By Jeff Gallatin
City Council gave final approval to the 2013 budget Monday a few days before the filing deadline, but officials noted it’s likely not the last time the city will have to consider issues with it.
“A budget is living, changeable document through the year,” Mayor Debbie Sutherland said prior to the meeting. “It rarely stays as you perceive it when you first approve it, and this year it’s likely we will see some changes in the course of the year. This year, it started with a large (more than $500,000) projected revenue shortfall and we had to make some tough choices as a city, but we’re coming through it.”
Sutherland again noted the decrease in state funding to the city coming via the elimination of the estate tax, the reduction in the local government fund and reduced revenues in other areas. In addition, Sutherland and other area government officials have been keeping a close eye on proposals in the state legislature to streamline the income tax collection system for businesses. Sutherland and the others have been expressing major concern about the state possibly taking over more control of the income tax collection in lieu of RITA (Regional Income Tax Agency, the regional tax collection entity that collects income taxes for Bay Village and other northern Ohio cities), and Ohio cities losing even more revenue as a result.
“That’s not a hit we can afford to take,” Sutherland said. “Losing more revenue as a result of more state changes would hit jobs and services not only in our city, but many others.”
By law, the city had to file a balanced budget with the state by the end of March, which is Sunday. As has been the case the last few years, both Sutherland and council said the choices they’ve had to make are not easy on how to make anticipated revenues and expenditures for the city balance out. This year, the city privatized the city building department and approved having Colorado-based SAFEbuilt take over those duties for the city, effective May 1. City administration projections are that the change will save several hundred thousand dollars for the city.
With a general fund budget of $10.76 million for 2013, Sutherland said the savings will make a difference.
“We likely will have to make other changes through the year as we deal with different situations,” she said.
In addition to the privatization, council Monday approved legislation altering the allocation of income tax receipts used for equipment replacement and related expenses in the 2013 budget. Normally, council would spend anywhere from 2 to 4 percent of the income tax receipts in that area.
However, Mike Young, chairman of city council’s Finance Committee, said this is a good year for the city to reallocate those funds to help cover the projected revenue shortfall and cover other areas of the general fund.
“We don’t have a lot of major equipment needs and other projects in the budget which need to be dealt with right away,” he said. “A lot of them are expected to start later in the year or even towards the start of 2014, which means the bonds and bills for them as well as other expenditures don’t have to go in this year’s budget.”
Young said he prefers keeping the amount of funds allocated for the equipment replacement and related expenses flexible each year, depending on the city’s needs.
“This year it works out that we can use less of it in that area,” he said. “We still will have some major street and sewer projects, which will be taken care of.”
He said officials also managed to keep the general reserve fund at $980,000 this year and did not have to raise any of the municipal service fees.
“We’ll be able to get an earlier start again next year,” he said. “Our new finance director (Renee Mahoney) hit the ground running this year and will be even more knowledgeable about the city for next year’s budget.”