Large cash balance forecast for 2015

It wasn’t too long ago that Findlay officials were contending with a shortage of operating funds, so much so that layoffs were necessary.
As was made clear Tuesday at a mid-year budget hearing, officials are now faced with just the opposite situation: what to do with a large cash surplus that’s expected going into 2015.
No proposals were made Tuesday for spending the money.
“What a great set of issues to have to talk about, as compared to a couple of years ago,” when some thought the expiration of the city’s additional quarter-percent income tax would cause hardship, said Auditor Jim Staschiak.
Now, the city’s fiscal future is expected to include a $9.6 million general fund balance at the start of 2015, with $5.2 million of that in cash. The remainder will be part of the city’s mandated reserve.
That’s a far larger balance than the city has had since the recession began in 2009.
Also, a large city income tax collection spike in October 2013 is expected to repeat this year, Staschiak said. Last year’s tax collection for that month alone topped $6 million, compared to previous months that, in most instances, saw collections of less than $2 million.
To even out its collections and reduce such gaps, Staschiak suggested the city could require businesses to make quarterly estimated tax payments rather than dumping all of what they owe into the city’s coffers in the fourth quarter.
“I’m not opposed to having this discussion, but we have to consider that we’d have to have the discipline not to spend that money,” until the city tax administrator certifies the actual amount owed by businesses, Service-Safety Director Paul Schmelzer said. Because such payments are estimated, they sometimes result in refunds from the city once actual earnings are reported.
Taxes aren’t the only reason for the city’s solid financial footing. Various departments are expected to return about $2 million in unspent money that was budgeted for their operations this year.
The capital improvements fund is also growing. Staschiak reported it now has an “excess amount,” above its $300,000 minimum reserve, of $5.3 million.
However, “When we talk about excess within the capital fund, there isn’t,” Schmelzer said, noting there is not nearly enough money to pay for all of the capital expenses and infrastructure projects that are needed in Findlay.
The amount of city income tax that is allotted to the capital improvements fund will increase next year. The fund will receive 18 percent of income tax collections, up from 17 percent.
Schmelzer said he thinks the city has a shot at increasing that percentage to between 25 and 30 percent within the next decade, which would enable “a sustainable plan and path going forward.”
Asset management, instead of quickly spending what is available, is the proper way to proceed, administrators said Tuesday.
“I am not all that excited to mow through, in one year, millions and millions in infrastructure money,” Schmelzer said. “But I’m not opposed to long-term planning and a two-year operational budget. I think it’s time to do that. It would be very prudent.”
The city has a five-year capital plan, which it updates yearly. A two-year operational budget, with forecasting further out, would be new.
“You get me excited when you talk that way,” joked Staschiak, who for years has been advocating at least a two-year operating budget.
The mid-year review “went as expected,” Mayor Lydia Mihalik said after Tuesday’s meeting. “There were no surprises. There are things that we’ll continue to work together to get accomplished.”
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