Re: Agenda Review

City Clerk Claire Funkhouser said that there were no changes to this evening’s agenda.

Re: City Manager’s Report

City Manager Scott Ullery reported on the following:

• There was a successful meeting regarding Rockville Pike and another meeting is scheduled for May 6
• The next Planning Commission worksession on the new zoning ordinance will take place on April 2
• Rockville Science Day is scheduled for April 27 from 12-5 p.m. at Montgomery College.

Re: Zoning Ordinance Update

Chief of Planning Jim Wasilak said that the focus of the discussion at the most recent worksession had been the Stonestreet Avenue corridor.  The next worksessions will take place on April 2, April 12, and April 16.

Re: Citizens' Forum

In response to the issue of pavers brought up during Citizens’ Forum, Mayor Hoffmann said that there needed to be extreme caution in discussion anything that was the subject of a legal dispute.  She asked City Attorney Paul Glasgow to explain the mediation process that the City is in the midst of in an effort to solve the dispute about the pavers in Town Square.  Mr. Glasgow said that the mediation would take place in May under the supervision of a distinguished retired judge. 

Mr. Glasgow explained that one of the foundations of the mediation process is its reliance on confidentiality.  Multiple parties are involved and it is not absolutely certain that mediation will be successful.  If mediation is successful, part of the agreement may be that the responsible parties may not be named publicly.  However, if mediation is not successful, then the City is prepared to go to court and name the parties. 

Councilmember Robbins said she understood that, for the time being, confidentiality should be preserved.  She said she herself had a very difficult time getting the story, stating that she wanted an accounting of the public money that had been spent on this problem.

On another topic, Councilmember Robbins said that she would like to reinstate the formal response to Citizens’ Forum that had been removed from the agenda, as suggested by Mr. Jordan.  Councilmember Robbins proceeded to thank those who had participated in Citizens’ Forum this evening.  She mentioned the comments of Mr. Powell and Mr. Schrack about the tax credit, saying that such a credit can be taken away at any time versus a reduction in the tax rate, which the City was able to do before and, hopefully, could do again.

Councilmember Robbins thanked Mr. Anastasi for his advocacy on the issue of the District Courthouse, adding that the lack of transparency had been appalling.

Councilmember Marcuccio said she echoed the feelings expressed about Citizens’ Forum.  Referring to the information about Science Day mentioned by Mr. Ekman, Councilmember Marcuccio said that there would also be thirty-six rockets displayed.  She also responded to Mr. Schrack’s suggestion about the tax rate cut, saying she was sympathetic to his comments.  Councilmember Marcuccio also said she thought that the Courthouse issue was exhausted and agreed with Mr. Jordan’s comments about the lack of transparency.

Re: Fiscal Year 2009 Proposed Operating Budget and Capital Improvements Program (CIP)

City Manager Ullery began his presentation by saying that the budget process had begum last fall with the approval of budget principles.  Mr. Ullery said that the action this evening was to introduce the ordinances and resolutions related to the budget.  What ultimately would be approved would, of course, be up to the discretion of the Mayor and Council.

Mr. Ullery extended his thanks to Budget Officer Stacy Tate, Management and Budget Analyst Erica Tompkins, and Director of Finance Gavin Cohen.  He said a large number of city staff in every department and at every level was responsible for putting the budget together.  Mr. Ullery also thanked the Mayor and Council for their leadership role and to the City’s taxpayers who provide the resources that make the City’s services possible.

As proscribed by law, the budget is a balanced budget, which responses to the priorities that the Mayor and Council selected at their retreat in January.  The theme for this year is sustainability, with an emphasis on the repair and maintenance of the infrastructure, the continuation of City services, and the continuation of sound financial practices.

