City budget holds steady, new departments formed

May 15, 2012

BY KAREN J. RILEY — Mayor Marc Tartaro’s budget for fiscal year 2013, which starts July 1, is positively upbeat in comparison to other jurisdictions.

Lower tax collections due to the collapse in housing prices and economic stagnation have forced many municipalities to reduce services and lay off staff.

While Hyattsville has seen a decline in property tax assessments, overall  city revenue has remained steady. The budget synopsis credits the city’s fiscal health to ongoing investments and annexation of major retail, and business-oriented development before the downturn.

Nevertheless, with prices rising nationwide for health care and gasoline, the 2013 budget includes a modest 3.6 percent reduction in spending from last year, from $14.6 million to $14.1 million, in order to achieve a balanced budget. But the trims have been done in such a way that there is no noticeable change in city services. In fact, s pending is slated to increase slightly in a few key departments such as general government, public safety and public works.

Residents will see their tax rates remain constant for the seventh straight year. Recognizing that many residents have been struggling in the sour economy, Tartaro has kept the property tax rate at 63 cents per $100 of assessed value.

That’s enough to collect an estimated $11.3 million in fiscal year 2013, which accounts for the bulk of the city’s total estimated revenue of $15.5 million. Hyattsville must use $1.4 million of that revenue to meet its debt obligations from leases and the principal and interest on city bonds. Under a balanced budget, that leaves $14.1 million to spend on city services.

Healthcare changes

Under the proposed budget, city staff will receive a 1 percent cost-of-living increase and will transition to a defined contribution model for employee health care from a defined benefit plan. So instead of receiving a set of health insurance benefits, staff will be given a fixed amount of money to buy or help pay for insurance they choose themselves. In FY13, the city’s contribution will be capped at $14,200 annually.

This will result, according to Tartaro, in lower health care costs for about 75 percent of city employees. In future years, the city’s contribution will be adjusted based on a cost-of-living formula.

However, this approach is not popular with the city’s chapter of the Fraternal Order of Police. “What this plan amounts to is price locking,” said FOP President Patrick O’Hagan. He fears that as healthcare costs go up, the employee rather than the city will be expected to absorb any increase.

Staff
The number of city staff will remain the same overall at 109.9 full-time equivalents. The new budget assumes that the city will fill several important slots, including a city administrator and city clerk.

Last year the city had to absorb steeply higher workers’ compensation premiums. A major task of its new human resource director, Chris Vermillion, will be controlling workers’ compensation costs. To help accomplish that goal, every city office is being asked to collect metrics on workers’ compensation.

Department of Community Services
The 2013 budget reflects the reorganization of some city services that was recommended by the city’s 2009 Management & Efficiency Study. A new Department of Community Services combines the functions of seven city offices: Arts and Arts Collaborations, Cable Operations, Communications and Public Relations, Recreation Services, Senior Services and Call-A-Bus, Special Events and Community Event Collaboration and Volunteer Services.

In addition, the Department of Public Works will handle park maintenance.

Community and Economic Development
This new department, in addition to being a general booster for new development and providing mapping services, will assume the responsibility for code compliance and parking compliance. The city sees these as key components in an overall plan for future economic development.

Under this scheme, code enforcement morphs into a broader code compliance role, working to preserve and enhance neighborhood conditions, collect economic development data and educate local business about available resources for business development.

Parking enforcement, previously tasked to the police department, becomes parking compliance in this department. This is based on the assumption that effective parking management is one of the city’s best tools to support continued revitalization. It’s also an important source of revenue, especially because the number of city parking meters will be increasing from 44 to 200.

“The parking program has been a failure for years,” said Tartaro. “We don’t have a coherent policy.”

Coming up with a parking plan is seen as all the more important, given concerns about the limited parking available at the new Route 1 development. In addition the capital budget (see page X) includes $2 million in FY1 to add new parking in that area.

For the first time, the budget includes metrics for each office that will make it possible to not only measure staff performance but also provide a wealth of data about how residents interact with the city government. Ultimately, this could lead to more intelligent allocations of staff and services in future budget years.

At press time, the council was expected to pass the budget at its May 7 meeting.