Current and Future Budget Planning

On April 16, Mayor Gavin Buckley presented his proposed budget for fiscal year 2026. It’s balanced and does not increase the property tax rate (the total property tax income is higher due to increased property values). But the road ahead is unpredictable and could be bumpy. That’s why, if elected mayor, I’ll follow a careful strategic planning process to ensure our budget provides the services you need cost-effectively.

After reviewing and amending the budget, the City Council plans to approve it on June 9, so it’ll go into effect on July 1, 2025. Before then, you can express your preferences to the City Council by submitting written testimony, contacting the Council, or testifying at the upcoming meeting on May 27. Even if the word “budget” makes you yawn—I urge you to look at the proposed budget (the Capital Budget is linked at the top half of the page; scroll down to see the Operating Budget) and speak up about any concerns.

The Capital Budget, which covers spending on infrastructure and other physical assets, is set at $30.2M. The Operating Budget, which covers daily operations and services, as introduced, is set at $199M, which equals the anticipated revenues for FY2026 of $184M, plus $15M in available fund balances (for a total of $199M). The Operating Budget has two buckets:

• The general fund (GF), which receives most ($70M, or 57%) of its total revenue ($122M) from property taxes and covers expenses like police, fire, parks and recreation, planning and zoning, and public works (streets and engineering).

• The enterprise funds (EF), which are for “self-supported” services, like water and sewer, and are intended to be covered by fees you pay.

Thankfully, the City’s finance team revamped policies in 2018 to weather temporary slumps, so we’re protected when revenues are lower than expected, such as a drop in home values (and thus in property tax income) during a recession. This helps ensure high marks from the three major bond rating agencies (Fitch, S&P, and Moody’s), which lets the City pay relatively low interest rates on bond issuances for capital projects. As your mayor, I would continue these conservative reserve policies and self-imposed debt limits of 10-12% of designated revenue.

Because we’re entering a period of heightened uncertainty, the next mayor needs to know how to pivot and adjust if revenue shortfalls occur from an economic downturn, lost grant money, or rising unemployment. Other challenges on the horizon:

• Money previously received from the pandemic is fully allocated and won’t be renewed.

• The rebuilt Hillman Garage, with an additional 165 parking spaces, doesn’t contribute the same revenue to the City budget as it used to because of the public-private arrangement for the new garage.  The revenues from the garage pay for the debt incurred to build the garage, a $25 million concession payment to the City, and operations and maintenance of the garage, with all remaining revenue paid to the City (actual revenue has exceeded projected estimates, resulting in additional payments to the City). The public-private agreement is for a term of 30 years, at which time the garage and its operations and revenue will revert to the City.

• The City Dock closure to address flooding and resilience—which is sorely needed—will result in lost dock charges and other fees.

• Higher interest and inflation rates have increased the City’s expenses.

The strategic planning I’ll initiate as mayor will be the foundation of our budget process. Through town hall meetings in each ward, we’ll bring together the community, City employees, unions, and the City Council to hear your feedback and requests. After the budget is set, we’ll measure programs against defined metrics to know each one’s level of success and whether funding should be raised, maintained, or decreased. 

As the alderman for Ward 5 (2013-2017), I was deeply involved in the city budget process, often cutting unnecessary expenses. I also oversaw a $100M budget as an associate attorney for Montgomery County. I have complex financial transaction experience as a corporate board member for an international hardware cooperative, as we saw through a $700M partial sale to private equity. 

I know how to adapt and control expenses, as I did when managing my hardware store through a recession and then a pandemic. If elected mayor, I look forward to shaping a budget that responsibly reflects your values and needs, reflects the hard work done by City staff, does not overly rely on borrowed funds, maintains our assets, and provides the services you need.

Warm regards,

Jared

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