For the past month, Hyattsville city government has been holding public meetings about city spending in the next fiscal year, which starts July 1.  

On March 30, the city council discussed a plan for getting federal COVID-19 relief funds to Hyattsville residents and businesses who need them. The council also reviewed the city’s proposed $45 million annual budget.  

On April 4, the council talked about whether to change the city’s property tax rate.

Councilmembers must propose any amendments to the budget before their April 18 meeting. On May 2, the city council will hold a hearing on the property tax rate and vote on budget amendments. The city expects to adopt the budget at its June 6 meeting.

City discusses COVID-19 relief

By the end of this summer, Hyattsville will have received $18 million under the American Rescue Plan Act of 2021 (ARPA). While half of those funds arrived last summer, they are not included in the budget until the city council decides how to allocate them. According to federal guidelines, ARPA funds must be spent by December 31, 2024.

In September 2021, the city added $2.5 million of the ARPA funds to the budget for the fiscal year ending June 30. The March 30 budget presentation to council shows a total of about $1 million in ARPA money going to administrative staff and contracted services for fiscal years 2022 and 2023. Most of the ARPA-related expenses approved so far are for management and planning.

Patrick Paschall, a former city councilmember and the city’s ARPA program manager since fall 2021, explained in a March 30 presentation that he had collected feedback from 400 residents and business owners through meetings, a web survey, and by phone and email.

Ron Brooks, Hyattsville’s treasurer, said in an interview that part of Paschall’s job is to identify city expenses that are eligible for ARPA reimbursement. 

At the March 30 meeting, Paschall noted that the city had identified $1 million expenses for projects that the city has already committed to that qualify for ARPA reimbursement, including $345,000 for renovations at the Hyattsville Municipal Building to upgrade the HVAC system and renovate for hybrid council meetings, and $200,000 for installing bathrooms in parks. 

Paschall presented a draft plan for the balance of the relief funds for the council to discuss. 

The first part of the plan was for programs that could be operating within three months. Paschall proposed establishing a $1 million fund that would provide grants of up to $2,500 each for eligible residents who apply, and a similar $1 million fund to provide grants of up to $25,000 each for businesses. A $500,000 fund would be established for nonprofits, and about another $500,000 would be divided among food assistance, outreach, administration and a case manager.

Smaller, specific grant programs, part of the same initial funding pool, would provide certification training to childcare providers, offer medical bill reimbursements up to $5,000, and be used to hire a consultant to help businesses secure county permits. 

Councilmember Sam Denes (Ward 1) asked why the individual relief fund was set at $1 million. Paschall said that prior COVID-19 relief programs had had fewer applicants than anticipated, and that the amount could be increased later.

Councilmembers cited what they considered to be urgent needs that called for prompt funding, including upgrades to citywide broadband access, childcare expenses for families and materials for city construction projects. Paschall said city staff would study these items and follow up with proposals. 

The second wave of ARPA spending would send the approximately $13 million in remaining funds to new programs and investments. Councilmember Ben Simasek (Ward 3) raised the possibility of establishing an affordable housing fund, as outlined in the city’s housing action plan. Paschall said such a fund would qualify for ARPA money and indicated that the overall challenge for such projects is prioritization and staff capacity. He said he hopes to bring in online technology over the summer that would help residents participate directly in prioritizing programs.

In an interview, treasurer Brooks said that a public ARPA prioritization exercise would be a step forward in the participatory budgeting process that council discussed in fall 2020.

City administrator proposes large budget increase

According to a March 24 city memo, after a hiring freeze during the pandemic, the city hopes to hire 14 staff members, including a mental health case manager in the police department, a case manager in community services, a transportation and traffic engineer, and a records and public information act manager.

According to the city administrator’s budget proposed March 30, Hyattsville expects to collect $22.3 million in taxes and fees in FY 2023, up from $20.6 million the previous year. The city plans to spend close to $26 million from its general fund, including a $3.7 million transfer from a $20 million reserve fund. Annual expenses include $9.7 million on police and $6.3 on public works, the department that handles trash and maintains streets and parks.

The city proposes spending an additional $15.7 on capital improvements, including equipment and construction. Public works would spend the most, $11 million, much of it on projects like sidewalk and street improvements. Capital improvement expenses come out of a separate fund which generally includes money from municipal bonds and lease proceeds. This year, according to Brooks, the capital improvements fund also includes allocated ARPA funds. 

The previous year’s budget (FY 2022) included $20.8 million from the general fund, and $10.8 million in capital improvements.

City council to set property tax rate May 2

Most of the money the city spends each year comes from real estate property taxes; the rate has been set at 63 cents for every $100 of assessed value since 2006. For FY 2023, the city anticipates collecting $16 million in property tax. The taxes will be due Sept. 30.

Hyattsville raised property taxes from 0.58% to 0.63% in 2006. The first year that tax was in place, Hyattsville collected less than $5 million in property taxes. 

As property values have risen, city property tax revenue has too. Hyattsville has also grown, from 14,700 residents in 2000 to 18,100 in 2020, according to census data.

In separate meetings, ARPA manager Paschall and treasurer Brooks told the city council that, under federal law, cities are not permitted to create a tax revenue loss and offset it with ARPA funds.

During their April 4 meeting, the council discussed the property tax rate. Because the state  determined that Hyattsville’s property tax revenue will be greater this year than last, Maryland law requires the city to give the public notice of the proposed tax rate for the next fiscal year and hold a related hearing. That hearing will be May 2.   

Councilmember Eduoard Haba (Ward 4) advocated for lowering the property tax rate to 0.5945%, the rate that the state calculated would give the city steady revenue; this would result in a budget reduction of $500,000. Haba argued that tax relief would be more immediate and broad-based than other programs planned and would go to people who need relief but might not apply for it.

Other councilmembers, including Daniel Peabody (Ward 4), Danny Schaible (Ward 2), Simasek, and Joanne Waszczak (Ward 1), said they supported keeping the tax rate the same, and providing more targeted, need-based relief.

Joseph Solomon (Ward 5) said improvements in need-based property tax relief had been under discussion for five years, and that in their absence, he favored immediate property tax reduction. 

Peabody said he would reach out to colleagues and work towards a resolution.