Gaithersburg: A Debt Free Island
Despite an austere economic climate where "debt" is a four-letter word, Gaithersburg has managed to maintain their pay-go philosophy and remain totally debt free.
When Mayor Sidney Katz says that Gaithersburg is the greatest city in the world, part of what he's talking about is the city's pay as you go philosophy.
At a time when cities like Harrisburg, Penn. are filing for bankruptcy because they can't handle their debt and revenues are across the board, Gaithersburg has managed to remain entirely, 100 percent debt free, the Washington Post reports.
The practice took hold in the early 1970s and city officials only rarely have took on one-time debts in order to pay for large purchases, such as the 57-acre Summit Hall Turf Farm in 1982.
That farm is now Bohrer Park, the Gaithersburg Activity Center, Mini-Golf Course, Skate Park and Water Park.
The city paid off that debt in a few years—ahead of schedule.
Other municipalities in the area carry varying amounts of debt, like Rockville, Takoma Park and Greenbelt.
But Gaithersburg not only has no financial anchors, it has a $33 million rainy day fund.
Factors like a non-unionized workforce and public-employee equivalent of a 401(k) retirement plan have helped keep the city's operating costs down. Gaithersbug's operating budget, $49 million, is less than half of Rockville's $107 million spending plan, despite the two cities having nearly identical populations.
Maintaining this philosophy hasn't come without a price. In fiscal 2011, the city raised property tax rates for the first time in four decades and slashed its operating budget by several million dollars.
Do you think Gaithersburg's approach is a good one? Should other municipalities strive to operate under similar rules? Take our poll and let us know.
In This article
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Bohrer Park at Summit Hall Farm
506 S Frederick Ave, Gaithersburg, MD -
Activity Center at Bohrer Park
506 S Frederick Ave, Gaithersburg, MD -
Gaithersburg Miniature Golf
508 S Frederick Ave, Gaithersburg, MD -
Gaithersburg Skate Park
510 S Frederick Ave, Gaithersburg, MD -
The Water Park at Bohrer Park
512 S Frederick Ave, Gaithersburg, MD
Citizen
12:34 pm on Wednesday, November 16, 2011
You can't compare Gaithersburg to Rockville ! Have you seen Rockville's Old Towne ? Gaithersburg has been re doing Old Towne for the past 15 years. Still no change! The only great change that took place in the Old Towne area in the past 20 years, that had any postive outcome for the city citizens was the destruction of Lee Street. This was an open air drug store that had the entire North Summit corridor involved. This was the only great accomplishment in the Old Towne area. Ms. Jones should be happy because she would be sitting in the middle of the drug store. Maybe she would of had a live in friend that would have been a pharmacist at CVS.
The mayor and counsel of recent has just wasted away the tax payes money over the years with no improvements to the Old Towne area. If something doesn't change, we wil look like Langley Park.
ryan o'toole
3:35 pm on Wednesday, November 16, 2011
When I opened my Post this morning, the only things that came to mind were: lack of investments, lack of infastructure, and lack of foresight. Keep up the good work Mayor and Ms. Jones!
Lois
10:40 am on Thursday, November 17, 2011
You shouldn't read the POST!
Tom Rowse
4:30 pm on Wednesday, November 16, 2011
At the rate that Olde Towne is falling apart and turning into a ghetto in front of our eyes, I don’t see how the city can remain debt free over the next 5 years.
tonic226
1:56 pm on Thursday, November 17, 2011
I thought you were so pro economic development for the area. Are you giving up now?
Lois
10:13 am on Thursday, November 17, 2011
Penny wise and Dollar foolish. Nice... $ in the bank and we Gaithersburg-ians flock to Rio and Rockville Towne Ctr. and Bethesda and leave our $$ there. We have entertainment and dining in a safe and secure environment elsewhere.
So, keep the $ and lose the prestige and enjoyment for your neighbors. What's the gain?