Sec. 20-56. Establishment of Guidelines.

   (a)   General. The Council must adopt spending affordability guidelines for the aggregate capital budget under this Article.

   (b)   Content. The guidelines for the aggregate capital budget must specify the:

      (1)   total general obligation debt issued by the County that may be planned for expenditure in the first fiscal year under the capital improvements program;

      (2)   total general obligation debt issued by the County that may be planned for expenditure in the second fiscal year under the capital improvements program;

      (3)   total general obligation debt issued by the County that may be approved under the 6-year capital improvements program;

      (4)   total amount of debt, except refunding bonds, issued by the Maryland-National Capital Park and Planning Commission that may be planned for expenditure in the first fiscal year under the capital improvements program for projects in the County;

      (5)   total amount of debt, except refunding bonds, issued by the Maryland-National Capital Park and Planning Commission that may be planned for expenditure in the second fiscal year under the capital improvements program for projects in the County; and

      (6)   total amount of debt, except refunding bonds, issued by the Maryland-National Capital Park and Planning Commission for projects in the County that may be approved under the 6-year capital improvements program.

   (c)   Procedures.

      (1)   The Council must adopt spending affordability guidelines for the aggregate capital budget, by resolution, not later than the first Tuesday in October in each odd-numbered calendar year.

      (2)   The council must hold a public hearing before it adopts guidelines under paragraph (1).

      (3)   The Council may delegate responsibility for monitoring relevant affordability indicators to its standing committee with jurisdiction over spending affordability matters.

      (4)   Not later than the first Tuesday in February of each year, the Council may, subject to paragraph (5), amend the resolution establishing the guidelines to reflect a significant change in conditions. An amendment may alter a guideline by either an upward or downward adjustment in dollar amount.

      (5)   Any upward adjustment of a dollar amount under paragraph (4) for a guideline required by subsection (b)(1), (b)(2), (b)(4), or (b)(5) must not exceed 10%. (CY 1991 L.M.C., ch. 29, § 2; 1997 L.M.C., ch. 33, § 1.)

Sec. 20-57. Affordability Indicators.

   In adopting its guidelines, the Council should consider, among other relevant factors:

   (a)   the growth and stability of the local economy and tax base;

   (b)   criteria used by major rating agencies related to creditworthiness, including maintenance of a "AAA" general obligation bond rating;

   (c)   County financial history;

   (d)   fund balances;

   (e)   bonded debt as a percentage of the full value of taxable real property;

   (f)   debt service as a percentage of operating expenditures;

   (g)   the effects of proposed borrowing on levels of debt per-capita, and the ability of County residents to support such debt as measured by per-capita debt as a percentage of per-capita income;

   (h)   the rate of repayment of debt principal;

   (i)   availability of State funds for County capital projects;

   (j)   potential operation and maintenance costs relating to debt financed projects; and

   (k)   the size of the total debt outstanding at the end of each fiscal year. (CY 1991 L.M.C., ch. 29, § 2; 1997 L.M.C., ch. 33, § 1.)

Sec. 20-58. Approval of Capital Budgets.

   Any aggregate capital budget that exceeds the spending affordability guidelines in effect after the first Tuesday in February requires the affirmative vote of 8 councilmembers for approval. (CY 1991 L.M.C., ch. 29, § 2; 2022 L.M.C., ch. 40, § 1.)

Article XI. Spending Affordability-Operating Budgets.

Sec. 20-59. Definitions.

   In this Article, the following terms have the meanings indicated:

   (a)   "Operating budget" means the total amount appropriated from current operating revenues for the ensuing fiscal year, including any current revenue funding for capital projects.

   (b)   "Aggregate operating budget" means the operating budget, minus any amounts appropriated for:

      (1)   enterprise funds;

      (2)   the Washington Suburban Sanitary Commission;

      (3)   expenditures equal to tuition and tuition-related charges estimated to be received by Montgomery College; and

      (4)   any grant which can only be spent for a specific purpose and which cannot be spent until receipt of the entire amount of revenue is assured from a source other than County government.

   (c)   "Council" means the County Council. (CY 1991 L.M.C., ch. 30, § 1; 1997 L.M.C., ch. 35, § 1; 1999 L.M.C., ch. 21, § 1; 2008 L.M.C., ch. 32, § 1.)

Sec. 20-60. Adoption of Guidelines.

   (a)   General. The Council must adopt spending affordability guidelines for the operating budget in accordance with this Article.

   (b)   Content. The spending affordability guidelines for the operating budget must specify:

      (1)   a ceiling on funding from ad valorem real property tax revenues; and

      (2)   a ceiling on the aggregate operating budget.

   (c)   Procedures.

      (1)   The Council must adopt spending affordability guidelines for the operating budget by resolution not later than the second Tuesday in February of each year.

      (2)   The Council must hold a public hearing before it adopts the guidelines under paragraph (1).

      (3)   The Council may delegate responsibility for monitoring relevant affordability indicators to the Council’s standing committee with jurisdiction over spending affordability matters. (CY 1991 L.M.C., ch. 30, § 1; 1992 L.M.C., ch. 30, § 1; 1997 L.M.C., ch. 35, § 1; 1999 L.M.C., ch. 21, § 1; 2008 L.M.C., ch. 32, § 1.)

   Editor’s note—1999 L.M.C., ch. 5, § 1, states: "Notwithstanding any provision of Chapter 20 of the County Code to the contrary, including Section 20-60(c)(4) and Section 20-62, the County Council may increase the spending affordability guideline for the aggregate operating budget for fiscal year 2000 by more than 1% over any guideline previously adopted.

Sec. 20-61. Affordability Indicators.

   (a)   Factors. In adopting guidelines, the Council should consider, among other relevant factors, the condition of the economy, the level of economic activity in the County, trends in personal income, and the impact of economic and population growth on projected revenues.

   (b)   Advice. To assist the Council in adopting guidelines, the Finance Director must each January, and at other times as necessary, consult with independent experts, who need not be County residents, from major sectors of the County economy. The experts should advise on trends in economic activity in the County and how activity in each sector of the economy may affect County revenues. The Director must report the experts’ views, if any are received, to the Executive and Council. (CY 1991 L.M.C., ch. 30, § 1; 1997 L.M.C., ch. 35, § 1; 1999 L.M.C., ch. 21, § 1; 2008 L.M.C., ch. 32, § 1.)