Condominium Woes

The God-awful collapse of a 40-year old condominium tower in the town of Surfside, Florida and the instantaneous deaths of nearly 100 people who were sound asleep in their beds is the stuff of nightmares. It should raise certain concerns we all need to pay attention to.

I am not talking about the chance of a tall building falling down, which is about nil in Takoma Park. Instead, I find one of the most tragic aspects of the Champlain Towers South collapse is the failure of the condominium association to do anything about the known and alleged problems affecting the elemental structure of the building. 

None of Takoma Park’s large, multi-family buildings are less than 50 years old. Some are a good bit older.

Doubtlessly there were a number of factors contributing to the collapse, leading to a retrospective sequence of ‘if-onlys” going as far back in time perhaps to how the construction company poured the concrete underpinnings and laid rebar.

Survivors have have been quoted in the press that condo association members argued and were unable to agree on a plan to make repairs. Some condo board members resigned in protest and frustration, it is said.

This is the part that strikes me as the saddest. It’s not hard to imagine how the discussions might have gone at a condo board meeting:

“Can we trust the engineer’s report? . . It’s been this way for years; this is nothing we don’t already know . . .Things aren’t this bad . . . The costs will be too high . . . Some of us can’t afford higher assessments and we’ll have to move out . . . You’re being too much of a Cassandra . . . Major repairs will scare away buyers . . . Our units will lose value . . . Let’s just do some of the repairs now and the rest later . . . The pool needs repairs first . . . No it doesn’t . . .  The longer we wait, costs will go up.”

Add in possible personality clashes and that some members were either out of their depth or just disinterested. In the board’s defense, it is inevitable to expect resistance to big outlays, especially when they feel unprecedented in scope. Just look at humanity’s resistance to dealing with global warming (in case you have doubts). 

Condo association boards are made up of volunteers. The only qualification to serve is the mere fact you own a unit, and the time and interest to serve. As with most communities, only a few are going to come forward and your neighbors are simply grateful you are willing to show up for meetings.

I raise this issue here because in Takoma Park all the larger multi-family buildings – whether rentals or condos – are old by any definition. None are less than 50 years old, and some may be pushing 70 or 80 years. 

Let me explain where I come from on this issue. As a commercial real estate lender for many years, I handled loan requests from condo associations to finance major improvements to their facilities. In some cases, condo association boards wanted to borrower the money needed to make repairs and replacements rather that hit up unit owners with huge one-time assessments. 

For a bank to lend money to a condo association, it has to know that the loan will be paid back. Since there’s no collateral to secure a loan (every unit has a different owner), the bank must have confidence on a reliable cash flow. It does so by looking at reserves, the capacity to increase assessments if needed, the board’s competency, and facilities in relatively good condition. 

But often, a bank’s investigation reveals serious disqualifying problems. Champlain Towers South may not have qualified for a loan due its evident poor condition. 

It’s safe to say no one buys a condo unit because they want to run a condo association.

This catastrophe is a grim reminder to all condo owners (and those thinking of buying one) of the perils of condo ownership in the face of neglect, mismanagement and procrastination. 

It’s safe to say no one buys a condo unit because they want to run a condo association. Under most states’ laws there’s no requirement for transparency regarding a condo’s finances such as its reserves and financial condition. This information is private, secret and not available to the outside world, including any legal matters and the property’s condition. 

Purchasing a condo unit in not unlike buying a used car. You can walk the property, kick the tires, talk to the property manager (who is a hired gun), speak to any unit owners you may know and then you take the plunge. Actually, this may be unfair to used car dealers. I’ve purchased nothing but used cars for the past 40 years. With a dealership, you at least get guarantees and recourse to a car’s history.

Well managed condominiums undertake a “reserve study” every five years. (Very old buildings should have it done every 3 years.) It requires contracting with an engineering firm to examine every component of the building(s) including the foundation, roof, exterior walls, all openings, and the electrical, plumbing, HVAC, incinerator, elevator, security and life safety systems. Even things like parking surfaces, pools, railings, balconies.

In Maryland before 2020 there was no law requiring condos to do reserve studies. The Maryland Condominium Act pertaining only to Prince George’s and Montgomery Counties (not to the rest of the state) was amended to require performing a reserve study every 5 years for “common property major structural components.” It requires that the funding recommended by the reserve study for repair/replacement be included in an association’s annual budget for that year and the study be made available to all owners. The law gives condo associations the added authority to override any restrictions in the organization’s charter documents that otherwise might limit assessment increases.

The engineer assigns a life expectancy for each component and the estimated replacement or repair cost. The condo board has the authority to budget for these replacements and set aside a portion of assessment income in a reserve fund. It can increase assessments. That way, when the roof has to be replaced, the money is there. There is money to replace common area carpets, paint stairwells and hallways and upgrade security cameras and laundry rooms. 

A more extensive description of the Maryland state law can be found here.

This is an important improvement in Maryland law. However, inherent weaknesses remain, because the law cannot force a condo association to actually increase the assessments or to actually make the repairs. Apparently, the amended law does not require that a condominium’s financial and physical condition be made public. 

Still, the law may go a long way to increasing awareness and higher expectations among existing unit owners. It will help would-be condo unit buyers to be more cognizant of risks.

Of course, apartment buildings are just as subject to the ravages of time and neglect. Our City needs to pay attention to these as well.

The SHA and the TPSS Co-op

“We had to destroy the village in order to save it.”

U.S. Army Major, Vietnam, 1968

Not everyone I know shops at the TPSS Food Co-op. As with any retail business, there are those who prefer other places to buy groceries. Be that as it may, it’s safe to say that no one disputes that the Co-op is a Takoma Park institution, a signature business with many devoted patrons that helps define the character of Takoma Park.

So why is it that the Maryland State Highway Administration (SHA) appears to have a regulatory stranglehold around the Co-op’s neck that threatens to put it out of business? This, notwithstanding that the Co-op has thousands of members and defenders including the prominent Peter Franchot, Maryland’s Comptroller, who lives almost across the street from the store.

The future of the Co-op and indeed of the whole highly trafficked intersection known as Takoma Junction, will reach a critical turning point this month (June) when the Takoma Park City Council votes to either support or vote down a redevelopment project on the city-owned parking lot immediately adjacent to the Co-op. The sentiment of the 7-member city council is not really in doubt. Through a couple of mayors, three city managers and four city elections, a stable majority of the city council has always supported redevelopment of the city-owned parcel. Neighborhood Development Company (NDC), a local minority-owned development firm, plans to build a 2-story, 40,762 square foot commercial building with underground parking to contain neighborhood shops and eateries.

(In the interest of full disclosure, for eight years I was one of those councilmembers supporting the redevelopment.)

The Layby

What casts a cloud over the outcome of the city council vote and the future of the Co-op itself is the SHA’s refusal to permit construction of a 12 x 140-foot long layby in front of the Co-op on Carroll Avenue. It will accommodate daily deliveries from 53-foot-long tractor trailers. These deliveries are the “life blood of the Co-op,” Diane Curran, president of the Co-op’s Board of Representatives, told me. The Co-op has no control over the size of the trucks, she said. Also, the Co-op’s building has limited inventory storage space, which means the timeliness of deliveries is critical.

Absent a layby of sufficient dimensions, the Co-op cannot survive. It is as simple as that. Currently, deliveries arrive through the city-owned parking lot. From 1998 to 2016, the city leased the lot to the Co-op to allow off-street truck deliveries. The lease became a sub-lease in 2016 when the city signed a 99-year lease and a Development Agreement with NDC, so deliveries have continued. In 2018 the Co-op and NDC signed a Cooperation Agreement in which the Co-op agreed “not to oppose” NDC’s proposed commercial development and NDC agreed to build the layby and adjacent off-loading space in accordance with the Co-op’s specifications. It details a layby made of concrete and flush with the adjoining 7-foot wide sidewalk area so electric pallet jacks can safely and quickly move heavy loads into the store’s receiving area.

In 2018 the city council adopted Resolution 2018-41 contingently endorsing NDC’s project plans. This was a prerequisite for NDC’s submitting its site plan application to the Montgomery County Planning Department. Together with the Cooperation Agreement and the 2016 City / NDC Development Agreement and ground lease, these documents all support the Co-op’s continuation and economic viability and the construction of a layby. It signifies that the layby will be built first to assure uninterrupted deliveries.

