BOWIE – Despite discussions and even warnings to the contrary, tax rates are not rising in Bowie for fiscal year 2018.
At a special city council meeting April 12, the city officially introduced the fiscal year (FY) 2018 budget ordinance and resolution, which includes the FY18-FY23 capital improvements program (CIP). The budget has grown by about $2 million, or 4.7 percent, to total $55.3 million, according to City Manager Alfred Lott.
“A reason for the increase has been the increase in police services that you all have implemented over the last few budgets,” he said. “When you hire a police officer, it’s almost a $200,000 a year expense per individual when you count training, equipment, cars, and salary and benefits.”
Lott also said the city’s real property tax rate would remain the same, at 0.40 per $100 of assessed value. The move came as a surprise, because discussions last year indicated that city staff felt the tax rate would need to be raised to address the ongoing gap between revenues and expenditures. According to the city’s budget ordinance, $29.3 million in revenues are projected from taxes, with $20.3 million from other sources such as state and federal funds and fees for services. That leaves a gap of $5.7 million, which the city intends to close by taking money out of the fund balance, which has more than $39.3 million in reserve.
“It is a common practice among cities and counties who are fortunate enough to have a strong fund balance to use those fund balances to level off budgets to avoid tax increases,” Lott said. “It is my professional opinion that when a city like Bowie has a fund balance of $39 million, you should not raise taxes. As a professional administrator, I cannot recommend that.”
Since there is about $20 million above the legal minimum of 25 percent of the operating budget left in the fund, Lott said it would be about four years before a tax increase would need to be considered.
Esteve questioned the move during the meeting. Last year, the city only transferred approximately $2 million from the fund balance into the general fund to close the budget gap, so this proposal would be a large escalation.
“The feeling that we had had and the feeling that we were getting from staff a year and two years ago was that we could only eat into our reserves so many times in order to pay for regular expenses, that that was just not a sustainable fiscal practice, which I agree with. This year, I’m a little bit surprised because we’re eating into our reserves at twice the rate that we expected to do it last year, and they’re delaying a tax increase," he said. “At some point, as the city manager said, we are going to have make a decision: either find a couple million dollars in cuts in the budget or raise the taxes. Why aren’t we having that conversation now? Why are we kicking it down the road?”
Councilman Isaac Trouth, however, pointed out that the state is beginning to reassess property values throughout the city, which could result in more revenue without raising the tax rate if the valuations rise. There are also several new development projects projected to come on line in the near future, Trouth said.
“You can either increase taxes or expand the tax base. And with some of the developments that we have coming on board, we have great potential for seeing the tax base be expanded,” he said.
Esteve asked city staff if the budget projections included the reassessment of property values. Finance Director H. Byron Matthews said they did, and pretty accurately.
“They’ve been tracking pretty well. We estimated they would come in at about 4 percent for FY17, and we’re tracking very much on that,” he said.
Esteve said the issue should be discussed more as the budget process progresses.
After the budget introduction, the council moved into the first of its budget work sessions, focusing on the CIP, which totals $7.3 million for FY18. Some highlights of the plan include $50,000 to install bleachers at Black Sox Park, $363,600 for restroom renovations and design services for the HVAC system and the replacement of cabinets and countertops at the senior center; $2.24 million for the construction of a new amphitheater and restroom building at Allen Pond Park (plus costs for management on those projects); $75,000 for a financial advisor to provide counsel about financing the proposed new indoor sports facility; and $441,800 for upgrades to the main building for the city department of public works. They include designs of a replacement underground fuel storage tank, IT and reception-area improvements to the administration building, and improved access and gate control.
A new project included in this year’s CIP is improvements to the Bowie Golf Course. A total of $2.9 million is anticipated, with $250,000 allocated in FY18 for repairs to irrigation pumps and pipes, a replacement boiler in the pro-shop, replacement windows and frames in the club house, plumbing repairs in the restrooms and renovations to the greens, fairways and sand bunkers.
The city is also planning to upgrade its radio infrastructure to turn the 911 call center into a multipurpose dispatch center for code enforcement, public works and first responders. $188,500 is budgeted for FY18 for the purchase of dispatch controls, voice recorder, 29 radios and a connection with the Motorola Turbo system the city plans to use.
“A major (beneficiary) will be the public works department,” Lott said. “This will also help us in the emergency management business because, one of the things we saw when we had this recent storm was that we need to make sure that everybody who's out there dealing with it, we have the ability to hear each other.”