Subject
title
FY 2026 Budget Public Hearing #3
end
Department
Finance
Recommendation
Staff recommends that the Mayor and Council conduct the public hearing and keep the record open until April 7, 2025.
Discussion
FY 2026 Operating Budget
The FY 2026 proposed operating budget totals $174.9 million across 10 funds, a 3.9 percent increase over the current fiscal year. Budget appropriations by Fund are shown below in Table 1 and include a comparison of appropriations in the FY 2025 Adopted Budget to the FY 2026 Proposed Budget.
Table 1 - Proposed FY 2026 and FY 2025 Budget Appropriations
Governmental funds are those through which most governmental functions of the city are financed. The acquisition, use, and balance of the city’s expendable financial resources and the related liabilities (except for those accounted for in the enterprise funds) are accounted for through governmental funds. The city’s governmental operating funds are the General Fund, the Special Activities Fund, the Community Development Block Grant Fund, the Speed Camera Fund, and the Debt Service Fund. The taxpayer-supported General Fund is the largest component, constituting 66.7 percent or $116.6 million of the total budget.
Enterprise funds account for operations financed and operated in a manner similar to private business enterprises where the cost of expenses, including both operating and capital, are financed or recovered from the users of the services rather than general taxpayers. The city's enterprise funds include the four utility funds, being the Water, Sewer, Refuse, and Stormwater Management funds; and the Parking Fund. The utility funds make up 27.8 percent or $48.6 million of the total budget.
FY 2026 Capital Improvements Program (CIP)
The FY 2026 proposed CIP budget includes new appropriations of $33.8 million to address the priorities of the Mayor and Council and residents of Rockville. This new funding combined with prior year carryover funding of $94.7 million, supports a total of 65 capital projects in FY 2026. The FY 2026 budget includes a new set of recurring five-year projects and allows for the carryover of funding for the closeout of the previous set of five-year projects. CIP appropriations by Program Area are shown below in Table 2 and include a breakout of carryover funding and additional new appropriations.
Table 2 - Proposed FY 2026 CIP Appropriations Summary by Program Area
There are six new discrete projects presented in the FY 2026 through FY 2030 capital budget, which are listed here along with a basic description (note: not all new projects are funded or are scheduled for FY 2026).
• Glenview Mansion Gardens Hardscape Preservation and Repairs (RB26) - This project funds an assessment of and critical repairs to the retaining walls and paths at the Glenview Mansion.
• Traffic Signal Upgrades (TF26) - This project designs and constructs traffic signal upgrades at multiple locations.
• Lead and Copper Regulatory Compliance (UB26) - This project aims to ensure compliance with the Environmental Protection Agency's (EPA) Lead and Copper Rule, and includes conducting a comprehensive inventory of service lines and addressing any other necessary compliance requirements.
• Water Distribution System Master Plan (UD26) - This project develops a comprehensive plan to optimize the performance, reliability, and sustainability of the city’s water distribution system. The recommendations will guide capital project decisions to improve fireflow, water quality, and meet future development demands.
• Core Financial, HR, & Procurement ERP Phase II (GA26) - This project includes the implementation of additional functionality of the city’s core Financial, HR, and Procurement Enterprise Resource Planning (ERP) system to further support business needs.
• Rothgeb Drive Maintenance Facility Improvements (GB26) - This project funds improvements to the Rothgeb Drive Maintenance Facility based on the results of the master plan, which is in development.
The CIP budget is funded by various sources, including paygo, grants, and proceeds from the issuance of loans and general obligation bonds. For FY 2026, staff does not anticipate the issuance of new general obligation bonds. An additional $2.5 million loan from the Maryland Department of the Environment (MDE) Drinking Water State Revolving Fund (DWSRF) will support Water Main Rehab & Improvement (UE26) and Lead and Copper Regulatory Compliance (UB26) in FY 2026. In addition to loans, the DWSRF program has also provided a grant for a project within a disadvantaged community census tract. Other grants and federal earmarks are reflected in the FY 2026 budget and are detailed on each project sheet. Additional Water and Sewer bonds are planned for FY 2027 based on anticipated capital spending. Each year staff reevaluates the need for issuing bonds with the goal of reducing the reliance on borrowing and increasing the reliance on ongoing resources or paygo support from the General Fund and the enterprise funds.
In addition to the capital funding needed to complete a CIP project, many projects require ongoing funding to operate or maintain the completed project. Ongoing operating cost impacts must be considered when determining if and when to include a particular project in the CIP. For FY 2026, a net total of $244,470 is added to the operating budget as a result of thirteen current CIP projects.
Mayor and Council History
|
Date |
Action Item |
|
October 28, 2024 |
Public Hearing #1 |
|
March 17, 2025 |
Public Hearing #2 Introduction of Budget Ordinance M&C Worksession #1 - Strategic Initiatives, Reorganization, Revenues |
Public Notification and Engagement
This public hearing was advertised in the Washington Post on February 27 and March 6, 2025. It was posted to the City of Rockville’s website, social media accounts, and the cable Channel 11 bulletin board, and was included in the February and October editions of “Rockville Reports”.
This is the third and final public hearing related to the FY 2026 budget. In addition to public hearings, the public can submit written comments directly to the Mayor and Council via the City Clerk/Director of Council Operations.
The Rockville community is also encouraged to submit an online budget survey to communicate their budget priorities for FY 2026. This form is available in three languages (English, Spanish, and Simplified (Mandarin) Chinese) and will be posted until April 7, 2025. The survey can be found at www.rockvillemd.gov/budget <http://www.rockvillemd.gov/budget>.
The FY 2026 budget public record closes on April 7, 2025.
Fiscal Impact
The FY 2026 proposed operating budget appropriation by category and fund can be found in the Financial Summaries section of the budget document. The FY 2026 proposed CIP budget appropriation by fund, program area, and department can be found in the CIP Overview section of the budget document.
Next Steps
|
Date |
Action Item |
|
April 7, 2025 |
Close of the community budget priorities survey and public record M&C Worksession #3 - CIP, Planned Debt, Changes, Final Balancing |
|
May 5, 2025 |
Budget Adoption |