The Origins

This project “began” in 2012 when a Council-appointed citizen group, the Takoma Junction Task Force, issued its 105-page report recommending how the city-owned lot should be put to use. In hindsight, the scope and breath of the group’s work over nearly two years was more than commendable. The city council (on which I served) took the report to heart and tried to realize the Task Force’s recommendations.

As a result, NDC’s proposed site plan fundamentally honors the main ideas expressed in that report. The essence of the report boils down to one sentence on page 66:

“A majority of the participants would support a multi-use development on the city-owned lot, including a potential Co-op expansion, provided that such a development did not impact traffic on Columbia/Sycamore Avenues, maintained an adequate level of parking in the Junction as a whole, and improved the attractiveness and livability of the Junction.”

(There was also “broad” support for a place for “non-permanent business activities,” cultural gatherings, games, music and dancing. Whether the proposed project can accommodate some of these functions remains to be seen.)

The SHA

Now at the 11th hour, the SHA has expressed in writing an adverse opinion on the feasibility of the proposed lay-by, citing engineering design hazards. On May 24, SHA wrote, As stated in our May 17 letter it has not been adequately demonstrated the network can safely support the layby lane at this location, therefore we cannot approve it as currently proposed.

Woah! That’s heavy stuff! The SHA’s stance is not necessarily determinative, but it has created doubt and confusion among public officials I’ve spoken to. The Montgomery County Planning Board holds final approval authority.

Strangely, the SHA’s objections lack so little substance as to verge on the immaterial. No civil engineering degree is needed to suss these out. SHA’s letter of April 6, 2021 (and subsequent ones on May 17 and May 24 that repeat the same concerns) to NDC’s traffic consultant, The Traffic Group, objects to inadequate “sight lines” on Carroll Avenue for an eastbound driver approaching the future layby and the parking garage exit (where today there’s already an exit from the parking lot). To illustrate, when a highway bends, a driver must be able to see far enough ahead in time to brake for unexpected things in the path. At speeds of, say, 55 mph, a sight line needs to be longer than, say, at 40 mph. At 15 mph, the sight line can be very short. In stop and go traffic, sight line is irrelevant.

The latter is the case in the Junction where traffic moves slowly. Proof? The Sycamore and Philadelphia Avenue intersections lie 500 feet apart. In this span there are 3 stop lights, a fire station, 3 bus stops, 7 private-property curb cuts and 3 painted crosswalks. Except maybe late at night when everything is closed, traffic never speeds through the Junction because it can’t. SHA’s own Visioning Study acknowledges the chronic traffic delays.

SHA’s second objection seems to be fear that a semi in the layby “may overhang” the bicycle lane “posing an increased risk to cyclists.” AASHTO, the bible that SHA references for road design standards, posits a 12-foot width for a layby for 8 ½-foot wide tractor trailers, the same width as an Interstate Highway Lane.

SHA’s third objection is that the equipment employed to move goods from the truck to the Co-op will interfere with people on the sidewalk (which is routine in every downtown in America).

Why?

Each of the above objections is immaterial – to put it kindly – for three reasons. First, the layby lane will be built on private land and add to the width the road; not interfere with it. Second, SHA’s arbitrary insistence on these sight line standards is tantamount to preventing any commercial use ever being built on the city-owned lot. Third, contrast this with the two-thirds of a mile of Ethan Allen Ave (Rte 410) between Sycamore and New Hampshire Ave, all of which fails to meet SHA’s lane and sidewalk standards and has no bicycle lane at all, not even a “sharrow”. Strangely, the SHA is quite content with that, but not for the Junction block. Thanks, however, solely to NDC’s site plan, there will be a safe bike lane and 6-foot wide sidewalks.

We’re forced to ask:   Why is the SHA being stubborn, pedantic, arbitrary and obtuse by withholding its approval of the layby that the TPSS Co-op desperately needs to survive?

Why is the SHA applying modern AASHTO standards to an urban infill development site abutting quirky roads that were laid out over 100 years ago?

Why does the SHA show no interest in reconfiguring the Carroll – Ethan Allen – Sycamore confluence? That would cure lots of headaches.

Why has the SHA taken 2 years to “study” and raise objections through the County’s Development Review process that normally requires a 30-day response? (NDC began exploring the layby concept with the SHA at least 3 years ago.)

Why did the SHA take over a year to produce a vacuous “Visioning Study” on the Junction’s future, which, unbelievably, ignored traffic improvements –– the whole point of the study? Perhaps the biggest let-down since Y2K or the Maginot Line.

The Stakes

This isn’t funny. The Co-op’s future hangs by this thread. No, it’s not NDC’s fault because NDC is building the layby for the Co-op, which NDC would otherwise not need nearly as big. Regardless of the outcome of NDC’s proposed site plan, the parking lot will not be available for the Co-op’s deliveries in the future because NDC and/or the City will build something there.

The Co-op needs a permanent layby now and for the future.

As to the “why,” rumors abound that certain high elected officials have pushed the SHA to help block NDC’s project from going forward. That could well be the case given the tenacity of opponents to the project. If true, such people are sadly misguided or awfully confused.

An iconic quote emerged at the height of the Vietnam War when the reporter Peter Arnett quoted a U.S. Army major who said, “We had to destroy the village in order to save it.” Later the quote became a tag line for the war itself about the U.S. forces having to bomb Vietnam in order to save it.

Opponents may win the battle, but lose the Co-op, which could move somewhere else. I have said it before: the opponents know how to oppose (that’s easy), but no two of them appear to agree on what they want instead (that’s hard).

As for the Co-op, despite the pandemic, the organization is strong financially and organizationally. At one time the Co-op vigorously opposed NDC’s proposed development in favor of its ambition to expand its store onto the city-owned lot. But in 2018, the Co-op dropped its expansion plans and opted to work out a quid pro quo with NDC. The Co-op has abided by the Cooperation Agreement ever since.

No one has said this to me, but unless the layby gets approved, it seems pretty clear to me the Co-op may have no other choice but to consider greener fields.

The Train to Rehoboth Beach

Ask yourself: When was the last time you rode a train (not counting the Metro)? Unless you commute on the MARC or VRE systems, it’s not likely you have or will anytime soon. We all know why.

Outside of North America, I’ll wager that in every other industrialized country in the world, passenger trains are a prominent, if not the preferred, means of regional travel. 

Imagine – if you will – taking a train to Ocean City or Rehoboth Beach and back again. (No Bay Bridge backups.) Imagine a fast trip to the capital in Annapolis. (No problems parking.) And then from Annapolis to Baltimore. How about frequent, reliable connections to Baltimore, Frederick, Fredericksburg, Leesburg, Charles Town and Charlottesville?

Large, high density metropolises like New York, Chicago, Boston and all across Europe and Asia have extensive rail services that radiate 40 to 60 miles into the countryside, interconnecting with towns and supplemented by bus lines. In Europe, a spaghetti of rail lines makes it possible to practically “go anywhere” any day in the region. Here’s a taste of the spaghetti: Cologne’s Hohenzollern Bridge over the Rhine handles 1,200 trains per day. I saw it for myself.

Unlike roads, rail service responds easily to population growth and seasonal shifts by adding or subtracting cars and service frequencies. 

Changes in our dependence on the automobile, a warming climate, the Covid-19 pandemic, and the ubiquity of video conferencing have converged to shift how we conduct our lives. The at-home/at-work boundary is totally blurred. Leisure time too.  Consider.  Where we are physically at any given moment matters less and less than at any time in human history. In a sense, these days we can be in two places at once. We can be at home and at work at the same time. We can be on vacation on an island or a ski lift and remain on the job. We can be traveling abroad and be “with” anyone we need to. 

Our reliance on cars consequently is diminishing. Families may be choosing to own one less car. In terms of the global climate, this is a good thing of course. Recently in Fort Myers, Florida an area of retirement communities, sprawling suburbs and shopping malls, I saw an abundance of battery-charged “golf carts” on streets and even golf-cart dealers selling these things. 

