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Legislation Details
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Type:
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Adoption
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Status:
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Agenda Ready
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On agenda:
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5/4/2026
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Final action:
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Title:
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Adoption of an Ordinance to Appropriate Funds and Levy Taxes for Fiscal Year 2027
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Subject
title
Adoption of an Ordinance to Appropriate Funds and Levy Taxes for Fiscal Year 2027
end
Department
Finance
Recommendation
Staff recommends that the Mayor and Council adopt the attached Ordinance to Appropriate Funds and Levy Taxes for Fiscal Year 2027 through the following actions: 1) motion to amend the ordinance as modified in Attachment 1, seconded, and passed; and 2) motion to adopt the amended ordinance, seconded, and passed.
Change in Law or Policy
Adoption of the Operating and Capital Improvements Program (CIP) budgets will require passage of the standard budget ordinance. This budget ordinance was introduced by the Mayor and Council on March 9, 2026.
Discussion
In accordance with the City Charter, the Mayor and Council adopt the budget at the fund level. The attached ordinance (Attachment 1) sets the FY 2027 property tax rates, FY 2027 operating budget, and FY 2027 Capital Improvements Program (CIP) budget for each fund. The tax rates and budget figures presented in the ordinance are consistent with the Mayor and Council's direction throughout the FY 2027 budget process.
Community engagement is a core component of Rockville’s budget process. The FY 2027 budget process included four budget public hearings, a community budget priorities survey, and community Propose-A-Project submissions. A summary of all public testimony, including Propose-A-Project submissions can be found in Attachment 2. The final community budget priorities survey report can be found in Attachment 3, with 537 responses in total.
Throughout the budget process, staff received questions from the Mayor and Council on the City Manager’s proposed budget. The Budget Q&A document was maintained throughout the process and used to track questions received and staff responses. The final Budget Q&A can be found in Attachment 4.
Final Budget Adjustments
The adjustments made to the FY 2027 budget include reductions to licenses and permits in alignment with more conservative fee increases, an increase to tax duplication revenue, administrative adjustments (including personnel updates), increases for known contractual changes, adjustments to several of the City’s community services and enrichment grants, and the addition of funding for a City placemaking plan. Tables showing General Fund revenue and expenditures changes by category are summarized below.
|
General Fund |
FY 2027 Proposed |
FY 2027 Adopted |
Dollar Change |
Percent Change |
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Revenue |
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Property Taxes |
$53,685,000 |
$53,685,000 |
$0 |
0.00% |
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Other Gov’t |
$41,375,090 |
$41,693,590 |
$318,500 |
0.77% |
|
Fines/Forfeiture |
$2,543,000 |
$2,543,000 |
$0 |
0.00% |
|
Use of Money/Property |
$2,646,600 |
$2,646,600 |
$0 |
0.00% |
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Charges for Services |
$10,237,050 |
$10,111,800 |
($125,250) |
-1.22% |
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Licenses and Permits |
$5,188,730 |
$4,671,980 |
($516,750) |
-9.96% |
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Other Revenue |
$9,786,330 |
$9,786,330 |
$0 |
0.00% |
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TOTAL |
$125,461,800 |
$125,138,300 |
($323,500) |
-0.26% |
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General Fund Expenditures |
FY 2027 Proposed |
FY 2027 Adopted |
Dollar Change |
Percent Change |
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Personnel |
$74,564,480 |
$74,706,580 |
$142,100 |
0.19% |
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Operating |
$19,373,760 |
$19,432,460 |
$58,700 |
0.30% |
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Capital Outlay |
$4,731,830 |
$4,731,830 |
$0 |
0.00% |
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Other |
$8,471,360 |
$8,547,060 |
$75,700 |
0.89% |
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CIP Transfer |
$12,300,000 |
$12,300,000 |
$0 |
0.00% |
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Transfers Out |
$5,420,370 |
$5,420,370 |
$0 |
0.00% |
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TOTAL |
$124,861,800 |
$125,138,300 |
$276,500 |
0.22% |
General Fund Tax Rates and Tax Credits
The Mayor and Council establish the tax rates each year in order to finance General Fund activities. For FY 2027, the City’s real property tax rate is set to remain unchanged at $0.292 per $100 of assessed value (note: the City has not increased its real property tax rate since 1995). The personal property tax rate is set to remain unchanged at $0.805 for every $100 of assessed value. In FY 2027, total property taxes are estimated at $53.7 million, or approximately 43 percent of the General Fund revenues.
Parking District Tax Rate
In order to support the debt service costs of the three City-owned garages in Town Square, the Town Center Parking District was formed in 2007. The Parking District is a special taxing district that levies a real property tax on the commercial properties within the Town Square boundaries. The FY 2027 Parking District tax rate is set to remain flat at $0.33 per $100 of assessed value.
