BY ANDREW MARDER — At the Feb. 24 Hyattsville City Council meeting, City Administrator Tracey Nicholson presented the Fiscal Year (FY) 2017 city budget, running from July 1, 2016 to June 30, 2017. With revenue forecasted to reach $16.76 million and expenditures forecast at $17.21 million, the city is currently predicting a $448,332 shortfall, according to Treasurer Ron Brooks.
The FY 2017 $17.21 million budget is a 4 percent increase over the FY 2016 budget of $16.55 million. Revenue is forecast to increase 7.5 percent from $15.59 million to $16.76 million.
According to figures provided by Brooks, both real property taxes and personal property taxes are expected to rise in fiscal 2017, up 4.4 percent and 5.9 percent respectively. Real property, which covers taxes on homes and land, make up the bulk of the city’s revenue and are predicted to provide $11.29 million in fiscal 2017.
Much of the increase is due to a recent property value assessment, which showed a 4.6 percent increase in the city’s taxable base, according to the city administrator’s office. The forecast for fiscal 2017 reveals that Hyattsville is expected to have a taxable base of $1.79 billion, up from $1.71 billion in fiscal 2016.
The predicted taxable base comes after the state increased its assessments of real property values in Hyattsville. Every three years, the state updates these assessments, phasing in property value increases over the subsequent three years. FY 2017 will be the first year that property assessments increase in Hyattsville.
While property assessments have risen, the city plans to maintain its 0.63 percent real property tax rate, according to the city’s presentation. That means overall tax revenues will increase, which requires a public hearing, according to the Maryland Department of Assessments and Taxation. That hearing is currently scheduled for April 27, according to the city.
Turning to expenditures, the city is proposing major increases across a number of departments, coming to a net increase of $656,975 over FY 2016.
City staff are poised to receive a 1.5 percent cost-of-living salary increase, according to Nicholson. Overall, general government expenditures are forecasted to rise 13.3 percent over fiscal 2016 – an increase of $310,664.
One of the largest single increases comes from the proposed addition of a police captain, increasing the “police command” line item by $249,536.
Departments forecasting a fall in expenses include street operations, building and grounds maintenance, vehicle maintenance, and information technology.
From the council, major budget initiatives included $250,000 for “a traffic study aimed at improving safety and mitigating traffic volumes on neighborhood streets east of Queens Chapel Road (MD 500), west of Route 1, and south of East-West Highway,” $10,000 for a snow removal program for seniors, $60,000 for sidewalk improvements in Ward 4, and $500,000 for city-wide lighting improvements, according to city documents.
The overall budget deficit will tap into the city’s reserve fund, which Brooks said was currently estimated at $9.31 million. Council members expressed some surprise at the size of the fund. Councilmember Patrick Paschall said, “[The] fund balance is substantially higher than any number we have seen in every budget that I’ve seen at this council.”
Brooks said that the newest figure had been updated after recent audits. He also said that the city had done a good job of keeping expenses down, allowing it to put more money aside than previously believed. Brooks said he expected the actual value of the fund to be slightly higher once all the audits were certified.
The council will begin in-depth discussion of the budget at its March 16 meeting, when it will discuss the proposed budgets for administration, legislative, finance, human resources , information technology, and elections. It will continue to discuss the proposed budget through the end of April, finalizing the budget at the May 25 meeting.