WORK SESSION OF THE GREENBELT CITY COUNCIL held Tuesday, January 31, 2006, for the purpose of meeting with receiving a budget briefing.

Mayor Davis started the meeting at 8:05 p.m. It was held in the Council Room of the Municipal Building.

PRESENT WERE: Councilmembers Konrad E. Herling, Leta M. Mach, Edward V.J. Putens, Rodney M. Roberts and Mayor Judith F. Davis.

STAFF PRESENT WERE: Michael P. McLaughlin, City Manager; Jeff Williams, City Treasurer; Joe McNeal, Assistant Director of Recreation and David E. Moran, Assistant City Manager.

ALSO PRESENT WAS: Joan Falcão.

Mr. McLaughlin began by thanking Mr. Williams for his work in preparing the spreadsheets. He also cautioned that the projections presented were preliminary and could change prior to the presentation of the FY 2007 budget.

Mr. McLaughlin reviewed his January 13 memorandum. He noted that the City anticipated a 9% annual increase in real estate assessments. Mr. McLaughlin reviewed the first table and indicated what would happen if the City did not increase the tax rate. The second table illustrated what was necessary to maintain the City’s fund balance at 10%.

Mayor Davis asked about the structural problem. Mr. McLaughlin responded that the structural problem was not going away and if real estate assessments returned to “normal historical” levels, the structural imbalance would return. Mayor Davis stated that the only way to solve the structural problem was to reduce services and/or employees, or to raise revenues.

Mr. Herling asked about what other municipalities were experiencing. Mr. McLaughlin indicated that no other city in Prince George’s County provides the same level of services that Greenbelt does.

Mayor Davis asked how the City can educate its residents about this situation. Mr. McLaughlin responded that he was fortunate to work in a City where he has proposed tax increases which the Council and the community have understood and supported.

Mayor Davis stated that this year for the first time she heard significant comments about taxes being too high. She hoped the City could avoid raising taxes in FY 2007. Ms. Mach also wanted to avoid raising taxes. Mr. Putens stated that he wanted to see what was proposed in the budget. He noted that City had to deal with bargaining costs. He expressed concern about workload in Planning & Community Development and Public Works and noted these departments may need additional help. Mr. Roberts stated that the City should avoid hiring new employees.

Mr. Williams summarized the revenue assumptions. He stressed that the projected 3% assessment growth from 2010 on was based on historical averages. He indicated assessments could remain flat or go down. He explained the rationale for the various percentage increases. Mr. Williams noted that beginning in FY 2006, real estate taxes accounted for 50% of the City’s revenue stream.

Under expenses, Mr. Williams summarized some of the percentage increases in expenditures.

Next Mr. Williams explained the need to close the Temporary Disability and Unemployment Compensation Funds. He reported that the fund balances in these funds had been depleted and now the City was transferring money from the General Fund to cover expenses. Council agreed to close these two funds.

Staff also requested Council approval to increase the limit on minor purchases from $500 to $1,000. Staff noted that this would also allow the purchase card limit to be raised on certain cards. Council agreed to this change as well.

The meeting ended at 10:05 p.m.

Respectfully submitted,

David E. Moran
Assistant City Manager

City of Greenbelt, Maryland
City Offices, 25 Crescent Road, Greenbelt, MD 20770
Phone: 301-474-8000 FAX: 301-441-8248