STOW -- City Council has approved the city's 2017 permanent budget appropriations, but not before removing around $1.5 million in proposed "placeholder" spending in connection with a possible loan that the city may take out to do stormwater projects.
Council unanimously approved the roughly $60 million budget March 23. Under state law, the permanent budget appropriations had to be approved by the end of March. The city had been operating under a temporary budget in the meantime.
The approval came after Council voted 4-3 to approve a motion made by Councilor Brian Lowdermilk to remove $1.5 million from the stormwater utility fund bonds and notes line item.
Council members Jim Costello, Brian D'Antonio and John Pribonic voted against the Lowdermilk motion.
In Council's finance committee meeting, before the regular meeting, Budget and Management Director John Earle said the $1.5 million is a contingency in case the city decides to take out a loan for stormwater projects later in the year. He said it is unclear whether there would be a loan and how much it could be, but if there is, Council would have to authorize both taking it out and spending it on projects.
Earle said the $1.5 million in the budget would be "simply a placeholder."
"Everything regarding that borrowing would come back through Council," he said. "It would not be done without Council's authority."
Finance Director John Baranek said approving the $1.5 million as part of the budget appropriations now eliminates the need for a third piece of legislation if a loan is taken out to include it within the budget.
"Leaving it in the budget is actually eliminating a step," he said.
Lowdermilk, however, questioned its inclusion, explaining it troubled him that the budget appropriations include funding that the city does not know it will have.
"I don't know it's a foregone conclusion that Council's going to approve to leverage that new [fee increase] money," he said. "I'd like to see the budget reflect actual numbers myself."
According to figures provided by Baranek, this year's appropriations for all funds total about $107 million; however, that figure includes money that was counted twice due to transfers from the general fund to other funds, making overall appropriations roughly $60 million. General fund appropriations, not counting the transfers, are about $31 million. Last year's overall expenditures totaled about $63.37 million, including about $27 million for the general fund.
Baranek has said the 2017 appropriations are much higher than the 2016 expenditures because they include transfers between funds which, for accounting purposes, are counted twice, once in the fund the money is transferred from and the second time in the fund they are transferred to.
Income tax collections were about $15.5 million in 2016, about what they are projected to be this year. By comparison, the city previously reported a little over $14.4 million in income tax revenue for both 2013 and 2014 and a little under $15.1 million in 2015.
The total cash balance left at the end of 2016 in all funds was about $22.35 million, including nearly $5.08 million in the general fund. The projected cash balance at the end of 2017 for all funds is a little more than $22 million, including nearly $4.74 million in the general fund.
These general fund balances include the general fund's $1 million rainy day fund for emergency use.
By comparison, the general fund ended 2015 with a $4.52 million balance, including the rainy day fund.
Earle has said the reduction in the general fund balance between the ends of 2016 and 2017 is due to about $340,000 being used from the surplus to help balance the books.
At the end of 2015, $550,000 was used from the balance to bring the city's books into balance.
Earle has also said $313,000 in the general fund surplus at the end of 2016 was due to a "number of payroll factors," some of which are potentially repeatable for 2017.
These included lower overtime costs, thanks in part to a mild 2016 winter that cut down on the need to plow and salt roads, and savings related to retirement pay, workers comp claims and low health care claims. Earle said last year's mild winter also cut down on salt costs.
Facebook: Jeff Saunders Record