Despite these evident trends, in Maryland and the “DMV” area, one gets the feeling it’s still the 1990s. Governor Hogan pursues his ambitions to dramatically widen I-270 and the American Legion bridge, as well as I-495 (the Maryland portion of the Beltway) by adding two High Occupancy Toll (HOT) lanes in each direction to relieve congestion. I-270 already has seven lanes in many sections. Picture each exit requiring double entrance and exit ramps with flyovers. Every crossover bridge will have to be lengthened. 

The estimated cost started out in 2019 at $9 billion and has now moved up to $11 billion. For comparison purposes, the literal design, land acquisition and construction of the 16-mile Purple Line was to have cost about $2.4 billion. 

The argument in favor of adding lanes is the region’s projected growth and already congested commuter routes. The Washington Post sadly has editorialized in favor of Hogan’s plan. Maryland has a governor in love with roads. He says so and his actions bespeak it.

Let’s recall in 2015 Governor Hogan killed the $2.9 billion Red Line in Baltimore which would have served the Black neighborhoods, which to this day remained embittered. Hogan said the State could not afford it. That project, which was further along than the Purple Line, was to have been completed in 2020. Hogan left 900 million in Federal dollars on the table. Black Lives Matter would not let him get away with this today.

Maryland officials say the road widenings will not cost taxpayers anything because it will pay for itself from tolls.  It was recently announced that it will cost $2 billion alone to relocate the underground storm water systems. Like the Purple Line, Mr. Hogan intends to build and operate the completed project through a “P-3” mechanism (public private partnership). This clever approach has private companies finance, build, operate and own the rail line because it’s supposed to be cheaper and faster to do it that way. The Purple Line broke ground in August 2017 with the promise it would be done in 2022. The contractor quit last year and work has all but stopped. At 40% completion, Maryland’s DOT candidly confesses no earthly idea when the project will be completed. So much for a P-3.

As with any massive public project the engineers and elected officials obviously have to convince taxpayers the project is needed, rational and affordable. And, that there is no better alternative. The inherent fallacy is that it’s humanly impossible to project the true costs, the duration of work and whether the outcome will achieve its promise. The reality? Once construction gets underway, it’s too late. It’s “Katy bar the door” by that time, as they say. I can hear it now. “But, but you said [fill in the blank].” 

Experience with road widenings around the world tells us that inevitably empty lanes attract more cars. The project has met opposition from many quarters, which I’m not repeating here. Instead, I pose questions that should challenge most peoples’ credulity. 

➤     What are the chances the project will greatly exceed cost estimates?  

➤     Is it wise to have a profit-driven organization determine toll rates?

➤     What happens if toll revenue is not large enough to carry the billions in debt?

➤     Do you really believe we will get all this with “no net cost” to the taxpayers?

➤     What happens if the P-3 partnership breaks down à la the Purple Line?

➤     Suppose the expanded lanes get re-congested in five years, then what?

➤     To get across the Potomac, do we really want an all-of our-eggs-in-a-one-basket 12-lane American Legion bridge?

More to the point, instead of spending, say $20 billion to do widenings — a solution whose outcome is seriously problematic — and is utterly antithetical to President Biden’s climate goals, we should be planning rapid rail lines either alongside of or elevated above I-270 to Frederick, and Route 50 to Annapolis.  In other words, it is time to stop this scheme dead in its tracks and shift to a whole new paradigm. Covid-19 has changed the world and Climate Change is upon us. There is still time. 

Whether the American Legion Bridge gets widened or not, imagine for a moment an elevated high-speed train from Rockville zipping above the western Montgomery County Agricultural Reserve and crossing the Potomac River into Leesburg, Front Royal and Harrisonburg with transfers along the way to Arlington, Winchester and Charlottesville. 

We have enough roads. More roads are never going to get us to our destination any faster than they do today.

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Thank You, Donald

We don’t know yet whether the loser of the 2020 presidential election will quietly slip out of a side door of the White House on January 20 or whether a bunch of Secret Service agents will wrestle the hefty Trump as he clings to the bedpost kicking and pleading, “No, no. I won, I won. Let go of me, damn’t.”

Either way, Donald Trump’s reign will end ingloriously as he and his failed administration get tossed onto the scrap heap of history.

But wait!

Notwithstanding his ignominy, we Americans owe Trump a debt of gratitude for enabling us to re-learn vital lessons that seem to have been lost to us over the past 40 years. President Ronald Reagan in his 1981 inaugural address, said famously, “In this present crisis, government is not the solution to our problem, government IS the problem.”

What Reagan started, Trump finished. On his path to autocracy, he’s cowed his own political party so it no longer knows what it stands for; demanded loyalty to himself alone; illegally augmented his personal wealth; belittled military leaders and invented the “deep state.”

He has single-handedly engendered the greatest internal threat to our Republic since the Civil War. Half our nation is not speaking to the other half, as is Congress.

In times of peace and prosperity, perhaps it is natural we take for granted our Republic’s foundational principles. Four years ago our invincible (we thought) Ship of State hit an iceberg. Our ship listed and lost its steerage way, but did not sink. Looking back over the past 46 months at the flotsam Trump left behind, it’s apparent that Trump has failed abjectly, leaving virtually no legacy of accomplishment. Nothing to remember his time in office. Not even a border wall.   

73 million Americans voted for Trump for what they thought were good reasons. The other half of America needs to understand why. The best explanation I’ve read for Trump’s support is: “They do not embrace him in spite of the schoolyard insults, Twitter tantrums and conspiracy nonsense, but because of these things,” according to Kevin D. Williamson (11/15/20 Washington Post). As Pogo once said, “We have met the enemy and he is us.”

So, what are the lessons learned?  

o  Our Constitution has been tested and withstood terrible adversity. Thanks to our system of checks and balances that disperses power among three branches, it has proved impregnable to Trump’s autocratic destructiveness.

o  At a dreadful cost in blood, Blacks have found their voice at the ballot box and in the streets. Trump’s championing of White supremacy has exposed the scope of unvarnished racism in our country. As a Black neighbor said to me, “Trump got the racists to take their hoods off.”

o  Trump’s flagrant misogyny has motivated women to fight to achieve elective office like never before. 

o  Barring immigration and immigrants weakens our society. Among all of us, they love liberty more. Their hard work and determination strengthens our country. Always has.

o  Americans need and want an ethical, experienced, intelligent, responsive leader in the White House. Trump is void of any virtues. 

o  Shockingly, however, only half of the electorate can tell the difference, apparently.

o  We do actually need a national government. The 50 states can do some things well, but not fight infectious diseases, deal with natural disasters, set immigration policy, support scientific research, guarantee health care or deliver the mail.

o  We’ve learned that the federal deficit is not a meaningful fiscal parameter except when the President is a Democrat.

o  Science and politics do not mix. 

o  America can’t be run like a business; to do so is antithetical to democracy for which there is no “bottom line.”

o  There is no “deep state.” The Civil Service that operates our national government is made of dedicated professional bureaucrats who form the bedrock underpinning our Republic.

o  Trump has set a new standard of presidential incompetence. He has elevated the historical standing of his 44 predecessors.

o  We have witnessed in this century the dissolution of the Republican Party as the standard bearer of conservatism into group of subservients obedient to and terrified of Trump. Except for a few, these Republicans have sacrificed their ability to speak for themselves in furtherance of their loyalty to Trump.

o  The political chaos, cynicism and mistrust over recent administrations makes it evident that many Americans, regardless of their political leanings, have little idea of how our Republic works, where sovereignty lies, the structure of our national government and the content of the U.S. Constitution and the Bill of Rights.

o  Of paramount importance is schools doing a better job teaching our kids the Bill of Rights, in particular the First Amendment, and that can’t start too young. Trump will fade fast, like a match on a wet campfire. But he has given us a teaching moment, so let’s use it to teach young people to have faith in government and take pride in public service. 

Flat Property Taxes

Controversy abounds these days between the two candidates for Mayor of Takoma Park, the incumbent, Kate Stewart and challenger Roger Schlegel. Regardless of who one supports, the contest forces each of us to think deeper about our values and ideologies. One of the top issues concerns property taxes. Mr. Schlegel asserts that taxes have risen considerably under the Mayor’s five years of leadership and Ms. Stewart says that’s not true: yes, taxes have gone up due to inflation and rather inconsistent assessments across the city, but tax rates have gone down and the City has run a tight ship.

I am paraphrasing and generalizing what the two candidates have said in their numerous respective oral comments and written responses. Who is right on this issue? 

