GREENBELT – The city is finally beginning to recover from the Great Recession, City Manager Michael McLaughlin to the Mayor and City Council last night after her proposed a “breakout” $26.4 million operating budget for 2016. The proposal represents an increase of $1.1 million from last year’s budget, or 4.3 percent. However, $300,000, or almost […]
GREENBELT – The city is finally beginning to recover from the Great Recession, City Manager Michael McLaughlin to the Mayor and City Council last night after her proposed a “breakout” $26.4 million operating budget for 2016.
The proposal represents an increase of $1.1 million from last year’s budget, or 4.3 percent. However, $300,000, or almost a third of the increase, will come from a transfer of the city’s reserves.
“At $26.4 million, it is the first budget since FY 2009 (seven years) to break out of a narrow range of between $24.5 and $25.5 million,” McLaughlin said. “While it is clear that the national economy is recovering from the recession, it is not as clear that the State of Maryland or Prince George’s County are recovering as they continue to deal with deficits and projected funding gaps. Though Greenbelt will not see any significant financial improvement until fiscal year 2017, there are signs of recovery which positively impact this budget.”
Councilman Edward Putens said the city has been looking for years for the economic climate to finally turn around for the better, and this might finally be the year that it happens.
“I’m hoping this is the beginning of the U-turn, to some degree,” Putens said.
McLaughlin said increased values of homes in Greenbelt attributed to the larger budget. Market sale prices of homes have risen 36 percent higher than their assessed value while apartment values also increased by 9.5 percent. The estimated gross assessed value of real property for FY 2016 is $1.9 billion, a 4.5 percent increase from last year, according to the proposed budget.
McLaughlin said four factors drive the city’s $800,000 revenue increase: the increase of value in apartments, the increased value of homes, continued growth in income taxes and speed camera revenue.
Income tax revenues for FY 2015 are estimated at $2.4 million, a 2.5 percent increase from a year ago, according to McLaughlin, and staff believes that applying a growth rate of 2.5 percent in 2016 is reasonable, resulting in an estimate of $2.4 million. Speed camera revenue is expected to increase to $450,000 due to the installation of a camera on a heavily-used state highway, according to the budget, but staff expects greater compliance in 2016, resulting in $350,000 in revenue, or a decrease of $100,000.
Even with the increases in revenue and a positive economic outlook for city, McLaughlin said the city still needs to look into reinvesting in old infrastructure.
“Greenbelt had a major capital expansion in the 1990s with things like the police station, the indoor pool and the community center,” McLaughlin said. “Those facilities are 25 years old since the last major reinvestment.”
McLaughlin said if the future of the FBI building becomes clearer and it comes to Greenbelt, it will be a “game changer” for the city.
“The future looks good,” McLaughlin said.
Putens said he had concerns about how the FBI building would impact the taxes on the city’s residents, since it will be a federal building. McLaughlin said the impact would be positive because the proposal lists the FBI as a private development leased by the federal government.
“That means that it is subject to property taxes for the city. And at 2.1 million square feet , that is larger than all of the office space in the city right now,” McLaughlin said. “And then you add on top of that the potential for private development that is the buffer between the FBI and the station. It is significant in terms of hotel, mixed use, office and retail. That will have a significant positive impact.”
If the city is awarded the contract with the FBI, McLaughlin said, that will also bring more jobs to places like Capital Office Park and other office spaces that need to be occupied.
“In my own mind, I look at it in terms of reducing the property taxes for the citizens that are already here,” Putens said.
McLaughlin said capital projects for the current fiscal year and fiscal 2016 are reinvestments in infrastructure. Things like the community center’s HVAC unit and the roof of the indoor pool are being upgraded and many other projects are coming.
“I think there needs to be a discussion or a consideration over the next year of where are we with infrastructure and what does the future hold and is there enough money being set aside for that?’” McLaughlin said.
Mayor Pro Tem Judith Davis said she is breathing a sigh of relief because there will be no increased taxes on citizens.
“With what the county is doing and what the state is doing, we have such goals we want to do,” Davis said. “I really thought we might have to do something.”
Even with no tax increases and a positive budget, Davis said the city still needs to look into reinvesting in the infrastructure as McLaughlin said.
“We have to look at our infrastructure. It’s aging. And we may have to do a lot more than what we’re doing right now,” Davis said. “So, yes, we may be able to reduce taxes. But I think we have to start looking at, perhaps, there are things we may have put off…there are a lot of things that need to be done.”