In terms of the financial state of the City, Mr. Ullery said that, unlike the state and Montgomery County, the City’s tax rate would remain the same.  Mr. Ullery said that being said, if revenues were reduced, expenditures would also have to be reduced.  Mr. Ullery said that the budget assumes a $100 tax credit for homeowners and an additional credit for seniors, culminating in $1.8 million in tax relief.  There will be additional costs to taxpayers in terms of the increase in water rates to repair and replace the water system’s infrastructure.  In light of the increased rates, Mr. Ullery said he is recommending that the fee for stormwater management be deferred until FY 2010.  There will be no increase recommended for refuse.  Mr. Ullery noted that a deficit is still expected in the RedGate Golf Fund.  However, another enterprise fund related for speed camera revenue is expected to increase. 

In terms of significant expenditures this year, cost drivers for this year include:

• The new Thomas Farm Community Center, which will be coming on line and need operational expenses covered
• GASB 45 expenditures for retirees
• 2.5 % Cost of Living Adjustment
• Gasoline and increase in the cost of utilities
• Some additional positions are included in the budget, with 6.12 included in the General Fund and 17 others in the enterprise funds.

Money is also included in the budget associated with the new Police Headquarters and significant new expenditures associated with the stormwater infrastructure as mentioned.  The transfer to the CIP will be sustained.  Mr. Ullery concluded his presentation by stressing that the focus will be on balancing community resources.

Budget Officer Stacy Tate highlighted some of the new sections in the budget books that the Mayor and Council would be receiving this evening including the five-year forecast and the additions to the Financial Management Policies.  The budget for FY 2008 will be $103.9 million, an increase of 10.7% over FY 2008. 

In term of significant changes in departmental expenditures, Ms. Tate culled out the following:

• Mayor and Council – No election; deletion of an Assistant City Attorney position
• Community Planning and Development Services – Elimination of consultants; move of the garages into the Recreation and Parks budget
• Police – Enhancement of the speed camera program
• Recreation and Parks – Transfer of the garages from CPDS
• Additional personnel, netting 23.40 full-time positions

Using a powerpoint presentation, Ms. Tate further reviewed the General Fund and Enterprise Funds revenues as to source and expenditures.

In response, Councilmember Robbins asked about a tax reduction.  Mr. Ullery said that reductions in recurring revenues would be possible only if there were an accompanying reduction in recurring expenses.  Councilmember Robbins said perhaps a reduction in staff salaries should be considered as part of the way to cut costs. 

Councilmember Marcuccio thanked staff for the five-year forecast of trends in revenues and expenditures.  She asked about a transfer from the General Fund to the Refuse Fund, which, it was explained, was for the refuse costs for Rockville Housing Enterprises.  Councilmember Marcuccio asked for some specific information about how Rockville Economic Development, Inc. planned to use their funds.

Councilmember Gajewski asked for some details about the Town Square street and commercial tax rate, which seemed to be doubling.  He expressed his surprise that the assessments were so high.  Mr. Cohen responded that the majority paying that rate is commercial and that Federal Realty Investment Trust, Inc. will be bearing most of those costs.

Councilmember Gajewski said he does not support a reduction in staff salaries.  He asked about the financial picture for RedGate Golf Course, where the loss last year was approximately $100,000.  Estimates for the losses in FY 2009 and FY 2010 are more in the estimated rang of $700,000.  Burt Hall, Director of Recreation and Parks, said that the estimates were very conservative and that it was hoped that the fund would outperform the budget estimates.  One issue that will affect the bottom line will be the cost of water, which will be billed to the Fund.  Mr. Hall said efforts would continue to put RedGate in the black.

Councilmember Gajewski asked about a tax deferral program, similar to a homesteader tax deferral, which had been discussed at an earlier meeting.  Mr. Ullery said that it would not be able to be accommodated on the tax bill this year, but might be a possibility for FY 2009.  Mr. Cohen said that Montgomery County does have such a program.  Councilmember Gajewski asked if it was utilized and Mr. Ullery said that no one participated in it.  Mr. Cohen said that staff had looked at other jurisdictions and those are not well-used either.  Councilmember Gajewski asked if it was revenue neutral.  Mr. Cohen said that it is basically a loan, which is a lien on the property.  Councilmember Gajewski said he was disappointed since this was something that had been talked about during the campaign and at the Mayor and Council’s retreat.  Mr. Ullery responded that the City is offering a tax credit for seniors in addition to the homeowners’ tax credit.  Councilmember Gajewski said his concern was that the tax cut was being offset by the increase in fees and other fees such as that for Town Center.

