Summary of Fiscal Year 2021 Proposed Budget

Budget Ordinance 20-O-07, incorporating the FY2021 Proposed Budgets for the City’s General Fund, Capital Projects Fund and Debt Service Fund, has been submitted to the City Council. The revised budget includes changes from the March 28 budget work session, provisions for impacts from the COVID-19 pandemic, and other changes recommended by the City Manager. The required public hearings on the proposed budget and the constant yield tax rate are scheduled for May 12, 2020. The effects of the COVID-19 pandemic on businesses, including local government are unknown. Trying to make projections is challenging. The widespread hits to various revenues and increased expenditures simply cannot be determined. However, with input from various resources, the City has attempted to do so. Revenue projections have been reduced by over $2 million - in FY2020 ($922,000 reduction) and FY2021 ($1,022,000 reduction). An additional contingency of $150,000 has been added to the FY2021 budget to bring the total to $250,000 to provide for possible relief efforts for the pandemic. The following provides a brief overview of the City of College Park’s FY2021 Proposed Budget as revised.

General Fund

The total General Fund proposed budget, as originally presented in March, has been reduced by $1.85 million, from $23.32 million, to $21.47 million, primarily a result of providing for financial effects from the pandemic. This is comprised of $20,354,000 for departmental expenses, contingency and transfers for capital projects and debt service; and a transfer of $1,117,000 of fund balance in excess of the 25% retention goal to the CIP. Excluding the excess fund balance transfer, this is a decrease of $534,000 or 2.6% compared to the FY2020 budget. Departmental expenditures have been reduced by $488,000; transfer to the Capital Project Fund has decreased by $1.1 million; and transfer to the Debt Service Fund has increased $900,000 to provide for payments on the new 2019 GO Bonds (for City Hall and Duvall Field). The decreases in proposed departmental expenditures are attributable to a number of expense reductions in FY2021. Many of these reductions were from non-routine costs included in the FY2020 budget (such as a 5-year Strategic Plan; Election costs; Inspection/Permitting Feasibility Study; and electronic files management costs) which are not required in FY2021 and a reduction in healthcare costs for FY2021. Proposed increases in salaries and wages for FY2021 for the most part were offset by the reduction of Tier 2 sick leave payouts that were completed in FY2020. The General Fund, by City Code, has a retention goal of 25% of the next year’s expenditures of unassigned fund balance. Based on current projections the FY2020 unassigned fund balance would increase to 39% of FY2021 proposed expenditures, exceeding the retention goal. As mentioned above, the FY2021 budget proposes a transfer of the excess of unassigned fund balance in excess of the 25% retention requirement, calculated at $1.17 million. This number will change when final numbers are known for FY2020, so the proposal recommends waiting to calculate the actual amount of the transfer after the completion of the FY2020 audit. The transfer would not exceed the $1.17 million in the proposed budget but could be less. The transfer is not proposed to be used for capital in FY2021 but to be available in future years when needed.