HomeMy WebLinkAboutCity of Rockville - Public Financial ReportPopularPopular Annual
Financial Report
City of Rockville, Maryland
www.rockvillemd.gov/budget
Fiscal Year Ended June 30, 2021
307,115,278
293,419,285
13,695,993
4.7%
To the Mayor and Council
and Rockville community:
I am pleased to present the Fiscal
Year (FY) 2021 Popular Annual Financial
Report (PAFR) for the City of Rockville, Maryland.
This report highlights a variety of relevant
and helpful financial information in a simple, user-
friendly format.
The City ended FY 2021 with an overall net position of
$307.1 million, an increase of 4.7 percent over last year.
The change in net position is based on increases in
property tax revenue, coupled with conservative
spending across City departments and programs. At June
30, 2021, the City's unassigned fund balance in the
General Fund was $22.9 million or 27 percent of FY 2021
General Fund adopted revenue, and our bond rating was
reaffirmed at AAA/Aaa.
Moving into FY 2022, City staff will continue to use
resources wisely and collaborate with the Rockville
community,as we work to implement the Mayor and
Council’s top priority initiatives.
If you have any suggestions or questions regarding our
City's finances, please do not hesitate to contact me.
Sincerely,
Robert DiSpirito
City Manager
rdispirito@rockvillemd.gov
240-314-8102
What is the PAFR and is it
consistent with GAAP?
What's inside the PAFR?
The PAFR or Popular Annual Financial Report is a
document designed to increase transparency and
awareness in City government finances through
user-friendly financial reporting. The PAFR
includes financial and other information that is
presented in the City of Rockville’s Annual
Comprehensive Financial Report (ACFR) and
annual budget document.
Because the PAFR is a summary document, not all
the financial information complies with the
requirements of Generally Accepted Accounting
Principles (GAAP). Residents who prefer to review
a GAAP-compliant report may review the ACFR at
www.rockvillemd.gov/budget.
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Rockville provides a full range of services, including:
acommunity centers
acommunity development
acommunity outreach
afarmers market
ahousing
aleaf collection
alicensing and permits
apolice protection
aproperty code maint.
apublic parking
What services does the City provide? Where is Rockville, Maryland located?
What is the form of government?
Rockville is one of the largest cities in Maryland, a
county seat, and a vibrant home to some of the
world’s most prominent bio-med and technology
companies. The City has a wide variety of housing
styles, a low crime rate, a vast transportation network,
an excellent school system, and a diverse population.
Some services are provided by other entities. Both
Montgomery County and the City provide police
protection to city residents. In some areas of the city, the
Washington Suburban Sanitation Commission (WSSC)
provides water and sewer service. The County provides
fire protection, the public education system, libraries, and
most social services in Rockville.
What makes up the community?
Rockville is a 13.5 square mile municipality located in
the southern portion of Montgomery County, approx.
12 miles northwest of Washington DC, and 35 miles
southwest of Baltimore, Maryland.
The City operates under the council-manager form of
government. The Mayor and Council are responsible
for establishing City policy and providing direction to
the City Manager. There are five elected members
comprised of a mayor and four at-large council
members. All members are elected for 4-year terms.
From Left to Right: David Myles, Beryl L. Feinberg, Bridget Donnell Newton (Mayor), Mark Pierzchala, Monique Ashton
MAYOR AND COUNCIL (2019-2023)
apublic parks
arecreation programs
arecycling/refuse collection
asenior services
asnow removal
astormwater management
astreet maintenance
awater and sewer utilities
azoning and planning
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COVID-19 and the City of Rockville
Almost 10,0000 virtual meetings
were held using the Cisco Webex
platform. City staff conducted
regular Mayor and Council and
boards and commissions meetings,
interview sessions, internal team
meetings, virtual classes, and
large-scale public events using this
platform.
Virtual programs enabled the
community to safely connect from
home in a variety of ways
including a virtual Rocktobierfest,
Mysteries from the Mansion, a
Master Gardener series, ballet and
fitness classes, book clubs, virtual
International Night, and a virtual
Memorial Day ceremony.
City parks experienced an
unprecedented increase in use, as
did open spaces and bikeways.
RedGate Park became a favorite
new destination, with portable
toilets added and increased
maintenance to meet need.
Physical distancing signs, hands-
free soap dispensers, and other
safety related improvements were
made to City facilities.
Community centers and the
Rockville Senior Center
coordinated with residents and
local nonprofits to collect and
distribute food for neighbors in
need. Thousands of face coverings
were given away and some
community centers were used as
COVID-19 testing sites.
