Candidate Orientation Provides Overview and Grim News

On Friday, September 16, the City of Rockville hosted an orientation for council candidates at Glenview Mansion to provide a general overview of city government and its operations.  Every candidate except the incumbents attended, and we received short presentations for every department head and the City Manager, City Attorney, and City Clerk that outlined the current status, anticipated challenges, and major projects.

The City Manager opened the orientation by recognizing the importance of elected citizens because we “can’t have a city government without a council” and noted that 2010 will be auspicious–it will be the 150th anniversary of the City but it will also be facing new economic challenges.  He then gave a quick introduction to the basic documents that every council member should know–City Charter (our “constitution”), City Code (“laws”), comprehensive master plan (lays out the broad vision for the city’s future), operating budget, and capital improvement programs (CIP) budget–and then described the roles, responsibilities, and chain of command in our Council/Manager form of government.

I won’t go into detail on every presentation, but here are the topics or issues that caught my attention:

1.  Finances will be difficult next year and the years that follow–and it’s not just due to the economy.  The series of property tax reductions instituted by the Mayor and Council over the past few years have reduced revenues to the point that next year they will no longer be sufficient  to cover the continuing growth in expenses.  What growing expenses?  Well, it’s everything from health insurance and pensions for the 500+ staff to parking and promotions at Town Square to losses at Red Gate Golf Course to increased demand for city services (police, recreation, parks, public works).  [In my opinion, this is where previous Councils have let us down.  Eager to satisfy the demands for decreased taxes in a period of apparent surpluses, they sacrificed longterm stability for immediate gratification.  Indeed, 2007, 2008, and 2009 all ran deficits–see the General Fund Five-Year Forecast.]

2.  Population growth (and hence demand on city services) has increased significantly over the past few decades.  In 2000, our population stood at 47,000.  It’s now over 63,000–a 25% increase.  During that time, our level of services haven’t increased at the same level but our longterm financial obligations have (e.g., we added a 30-year “mortgage” of $36 million for the Town Square garages).  [In my opinion, this is where previous Councils have let us down.  They loved to build new things and expand services, without fully considering the ongoing maintenance costs.  It seemed they wanted their name on a new building or brag about how they increased senior services, but weren’t able to pay the bills when they came due.]

3.  Although serious crimes are low compared to other local jurisdictions, there are a couple areas of concern:  juvenile crime (which is becoming more aggressive) and property crime (e.g., thefts).  [In my opinion, combating this will require more than just hiring more police officers, which is expensive, but a multi-pronged approach including such diverse tactics as youth activities and street lighting, which is even more expensive].

The good news is that the City is already undertaken several studies to better understand the financial situation and to help the Mayor and Council make informed decisions:

  • an analysis of all the “enterprise funds” (i.e., such as water, sewer, trash, golf course).  This will help determine if these funds are self-supporting and are breaking even, and where adjustments need to be made.
  • a “user fee” study to measure actual revenues and costs for various programs.  This will help determine where and how to adjust fees to better recover their costs.

These reports are due shortly after the elections, so finances will be one of the major serious challenges to face the new Mayor and Council.  Please keep this in mind to ensure the people you elect have the ability and experience to understand both the financial details as well as the big overall goals.  2010 is going to be a very tough year and there will be no easy solutions.

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5 responses

  1. Hi Max…I understand some information on the retirement plan and the retirement benefit trust situation was dispensed at the orientation. GASB 45 concerns me because the impact it could have on funds such as the Redgate fund, adding additional overhead to the operation….can you comment on your interpretaion of what was told you all, and how you see it impacting the budget and future financial condition of the city?

  2. Max, further to my earlier question on retirement fund, I’m curious why you lay blame exclusively on the council for some of the financial mess we are in? What about the City Manager…senior staff members in Public Works, Recreation and Parks and Finance? This years budget process was a joke…anyone who calls the meetings “worksessions” is only fooling themselves. Some councilmembers did indeed push back on staff…voted against appropriations when the economy turned sour and in fact voted against the budget.

  3. Hi Max…any chance of a reply to my questions above? Thanks

  4. The orientation program provided just a few minutes for each major program area of the city to list the current status and anticipated major challenges, so we only heard a sentence or two that the retirement fund was undercapitalized due to the decline in the market (which means we anticipate that the City would need to provide millions of more dollars over the next few years to ensure that retirement payment obligations are being met) and that changes wrought by GASB 45 would also in significant costs.

    And why blame the council exclusively for the “financial mess”? Because the Mayor and Council review, approve, and adopt the budget. And it’s pretty clear that the major reason for the deficit is that the Mayor and Council approved a series of tax cuts without making parallel reductions in revenues. Unbeknownst to most residents, we’ve been running deficits for the past few years (but this is public knowledge, see the 210 Operating Budget, page 4-5). But everyone loves a tax cut and everyone loves lots of city services, so the Mayor and Council did what made everyone happy at the moment, without fully considering the longterm consequences. Our shortterm pleasure is turning into longterm pain.

  5. John Cooper-Martin

    Dear Mr. van Galbooy:
    I wrote you, yesterday, about this, and I know this is not the “proper” section of your website to ask this question, but I could not find any other one that was any more “proper.” My question today, as it was yesterday is: what is your position on parking fees and charging for parking hours in The Town Square garages. Thank you. If you want to e-mail me, directly, that is fine.
    Sincerely,
    John Cooper-Martin
    1021 Gilbert Road
    Rockville

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