Friday, May 23, 2008

Frederick officials approve $83.1 million budget

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The financial roadmap for the next year in the City of Frederick is complete with the adoption of a fiscal 2009 budget by the Board of Aldermen Thursday night.

By a unanimous vote, the five-member board approved the $83.1 million operating budget presented in March by Mayor W. Jeff Holtzinger (R), as well as a 65-cent property tax rate per $100 of assessed value. The new tax rate represents a two-cent reduction in the current rate of 67 cents.

The final budget, which goes into effect July 1, includes a 3.5 percent cost-of-living increase for city employees as well as 21 new positions, notably two for code enforcement and five for the Frederick Police Department.

Also included is $150,000 for a workforce housing program that will help those who work in Frederick live in the city. While the program has not been clearly defined, the aldermen agreed to allocate the money for future discussions on how it will operate.

The same discussion will be needed for a tax credit for residents ages 70 and older. The city plans to mirror state and Frederick County programs to assist seniors with their property taxes, but needs to enact an ordinance to give these residents the tax break. Discussions on that program will also commence in the near future.

In addition to the decreased property tax rate, residents will not see an increase in water and sewer rates. They will, however, see a 20 percent increase in storm water rates to help the city process water, mostly from rain, leaking into the sewer system for treatment.

Parking fees will also rise in the city from their $70 per month to $80, and hourly parking will increase by $1 per hour. That money will be used for additional parking decks and maintenance of existing structures.

There was little discussion on the final budget by the aldermen Thursday night following two months of presentations, debate and amendments by Holtzinger.

Alderman David ‘‘Kip” Koontz (D) made it clear that his favorable vote was contingent on the city finalizing details of the senior tax credit. Holtzinger said that would occur, and that the revenue impact to the city for the next fiscal year would likely be between $50,000 and $100,000.

‘‘I have a vision of where this city needs to go ... and the budget proposed helps take us there,” Alderman C. Paul Smith (R) told his colleagues. ‘‘...This is good for the city.”

There was a brief discussion about Holtzinger's proposed tax rate, mainly its relation to the constant yield rate, which for the city would be 61.6 cents. That is the rate, set by the State of Maryland, the city would need to charge to collect the same amount in property taxes next year as it did this year.

Koontz asked why the city could not reach that rate. Holtzinger replied that it was to give some relief to taxpayers who are seeing increased state taxes due to rising assessments. The 65-cent rate gave them that relief, he said, as well as generating added income to the city, for increased costs, such as salary increases and higher insurance costs.

‘‘We need that $2 million [in additional revenue] to pay for things,” Alderman Donna Kuzemchak (D) said. ‘‘Look at the price of gas.”

Smith said he would like Holtzinger to present next year a ‘‘constant yield budget ... to force us to debate and to deal with that.”

‘‘It might encourage more contention and debate ... but it might help,” Smith said.

The budget approved on Thursday night also includes a little over $90 million in construction projects for the coming year, including $13 million for expansion of the New Design Road water plant, $11.4 million for a central section of Monocacy Boulevard, and $6 million for a northern city police substation.

A late addition to the construction budget was $200,000 for fiscal 2009 and another $200,000 in fiscal 2010 for the city's ‘‘way finding” efforts, installing new, uniform signs around the city to help navigate downtown.