Fiscal Year 2021 was a full year of City operations during the pandemic. The City adapted and innovated to meet
the needs of the community, while continuing to provide a high level of service. When restrictions forced facilities
to close and events to be cancelled, staff found ways to keep the community safe, informed, and connected.
Virtual Programs/Events
City Parks/Facilities
Distribution of Food/Supplies
Virtual Meetings
In addition to ARPA, Rockville
received $1.1 million in federal
CARES Act and FEMA
reimbursements for pandemic-
related expenditures.
Financial Assistance
Rockville City Police Dept (RCPD)
maintained full operations of
police services and responded to
calls for service without
interruption during the pandemic,
establishing internal and external
protocol for, and taking proper
precautions to maintain, the
health and wellness of all essential
personnel. RCPD also safely
conducted drive-thru National
Drug Take Back Day events,
holiday food donation drives, and
toy donation drop-offs.
Police Services
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Fund Name Purpose is to support the…Type
GENERAL City's general provision of programs and
services Operating
CAPITAL PROJECTS Capital (CIP) projects benefitting all residents Capital
DEBT SERVICE Principal and interest payments on bonds
supporting the Capital Projects Fund Operating
SPEED CAMERA Speed camera operations and pedestrian
safety initiatives
Operating
Capital
SPECIAL ACTIVITIES Specific programs as defined by the legal or
policy restrictions on the revenue
Operating
Capital
COMMUNITY DEVEL.
BLOCK GRANT
Nonprofit service providers and home
renovations for low- to-moderate income
homeowners
Operating
WATER Production, delivery, and storage of safe
water
Operating
Capital
SEWER Collection and transportation of wastewater
to the Blue Plains treatment facility
Operating
Capital
REFUSE Collection and disposal of residential recycling
and refuse
Operating
Capital
STORMWATER
MANAGEMENT
Protection of streams and watersheds from
stormwater runoff
Operating
Capital
PARKING Parking permit program, parking meter
program, and debt service for parking garages
Operating
Capital
REDGATE GOLF Debt service on past improvements to the
municipal golf course (course is now closed)Operating
En
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F
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Go
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Why use separate funds?
Separate funds show accountability and
stewardship of specific resources. For
example, the City wants to ensure that all
payments received from its water utility
customers are spent to provide water
services to those customers.
What is the City of Rockville's
financial structure?
The City records its financial transactions
in 6 governmental and 6 enterprise funds.
The governmental funds account for the
City’s basic operations, like street
maintenance, inspections, police services,
and recreation. Most of these services are
financed by property and income taxes.
The enterprise funds account for the
City’s main utilities and public services
and are managed like private industry,
where costs are covered by fees and
charges.
The City's budget supports TWO TYPES OF
SPENDING: operating and capital. Operating
accounts for the day-to-day costs to provide
services to City residents. Capital or CIP is a
five-year investment plan that maps out how
the City will replace, repair, or build new
infrastructure. Several of the funds support
both the operating and capital budgets.
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2017 2018 2019 2020 2021
$528.7 $546.8 $475.5 $478.1 $500.9
$179.9 $187.2 $192.5 $184.7 $193.7
TOTAL NET POSITION $348.8 $359.6 $283.1 $293.4 $307.1
Total Assets and Deferred
Outflows of Resources
Total Liabilities and Deferred
Inflows of Resources
The City's target reserve equals at least 20 percent
of annual adopted General Fund revenue.
Reserves may be used for an emergency or natural
disaster. If reserves exceed the target, they can be
used for capital projects or other one-time needs
with approval by the Mayor and Council.
At the end of FY 2021, the actual General Fund
reserve balance was $22.9 million, which is $5.9
million over the FY 2021 reserve target.
What is the City's Net Position?
The City had a solid financial year with the FY
2021 net position increasing by $13.7 million to
$307.1 million. Change in net position is a useful
indicator of a government's
financial health and
represents total assets
less total liabilities on an
organization-wide basis.
The largest portion of the
City’s net position (78.9%)
is reflected in its net
investment in capital assets.
The City uses these capital
assets to provide services to residents making
them not available for future spending.
Source: Annual CAFRs, "Management's Discussion and Analysis."
Note: Deferred outflows/inflows of resources refers to the consumption
of/acquisition of net assets that is applicable to a future reporting period.
Net Position (millions)
The largest General Fund revenue category, property tax,
increased each year over the past five years. For FY 2021, property
taxes made up 54 percent of all revenues. Other General Fund
revenue categories were lower in FY 2021 compared to previous
years due to the impacts of the pandemic. The property tax
revenue increase, combined with conservative spending across all
city departments, led to the increase in the unassigned reserve
balance.
