Subject
title
Introduction and Adoption of an Ordinance to amend Ordinance No. 07-25 to appropriate funds and levy taxes for FY 2026 (Budget Amendment #1)
end
Department
Finance
Recommendation
In accordance with the City Charter, since the budget ordinance is adopted at the fund level, a change in the appropriated amount of any fund requires action by the Mayor and Council. The vehicle for such action is an amendment to the budget ordinance. The proposed ordinance, Attachment 1, would amend the FY 2026 budget. The FY 2026 budget was adopted by the Mayor and Council on May 5, 2025.
If the Mayor and Council wish to proceed with adoption of the ordinance at the same meeting, the ordinance should first be introduced and then a motion should be made to waive the layover period. If the motion to waive the layover period is approved by an affirmative vote of six or more members of the Mayor and Council, a motion to adopt the ordinance may then proceed.
Discussion
The proposed ordinance, Attachment 1, would amend the FY 2026 budget as described in this agenda report and detailed on Attachment 2.
Amendment Detail (Attachment 2)
This amendment includes operating and capital improvements program (CIP) budget adjustments as described below.
Operating Budget
Department of Energy (DOE) Energy Efficiency Community Block Grant (EECBG) (General Fund, $109,900 revenue and expenditure increase): This grant funding to install solar on the rooftop at Lincoln Park Community Center will be re-appropriated in FY 2026.
Department of Homeland Security State and Local Cybersecurity Grant Program (General Fund, $135,686 revenue and expenditure increase): This grant funding will cover the first two years of asset discovery and vulnerability management software. After the first two years, the city will take on the cost, which has already been negotiated at $79,000 total for the next two-year period.
Housing Needs Assessment Funding Re-Appropriation (General Fund, $100,000 expenditure increase supported by unassigned reserves): During FY 2025 $100,000 was added to the Department of Housing and Community Development’s budget to conduct a housing needs assessment. The contract for this assessment was not awarded by the end of FY 2025, so this funding is being re-appropriated in FY 2026 to award the contract and conduct the assessment.
King Farm Farmstead WSSC Charges (General Fund, $25,200 expenditure increase supported by unassigned reserves): Now that water and sewer infrastructure has been added to the King Farm Farmstead property, funding for WSSC account maintenance and infrastructure fees, as well as a small amount of maintenance usage, needs to be added to the Facilities Maintenance budget.
Painting of CSX Overpass at Park Road (General Fund, $135,000 expenditure increase supported by unassigned reserves): This funding allows for the painting of the East Rockville face of the CSX bridge over Park Road with “I (heart) Rockville”. The cost includes CSX fees and qualified bridge painting contractor services to prepare and paint the bridge.
Wayfinding Phase 1A (General Fund, $160,000 expenditure increase supported by unassigned reserves): The Department of Public Works has developed a multi-phase project based on the Wayfinding Study conducted in 2021. This amendment provides funding for Phase 1A Wayfinding, which includes fabricating and installing 46 signs and removing 40 existing signs in the Town Center area. City staff will install the new signs and remove the existing signs. This phase includes vehicular, pedestrian, destination, and parking directional signage which will be implemented first in Town Center, and then throughout the rest of the city. Phase 1B Wayfinding, which is not currently funded, includes fabricating and installing 45 signs and removing 13 existing signs throughout the rest of the city. Phase 1B Wayfinding funding will be proposed through a future budget. Future Phases beyond 1A and 1B include gateways, kiosks, and Parks and Facilities monumental signs.
Transfer to the Special Activities Fund for REAP (General Fund, $100,000 expenditure increase supported by unassigned reserves): This transfer to the Rockville Emergency Assistance Program (REAP) supports the increased demand for financial assistance that staff anticipate this fiscal year due to widespread federal layoffs, and help to support the program's new assistance category of payments to childcare providers, approved by the Mayor and Council on May 19.
Appropriation of Committed Reserves (General Fund, total $2,080,000 expenditure increase supported by committed reserves): With the adoption of the FY 2026 budget ordinance the Mayor and Council committed just over $2 million in General Fund reserves for the purposes shown below. This amendment appropriates this funding to allow these items to move forward.
• $750,000 for a transfer to the Special Activities Fund for a subsidy to the Housing Opportunities Fund sub-account
• $280,000 for a Green Space Management Plan
• $250,000 for a contribution to support a new vehicle for the Rockville Volunteer Fire Department (RVFD)
• $800,000 for a transfer to the CIP to support the construction for the Senior Center Entrance (TA24) project
Re-appropriation of REAP Funding for Bethany House (Special Activities Fund, $80,000 expenditure increase supported by reserves): During FY 2025 the Mayor and Council approved funding within the Department of Housing and Community Development to, in partnership with Montgomery County, clear tenants’ rental arrears at Bethany House, a non-profit senior affordable housing provider. This funding was not encumbered by the end of the fiscal year, so it is being re-appropriated in FY 2026 via this budget amendment.
