Assessment Increases Boost Municipal Budgets
Plans Add Services, Meet Higher Costs

By Fredrick Kunkle
Washington Post Staff Writer
Thursday, June 15, 2006

Rockville, Gaithersburg and Takoma Park have adopted budgets for the next fiscal year that, because of higher property values, will result in higher tax bills to pay for expanded services and rising costs.

Rockville's council and mayor last week unanimously adopted an $85.7 million capital and operating budget effective July 1. After adjusting for an unusual expenditure in last year's budget, the fiscal 2007 plan represents a 13.8 percent increase over the previous year's spending, city officials said.

Sewer rates will increase 3.3 percent, to $3.75 per 1,000 gallons, while garbage collection fees will increase 5 percent, to $31 a month. A new tiered system for water fees increases the rate charged as usage rises.

The property assessments of Rockville homeowners have risen an average of 18 percent for fiscal 2007, said Dominic Del Pozzo, the city's budget officer. The effective tax payment on that increase, by state law, can rise no more than 10 percent annually in any jurisdiction, Del Pozzo said.

To soften the blow, the mayor and council adopted a one-cent reduction of the property tax rate, to 31.2 cents per $100 of assessed value, marking the first decrease in the rate since the fiscal 2000 budget. Because of the higher assessments, the city would have needed to lower the tax rate to 28.4 cents to keep revenue the same.

Del Pozzo said that with the rate cut, the owner of a home assessed at $310,000 -- which he said is the city's average effective tax assessment -- will pay about $967 in city taxes. The tax would have been $998 had the rate not been reduced. Had the city lowered the tax rate to 28.4 cents, the same homeowner would have paid $880.

Rockville officials said much of the increase in spending can be attributed to paying debt on the Town Center project and three parking garages under construction downtown.

The city's capital portion of the budget calls for spending $16.5 million for several projects, including the proposed Thomas Farm Community Center. Design of the center, to be located in the Fallsgrove development at Fallsgrove Drive and Route 28, and other projects is half complete and construction is expected to begin later this year, said city spokesman Neil H. Greenberger.

Other capital projects include the initial phases of Mattie J.T. Stepanek Park, in the King Farm development near the intersection of Piccard Drive and Gaither Road, and renovations at the Rockville Municipal Swim Center.

In Gaithersburg, the City Council adopted a $45.8 million capital and operating budget that benefits from a projected 14.3 percent increase in revenue, fueled largely by rising tax assessments, City Manager David B. Humpton said.

The council voted 3-0 last week, with two members absent, to adopt the spending plan and the property tax rate, which remains unchanged at 21.2 cents. With property assessments rising by 12.6 percent, officials would have needed to lower the rate to 18.8 cents to avoid an increase in taxes.

Humpton urged the council not to reduce the rate because of projected expenses from the construction and operation of a new $21.6 million aquatic and recreation center, as well as other capital projects.

The county is contributing $1 million in fiscal 2007 toward the new center on Route 28 at Edison Park Drive, Humpton said. The county's contribution is expected to rise to $2.5 million in fiscal 2008 and 2009.

The city also upgraded some contract employees to full-time status and added key personnel, such as three police officers, three public works employees and a construction code inspector, Humpton said.

"Our rate's still so low compared to other jurisdictions," Humpton said. "We're still a growing city."

In Takoma Park, the City Council on Monday adopted a $19.8 million spending plan. It includes general fund expenses of $17.7 million plus $2.1 million for storm water management and other programs.

The council did not change the property tax rate, which is 63 cents per $100 of assessed value. With tax assessments projected to rise in 2006 by 9.9 percent, officials would have needed to lower the rate to 57.3 cents to keep revenue the same. The City Council lowered the property tax rate last year by 3 cents, down from 66 cents per $100 of assessed value.

The council agreed to nearly double the city's storm water management fee -- which covers the cost of construction, operation and repair in managing runoff from rain -- to $48 a year per property owner. The base fee, which had been set at $28.63 in fiscal 1999, had not been enough to keep up with stricter environmental standards that the city is required to meet, City Manager Barbara B. Matthews told the council in her budget documents.

Takoma Park Mayor Kathy Porter said some residents argued for a reduction in the property tax rate this year, but others wanted to add services to the budget.

This year, for example, some residents asked for and the council agreed to spend $75,000 on a cross-border initiative with the District to prevent crime, Porter said. The District committed $75,000 to the program as well, she said.

The city also agreed to fund an additional code inspector to ensure that homeowners and businesses are keeping up their properties, Porter said.