By Rick Palsgrove
The city of Groveport’s financial forecast projects increases in the city’s income tax revenues, general fund contingency balance, and Rainy Day Fund as well as debt service payments.
“The forecast gives us a look at what we can carve out for our annual budget,” said Groveport City Administrator Marsha Hall. “Our budget is our annual plan and the financial forecast gives us a long range view.”
Added Groveport Finance Director Jeff Green, “The financial forecast gives city council an idea of where the city is financially that we’re on target to meet goals. It’s a progress report.”
Income tax revenues
According to the forecast, income tax revenues are projected to be $16.3 million this year, $16.8 million in 2018, and $17.3 million in 2019. So far this year, income tax revenues are $12.1 million, which is up 35.6 percent compared to this time in 2016. The income tax revenues have increased each year since 2012.
In the financial forecast report, Green notes that economists are predicting an economic slowdown starting in 2018 or 2019. He also stated changes made by the State of Ohio to municipal income tax rules could affect revenues.
“We must continue to be diligent in retaining and seeking new business to the city,” wrote Green. “Many programs offered by the city are not self-supporting and rely on the general fund to supplement their operations. We should remain aware of potential negative changes in the economy and in the municipal tax code as they might impact the level of services the city provides.”
General contingency fund
Groveport City Council mandated that at least 20 percent should be added until a $2 million balance is met.
According to Hall, the balance from 2015 to 2016 was $910,573 and from 2016-17 it was $1.7 million. The forecast projects the contingency balance will reach $2.4 million from 2017-18.
Hall said reaching the goal was delayed because funds were needed for several capital projects.
“To consistently meet this priority, capital projects should continue to be scrutinized carefully for the next few years,” said Hall.
Hall added that two water line projects which had been delayed – for Hanstein Addition and Front Street – are scheduled to be in the 2018 budget.
Rainy Day Fund
Council also determined that the city’s Rainy Day Fund balance should be raised from $1.5 million to $2 million and that the annual allocation should rise from $100,000 to $150,000 to meet that balance.
According to Hall, the fund balance starting in 2017 was $641,667 because $1 million from the fund was spent on repairs to the recreation center roof. In 2017, $150,000 was moved from the general fund to the Rainy Day Fund along with $600,000 from the legal settlement the city received regarding the recreation center roof.
“At the end of 2017 the Rainy Day Fund balance will be $1.39 million,” said Hall. “It will take through 2021 to meet the $2 million threshold.”
The city sets aside 20 percent of income taxes to the debt service fund. The fund is estimated to have a balance of $2.6 million by the end of this year.
“Our goal is to be in position to pay off (notes for) the golf course improvements and the police building facility debt of approximately $1.5 million in 2019,” said Hall.
Green said the bonds on the recreation center and the aquatic center will be paid off by 2022.
“The city is doing well and I’m comfortable with where we’re at,” said Groveport Mayor Lance Westcamp. “We’re growing and so are the services we provide to the residents. We have so much to offer to the community.”
However, Westcamp added the city must always be prepared for economic downturns.
“In case times get tough, we have to be prepared to tighten up the budget if need be,” said Westcamp.
Groveport City Council will begin discussions of the 2018 budget this fall