Community Development Block Grant (CDBG) Year 50 Grant Roll (CDBG Fund, $75,000 revenue and expenditure increase): At the end of FY 2025, $75,000 of the city’s Year 50 CDBG grant was unobligated. This amount needs to be re-appropriated in FY 2026 to complete the Year 50 grant work.
1.0 FTE Crew Supervisor II (Water Fund, $108,000 expense increase): This new position implements and manages the increased workload within the Water Meter Shop for the Public Works Operations Maintenance Division. This position will assist in implementing the Mayor and Council’s guiding principles, specifically the core commitment to provide stewardship of the environment and infrastructure. The Water Meter Shop Crew Supervisor is a strategic move to prepare for the implementation of Advanced Metering Infrastructure (AMI), improve efficiency, ensure compliance, enhance service delivery, and manage growing operational complexity. The position will result in long-term cost savings, better asset management, and improved public service outcomes. The total Water Fund request is for $108,000 which includes a leased vehicle, salary and benefits, and computer hardware and software.
Capital Improvements Program (CIP) Budget
Community Parks and Playgrounds Grant (RC26, Capital Projects Fund, $225,000 revenue and expenditure increase): This grant funding will replace playground equipment at Fallsgrove Park, freeing up currently appropriated funding to move forward additional playground structure replacement planned for Horizon Hill Park.
Senior Center Entrance Construction (TA24, Capital Projects Fund, $800,000 expenditure increase): As noted above, the FY 2026 adopted budget ordinance committed $800,000 to fund the construction portion of the Senior Center Entrance (TA24) CIP project.
Water Treatment Plant Safety Improvements (UB19, Water Fund, $210,000 expense increase): The June 2, 2025 budget amendment (FY 2025 budget amendment #4) included additional funding to accommodate updated construction support requirements and construction contingency. As explained in that amendment, due to the timing of the adjustment this same $210,000 needs to be reappropriated in FY 2026.
Impact Statements
Equity
This amendment includes funding for the following items that address equity in the city:
• Funding for a housing needs assessment to analyze existing conditions and future needs, and to help the city understand how to use its resources to further housing affordability and stability goals.
• Additional funding for REAP to accommodate increased support to community members facing financial hardships as a result of mass layoffs in the federal workforce, as well as to address childcare affordability.
• A contribution to the Housing Opportunities Fund sub-account to support affordable housing initiatives in the city.
• Support for non-profit senior affordable housing provider Bethany House on its high number of tenants with large rental arrears. Given the vulnerability of seniors on minimal fixed-incomes, preventing evictions at this location is an urgent need.
Environment
This amendment includes funds for solar installation at Lincoln Park Community Center, a green space management plan, the Water Treatment Plant Safety Improvements (UB19) CIP project, which funds the transition to safer processing at the city’s Water Treatment Plant.
Economy
There are no significant economic impacts resulting from the adoption of this budget amendment.
Mayor and Council History
This is the first budget amendment for FY 2026. The FY 2026 budget was adopted by the Mayor and Council on May 5, 2025.
Fiscal Impact
The following operating fund(s) will be adjusted if this budget amendment is adopted.
TABLE 1
|
Operating Fund |
Adopted Budget |
8/4/2025 Amendment |
Amended Budget |
|
General Fund |
$117,087,900 |
$2,845,786 |
$119,933,686 |
|
Water Fund |
$16,314,940 |
$108,000 |
$16,422,940 |
|
Sewer Fund |
$15,982,230 |
$- |
$15,982,230 |
|
Refuse Fund |
$8,759,240 |
$- |
$8,759,240 |
|
Parking Fund |
$2,926,520 |
$- |
$2,926,520 |
|
Stormwater Mgt Fund |
$7,625,700 |
$- |
$7,625,700 |
|
Special Act. Fund |
$1,797,500 |
$930,000 |
$2,727,500 |
|
CDBG Fund |
$263,000 |
$75,000 |
$338,000 |
|
Speed Camera Fund |
$1,380,080 |
$- |
$1,380,080 |
|
Debt Service Fund |
$3,342,000 |
$- |
$3,342,000 |
|
Total |
$175,479,110 |
$3,958,786 |
$179,437,896 |
The following Capital Improvements Program (CIP) fund(s) will be adjusted if this budget amendment is adopted:
TABLE 2
|
CIP Fund |
Adopted Budget |
8/4/2025 Amendment |
Amended Budget |
|
Capital Projects Fund |
$54,536,325 |
$1,025,000 |
$55,561,325 |
|
Water Fund |
$29,218,055 |
$210,000 |
$29,428,055 |
|
Sewer Fund |
$15,249,173 |
$- |
$15,249,173 |
|
Refuse Fund |
$719,618 |
$- |
$719,618 |
|
Stormwater Mgt Fund |
$19,619,853 |
$- |
$19,619,853 |
|
Special Activities Fund |
$ 1,370,286 |
$- |
$ 1,370,286 |
|
Speed Camera Fund |
$- |
$- |
$- |
|
Total |
$120,713,310 |
$1,235,000 |
$121,948,310 |