Anyone who owns property here is naturally concerned about the seeming relentless rise in property taxes, not just for themselves, but also out of concern over the affordability of housing in general.

Part I

Montgomery County does the tax billing for all the municipalities in the County as well as for itself.  The statement that we recieve shows assessment figures, tax rates and charges due. It can be a bit confusing for many people. First, to make sense of it, I am going to refer to the real property tax bill that the Schultz household receives.

There’s a list of dollar figures under the “tax/charge” heading that contains the following:

State property tax$476.00
County property tax$4,212.60
Takoma Park property tax$2,293.73
Solid waste charge$31.19
Takoma Park special$92.00
TOTAL$7,105,52
Actual 2020-21 Real Property Tax Bill

To simplify the math, I will omit the last two lines. The first three lines add up to $6,982. The combination of State and County figures equals $4,688, which is exactly 67% of the total. Takoma Park’s portion adds up to 33%. 

Bluntly put, this means that only one-third of the Schultz’s tax bill results from Takoma Park taxation. When we write our check, two-thirds is owed to the County and State and only about $2,300 goes to my city.

Part II

Keep the above in mind as we look at property tax rates. The City Council annually sets a tax rate for the coming fiscal year. The rate is expressed as X cents per $100 of a property’s assessed value. 

Not to go too far astray here, but it may help you to know that the State of Maryland determines the assessment of every property in Maryland. (The “assessed value” has only a casual relationship to the actual “market value” of one’s property.) The State assesses properties on a 3-year (triennial) cycle. If your property’s assessment goes up and the tax rate remains the same, then your bill will go up too. But the City Council can and does lower the rate as much as possible to keep our tax bills from rising too much. Unfortunately the County does not always do this. Its $5.8 billion operating budget has to pay for the schools.

The table below shows how tax rates have changed over the past 10 years from 2010 to 2019. These numbers come from annual city audits:

Property Tax Rate Comparison by Taxing
Jurisdiction in Dollars per $100 of
Assessed Value
change
FY 2010FY 2019
1City of Takoma Park0.58000.5291– .0509
2State of Maryland0.11200.11200
3Montgomery County0.68300.7166+ .0336
4M-NCPPC0.06900.0740+ .0050
5Transit District “Ride On”0.03700.0672+ .0302
6Recreation Areas0.01900.0264+ .0071
TOTAL1.50001.5250
Source: CAFR, fiscal year 2019, page 100

Notice that over the past 10 years Takoma Park’s tax rate has gone down from 58.0 cents to 52.9 cents = a reduction of over 5 cents. Maryland has not changed its rate. Lines 3, 4, 5 and 6 are all Montgomery County, which added together show the County has raised its tax rate by .0759 cents = an increase of 7.6 cents.

While Takoma Park has been steadily reducing its tax rate, the County has been raising its rate. Even worse, the County’s impact is twice as heavy because their share of the bill is twice as big as the City’s. As a consequence, even if the City Council lowers our rate and the County raises its rate, our tax bill goes up. Yes, some years the City has raised our tax rate because of exigencies.

Our Mayor and City Council are fighting a losing battle. Our tax bills go up each year largely because of the County. So, while the perception may be that the City is increasing our tax burden a lot, that is not the case. So, the answer to the question is that, for the most part, the City has either not been raising our property taxes or doing so quite modestly. It’s a mistake to say otherwise.

Part III

The City’s revenues come from many sources, the property tax being the largest percentage. Did you know that the property tax is the only revenue source over which the city has full control? Intergovernmental revenues are large, but almost all of it is restricted to designated purposes. By law the City cannot introduce a new tax. The County can.

Roughly 74 percent of the City FY’21 budget, excluding capital projects and debt service, is attributable to personnel costs; that is, salaries and benefits. This means in order to do large enough cuts to materially reduce our property tax bills, the Council would likely have to lay off a lot of people. Let me illustrate.

If the City Council chose to reduce our budget by 2%, say, that would mean a household’s $6,000 annual property tax bill would go down by about $40. That’s hardly of consequence. However, for the City, it is signifcant: about $280,000. If we multiply that by 74% = $207,000 which is a reduction of two lower salary level employees and the services they support. The bigger the reductions the more lay-offs.

Part IV

The current FY’21 budget does not raise our tax bill. The City Council set a tax rate equal to last year’s rate. The Council has built into the budget certain expenditure “holds” totaling $1.3 million due to uncertainties related to the Covid-19 pandemic. The “holds” come from leaving staff vacancies unfilled and other short term cuts. This money is held in the unrestricted General Reserve until the Council can decide via budget amendments where and when the money can best be used. The 2021 budget includes a new Covid-19 Fund of $440,000 to respond to the need “for direct assistance to business owners, housing assistance for vulnerable families, COVID-19 personal protective equipment purchases, and workforce development assistance” [2021 adopted budget, page 3].

So . . . . . I hope this contribution can help calm nerves about our city taxes and the conscientiousness of our City Manager and Councilmembers. We have enough to worry about with the “Crazy Uncle” in the Whitehouse without having to invent new ones in Takoma Park.

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Our New Library

With the city election coming up November 3, now is a good time to explain the reasons for Takoma Park’s rebuilding and expanding our library. There seems to be some misconceptions about the project and some bad information circulating.

To help folks sort this out, let’s look at it from two angles: first the “why” and second, the money to build it. 

Our library has been described in public testimony as the “Soul of the City;” it’s cultural heart. Its plentiful programs and holdings capture a broad patronage among all ages and from every social and economic segment of our city. In contrast, the County library in Silver Spring isn’t about that at all.

Built 65 years ago, our library is a 9,400 sq. ft. utilitarian building with no enduring qualities. It has outlasted its useful life. It is obsolete by many standards and must be rebuilt. Prior to the new Community Center, it was a stand-alone building. The attempt to connect the two structures led to a confusing, inefficient waste of space. This part of the Community Center will be remodeled as part of the library re-build.

It is constructed of uninsulated masonry walls and windows. The ventilation systems are old and failing and are inadequate for the Covid-19 pandemic. A low ceiling eliminates room for new ventilation ducts above the dropped ceilings. There are no sprinklers. Structural weakness prevents adding an upper floor. The concrete floor sits below the flood plain and is decaying. 

There’s not enough space for the collections and new technology; for young people to be comfortable reading and studying; or to serve children’s programming needs.

Cramped employee work stations, out of public view, look like something from a horror movie. A small storage room serves as the employee conference/lunch space. Restrooms are obsolete and ADA non-compliant. Aisles in the book stacks are too narrow per ADA and lack wheelchair turn-around space. The 84” high shelves are too high for many people. Tall shelves severely limit staff visibility and limit light and air circulation. Both natural and internal light are inadequate. To comply with ADA, a lot of library space would be lost.

You can finds tons of information, data, photos and design renderings on the City’s “Library Renovation/Reconstruction” web site here.

The Money

In 2017, the City Council approved, 7 to 0, issuance of a $9,000,000 infrastructure bond, of which $7 million is earmarked for the library. The remainder is for the Flower Avenue Green Street and related purposes. These funds are in hand, effectively in escrow, and are by law restricted for the designated use: the design, engineering, construction and outfitting of the library and other listed purposes. 

It’s important to understand that the bond money does not belong, per se, to the City’s taxpayers. It is borrowed money and did not come out of taxpayers’ pockets. Like any loan, you have to spend it the way the lender requires. 

Some people feel the City cannot afford a new library. But in fact we can. Repayment of the bond is spread out over 30 years, rather like a home mortgage. The City Council determined that the City could indeed afford the semi-annual payments within the City’s yearly budgets. The City still has surplus borrowing capacity within its self-imposed prudent borrowing limits. 

I know some residents question the need for a new library and suggest abandonment of the project because of the costs. Here’s why this doesn’t make sense:

(1) Our community needs the library. Killing the library runs counter to our town’s core values in a time when racial equity frames our social ethos. Our library lies steps away from three public schools. Many nearby residents have limited means of mobility and no broadband access. Our library greatly helps compensate for that. 

(2) Greg Lukemire of the Lukemire Partnership in 2016 presented 12 different design options for the library covering every possible solution. These have been narrowed down based on Council and community input and surveys. All this would be wasted including hundred of thousands of dollars in fees. It would discredit the work of every City Councilmember since 2014 who have voted unanimously without exception for this project.

