Mayor Gavin Buckley introduced a $152 million spending plan for the next fiscal year on Monday.
Buckley’s budget for fiscal 2022, which begins July 1, proposes no new taxes. The budget does include proposed rate increases in the enterprise fund, including a 4.5% in water rates, a 5% increase in watershed rates and a 9.5% increase in refuse fees. City department heads also have been asked to trim their budgets, but city officials said it will be lower than last year’s 10% cut.
Thanks to a mix of better-than-expected revenue projections, most notably growth in the city property tax base and more occupancy tax revenue, and roughly $3.1 million from the American Rescue Plan Act, the budget will be balanced. The $3.1 million is about half of a $6.6 million federal coronavirus aid package to help close a financial shortfall produced in part by the pandemic and skyrocketing personnel costs.
Buckley, who is seeking a second term in November, delivered a pre-recorded State of the City address at the council meeting, highlighting efforts over the last year to protect the city from the coronavirus while ensuring major infrastructure projects, like the rebuilding of Hillman Garage, moved forward. The next step, Buckley said, is for city residents to continue receiving vaccinations for a return to a “new normal.”
“The words that best describe the state of the city this year are ‘resilient’ and ‘poised for a comeback,’” Buckley said. “We look forward to a robust summer and fall for our residents with a return to events and celebrations, commerce and community.”
Unlike prior coronavirus aid packages passed by Congress, the American Rescue Plan, signed by President Joe Biden in March, allows municipalities to use the money on operating expenses. About $1.3 million of the aid will go toward paying down shortfalls in the parking and transportation funds for the current fiscal year of about $723,200 and $603,400, respectively. Both have been walloped by the pandemic.
The remaining $2.2 million will be carried over to the fiscal 2023 budget to address what is expected to be a structural deficit — expenses exceeding revenue despite a healthy economy, City Manager David Jarrell said.
Buckley praised city employees in his address, including the Office of Emergency Management for overseeing the response to the pandemic, and Public Works and Transportation employees who kept the city running for the last year.
Absent from the budget proposal are any furloughs, pay cuts or deferred pay increases, all of which had been mulled by the City Council late last year as the pandemic continued to wreak havoc on the city’s revenue streams. The budget picture improved as the year went in, thanks in part to the prospect of large public events like the spring and fall boat shows returning, Jarrell said.
Buckley’s budget honors the city’s existing union contracts for fiscal 2022, the final year of a four-year deal. Those pay packages include scheduled step increases for some employees, a 2% cost-of-living pay raise for police and a 3% pay bump for all other civil service and exempt employees. Contractual and temporary/seasonal employees will not get pay increases.
New labor contracts will have to be negotiated for fiscal 2023 and beyond. Those deals will likely have to be “conservative to mitigate/eliminate” the looming structural deficit, according to a city budget document.
For the second straight year, the city plans to leave vacant jobs open to save money. Last year, the city proposed $1.4 million in savings on vacant jobs, about half of which came from the police department. Similar savings are proposed this year, Jarrell said. The budget also includes a new position to the Harbormaster’s Office to manage operations and two Office of Emergency Management positions will be converted from contractual to grant-funded.
Also, a repeat of last year, pension contributions for police and fire employees will go up significantly with an expected increase in the city’s contribution to those employees’ pensions from 28.2% to 34.77%.
A $240 million budget for capital improvement projects over the next five fiscal years, 2023 to 2027, was also introduced Monday night. Some of the projects the city hopes to start or complete over the next half-decade include public water access at Hawkins Cove, the CRAB accessible boating facility on Bembe Beach Road, the Tucker Street boat ramp and much more.
The council will convene a work session Thursday to discuss the budget as a group before the legislation heads to the Finance Committee for extensive deliberations over the next several weeks. The Planning Commission and Financial Advisory Commission will also review the budget.
Alderman Ross Arnett, D-Ward 8 and Finance Committee chair said he “wasn’t all that excited” about the budget because while it allows the city to move forward with a balanced budget, it makes no substantial attempt to cut spending that could help address the structural deficit.
“When I thought there was a chance we might be able to force some real budget cuts, I was raring to go,” Arnett said. “But I’m not seeing that happening.”
Monday’s meeting was also marked by the introduction of a major police reform bill drafted by Alderman Rob Savidge, D-Ward 7.
Ordinance 12-21 would ban chokeholds, limit “stop and frisk” searches, restrict “no-knock” warrants and codify numerous other standards of procedure in the Annapolis Police Department.
“This piece of legislation does not attack police, nor does it defund them,” Savidge said in remarks to the council. “This is not rushed. For those who might not be aware, I spent probably nearly eight months working on this legislation, researching other jurisdictions, speaking to experts in the community.”
At present, the bill has five co-sponsors, the minimum number of votes needed to pass. Aldermen DaJuan Gay, D-Ward 6, and Brooks Schandelmeier, D-Ward 5, Alderwoman Elly Tierney, D-Ward 1, and Arnett are co-sponsors along with Savidge.
The bill was given initial approval on first reader by a vote of 8-0. Alderwoman Rhonda Pindell-Charles, D-Ward 3, the Public Safety Committee chair, abstained from voting on the legislation saying that she first wanted to hear from the police department about the impact of the bill.
It will be referred to the Economic Matters, Housing and Human Welfare, Public Safety and Rules and City Government committees and the Human Relations Commission.
Prior to the bill reaching those committees, Alderwoman Sheila Finlayson, D-Ward 4, recommended the council hold a work session on the bill.
The council approved a resolution in support of the Digital Connectivity Act of 2021, co-sponsored by state Sen. Sarah Elfreth, D-Annapolis, to provide broadband access to every state resident within five years. The bill passed the General Assembly and will head to Gov. Larry Hogan’s desk for approval.
And, after more than an hour of debate, the council defeated O-19-19, a bill co-sponsored by Savidge and Arnett that would have changed when transit studies were completed on new development projects. The bill was part of the aldermen’s effort to reform the city’s adequate public facilities code.