Frostburg staff present balanced budget ordinance that relies on fund balance and trims expenses

City staff presented a proposed budget ordinance that would close a budget gap by using fund balance and trimming planned expenses while keeping most tax and utility rates unchanged.

The ordinance before the Frostburg City Council shows total projected citywide revenues of about $17,600,000 and total expenses near $17,400,000. To reach balance, staff said the plan uses fund balance in the corporate fund and in the waterfront fund and reduces several departmental line items and planned capital outlays.

Staff said the draft budget presented last month included a 5% across‑the‑board salary increase for full‑time employees; the ordinance reduces that to a 3% general increase while preserving targeted increases for four police officers and three street‑department promotions. The city also removed the intern stipend and seasonal recreation wages from the salary accounts, and lowered the retiree payout liability to reflect only the incremental accrual since June 30, 2024; staff estimated those salary adjustments reduce expenses by about $94,000 across funds.

On utilities, staff recommended keeping current water and most utility rates unchanged while increasing the garbage fee by $2 per unit per month. The fee schedule also adds a new leak‑adjustment protection program tied to the Servline agreement: a monthly charge of $1.70 per single‑unit residential account, with an opt‑out option before the fee begins.

Staff warned the water fund remains stressed under current rates. The ordinance reduces planned capital outlays, including removing $200,000 for planned water‑line replacements, and trims the MES filtration contract and transmission main budgets; staff said those reductions were necessary to balance the fund but leave little capacity for proactive projects or emergencies. Separately, staff added a $172,000 line item for a well‑exploration project to the water surcharge fund but said the city will not pursue the work unless grant funding covers a large portion (staff estimated a likely grant share around 60%).

Sewer‑project timing also changed: staff and outside engineers reevaluated the projected CSO (combined sewage overflow) schedule and reduced the portion expected to be completed in fiscal year 2026. That revision accounts for roughly a $2.9 million decrease in projected sewer fund activity between the draft budget and the ordinance, primarily reflecting adjusted timing for grant and loan drawdowns.

Staff described the garbage fund as showing a modest net positive in the ordinance that will begin to rebuild the fund balance after a shortfall in the prior fiscal year. The city’s target unassigned fund balance is set by Resolution 2011‑52 at 30–50% of expenditures; staff said Frostburg ended the prior year roughly $158,000 short of that target in unassigned balances.

Staff emphasized that the ordinance is presented as the balanced version the council will consider; no final adoption occurred during the discussion. Staff offered to answer further questions and noted the ordinance will move forward for formal consideration at first reading next week.

Ending: Council members asked for clarifications on individual line items and next steps. Staff said they will provide follow‑up details ahead of the ordinance’s first reading.