Annapolis Passes Budget, Fees And Taxes On Way

| June 7, 2011 | 1 Comment

See the following release from Annapolis City Hall which was received immediately following the Council meeting at 12:09 am.

City Council Approves FY 2012 Budget of $90.0 Million

Spending plan increases property tax rate; capital budget also passed

Annapolis, Md. (06-07-11) – The City Council voted last night to approve Mayor Joshua J. Cohen’s $90.0 million budget for the fiscal year that starts July 1. The Council approved the fiscal year 2012 operating budget, 7-2, with Aldermen Frederick M. Paone and Mathew Silverman opposing. The council went on to approve the $9.1 million capital budget, 9-0.

The approved fiscal year 2012 budget reflects an accord reached last month by a Council majority that mandates $2.8 million in spending cuts – achieved mainly through a hiring freeze and attrition – and nearly $1.9 million in property tax revenue increases. The City’s property tax rate will increase 3 cents to 56 cents per $100 of assessed property value. The tax bill on the average assessed value of property in Annapolis ($375,450) would rise by $112.63 to $2,102.52.

The tax rate increase is expected to partially offset a projected annual loss of $2.5 million to $3.7 million in property tax revenue from FY 2013 to FY 2015 because of an expected decline in property assessments. It also compensates for one-time spending overruns for health, liability and workers’ compensation insurance and financing payments for the Park Place TIF project that were left out of previous budgets.

Provisions in the operating and capital budgets include:

  • Eliminating the proposed $500,000 sidewalk revolving fund
  • Fully eliminating the proposed conversion of contractual employees for FY 2012 (a savings of $350,000)
  • Increasing the refuse fee by an average of $46 per residence per year
  • Raising the fare for most Annapolis Transit riders by 50 cents per ride, to $1.50
  • Spurring economic development by designating $50,000 for the Main Street Program, the Capital City Cultural Arts District, and enhancing the City Dock “placemaking” process
  • Raising the voluntary stormwater fee from $22 to $40 per residence and adding a 50 percent incentive credit for use of on-site stormwater management
  • Directing $3 million for sewer and water infrastructure upgrades; $2 million for roads; $200,000 for Truxtun Park improvements; and $140,000 for City Dock redevelopment efforts
  • Establishing a general fund reserve of $10.5 million – representing roughly half of the required reserves necessary to end the cycle of short-term borrowing

While $150,000 was eliminated for the proposed downtown Circulator, the administration plans to push ahead with launching the shuttle service next month.

Separate rate increases for water and sewer services are embodied in O-11-11 (http://bit.ly/mkrR56); they would go in effect on July 1 if approved by the council later this month. Along with funding the design of the treatment plant upgrade, the proposed water and sewer rates would pay for operating and maintaining the treatment and distribution systems; repay an almost $4 million loan from the City’s General Fund; and fund the replacement of our oldest water pipes. (As part of the budget accord struck last month, the City will enter into “extensive high level” negotiations with Anne Arundel County on the option for joint operations for a proposed water plant.) A public hearing is scheduled on the revised water and sewer fees at the regular meeting of the City Council on Monday, June 13. A final vote is scheduled to occur June 20.

“Last year, the City Council pulled the City back from the brink by cutting an unprecedented 13 percent from the operating budget,” Mayor Cohen said. “The Council has taken the next significant step forward in our effort to transform the City’s finances by beginning to rebuild our reserves and address our long-term obligations. Our fees for so long have not covered the expenses of services, and this budget accurately and honestly does so. In passing this budget, the Alderpersons also endorsed this administration’s charge to present a more transparent budget that fully accounts for all transfers between funds as well as grant spending.

“The work to restore the City’s financial health is far from done. We must continue to rebuild our reserves so that we can end our reliance on short-term borrowing. Yet at the same time we must also preserve essential services that Annapolitans have come to rely upon. We did not arrive at this point overnight, and it will take the continued, dedicated work by this administration and the City Council to emerge from this period in sound shape.”

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