On April 3, Takoma Park City Manager Robert DiSpirito presented his proposed budget for Fiscal Year 2025 (FY2025), which begins on July 1, 2024. A detailed version of this summary can be found in the Takoma Park Newsletter May 2024 Edition:
No Tax Rate Increase Proposed: The proposed budget keeps the real property tax rate at 55.22 cents per assessed valuation, despite a drop in revenue from other key sources. Throughout April, the City Council has been reviewing and discussing the budget, holding work sessions, and listening to public comment.
Transitions and Challenges: Manager DiSpirito has titled the draft budget “A Bridge Forward,” stating that Takoma Park faces several realities that will reduce city revenue and increase expenses. Proposed expenditures for FY2025 are $32,245,760 versus projected revenues of $30,586,928. This is a difference of approximately $1.6 million. The proposed budget intends to cover the deficit by assigning $206,997 in interest from the Library Bond Reserve and about $1.4 million from the Unassigned Reserve Fund.
Manager DiSpirito cites the following financial challenges that the city will face in FY2025:
- The ongoing impact of unavoidable higher inflationary expenses on capital improvement projects and the procurement of necessary equipment, commodities, and services
- The dwindling balance remaining in the city’s account containing the federal American Rescue Plan Act (ARPA) fund
- The increased cost of employee compensation (salaries, wages, and benefits) resulting from the implementation of two new multi-year employee collective bargaining agreements (AFSCME and UFCW Local #400) as well as needed adjustments for non-represented employees, for both the new FY2025 budget and retroactively for FY2024
- The announced reduction in tax duplication funds from Montgomery County
- The continued decline in cable TV revenues
- The continued decline in speed camera revenues
- Possible reduction by the State of Maryland for shared Highway User Revenue funds.
General Fund Reserve Balance Policy Goal Restored: Despite the financial pinch, the proposed FY2025 budget returns the General Fund’s Unassigned Reserve Balance to 17%, which is the financial policy goal previously set by the mayor and council, based on recommendations from the Government Finance Officers Association. The Unassigned Reserve balance of the current FY2024 Budget was approximately 14%.
Personnel Level Is Stable: For the General Fund, no additional full-time positions are proposed. While there is not a universal hiring freeze in place, some currently vacant positions are proposed to be strategically re-purposed for other positions in FY2025. A minor net reduction of 1.98 in overall full-time positions is forecast based on an adjustment of hours for some current seasonal and part-time positions.
Red Light Camera Fund: DiSpirito expects to raise approximately $1.3 million in FY2025 through red light cameras that will document and fine traffic violators. These funds are proposed to go to a special revenue reserve fund in the Police Department, not the General Fund, since the purpose of this revenue is to address public safety. The Red Light Camera fund will supplement declining revenues from the current and ongoing Speed Camera fund. DiSpirito proposes that some amount of new revenue from the Red Light Camera fund be earmarked for a transit planner, who will be tasked with improving pedestrian and traffic safety.
The entire 300-page proposed budget can be found at takomaparkmd.gov, with further details about revenue and expenses, by department and division. The additional detailed summary can also be found here.