Councilmember Marcuccio asked if the Constant Yield Tax Credit had been advertised as part of the Public Hearing and City Clerk Claire Funkhouser responded in the affirmative.  Returning to the subject of RedGate, Councilmember Marcuccio said she hoped that the new driving range would increase revenues.

Mayor Hoffmann said she saw the FY 2009 budget as a “good news” budget.  She reiterated that the City is not raising taxes and, in fact, would be offering some credits and that the City is also able to delay the implementation of the fee for stormwater management until FY 2010, despite receiving less money from the state.  The Mayor added that she would rather not enact a tax reduction that could not be sustained in the future.  She extended her thanks to citizens and residents who supported the City through both their property tax and their income tax and thanked everyone on staff who had contributed to the development of the budget.

Re:  Introduction of Ordinance to Appropriate Funds and Levy Taxes for Fiscal Year 2009

Councilmember Marcuccio introduced the ordinance.

Re: Introduction of Ordinance to establish a tax credit against City taxes imposed on real property to offset increases in City income tax revenues in the amount of $100.00 to eligible homeowners for fiscal year 2009

Councilmember Gajewski introduced the ordinance.

Re: Introduction of a Resolution to establish the Fiscal Year 2009 service charge for municipal refuse collection pursuant to section 20-6 of the Rockville City Code.

Councilmember Gajewski introduced the resolution.

Re: Introduction of an Ordinance to amend Chapter 24 entitled "Water, sewers and sewage disposal," Article III, "Rates and Charges" to establish water and sewer rates for each fiscal year from FY 2009 through FY 2013; and to amend the monthly Ready to Serve charge.

Councilmember Marcuccio introduced the ordinance.

Re: Future Agendas 

City Manager Ullery said that there did not seem to be sufficient business to warrant a meeting on April 7.  A couple of proclamations that had been planned could be moved to another date.  Councilmember Gajewski suggested that the Mayor and Council use that date as a follow-up to the Mayor and Council’s retreat.  There was a discussion with the City Attorney about the parameters of meetings, in terms of what constituted an open meeting, versus a meeting where personal interaction was discussed.  There was discussion about the pros and cons of having a meeting at all as well as deciding this when Councilmember Britton was absent. 

Councilmember Gajewski made a motion to proceed with a meeting on April 7, which was seconded by Councilmember Marcuccio.  A vote was taken, with Councilmembers Gajewski and Marcuccio voting, “aye,” and Mayor Hoffmann and Councilmember Robbins abstaining, after which Mayor Hoffmann said that the motion had failed, and therefore, there would be no meeting on April 7.

Re: Old/New Business

Councilmember Robbins made a motion to reinstate the Mayor and Council’s response to Citizens Forum as a regular item on the Mayor and Council’s agenda.  Mayor Hoffmann said that one thing that had been mentioned before by former Mayor Giammo had been the possibility of moving the response to the end of the agenda.  Councilmember Marcuccio said removing it had been an idea as a way to shorten the meetings, but that she supported Councilmember Robbins’ motion.  Councilmember Gajewski said that his recollection of the discussion that took place at the retreat regarding this issue was the concern that too much time was taken with making speeches during the response period.  He added that there was nothing to restrain a member of the Mayor and Council from responding or speaking out if desired.

The vote was taken and with Mayor Hoffmann, Councilmember Marcuccio, and Councilmember Robbins voting, “aye,” and Councilmember Gajewski abstaining, the Mayor and Council reinstated the Response to Citizens’ Forum as a regular part of the agenda.

Councilmember Gajewski said that he felt that doing this in Councilmember Britton’s absence was a little awkward.  He said that it could be brought up again.

Re: Adjournment 

There being no further business, the Mayor and Council adjourned at 9:00 p.m.