3) It would mean having no library at all in the near future, according to City Manager Suzie Ludlow. That would be a considerable loss that no one would be happy with. The present library is simply too hazardous for employees, patrons and children, made even worse by the pandemic. The bond funds would then need to be used to pay off the bond holders. There’s zilch to be gained by killing the library.

This fall the City Council will be reviewing and making alterations to Lukemire’s final plans. The current projected cost estimate is $8.43 million, according to Deputy City Manager, Jessica Clarke. But certain project components could be omitted to pare costs. Meanwhile, the City has won $300,000 in state bond bills (grants) pegged for the project. Additionally, the City can access substantial restricted cable grant funds. 

Tentatively, after the bid process and permitting, actual construction could begin next spring. How can we not be excited about the prospect of a beautiful new building providing so many new resources for everyone?

Clearing the Air: Takoma Junction

With the days winding down toward the November 3 election, we feel the growing tenseness in the air. This presidential election will mark a crossroads in our nation’s history. And locally, Takoma Park’s city election will be more important than in recent memory.

In Takoma Park, some candidates for Mayor and City Council are making themselves known. Mayor Kate Stewart is being challenged by a repeat candidate, Roger Schlegel, who has announced his intention. Rumors circulate as to which city council members may face challengers or might retire. It is rare, however, for incumbents to be unseated because divisive issues have rarely arisen.

It may be different in Takoma Park this year. Proverbial lines have been drawn in the sand over the future of the city-owned public parking lot at Takoma Junction. For years a small number of folks employing an endless array of objections have tenaciously argued against all versions of the proposed 2-story mixed commercial project. Opponents may know what they don’t want on the asphalt lot, but not what they do want. 

Meanwhile questions have arisen over the wisdom of paying $7 million to modernize and expand the City’s library. Covid-19’s threats cast a different light on the City’s finances. Going back many years the councilmembers have consistently voted to support both projects.

In this blog I want to address the Takoma Junction project. I will save the library for next time.   

NDC’s latest preliminary architectural rendering submitted July 2020 to the Montgomery County Planning Board

Opposition to the Junction project has always been vigorous, but now has tipped over into personal acrimony questioning the honesty and motivations of our mayor, the city manager and professional planning staff.

I have supported this project since the Takoma Junction Task Force (TJTF) made its recommendations in February, 2012. I am deeply familiar with the professional aptitude and integrity of each of the city officials involved with this project as well as the processes employed, which have been by the book.

Let me clarify unfounded alarmist claims against the Junction project as recently as the Council’s July 29 meeting.

1. The project does not address racial equity at the Junction.

The developer, NDC, is a Black-owned company. No names of tenants, if any, have been released. We can merely guess at the nature of the retailers and their price points. The Development Agreement limits subleasing to local and regional operators.

2. The new businesses will negatively affect other businesses in the Junction.

Economic Development principles stipulate the proximity of more, similar businesses attracts more customers and more spending. Hence the premise for town centers and shopping centers. 

3. We don’t know how the developer will get financing.

Financing is a private matter for the developer, not a concern for the public. NDC is a proven, experienced developer, having done many projects across the region, including the new project breaking ground at Carroll and Cedar Streets. 

4. Developers are not building because of the economy. 

This is untrue. According to the Washington Businss Journal 7/31//20, “Due to Covid-19, leasing velocity was slow in the 2nd quarter, and effective rents are likely to decline in the months ahead. However, activity in the Washington area has been more robust than in many peer markets, suggesting that this market is poised for a speedier recovery when conditions begin to normalize.

5.  TPSS Co-op is suffering from the project and has a gag order to keep it silent.

Neither is true. Were the coop suffering financially, it may be due to the pandemic, not the NDC project which hasn’t even started yet. No “gag” order exists as such, but maybe an agreement to cooperate with NDC.

6. There are secret negotiations occurring between the City and the County.

This is Trump-inspired paranoia. The City’s planning staff work daily with the County’s planners out of a spirit of cooperation and because laws require it. The Junction project is no different. Takoma Park relies on the County because we lack planning or zoning authority

7.  The project is too high and needs to be one story.

Since when? Nothing in the project’s planning since 2014, including the TJTF Report, has ever suggested a 1-story facility. What an enormous waste of valuable commercial land. Many of the nearby houses are two and three stories tall. 

8.  The SHA has raised objections to NDC’s project.

Not so far. SHA has only released a draft of its Vision Study findings, which does not adddress traffic issues or solutions for the intersection.

In sum, project review by State and County agencies may be slow but is proceeding deliberately. Our City’s staff are just doing their jobs professionally. NDC’s completed project will be a major asset to the City and our local economy. 

Next: The library expansion

“You’re Fired !”

We are approximately 100 days away from the November 3 election, and it seems pretty obvious that Joe Biden will be our next president. Biden, I expect, will easily defeat Donald Trump if he hasn’t died before then. The Senate may fall to the Democrats. 

Trump’s support has been sliding over the past 90 days. Polling in the largest electoral states by reputable non-partisan pollsters shows unwavering leads for Biden. Even in red states like Georgia and Alabama, Biden is leading by small margins. That he would even be close to Trump, much less ahead, is a remarkable indicator. 

The reality TV host of The Apprentice that ran for 15 seasons is where Trump got his training for his next job on The President

Why am I this confident? Two reasons. The main reason is Donald Trump himself. He is uniquely abnormal. Normally one could reasonably argue that it’s too soon to predict the election; that dramatic events might occur; and that the incumbent has the power to capture the headlines or change his message.

But Trump will not change his message, his image or how he acts because he cannot. His deep personality disorder causes a lack of self-awareness. He knows only one script. You can put lipstick on a pig, but you cannot teach it to whistle. For his followers, they can happily take assurance in Trump not changing.

The second reason is that, in a sense, the voting is already over. Biden’s supporters are not going to change their minds. We are deeply dug in. Many Democrats dearly wanted Bernie Sanders or preferred Warren, Booker or Klobuchar, etc. And some fret over Biden’s age and malapropisms. But Biden doesn’t need to campaign hard as long as Trump keeps stepping on his own shoelaces. Republicans attack Biden as a tired member of the insider establishment in contrast to Trump’s “outsider” stature. Be that as it may, Democrat primary voters effectively decided that Biden had the best chance of beating Trump, and that’s that.

By the same token, Trump’s supporters are just as convinced of their guy. The persistency of Trump’s approval rating between 40 and 44% over 47 months is astonishing. 

The sides are far apart with no middle ground. It’s like the 1770s colonists who had to choose whether they were a Tory or a revolutionist.

Other variables factor into a Biden walk-away win. Covid-19 isn’t going away anytime soon, thanks largely to Trump’s refusal to lead. The hoped for “V”-shaped economic rebound clearly is not happening with major retailers filing bankruptcy and whole industries: air travel, cruise lines, hospitality, restaurant, entertainment, and collegiate and professional sports groping for oxygen. 

Add the cataclysmic Black Lives Matter movement. Unexpectedly, we are experiencing a defining moment in America’s racial relations from which there’s no turning back. Both conservatives and liberals are awakening to this. But Trump hasn’t and will not.

Why is Trump’s so-called “base” so steadfast? It isn’t because his supporters are stupid or uneducated. That’s an easy answer, but inaccurate. I have heard from too many Trumpers who are bright and involved. The answer is complex. Black Lives Matter has partially revealed the answer. 

Many white Americans are deeply distrustful of the federal government. (Why is a question for another day.) We all find change difficult. But these whites also have fear of “the others,” of immigrants, of non-Christians, of genetic differences, of sexual preferences and, yes, fear of equality. Trump engenders distrust of the media, scientists and the “deep state.” Racism runs so deep in our American character, only now has the scale of this fear among whites become manifest.

Trump speaks to these peoples’ deep, unspoken anxieties that few can admit to. But by cheering on Trump, they don’t have to. Trump does it for them. His supporters admit this when they say, “He says what I feel.” Trump’s other transgressions thereby pale before these existential anxieties. So, Trump is the hero/savior because he alone truly knows what they truly know.

