Politics & Government

Fiscal 2012 Budget Introduced to City Council

The spending plan calls for no new taxes.

City Manager Angel Jones will introduce the fiscal 2012 budget to the Mayor and Council at a special session of the Mayor and Council tonight.

The spending plan calls for the property tax rate to remain flat at .262 cents per $100 of assessed value.

Jones called the City's budget outlook "optimistic" in the face of gloomy budget predictions across the rest of the country, and said this is due to long-range planning.

Find out what's happening in Gaithersburgwith free, real-time updates from Patch.

"But this does not come without challenge and sacrifice," she said in a statement on the City's website. "We are not able to return to the staffing levels we experienced a few years ago and some vacant staff positions remain unfilled.  Significant service cuts that were made to balance the FY2010 and FY2011 budgets remain in place."

The total anticipated revenue for the upcoming year is $47,887,492, which is an 8.4 percent increase over last year.

Find out what's happening in Gaithersburgwith free, real-time updates from Patch.

The operating budget—$41,745,362—is 2.6 percent higher than fiscal 2011.

A $5.2 million transfer to the Capital Improvement fund is a 71.7 percent increase from last year, due largely to the construction of Teachers Way in Olde Towne.

"The contribution to the Other Post-Employment Benefits Trust (OPEB) calculated by our actuaries is $910,000, which is twice the amount budgeted in FY2011," Jones said. "It is important to note that our post-employment benefits are funded at the recommended level; we are not jeopardizing the future by underfunding these benefits to balance the budget."

In last year's five-year budget plan, the City was expecting to spend more than $500,000 their reserves because of falling tax assessments. But relatively flat property taxes and revenue from previously stalled development projects mean the City will have to spend only about $138,000 from the reserve fund.

Associated with those projects, the City expects to collect more than $3 million in licensing and permitting fees, which is about 6 percent, or $180,000, more than was budged last year. Jones credits this increase to the $2 million specifically earmarked in last year's budget for economic development.

Also at tonight's meeting, the City will announce a public hearing on the constant yield tax rate. The hearing will be held May 2.

The constant yield rate is the tax rate that would bring in the same amount of money as last year.

This year, because of increasing property assessments, the constant yield rate is .2601, slightly lower than the actual tax rate.

Jones is proposing keeping the rate at .262 cents per $100 of assessed value, which would mean the City would collect $172,165 in new property tax revenue.

This article was corrected to reflect that the hearing for the constant yield tax rate will be held on May 2.


Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

We’ve removed the ability to reply as we work to make improvements. Learn more here