
Speed Camera $1,801,200 -0.6 $1,906,930 39.3
Total $27,561,4229 4.6 $29,615,989 6.8

Chart by Naomi Eide

 

Property value decline means tax revenue decline

Property taxes make up about 50 percent of Takoma Park revenue. Normally the assessable base, the total amount of taxable property, goes up a little every year, but this year there was a slight decline. Because of the decline, it would cost the city a half-cent tax rate increase to match this year’s property tax revenue.

Because of the decline in property value, the two-cent tax rate increase will only add about $325,000 to the city. County property taxes are not expected to increase, Ludlow said.

Takoma Park needs about $400,000 next year to raise employee wages to market rate by fiscal year 2017. Because of the half-cent lost taxing properties, the two-cent increase alone will not cover the cost of raising employee wages, said Ludlow.

Belt-tightening

To avoid raising the tax rate any farther, Ludlow said the city is tightening its belt and departments were very careful about limiting departmental cost.

“Many things we would like to do are not included; so very few new staff, very few new kinds of activities,” said Ludlow at Monday’s city council meeting. “Many things that we would like to do we did not put in the budget.”

The city is proposing to pay for large infrastructure improvements by using some money normally budgeted for street repair, sidewalks and ADA improvements. Takoma Park will use some of those funds for initiatives like the Ethan Allen project, stormwater infrastructure improvements and library design. In turn, the city will use speed camera funds to pay for new sidewalks and ADA sidewalk retrofits.

councilbudget16-1

April 6 city council meeting.

Dog park

Takoma Park still plans on building a dog park. Ludlow said, the city will see how the dog park is used and how it functions before they decide whether expansion is physically or financially feasible.

In this year’s budget, Takoma Park raised the salaries of employees paid well below market rate and will phase in further salary increases during fiscal years 2016 and 2017, Ludlow said. A fiscal year is the budget year for a city and in Takoma Park the budget year runs from July 1 through June 30.

Ludlow said that of the 150 permanent Takoma Park employees, 15 employees had salaries well below market rate for their positions. This year the city increased those employee’s salaries to just 7 percent below the market rate for their positions. The city plans to phase in the rest of the wage increases over 2016 and 2017, Ludlow said.

This year the city also increased the salaries of nine permanent employees making less than $40,000 per year to the market value, as waiting for three years for the wage increases would be difficult for them, Ludlow said.

City not paying market rate

Based on a study evaluating job requirements and their pay for city employees, the city found that Takoma Park was not paying market rate for comparable positions in other cities, Ludlow said. They also found that the city had kept wage increases modest following the 2010 recession when Takoma Park had to lay off staff and freeze wages.

In April, the city council will meet twice a week until the budget is voted on and formalized, including budget public hearings. Takoma Park will send the official budget to Montgomery County towards the end of May.

 

About the Author

Naomi Eide
Naomi Eide is Washington state native who spent her college years and beyond wandering the East Coast. She received her undergraduate degree from Providence College in Rhode Island where she studied history and music. Following a year working in corporate America, Naomi left her full-time job for the University of Maryland where she is currently pursuing her Masters of Journalism.

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