Trump is first and always a reality show host who says “You’re fired” and humiliates the contestant. His White House years have been spent acting the part of a president, not being president, which he doesn’t care about. Trump is preoccupied with playing his role perfectly; whatever sustains his audience’s applause. He craves doing rallies where he performs on a real stage. In truth, Trump is nothing more than a serial masturbator who can’t stop. He will do this until November 3. 

Things are going to get crazy between now and January 20, 2021 before they get better.

Solving City Budget Mysteries

Concerns this year about the Coronavirus pandemic’s impact on the City of Takoma Park’s operations and residents’ welfare have caused residents to pay greater attention to the budget and budgeting process. Sadly, all this attention has revealed how little most residents understand the budget. Some people have huge misconceptions. Others distrust what they hear from the City. There’s a lot of confusion. And it is not anyone’s fault.

When it comes to the City’s budget, a huge knowledge gap persists between the City Council on the one hand and everyone else who lives in the city.

This is a serious problem that needs to be fixed and no one is doing anything about it. This lack of understanding makes it really difficult for taxpayers to intelligently comment on the budget. Public criticism often misses the target. Well-meaning residents want to make productive contributions to the budget discussions, but if they’re ill informed they get frustrated and feel like their concerns are falling on deaf ears. Councilmembers don’t benefit from the sound opinions they need to get from residents. 

From my own Council experience, I know this to be true. It just isn’t possible to take the time to thoroughly explains things to constituents. No one comes out a winner in this situation. At Council work sessions residents hear a lot of accounting jargon and Councilmembers’ disjointed questions and answers. Listening to Council work sessions that go on into the wee hours of the morning can’t teach us anything. Who can deal with that? No matter how clear the budget document is written, at 200+ pages it intimidates even the most plugged-in citizen.

A 3-Step Solution

My intention is to fix this in a 3-step process.

Step One, I explain the budget in plain English below: why the budget is structured the way it is, how it works; and the external realities that shape our budget. This is cursory overview. I truly wish I had had this information when I joined the Council in 2009. There was no one to teach me. 

Step Two, In order to elevate the dialogue, I recommend that the City set up a series of trainings for residents who want to learn about the budget. Today, there is no way to do that. (There never has been.) Four 2-hour sessions ought to give people a good start. 

Step 3. From those attendees, the City Manager should select five persons to serve on a new Citizens Fiscal Advisory Board. Members, while continuing to learn, will function as interlocutors between the community at large and the City’s Manager and Council. Their job will be to assist the City Manager year-round when needed and to grease the communication skids. 

As interlocutors, Fiscal Advisory Board members’ role will be helping residents to understand the budget process. Psychologically for many it is easier to grasp information in a casual setting from a fellow resident who’s not part of the decision-making apparatus, or part of a public debate.

In the other direction, Advisory Board members will provide early guidance to the City Manager and Councilmembers on things residents are concerned or confused about, and to offer help with solutions. This will be a new avenue to obtain community input. And ultimately it will elevate the dialog around the budget and other fiscal matters.

An existing entity similar in function is the Police Chief’s Advisory Board. I’ve advocated for a fiscal advisory board for years. Other cities do this. There is no reason we can’t. It will fill a huge knowledge gap and make Councilmembers’ jobs easier.

By the way, the City’s budget document is indeed praiseworthy. When I first clambered aboard the City Council in 2009 the first budget I saw was twice as thick and nowhere near as well organized. So things are relative.

Let’s be real. Municipal budgeting is extremely complicated. Believe me, it is hard even for the Mayor and City Councilmembers to decipher all of its components and make sense of it all. You can tell this by some of the clarification questions they ask the City Manager and the Finance Director.

So let’s get down to business.

8 Realities

We have to start with the big picture first. 

1) Divorce your perceptions of a municipal budget from your home finances and your business financial statements. The similarities are scant. But the contrasts can be very helpful to your understanding.

2) In Maryland, municipalities (except Baltimore) are at the bottom end of a food chain.

3) Small municipalities have very little control over their revenues.

4) There is no such thing as a “bottom line,” a profit or a loss. 

5) A business and an organization can fail or voluntarily cease, but a government never has that option. 

6) In local government expenses get paid daily, but revenues come in irregularly.

7) A budget is an educated best-guess plan for the next 12 months. The City rarely spends all the money it budgets for, but it must budget for all expenses as though it will. 

8) The idea of running a government like a business is a false hope.

A side note on terminology — The terms municipality, city and town are synonymous. Different places call themselves different things, like the Village of Chevy Chase, but in Maryland there are no legal distinctions. Either a place is duly incorporated as a municipality or it is not. 

What is Fund Accounting?

Governments use an accounting system call Fund Accounting. Except for the arithmetic, it has almost nothing in common with commercial accounting. Basically it’s a system for tracking income (revenues) the use of which is limited either by the entities that provide the money or by law. The system emphasizes accountability to the taxpayer rather than profitability. 

While a business’s revenue come from one basic source, the sale of products and services, local government’s revenue comes from a multiple sources. They include various taxes, fees, grants, governmental transfers, licenses and permits, penalties, fines, rents and loans. 

Due to these limits, a city must set up various separate accounts called “Funds” to keep it all sorted.

The Speed Camera Fund is an example. Maryland created the program in 2009 to control speeding on state highways only. All the money comes from speed violations. Most of the proceeds benefit the City, but State law requires it to be used solely for “public safety.” This money can’t be mixed with other money.

The City has four major funds: the General Fund, Stormwater Management Fund, Speed Camera Fund and Special Revenue Fund. The latter one is comprised of a number of distinctly funded projects (sub-funds), which the City must keep separate track of. In the draft FY 2020 budget there are 9 of these projects and some, like the Flower Avenue Green Street, have multiple grantors, creating an accounting nightmare. 

The City must account to each grantor that its funds were spent as intended. At the conclusion of a fiscal year, the City reports the ending Fund Balance, which is the net difference between income and expense with each Fund.

Budget Structure 

The budget binder is structured around departments and within departments by functions, which is how the chain of command works. If you want to know about a program, you have to know what department it is in. 

Interestingly, things like Funds, Reserves, Debt and the Capital Budget cut across department boundaries. 

Capital Improvement Program

The C.I.P. section in the budget is a large matrix that looks 5 years forward at how the City expects to spend money on tangible hardware and structural items like streets, buildings, equipment and stormwater. Primary focus is the upcoming fiscal year, which is included in the overall budget. All municipalities use a similar format to plan for the long term. It’s a good way to look at the City’s expenditures down the road. 

Reserves

The City Council creates individual Reserves. They accomplish several things. Most importsant is to assure the City doesn’t run out of money unexpectedly in case of an unforeseen major financial hit. The City uses the reserve to smooth out financial disruptions and avoid a sudden hike in tax levies. The Equipment Replacement Reserve (“ERR”) is an example. Another reason is to accumulate money for a certain desireable gosls, such as the Housing Reserve.

The City Council decides how to fund a Reserve and how and when to use the monies. Think of a Reserve like a family savings account. In one savings account you put money away for your kid’s college education so the money will be there for the dreaded day you have to write a tuition check. Another savings (i.e., reserve) could be a vacation fund for future trips.

The City has six Reserves. These include the: 

  • General Fund Reserve  
  • Equipment Maintenance Reserve
  • Facilties Maintenance Reserve
  • Emergency Reserve
  • Housing Reserve
  • Restricted Bond Reserve

The City Council controls each of these accounts, except for the Restricted Bond Reserve.

The Reserves are designated as “Unassigned” and “Assigned.” The funds in unassigned reserves, like the General Reserve can be used flexibly without constraint. Control derives from the Council’s discipline in sustaining it. The General Reserve is dipped into when cash runs thin to pay obligations. Payables are regular, but revenues arrive irregularly. So the General Reserve acts like a business line of credit whose balance goes up and down throughout the year. 

Assigned Reserves, like the ERR, have set mandates for how the money can be used. The City charts the longevity of each equipment item. Each year the City Council adds money to the ERR to assure that replacement equipment can be purchased per schedule. The Housing Reserve is a bit open-ended pending the Council’s decision on how to best make use of it.

Bonds and Debt

The Restricted Bond Reserve is a different animal. Money going into it comes from the City’s sale of bonds to finance really expensive projects that have a very long life span — like the Community Center (2005), the Public Works Yard (2010) and for the new library (2018). All of this data can be found in the “Debt Service” section of the budget binder. The City monitors its total debt burden so it stays within manageable proportions. 