$1
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4
$1
5
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9
$1
6
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5
$1
6
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8
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6
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9
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6
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7
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9
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$5.0
$10.0
$15.0
$20.0
$25.0
$30.0
20
1
7
20
1
8
20
1
9
20
2
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20
2
1
Reserve Target versus Actual Reserve (millions)
What is the City's Reserve Balance?
FY 2021 General Fund Budget Activity
Source: Annual Budget Documents, Financial Summaries section.
Rev. (in $1,000s) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
Property Taxes 40,106 41,385 42,168 42,552 44,327
Other Gov't. 20,599 20,568 22,774 23,201 24,560
Fines/Forfeitures 1,267 1,443 1,578 1,510 948
Use Money/Prop. 1,442 1,567 2,013 2,364 1,553
Charges for Serv. 6,817 7,526 7,779 5,472 2,996
Licenses/Permits 2,927 3,085 3,464 3,595 2,833
Other Revenue 6,725 7,029 6,279 5,204 4,380
Total ($) 79,883 82,604 86,056 83,896 81,597
Exp. (in $1,000s) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
Personnel 45,793 47,691 49,833 51,146 49,248
Operating 12,681 13,119 13,954 13,092 12,515
Capital Outlay 2,665 1,852 2,488 2,097 1,797
Other 3,040 1,641 2,098 2,307 2,372
CIP Transfer 12,115 11,500 8,448 9,800 7,507
Transfers Out 6,229 6,246 6,429 6,202 6,962
Total ($) 82,523 82,050 83,251 84,644 80,401
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City of Rockville's Capital Budget
The City maintains a bond rating by
Moody's Investor Services and Standard and Poor's.
This rating saves the taxpayers money by allowing
the City to issue bonds at the lowest possible
interest rates. Ratings are based on debt burden,
financial management, financial performance, and
economic base/prospects.
Why does the City issue Bonds?
The City issues bonds to raise cash while promoting
intergenerational equity by spreading the investment
costs over time. General tax revenues pay for bonds
used to support projects funded through the Capital
Projects Fund. Revenues from utility rates and
charges pay for bonds used to support the projects
funded through each enterprise fund.
There are no restrictions on the amount of debt the
City of Rockville can issue per Maryland State law or
the City Charter.The City ensures that debt is being
used responsibly by setting affordability guidelines or
debt ratios in Rockville's Financial Management
Policies.
How is the Capital Budget Funded?The City's capital budget focuses on maintaining
and improving existing infrastructure—including
roadways, sidewalks, water and sewer systems, and
facilities—while incorporating new projects that
promote the health, recreation, and general
livability of the city. New capital projects that were
funded in FY 2021 include:
Capital investments are funded from various
revenue sources, including:
atransfers from the General Fund/other funds,
adeveloper and community contributions,
aState of Maryland and federal grants,
aspeed camera citation revenues,and
abond proceeds.
AAA/Aaa
What is the City's Bond Rating?
The City issued $18.7 million in new bonds (Series
2020B) and $23.7 million in taxable refunding bonds
(Series 2020C)in September 2020. The new bonds
were issued to support water and sewer
infrastructure.
New Bonds in FY 2021
Page 7
From ACFR:
2008
2009
2010
$10
$11
$12
$13
$14
$15
20
1
2
20
1
3
20
1
4
20
1
5
20
1
6
20
1
7
20
1
8
20
1
9
20
2
0
20
2
1
Group 1, will be assessed in 2022
Group 3, will be assessed in 2024
Source: FY 2021 ACFR, page 88.
FY 2021 is the highest ever at $14 billion
Revenue from Property Tax
.
Source: Annual Budget Documents.
Assessed Value of Real Property (billions)
What are Rockville's Assessment Areas?
The City contains two real property
assessment areas: Group 1 (dark orange)
and Group 3 (light orange). Property value
is determined by the assessed value of real
estate (including land and structures on
the land) and the assessed value of
personal property (including inventory,
furniture, and fixtures). The State
Department of Assessments and Taxation
(SDAT) is responsible for determining the
assessed values for all properties located
in the City. The State assesses real
property every three years, and tax bills
are based on those assessments. If a property increases
in value, that increase is equally phased in over three
years. If a property decreases in value, the decrease is
fully factored into the first levy year after the
assessment.
The City's tax rates per $100 of assessed value equal
$0.292 for real property and $0.805 for personal
property.
Fiscal
Year
Property Tax
Revenue
% of Total
Revenues
2017 $40,105,715 50.2%
2018 $41,385,200 50.1%
2019 $42,167,988 49.0%
2020 $42,551,677 50.7%
2021 $44,327,269 54.3%
Property taxes comprised a larger percentage of
the FY 2021 total General Fund revenues due to
the impact of the COVID-19 pandemic on the
City's other revenue sources.
