Wednesday, April 2, 2008

Gaithersburg considers pay increases as revenue drops

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Despite decreased revenues and project cuts, city officials have proposed that all city staff get a 2 percent merit increase in salary on top of a 4.5 percent cost of living increase in its $52 million fiscal year 2009 budget.

Three major expected revenue categories have switched courses the past few weeks, causing a wrinkle in ongoing budget calculations, said Assistant City Manager Tony Tomasello. Contract settlements on city-owned land slated for redevelopment at the ‘‘Y” site on Olde Towne Avenue and the Fishman Building at 315 E. Diamond Ave. have been delayed until fiscal 2010, postponing at least $4.8 million in revenue.

‘‘What’s not in the budget says almost as much as what’s in the budget,” Acting City Manager Jim Arnoult told the mayor and council during a work session Monday night. The city’s operating and capital budgets total $52 million, while revenues are currently at $48 million and ‘‘these figures are still changing.”

No decisions were made Monday night as Arnoult, Tomasello and Assistant City Manager Fred Felton presented officials with draft budget highlights.

The only new positions the city will see this year are two police officers, two public works employees and one information technology employee, Arnoult said. All requests to upgrade part-time staff to full-time were denied.

Employee health care costs have increased more than 10 percent, he said, but the budget team is trying to ‘‘hold the line” on increasing co-payments and prescription plan costs.

The mayor and council advised that spending $50,000 to study making city police, currently a supplement to the county department, a ‘‘standalone” force was appropriate. They also guided staff to set aside $150,000 to create a taxable city residency stipend for non-exempt employees, such as police officers or bus drivers. Tomasello said the perk could provide a boost to hiring and retention as well as increase year-round public safety and efficiency by having police and public works employees living nearby.

Affecting revenue is a dramatic drop in traffic citations, Tomasello said. Police had forecasted about 60,000 citations would be issued in fiscal 2009, about $2.4 million in revenue, but that expectation is sinking.

A controversial speed camera on Watkins Mill Road yielded about 2,800 citations in January, Gaithersburg Police Chief John King said in February. After city officials raised the speed limit at that spot, the camera yielded only 620 tickets between Feb. 1 and 19, he said. Pending statewide legislation also means that profits from speed cameras could be rerouted to the county.

The city also owes the federal Department of Housing and Urban Development $1.8 million in pro-rated community block development grants used to purchase the Olde Towne Youth Center at 402 E. Diamond Ave in 1998, Tomasello said. The property has been sold to make way for the Archstone-Smith development, and the money will not return to municipal funds.

Other budget drains include increased prices for gasoline and energy costs, as well as sand, salt and asphalt, Tomasello said.

City leaders agreed in January to delay construction of a $25 million-plus aquatics and recreation center slated for the Lakelands, although designs were two-thirds complete.

‘‘I cannot at any time within the next five years say that I envision having $15 million for a pool,” Tomasello said, especially with an estimated $1 million in operating costs.

Solutions include borrowing money, building a scaled-down facility, even combining the pool center with the expected new senior center.

Mayor Sidney A. Katz pushed staff to pursue possible partnerships with the county, and the council agreed to hold work sessions this year to discuss the aquatics center and other pricey projects such as stormwater management and stream restoration and preserving historic properties at Crown Farm.