A public hearing and discussion of the fiscal 2013 city budget highlight the agenda for Monday’s meeting of the Rockville City Council.

The council meets at 7 p.m. at City Hall. The meeting will be carried live on Rockville 11.

The council will continue its review of council members’ responses to budget preparation surveys. City staff uses the surveys to develop the budget around priorities set by the council.

In an interview last week, Mayor Phyllis Marcuccio explained her decision not to respond to the budget survey directly and instead released notes that detail her thoughts on specific budget items.

Marcuccio also said she is concerned about how a nearly $2 million decrease in property tax revenue will affect the city’s bottom line.

The city has been expecting the decrease in property tax revenue, Gavin Cohen, the city’s chief financial officer said Jan. 23 during the first discussion of the fiscal 2013 budget.

“This is really the first time that we’re going to be budgeting a revenue decrease for this particular line item,” Cohen said. “It’s also the first time that the council will have experienced, for a long time, decreases in assessed evaluations.”

The state assessed property values for half of the city earlier this month and recorded an approximately 6 percent decrease in assessed value, he said. The other half of the city will be assessed in Jan. 2013.

“Unless something really different happens between now and then, I think we’re going to see something similar when that other half gets assessed,” Cohen said.

During the Jan. 23 discussion, the council said it would include a 1 percent salary increase for city employees—for now.

The increase, which would cost an estimated $350,000, could be eliminated if the council finds it needs the money later in the budget process.

Even with the 1 percent increase, the cost to the city of salaries and benefits is expected to be down this year, due to attrition and other factors, Cohen said.

Cohen said he expected to be able to give the council the “big picture” on personnel costs at tonight’s meeting.

Marcuccio said Jan. 23 that she would like to revisit the increase as “one of the last items” toward the end of the budget process, once the council knows whether revenues will cover other priorities.

Councilwoman Bridget Donnell Newton agreed with that approach and suggested that the council set aside the pay increase as something that the council would like to do.

“I was just trying to have the conversation without making this a definitive, definite, everybody’s in a box and you can’t change your mind,” Newton said.

The council has always been able to make budget changes right up until the final vote, Councilman Mark Pierzchala said.

“Nobody’s in a box,” he said.

The council can revisit any budget item, Cohen said. The increase was one of the first items considered because “personnel costs are the biggest item within in our budget,” he said. “Not knowing what to do by way of an increase severely hampers our ability, literally, to get a budget together.”

The debate underscores a concern that Marcuccio said she has with the budget process.

Marcuccio and Newton did not respond to the survey item about the salary increase. Marcuccio did not respond to any of the budget items in the survey, which uses a range of responses from “strongly disagree” to “strongly agree.”

During the Jan. 23 meeting, Marcuccio said she did not fill out the survey because she wanted “latitude” and more information about the budget before committing to a position. “I thought it might sway or give an impression to a direction that maybe I’m not ready to go in,” she said.

Instead, Marcuccio provided notes on specific budget items to the council. Those notes, which can be viewed by clicking on the PDF at the right of this article, offer clear opinions on some items and ask questions about others.

Marcuccio said in an interview that she feels that the surveys were more helpful during last year’s budget process when they were discussed at the beginning of November 2010. With last year’s Nov. 8 city election pushing this round of budget discussions later, “We’re two-and-a-half months behind on our budget,” she said. “I want to move us forward so we can make up some time.”

“I didn’t want to be locked in to having picked an opinion” on budget priorities, Marcuccio said.

The council on Jan. 23 also decided—without a formal vote—against instructing staff to include in the budget proposal a 3.2 percent pay raise for the mayor and council.

The mayor earns $25,750. Council members each earn $20,600. The increase, which had been recommended by the city’s Compensation Commission, would have cost the city $3,491.

On the budget surveys, council members Tom Moore—the immediate past chairman of the Compensation Commission—and Pierzchala said they strongly agreed with the recommendation. Newton marked “agree” with the recommendation. Councilman John Hall marked “disagree.” Marcuccio said in the notes she provided colleagues that she too disagreed with pay raises for the mayor and council.

In light of the budget process, Newton—also a past chair and longtime member of the commission—said that she would change her position on a council pay raise.

“If we get to the end and we’ve got extra money, we can talk about it, in my opinion,” Newton said on Jan. 23. “But there is a lot of other things that are more important to me than compensation.”

The council will hold additional budget work sessions in the coming months. Budget adoption is scheduled for May 21.