Page 8
VIEW AND PAY YOUR BILL online at
https://apps.montgomerycountymd.gov/realpropertytax/.
You can select property tax records to view and/or make
payment online by credit card or automatic deduction from
your bank account as appropriate.
UNKNOWN
0000111100000001
999 OWENS ST
98 52 324
TAX CLASS determines
the tax rate that is
charged.Over 99% of
Rockville properties are
located in Tax Class R050.
ROCKVILLE PROPERTY
TAX is the annual
amount that is due to the
City for real property tax.
This amount is calculated
by multiplying the
assessed value by the
City's property tax rate of
$0.292 per $100 of
assessed value.
The ROCKVIILE REFUSE
CHARGE and
STORMWATER MGMT FEE
are the annual amounts
that are due for the City's
stormwater management
program and recycling and
refuse services.
ASSESSMENT is the value of the
property that is determined by
the Maryland State Department
of Assessments and Taxation.
CREDIT DESCRIPTION lists the
property tax credits that were
applied to the account. Although not
on this bill, Rockville properties
might see a homeowners' tax credit
or a homestead tax credit.
Page 9
2017 2018 2019 2020 2021 2017 2018 2019 2020 2021
SWM
Water
Sewer
Refuse
SWM
Water
Sewer
Refuse
To hit TARGET #2 for Water and Sewer, a new rate structure that considers the
cost of service by property classification will begin Jan. 1, 2022.Based on the
adopted rates and assumptions, the Water Fund is expected to be in compliance
by FY 2024 and the Sewer Fund by FY 2023.
There are two policy targets that the City uses to
manage the utility or enterprise funds. TARGET #1
analyzes revenues versus expenses. For each utility
fund, total operating revenues must meet or exceed
total operating expenses, unless there is a planned
drawdown of reserves. For FY 2021, all utility funds
were in compliance with this target.
What Utility Services are Operated by the City of Rockville?
TARGET #1: Revenues versus Expenses
Source: Annual Budget Documents.Source: Annual Budget Documents.
The City of Rockville manages four utility services: water, sewer, recycling and refuse, and stormwater
management (SWM). The City accounts for these services in enterprise funds, which operate and account for their
transactions like private businesses. Customers pay for water and sewer on a monthly or quarterly bill that comes
from the City of Rockville (page 11). Customers pay for SWM and recycling and refuse services on their annual real
property tax bill that comes from Montgomery County (page 9).
TARGET #2: Sufficient Reserve Levels
What are the Enterprise Fund Policy Targets?
TARGET #2 looks at the cash balance at fiscal year
end. For this target, the Water and Sewer funds
must maintain a cash balance (less bond proceeds)
equal to six months, Refuse one month, and SWM
three months of operating expenses. Refuse and
SWM were in compliance for FY 2021, but Water
and Sewer remain below the target.
Page 10
999 OWENSST
SAMPLE CUSTOMER
012345
63101234
BAY FEE or
Chesapeake Bay
Restoration fee is a
fee mandated by
the State of
Maryland.
SEWER USAGE is the
sewer charge and equals
$10.50 per 1,000 gallons
or 1 unit.
The WATER/SEWER RTS is
the water and sewer ready
to serve charge. This
charge recovers a portion
of the fixed costs of
operations. The amount of
charge is based on the
meter size.
WATER USG QTRLY is the
quarterly water charge and
is based on a four tier
structure. This customer
used 13,000 gallons of
water or 13 units at $5.61
per unit (first tier).
Units in a billing period.
1 unit = 1,000 gallons
63101234
Page 11
Prepared by the Department of Finance
City of Rockville, Maryland
111 Maryland Avenue
Rockville, MD 20850
www.rockvillemd.gov
The award represents a
significant achievement by the
entity. In order to be eligible for
the PAFR award, a government
must also submit its Annual
Comprehensive Financial Report
(ACFR) to GFOA’s Certificate of
Achievement for Excellent in
Financial Reporting Program and
receive the Certificate for the
current fiscal year. Each eligible
report is reviewed by judges who
evaluate the report based on the
following categories: reader
appeal, understandability,
distribution methods, creativity
and other elements.
*****
GFOA advances excellence in
government finance by providing best
practices, professional development,
resources, and practical research for
more than 21,000 members and the
communities they serve.
Government Finance Officers Association (GFOA) is pleased to announce
the City of Rockville, Maryland has received GFOA’s Award for Outstanding
Achievement in Popular Annual Financial Reporting (PAFR award).
Page 12