Next year, Hyattsville expects to spend more on policing and paying creditors, according to the proposed fiscal year 2024 budget, first presented to the city council on March 29. The final FY 2024 budget will cover city expenses from July 1, 2023, through June 30, 2024, and does not include American Rescue Plan Act of 2021 expenditures.

The FY 2024 budget proposes $51.3 million in expenditures, with $30.4 million budgeted expenditures coming from the general fund. The $30.4 million in general fund expenditures would be a 17% increase over what was approved for FY 2023, and almost $6 million more than anticipated general fund revenues of $24.6 million. 

General fund revenues come from city taxes and fees. Real property tax revenue is budgeted at $17.2 million, a 9% increase from the FY 2023 budgeted amount of $15.8 million, and income tax revenue is budgeted at $3 million, an 18% increase from the $2.5 million of FY 2023. 

The proposed budget also anticipates $1.4 million in expenses from special revenue funds, such as grants that can only be used for particular purposes, and proposes $19.6 million in expenses from capital improvement funds typically used for construction or major purchases, and funded separately, in part through loans. The city charter requires the city to propose a capital improvement plan budget, but according to statements by City Treasurer Ronald Brooks at the March 29 budget presentation, the full proposed amount is not typically spent in a single year.

Transfer from operating reserves

Because the city’s general fund expenses are proposed to be higher than its general fund revenue, the budget requires a $5.8 million transfer from the general fund operating reserves. The original presentations to city council on March 29 and April 17 stated that the projected beginning general fund balance for FY 2024 was $28.2 million, but after the Hyattsville Life & Times (HL&T) raised questions about discrepancies in the presentation slides, the city revised the balance to $21.2 million. The proposed $5.8 million transfer to cover FY 2024 expenditures represents a 27% decrease in the general fund reserve balance over the course of FY 2024, with a projected FY 2024 ending balance of $15.4 million.

Unlike recent years when the city has spent approximately 80% of its budgeted general fund expenditures, Brooks said at the April 17 city council meeting that he anticipated the city ending FY 2023 right on budget.

Police expenditures

The police department budget is the largest part of the FY 2024 increase, going from a budgeted $9.7 million in FY 2023 to $12 million, a 23% increase, making up just over half of the overall general fund expenditures increase. 

About half of the police department increase is a 117% increase in the police department investigations budget, which was $1 million in FY 2023 and is proposed at $2.1 million for FY 2024. City staff said in an email that this increase “reflects a restructuring and shifting of current staff (not new staff) in [FY] 2024 between the Patrol Division and [investigations],” as well as increases in salary and benefits expenditures due to the recent compensation study for city employees.

The staffing shift is not reflected in police department organizational charts submitted with the FY 2023 and FY 2024 budget presentations, both of which show seven employees in the investigations division and 25 in patrol.

Paying creditors

The proposed FY 2024 debt service, the money the city pays its creditors each year, is $2.4 million, 23% higher than FY 2023. At the April 17 city council meeting, Brooks said the city’s debt repayments would increase by approximately $500,000 once current short-term debt for the police building at 3505 Hamilton Street is converted to long-term bonds. 

As previously reported by the HL&T, Moody’s withdrew the city’s credit rating in August 2022 due to “insufficient or otherwise inadequate information to support the maintenance of the rating.” Brooks said in an April 2023 email that he expects the FY 2020 audit to be ready “within weeks,” and the FY 2021 and FY 2022 audits to be ready by August 2023.