The sale of a bond and the use of the proceeds are regulated by the State and federal government in order to protect the bond buyers (investors). The money must be used for its original purpose. Thus the City Council’s control is quite limited.

Revenues – The Cheese Stands Alone

As in any business, estimating future revenues is the hardest part of city budgeting. Doing so is ultimately an educated guessing game. Each year the new budget is built on the experience and outcome of the previous one.

The big problem is that the City has very little control over most of its revenues. Ninety-two percent of its inflows come from three sources: property tax (54%), income tax (13%) and intergovernmental revenues (25%). The City has a real “say” only over the property tax. 

In the song, the Farmer in the Dell, as children we learned that, in the end, the cheese stands alone. The “mouse takes the cheese,” but the cheese doesn’t take anything. Takoma Park is at the end of the line; it doesn’t get any choices.  

In Maryland a city has very limited chances to alter its revenue sources. It cannot create a new tax to raise money. (A county can.) We’re at the mercy of the Governor, the State legislature and the County. (This is where our District-20 Annaoplis delegation is so important.)

Maryland cities rely principally on the property tax for the largest share of their revenue. The State performs the property assessments every three years, and the city determines the tax rate annually. Unfortunately for us, the County and the State also tax real estate, which drives up our tax bills considerably. So even though Takoma Park may hold or lower its rate, the County effectively forces it up. 

It is unlikely property tax receipts will be affected by the pandemic because, first, property values would have to decline (unlikely) and the next assessment won’t happen until 2022. Property tax revenue is not where our City is vulnerable.

Takoma Park automatically receives a flat 17% of the income tax paid by Takoma Park residents to Montgomery County in the preceding year. This amount can vary considerably from year to year as residents’ income varies because of the effects of prosperity, recessions and economic turbulence like the Coronavirus. Income tax revenue receipts come in about 8 times a year due to different tax filings, according to the City Manager. Because this tax revenue is based on calendar year 2019 earnings, FY 2021 income tax revenues won’t be much affected by the pandemic.

Intergovernmental transfers represent more than 15 categories of programs and agreements by which funds come from the County and the State to the City. These infusions tend to be fairly stable year to year. Included our several “in lieu of” (a.k.a. “tax duplication”) grants from the County reimbursing the City for services we provide in lieu of the County. These transfer protocols are set by legislative acts, mutual agreements and political understandings. But the higher government can at any time reduce or terminate at its discretion. This has happened.

Expenses and Deficits?

Some people get terribly confused because the City seems to operate at a deficit some years. In FY 2019 the City had total revenues of $25.7 million and expenses of $27.0 million producing an operating loss of $1.3 million. How can this be? Aren’t local governments required to adopt balanced budgets? Yes they are. 

The City balances its budget by using money from its General Reserve when there is an operating deficit. In such cases the General Reserve shrinks. On the other hand, should major projects get delayed, or jobs become vacant, the city wins a grant or the State legislature increases programming support, then there could be a surplus.

Keep in mind that an adopted budget is just a plan; effectively it’s a best guess of what is likely to happen with revenues and expenses in the coming year. As the fiscal year progresses, adjustments get made; money needs to be shifted among accounts, and this requires the Council’s approval.

Otherwise, in a normal year expenditures are not complicated and are relatively predictable. Since this is not a normal year, the City Council is reducing expenses in favor of conserving cash and waiting to see how things play out pandemic-wise.

No More Mystery

The City’s Budget is complicated. That’s the nature of the beast. Even the brightest of people have difficulty dealing with it because it is unfamiliar. But it doesn’t need to be mysterious and off-putting. We as a city want and need informed participation. But to get that, we have to give folks a fair chance to be able to participate intelligently. The steps I’ve outline here will achieve that.

Nature Versus Society

Once the coronavirus became an obvious serious threat, I found myself struggling to find an historical precedent that could help make sense of the global magnitude and uncertainty of the event. I’m sure I’m not alone in this. It’s pretty natural to seek lessons from the past to guide us and give us heart.

The onset of World War II for America, as it turns out, may be the only comparable time in our national history. The War affected most of the world at the same time. It was probably the last event to do so until this year. So there are lessons to be learned. One thing we know, our society was hugely transformed by the Second World War as was much of the modern world.

That War and the the novel coronavirus have much in common. Let’s look back for a moment to try to imagine ourselves in that time. Then we’ll look to what our future might bring.

In 1941, the war in Europe had already been underway for two years while the U.S. officially remained neutral. Many Americans strongly opposed our entry into war. Folks like Charles Lindbergh and John D. Rockefeller thought Adolf Hitler was pretty cool. Meanwhile Japan was at war in the Far East. Our military leaders knew Japan was planning a major naval attack, but assumed it would be in the Philippines, and thus nothing to worry about. It was common knowledge that Japan lacked the wherewithal to stage an attack on our naval base in Hawaii.

So it was a total surprise when on the morning of December 7, 1941 the Japanese navy made a surprise aerial attack on Pearl Harbor virtually destroying America’s Pacific Fleet in a matter of hours. The shock was staggering. Everyone in America would remember exactly where they were when they heard the news. America wasn’t ready for war. Separated by oceans, America had felt safe and strong in its geographic isolation.

While we know America would win the war, back then absolutely no one could anticipate that outcome. The future was a blank, dark slate. The United States got caught with its pants down. And things would get a lot worse before they got better.

The commonality of today’s Covid-19 virus and America’s entry into WWII is this. Suddenly we were under attack from an enemy we didn’t see coming. No one could believe it. This hadn’t happened before. How could this have happened? What would happen next? Who is to blame? How will we survive?

On the radio the following day, President Franklin Delano Roosevelt spoke the famous words, “. . .  the day will live in infamy.” People listened to the FDR’s voice on the radio (if you owned one) for guidance, leadership and hope. There was no other voice. There were no TVs; only radio, your daily newspaper, some magazines like Life, Look and Time and the MovieTone News at the “picture shows.”

Four days later Germany declared war on the United States. Americans found themselves expecting direct attacks any day by the Germans and Japanese on the U.S. mainland. Air raid sirens and blackouts were routine.

The country’s economy and way of life were turned upside down in the ensuing months and years. Gradually people realized our country would never be the same again. Soldiers, seamen and airmen were shipping off to war with no return dates. Factories were shifted into war matériel. Women took over men’s traditional jobs. The Great Depression became a memory. Domestic goods were rationed: shoes, gasoline, nylons, butter, meat, cooking oil, rubber. People saved tin cans, string, bacon grease and rubber bands.

When Pearl Harbor was attacked I was not born yet, arriving a year later. I grew up during the war and then for years afterwards I heard stories of the experiences and sacrifices people had to make to contribute to the war effort. As a youngster in the 40’s and 50’s these deprivations and sacrifices became a normalized value that was bred into me and everyone else my age. Frugality was paramount. You cleaned your plate. We did not know any different. Almost every family in America had members in the service and many families lost close relatives in the war. Mine did too.

Looking Ahead

Cataclysmic events cause societal and economic changes that otherwise would possibly take a lifetime to emerge or never at all. When the proverbial dust settles the old normal is gone. It’s like Humpty Dumpty.  (Thank God for Mother Goose.) Societies look around for the broken pieces and shards and begin to rebuild, but it will be different. And, most importantly, everybody realizes that things have to be different. Don’t bother with Humpty.

That process has already begun to happen in America, in case you haven’t been paying attention. 