FY 2027 Operating Budget
The total FY 2027 all funds operating budget of $186.8 million increased by $11.4 million, or 6.5 percent, from the FY 2026 adopted budget. The General Fund budget increased by $8.1 million or 6.9 percent. The following chart shows the total operating appropriations by fund for FY 2026 and FY 2027:
|
Operating |
FY 2026 Adopted |
FY 2027 Adopted |
Dollar Change |
Percent Change |
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Fund |
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General Fund |
$117,087,900 |
$125,138,300 |
$8,050,400 |
6.88% |
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Water Fund |
$16,314,940 |
$17,454,700 |
$1,139,760 |
6.99% |
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Sewer Fund |
$15,982,230 |
$16,475,400 |
$493,170 |
3.09% |
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Refuse Fund |
$8,759,240 |
$9,434,820 |
$675,580 |
7.71% |
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Parking Fund |
$2,926,520 |
$3,006,400 |
$79,880 |
2.73% |
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Stormwater Mgt Fund |
$7,625,700 |
$8,231,060 |
$605,360 |
7.94% |
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Special Activities Fund |
$1,797,500 |
$2,090,820 |
$293,320 |
16.32% |
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CDBG Fund |
$263,000 |
$263,000 |
$0 |
0.00% |
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Speed Camera Fund |
$1,380,080 |
$1,397,340 |
$17,260 |
1.25% |
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Debt Service Fund |
$3,342,000 |
$3,340,000 |
($2,000) |
-0.06% |
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TOTAL |
$175,479,110 |
$186,831,840 |
$11,352,730 |
6.47% |
FY 2027 CIP Budget
The total FY 2027 CIP budget of $125.6 million increased by $4.9 million, or 4 percent, from the adopted FY 2026 budget. The CIP budget generally fluctuates from year-to-year, depending on the number and type of projects that are funded. The FY 2027 budget includes a $12.3 million transfer from the General Fund. The following chart shows the total CIP appropriations by fund for FY 2026 and FY 2027:
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Capital |
FY 2026 |
FY 2027 |
Dollar |
Percent |
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Fund |
Adopted |
Adopted |
Change |
Change |
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Capital Projects Fund |
$54,536,325 |
$55,667,076 |
$1,130,751 |
2.07% |
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Water Fund |
$29,218,055 |
$30,481,438 |
$1,263,383 |
4.32% |
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Sewer Fund |
$15,249,173 |
$18,120,294 |
$2,871,121 |
18.83% |
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Refuse Fund |
$719,618 |
$694,350 |
($25,268) |
-3.51% |
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Stormwater Mgt Fund |
$19,619,853 |
$19,240,516 |
($379,337) |
-1.93% |
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Special Activities Fund |
$1,370,286 |
$1,385,925 |
$15,639 |
1.14% |
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Speed Camera Fund |
$0 |
$0 |
$0 |
0.00% |
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TOTAL |
$120,713,310 |
$125,589,599 |
$4,876,289 |
4.04% |
Impact Statements
Equity
The FY 2027 Adopted Budget advances equity by supporting affordable housing initiatives, maintaining financial assistance for recreation programs and memberships, and investing in community safety and neighborhood services that benefit residents across all income levels. Fee adjustments and utility rate changes are structured to support long-term service sustainability while preserving assistance programs for qualifying households.
Environment
The FY 2027 Adopted Budget supports environmental stewardship through continued implementation of the Climate Action Plan, investment in stormwater management and utility infrastructure, expansion of recycling in parks, the addition of electric vehicle fleet assets, and the introduction of a new building energy performance improvement project to the CIP. These initiatives strengthen resilience, reduce environmental impacts, and promote sustainable infrastructure planning.
Economy
The FY 2027 Adopted Budget reinforces the City’s economic stability by maintaining a flat property tax rate, supporting Rockville Economic Development, Inc. (REDI), and investing in infrastructure that sustains business growth and long-term competitiveness.
Mayor and Council History
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Date |
Action Item |
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November 10, 2025 |
Budget Public Hearing #1 Budget Timeline Presentation |
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January 5, 2026 |
Mayor and Council Priorities Discussion |
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March 9, 2026 |
Public Hearing #2 FY 2027 Budget Introduction M&C Worksession #1 - Strategic Initiatives and Revenues |
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March 23, 2026 |
Budget Public Hearing #3 M&C Worksession #2 - Operating Expenditures and Grants |
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April 13, 2026 |
Budget Public Hearing #4 Close of the community budget priorities survey and public record |
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April 20, 2026 |
M&C Worksession #3 - CIP, Debt Review, Final Balancing |
Public Notification and Engagement
The FY 2027 budget public record closed on April 13, 2026. The final public hearing was held on April 13, 2026.
The FY 2027 budget process included multiple opportunities for public input, including “Propose-A-Project” submissions, four budget public hearings, and written testimony. A summary of all public testimony, including Propose-A-Project submissions can be found in Attachment 2.
The Rockville community also submitted an online budget survey to communicate their budget
priorities for FY 2027. This form was available in 3 languages (English, Spanish, and Simplified (Mandarin) Chinese) and was posted through April 13, 2026. The final community budget priorities survey report can be found in Attachment 3, with 537 responses in total.
Fiscal Impact
The proposed real and personal property tax rates and the appropriated amounts by fund for the FY 2027 operating budget and CIP are included in the attached ordinance (Attachment 1).
Next Steps
The FY 2027 adopted budget will begin July 1, 2026, and continue through June 30, 2027. The FY 2027 budget document will be posted to www.rockvillemd.gov/budget <http://www.rockvillemd.gov/budget> in July 2026.
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