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Frostburg staff previews FY2026 draft budget, proposes $2 monthly garbage rate increase
Summary
City staff presented highlights of the draft fiscal year 2026 budget, reported remaining ARPA obligations, and recommended a $2-per-month residential garbage rate increase to avoid a projected fund loss.
City staff presented highlights of the draft fiscal year 2026 operating budget and said the city will present a formal budget ordinance at next month’s council meeting.
The finance presentation said the draft operating budget covers the corporate (general) fund as well as water, sewer, water surcharge and garbage funds. Staff said the proposed real estate tax rate in the draft maintains the current rate of $0.70 per $100 of assessed value; the Maryland Department of Assessments’ constant-yield rate for the year was cited as $0.6639 per $100. The presentation said utility funds must be self-supporting through user fees and grants, and the draft assumes current rates and fees for water, sewer and associated surcharges.
The city noted remaining American Rescue Plan Act (ARPA) funds have been obligated to specific purchases and projects, including a plow truck, a street sweeper, portions of the roundabout design and a portion of Combined Sewer Overflow (CSO) phase 10a design. Staff said ARPA obligations required by prior deadlines were entered and that funds must be expended by December 2026 or returned; reporting to the federal program will continue until funds are spent.
To address an anticipated shortfall in the garbage fund, finance staff recommended the mayor and council consider a $2-per-month increase to the residential garbage rate (about $0.50 per week). Staff said without a rate increase the garbage fund would operate at a loss under estimated next-year expenses. The draft municipal fees and budget documents are available on the city’s public meeting portal, the presentation said.
Finance staff also announced the upcoming retirement of Deborah Heath from the finance department on March 28 after nearly 16 years of service and invited the public to offer congratulations.
Council members asked clarifying questions about ARPA reporting and the timing of obligated purchases; staff said obligated ARPA funds remain under city control but must be reported and expended according to federal deadlines. No formal budget ordinance vote occurred at the meeting; staff said the ordinance will be presented at the next meeting for formal action.