  • As vehicles disappear, around the world reports abound of dramatic drops in nitrous dioxide (NO2), a toxic gas mostly caused by vehicle emissions that harms the lungs of all breathing things especially asthmatics. New York City’s air pollution levels have already dropped 50%. Environmental scientists are calling this an accidental experiment that could never have been intentionally planned and carried out. But, remember the old WWI song lyrics: “How are you going to keep ‘em down on the farm after they’ve seen gay Paree.” Once the urban masses have seen the smog lift, tasted cleaner air and breathed deeply, they are not going to forget this and will be far more eager to protect clean air.
  • Witness a huge irony happening all around us. A truism: Nature is always the winner, eventually, when Society tries to resist it. Global warming is Mother Nature’s way of telling us that Society is screwing up the environment. Now Covid-19 may be helping us push back against global warming. Electric cars are going to part of our lifestyle sooner than we thought. Coal and Oil are on the way out. Could this lead to a big step in combatting climate change? 
  • A barrel of crude oil is selling at $24 today, forty percent of the price at the beginning of this year. This is partly because global demand has shrunk. Oil inventories are overflowing storage capacity. In the U.S., the fracking and refining industries could be gravely wounded. The Covid-19 pandemic may someday be looked back on as the beginning of the end of fossil fuel’s heyday.
  • Our health care system, already well out of control in terms of costs and access, has proven itself woefully inadequate. The pandemic has erased any doubt that millions cannot get the life-saving care they need when they lose their jobs. The practice of medicine, private and public, will have to be reorganized and paid for differently. Universal health care, for many an unattainable dream since the Nixon administration, and for others, a paradigm for rampant socialism, will now be realistically on the table. 
  • The stock market’s gigantic losses beyond anyone’s pessimistic imagination has shivered the timbers of investors, big and small, and possibly made financial planning (i.e., retirement planning) into an oxymoron. The stock market will someday rise again, but who wants to ride the roller coaster where the cars come off the tracks. 
  • A universal basic income (UBI) for certain elements of society will surely get a far more serious look. UBIs have been empirically tested in various forms over the years in different countries and may prove to be a viable path. The fact that in 2020 millions of households live from paycheck to paycheck and possess almost no financial resilience — even when fully employed — tells us that our economic system is fundamentally flawed. Covid-19 has exposed another critical societal divide between the citizens who don’t much need the safety net, and all the rest who find the safety net has gaping holes for them to fall through. Trillions of dollars of emergency legislation to stitch the gaping holes, only goes to prove how bad the situation has become in our country. People need to be able to earn enough to build to live and build a savings cushion. A $7.25 Federal minimum wage is a sharecropper’s allowance.
  • Maybe we have seen the first glimmer of the restoration of a bi-partisan Congress for the first time since Newt Gingrich proselytized the Republican Party’s “Contract for America” in the 1990s. Remember when a Republican dominated Congress under President Obama refused to spend money to expand Obamacare without offsetting cuts in other programs because, Republicans said, our country was “bankrupt.” Now Congress has allocated over two trillion dollars to salvage our economy. Wave bye bye to obsolete ideologies. Gee, whatever happened to the need for a balanced budget?
  • “Government is not the solution to our problem; government is the problem,“ said President Ronald Reagan in his 1981 inaugural address. That has been the mantra of the right for the past 39 years: less government is better government. The right has distrusted and denigrated our national government, alleging waste and inefficiency, and reaching its nadir with Trump’s fantasy about a “deep state.” Now that the almighty free enterprise system is staggering, big business stands at Congress’s doorstep, cup in hand, whining for government handouts. That happened in 2008 but the lesson did not sink in. Here we are again in 2020. Reagan may have been witty and clever, but he was wrong. Covid-19 will undoubtedly change a lot of corporate minds. 
  • Scientists’ credibility has hopefully gotten a giant shot in the arm. Anti-intellectualism, and the accompanying distrust and ridicule for expertise, excellence and genius, has pervaded our country for decades. Now maybe we’ll begin to see that change. Today it’s Dr. Fauci, head of the National Institute of Allergies and Infectious Diseases, who everyone wants to listen to, and not the bloviating President who hasn’t an original idea in his head. 
  • Businesses and educators are fast acclimating to remote work, remote instruction and remote meetings and collaboration. Is there anyone not learning about Google Hang Out, Zoom, Team Meeting and other apps? What does this mean for the future of job commuting, rush hour congestion, office building construction? Maybe we won’t need two more lanes added to the I-495 Beltway. It is time to guarantee broadband connection to every domicile in the U.S., just like water and electricity.
  • As working from home becomes routinely commonplace, sick leave and childcare issues may become far more manageable for certain employees and employers. 
  • Covid-19 is testing the resilience of families, no matter how they may be comprised and whether they live under one roof or are scattered across the globe. It’s fair to hope this pandemic is knitting those we love closer together.
  • Younger folks are naturally stressing over their parents’ and grandparents’ health, calling them, texting and FaceTiming. For many scholastic and college students the big stressors have always been the pressure of exams and project deadlines. Now, maybe not so much as Covid-19 gives new meaning to stress.
  • Marriages are being tested as couples cope with the lockdown and have nowhere to go. Maybe long overdue conversations are happening as we talk over meals, board games, jigsaw puzzles and dirty dishes. Perhaps we are finding better ways to listen to each other as we share existential anxieties, the what-ifs and the need to negotiate alone time amidst the togetherness.
  • Kitchens are being put to use as pizzas and carry-outs lose their luster. Expect the art of baking to rise again, dutch ovens being pulled down from the top shelf, and crock pots simmering soup and stews. With warming temperatures, I wouldn’t be surprised to see a keener interest in vegetable gardens. During WWII these were called Victory Gardens. Our own fresh produce tastes all the better for the labor put into it. We also hear more stories of chicken raising. 
  • Grocery deliveries are in high demand. Chains can’t hire people fast enough to fulfill the deliveries. What goes around comes around, they say. When I was boy there was the milkman, the egg man, the bread man and the Fuller Brush man. The idea of home delivery is not new.  Right now the idea of eggs and milk being delivered to our door seems pretty desirable. 

LEGACIES

How do we keep our distance and yet stay emotionally close?

Here is the point where WWII and Covid-19 don’t compare anymore. My friend Erwin pointed out to me that for the first time in world history, all mankind is united in facing a common enemy. Think about it.

This is a time of unification. The human impulse in times of trial is to gather with others and put an arm around someone’s shoulder and squeeze. (I remember on 9/11 hugging the fire chief of Steamboat Springs, Colorado where we were at the time. He was dressed in a very starched white shirt.)

But we can’t do that.

Isolation runs counter to our nature as social beings. It doesn’t feel right because it isn’t. Our emotional wellbeing depends not just in communicating with one another — we can do that easily — but being literally with other people even if we don’t know them. When we visit a library, attend a ballgame, or shop in a store we unconsciously bond to all those around us who are sharing the same experience. If you doubt that, think how it feels to be the only customer in a restaurant or the first person to show up at a party. It feels strange and uncomfortable. 

With proximity we have eye contact, body language and inadvertent physical contact. We wear our public face and match our behavior to the occasion. Being seen in public by others awakens our self-consciousness and triggers spontaneity.

My deepest concern is the loss of community. Community forms a huge part of our identity whether it’s where we worship, our work colleagues, classmates, a circle of friends, a Veterans organization, the places we frequent, the team we root for, the politics we espouse, or the town we call home. 

The pandemic weakens our community as it threatens our lives. The core institutions that structure our lives: schools, colleges, theaters, libraries, museums, sports venues, and the forums for public discourse and protest have suddenly become fragile and tenuous.

Video technology helps sustain work connections and education, but ultimately it is a temporary artifice with limited utility. It is painfully clear video cannot substitute for the efficacy of human propinquity. If you doubt that, try flirting romantically during a Zoom meeting. So, the question becomes how long can this isolation be sustained before we lose social continuity.

Many small business are going to close if the lock down goes beyond another 30 days. This will be tragic. Economists say we are headed for a big recession and sustained unemployment. Government loans will pay bills and wages, but small businesses depend on customers to survive. People in the entertainment world are suffering mightily. 

Most unfortunate is that at a time when we need to rely on our faith to pull us through, churches, synagogues, temples and mosques are sealed off. It is a shame that religious leaders cannot find ways to lead outdoor services in parks or parking lots. Practicing our faith alone is not the same as congregating with others, even if at a distance. Jesus didn’t need a temple to give his sermons.

Regarding our doctors, nurses, and first responders, America after the Second World War treated our warriors as heroes when they came home and honored them in many ways. It’s been 75 years since those victory parades. In 2020 our front line people dealing with Covid-19 daily are risking their lives just as much as the ones who fought on the Pacific islands and on the beaches of Normandy, and who can stand beside our 9/11 World Trade Center heroes.

Thousands of other heroes in America today include our scientists, journalists and reporters and, of course, the cashier at the grocery store. This will be the greatest legacy of our surviving and ending the Covid-19 Pandemic.

I have a feeling that next November 26 for all of us under age 81, Thanksgiving will have a far deeper meaning than it has ever had before.

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