Gaithersburg expects to face a revenue shortfall of $3 million to $4 million for fiscal year 2021 due to impacts from the coronavirus pandemic, City Manager Tony Tomasello said.
The mayor and City Council introduced a proposed $72 million budget on March 16. The fiscal year starts July 1.
The council discussed the budget at a virtual meeting Monday night and heard comments from members of the community.
During the presentation, Tomasello said there were “short-term” revenue losses from the hotel-motel tax, amusement tax and service charges due to social distancing restrictions. There are also longer-term revenue losses from income and property taxes, he said.
Making up the shortfall could mean a hiring freeze for city employees, decreases in merit pay, fewer city events and a lower business travel budget, he said.
Tomasello, who will retire on May 7, made similar comments to Bethesda Beat this month, but didn’t give a specific figure of how much lower revenues would be.
Council members remained optimistic during Monday’s meeting.
“I don’t want to minimize the challenges that lay ahead of us … but all things considered, we’re in relatively good shape to weather this, at least in the short term,” Council Member Ryan Spiegel said.
Spiegel said a hiring freeze and other strategic cuts made sense during the pandemic. He said he was also open to using money from the city’s reserves, also known as the rainy day fund.
Council Member Neil Harris agreed.
“If it’s a rainy day fund, it’s raining, and it’s time to get out the umbrellas,” he said.
Harris was also open to deferring funding for future projects in the capital improvements program.
During the meeting, representatives from area nonprofits called in to urge the council not to cut funding for nonprofits or social services.
Jackie DeCarlo, the CEO of the food bank Manna Food Center, said food requests from Gaithersburg residents increased 22% since the middle of last month, when the organization waived its income requirement because of the pandemic.
“Even though there are uncertain financial times ahead, I ask that you maintain allocations to the safety net providers,” she said.
Michele Levy, the director of development for the nonprofit medical clinic MobileMed, said the city should increase funding for health care services. The organization has been seeing more patients during the pandemic.
“Even in a tight budget, we request an increase in funding to meet an anticipated increase in the number of residents who seek their services,” she said.
Bob Ponichtera, the executive director of the nonprofit Liberty’s Promise, which helps low-income immigrant youths, also urged council members to avoid cuts to nonprofit funding.
“Long after this crisis is over, the youth of our programs will be making a positive contribution to the life of the Gaithersburg community,” he said.
Tomasello said he does not anticipate that there will be cuts to any of the areas community members spoke about on Monday.
Council members echoed those sentiments.
“Times like this are not times to cut back on social safety net services. People are hurting,” Harris said.
Council Member Robert Wu said he would even entertain the idea of the city giving assistance to small businesses struggling during the pandemic.
“We shouldn’t be cutting. Possibly we should be looking to meet the needs of the community in a more robust fashion,” he said.
The mayor and council are scheduled to discuss a revised budget next week — at a regularly scheduled meeting on Monday and possibly on Tuesday, if necessary. Final adoption is scheduled for June 1.
Community members can submit comments to the city on the budget through May 13 by email at cityhall@gaithersburgmd.gov, by phone at 301-258-6310 or by mail at 31 S. Summit Ave., Gaithersburg, MD 20877.
Dan Schere can be reached at daniel.schere@moco360.media
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