COLUMBIANA - The city should end this year with $164,000 more than it had to start with, but more spending is reflected for nearly all funds, according to 2013 budget projections.
Finance Director Mike Harold presented the budget to council recently and explained revenues are down as a result of cuts to local government funding (LGF) and increasing self-funded health care costs, among other things.
He said the city has lost about $40,000 in LGF as a result of the state budget cuts. The city will also no longer receive estate taxes this year as a result of the budget cuts.
The cuts are reflected in the city's general fund, which will decrease by $66,663 over this year as a result of spending. The fund is currently at $343,842 and is projected to be at $277,178 by the end of the year.
According to the budget, the city is expected to take in $1.77 million and spend $1.8 million in the general fund alone.
Expenses include administrative costs - including the roughly $40,000 combined payout to former city manager Keith Chamberlin and service director Jay Groner for accumulated sick and vacation time.
Other expenses in the general fund targeted for this year are professional fees for labor negotiations with the police department. The department accounts for roughly 62 percent of the general fund and the union contract runs out this year, Harold said.
Police Chief Tim Gladis noted some money is being saved this year since the 1 percent longevity bonus was eliminated for new hires.
"We negotiated a tiered salary structure with the last contract we did ... we finally got (the longevity bonus) out for the newer hires," he said.
The two newest officers, and any officers hired in the future, will not receive the annual bonus although they will receive increases through the tiered structure.
Harold said the department only spent 92 percent of its budget last year. The remaining eight percent went back into the general fund.
"Hopefully we won't have to use all the money that we set up in the budget," he said.
Harold met with all department heads prior to establishing the overall budget projections.
Gladis said the projections for this year are "based on real numbers" and added the department is operating on funding levels that were better than they were five years ago.
"We found ways to save money in the overtime budget. We were able to get equipment through the Department of Homeland Security grants," he said.
The department is expecting to purchase a new cruiser as part of its five-year life cycle replacement program and that expense was also built into the fund, Harold said.
The Ford Explorer cruiser will be purchased through a state contract and will replace one of the older Chevy cruisers, Gladis said.
The department typically spends about $36,000 on the new cruisers through the program, equipment included.
One of the few funds in which expenditures will not exceed revenues is the fire levy fund, which is currently at about $426,000.
Harold said the levy fund was first used last year and that the fire department is no longer accounted for in the general fund. The fund will increase by $39,600 over the year.
The city is expected to spend about $112,370 more than it will take in with regards to the self-funded health care program, according to the projections.
The city normally budgets around $900,000 but Harold increased that amount to $1 million as a result of additional costs toward the end of 2012 when several serious claims resulted in needing more money in the fund.
Council is considering leaving the self-funded program.
More money will also be spent out of the EMS fund this year through the purchase of a new box ambulance.
EMS Director Tom Farley said the ambulance would cost about $130,000 and the expense has already been factored into the budget.
He said a new one is needed because the current ones are late 90s or early 2000-models. The 1999 ambulance is at 117,000 miles.
Harold said the ambulance would be financed through a loan. Once a loan is granted revenues in the fund can be adjusted at a later date, he added.
As far as the water treatment plant is concerned, he said the city will not be paying back on the 40-year loan until the plant is completed in 2015.
The water fund is expected to increase by little more than $1 million this year, with an ending balance of $1.66 million. The fund's beginning balance was just under $650,000.
The increase is a reflection of the loan and grant awarded the city by the United States Department of Agriculture (USDA) Rural Development Water and Wastewater Disposal Program.
The city is expected to close out the year with a total fund balance of $8.87 million.