Village General fund deficit forecast
- Published: March 6, 2014
At a special budget review before the Feb. 18 Village Council meeting, Finance Director Melissa Vanzant projected that the Village 2014 general fund budget will have a shortfall of about $500,000, a significantly bigger gap between revenues and expenses than in recent years. The general fund, which pays for most Village people-oriented services, along with streets, is generally regarded as a barometer of a community’s economic health.
The budget topic was part of Council’s 2014 budget review and did not include a vote. Council will continue discussion and vote on the projected budget at its March 3 and March 17 meetings; the budget must be approved by April 1, according to state law.
The 2014 general fund budget projects revenues of $2,691,692 and expenses of $3,162,530.
The projected 2014 shortfall can be linked to both an increase in expenses and a decrease in revenues, according to Vanzant. Specifically, the budget includes increases in personnel and contractual services related to the current search for a new Village manager and subsequent hiring, along with a drop in revenues from the estate tax, a state revenue source that has been discontinued. In 2013, the Village received final, unexpected payments from the estate tax of more than $300,000, but no significant estate tax revenues are expected in 2014, according to Vanzant. The budget also projects income tax revenues of about $100,000 less than in 2013, although Vanzant said that number was not based on new information but on previous budget projections.
The 2014 general fund projected deficit of about $500,000 compares to a 2013 shortfall of about $48,000, with revenues of $3,140,342 and expenses of $3,189,339, and, in 2012, revenues of $2,725,444 and expenses of $3,189,339. The general fund also currently has a surplus balance of about $2 million.
The Feb. 18 meeting discussion around the general fund was brief, with Council President Karen Wintrow expressing concern about the need for more revenues.
“The bottom line is that we’re almost a half million in the red with just operating costs,” Wintrow said, stating that the deficit “doesn’t surprise me” because the Village has been eating into its reserves.
However, Council member Lori Askeland saw things differently, stating that, “We’ve been building our reserves the last few years.” However, she said, citing state revenue sources such as the estate tax revenues, “those things are going away.”
The Village’s current surplus balance is considerably more than the 25 percent of the general fund that former Finance Director Sharon Potter described as best practice to keep in reserve. However, at a previous 2014 budget review meeting, Vanzant emphasized that three out of the Village’s four utility funds have projected deficit spending next year.
See the Feb. 18 Council packet at yso.com for a detailed look at the projected 2014 Village general fund budget.
Police request hike
At a special budget review meeting on Monday, Feb. 24, Council member Lori Askeland raised questions regarding the 2014 police department budget, which is the single biggest expense in the general fund budget and which showed a significant increase this year. In 2014 the department has requested $1,404,572 out of total general fund expenditures of $3,161,530, compared to its 2013 budget of $1,123,885. The increase is linked to the request for an additional police officer and two part-time dispatchers, according to Vanzant. Police Chief Anthony Pettiford, who attended the meeting, has repeatedly stated his desire for two police officers on duty at most times. The 2014 budget request would allow double officer coverage for all peak times, Pettiford told Council, with only the early morning hours covered by a single officer.
Having two officers covering the village enhances officer safety, Pettiford said, and also allows the police more flexibility in aiding other departments, such as the Greene County Sheriff’s Office, should the need arise.
“There are so many variables if there’s just one car in the village and someone else needs help,” he said. “We can better serve the community if we have two cars.”
Council member Marianne MacQueen, who was out of town Monday night, had sent a written statement to Council regarding her concern over the general fund deficit and questions regarding the police department requests.
“We are not a high crime community and we have a lower population than in the past as well as a lower college student population,” MacQueen wrote. “Even though we do have bleed-over from neighboring communities where crime is more of an issue, I question whether we need the number of personnel in this department.” MacQueen wrote that she would not support hiring new personnel.
What projects necessary?
In other budget business on Feb. 24, Council heard from Village crew leaders regarding capital needs in the village. Streets and water distribution head Jason Hamby explained requests for about $1 million in capital improvements for 2014 for streets, parks, water distribution and library upgrades, although he emphasized that not all of the projects are pressing.
“These projects aren’t all necessary this year, but we want to get them on your radar,” he said.
Funding for streets, parks and the library all come from the general fund, while the water fund covers water distribution needs.
And some of the needs can be addressed with current surplus balances in various smaller funds (also part of the general fund, except for water and electricity), Vanzant said. For instance, the street fund has a balance of $279,019, the parks fund has $321,755, the facilities improvement fund has $319,233, the water fund has a balance of $240,262 and the electric fund has a balance of almost $2 million.
Spending some of that surplus on necessary projects makes sense, according to Askeland.
“I think we need to invest and do some of these improvements,” she said.
Council members agreed on several capital projects they see as priorities. While a new building for Village crews at Sutton Farm has been on the capital projects list for years, it has never been addressed, and currently crew members have no facility in which to shower or change clothes. Providing basic comforts to crew members seems critical, Askeland said.
“This would be an investment that protects us in the long run,” she said.
Council members asked Hamby to gather information regarding relatively inexpensive ways to construct a new building, such as a pole barn model, and bring it to Council. Council members also prioritized fixing sidewalks around Mills Lawn School, and asked for an estimate for those repairs. Hamby said he also hopes to complete sidewalk repairs downtown, for about $180,000.
Other capital project 2014 priorities identified by Hamby include a new roof on the library, to replace the current one that leaks inside, for about $150,000; two new box spreaders for streets, which will allow more efficient road salting, and a new dump truck for $135,000, although the cost could be spread over several years. Parks improvements include a new $70,000 bridge over the spillway at Ellis Park, where a villager had a serious fall last year and $20,000 for enhanced shelter from sun exposure at Gaunt Park pool. Upgrades to the skate park at about $35,000 are also needed, Hamby said.
What is not needed is significant improvements to Village streets, according to Hamby, who said that the Village has largely completed its promise to upgrade streets that accompanied the request for a tax levy increase in 2006.
Electric fund capital improvements needed this year include completing street light upgrades for $100,000 and upgrading a traffic signal at East Enon and Dayton Streets for $12,000, according to crew head Johnnie Burns. The Village also needs sewer system upgrades on Limestone Street for about $85,000 to accomodate the planned new Mills Park hotel, along with sewer treatment system lift station improvements, according to Water Superintendent Joe Bates.
• Council’s next meeting, at which it will further discuss the 2014 Village budget and take the first vote, will be Monday, March 3, at 6 p.m. in Council chambers.