By Rick Palsgrove
Municipal budgets are not set in stone and often have to be flexible enough to meet changing circumstances.
With this in mind, Groveport City Council is considering legislation to amend the city’s 2020 budget.
According to Groveport Finance Director Jason Carr – based on changes to
health insurance premiums and deductibles, staffing changes, cost allocation changes, and final performance raises – the city’s employee salaries and benefits should be increased 7.33 percent from the $12.5 million presented in the original 2020 budget to $13.4 million in the amended budget.
“The totals in the salaries and benefit charts represent salary, retirement, health, vision, dental insurance, Medicare, health reimbursement account, and workers compensation,” said Carr.
Also, council’s recent approval of upgrades in salary ranges for lifeguards, head lifeguard, and assistant aquatics manager resulted in a total estimated increase in salary and benefits for these positions from $223,759 to $297,163.
The budget’s termination fund, which represent the city’s liability for known retirements, as well as those eligible to retire in 2020 (although those employees may not choose to do so), would be adjusted under the proposed legislation.
“Future retirements are based on current years of service for employees and an estimate of what those costs may be in the future,” said Carr.
According to Carr, the city updates the list of eligible retirements and matches current funding to the estimated future funding.
“The city consistently evaluates its current and future workforce needs and the termination fund is the city being pro-active and setting aside funds so that a future retirement will not significantly impact the budget,” said Carr.
The total liability under the termination fund is $326,478 with $279,907 budgeted for the fund in 2020.
Rainy Day Fund
The city has a target balance of $2 million for its rainy day fund. The amount of this fund at the end of 2019 was $1.6 million.
According to the city’s financial policies, money in the rainy day fund may only be used for “unforeseen emergencies or revenue shortfalls and may be reduced or eliminated at any time by city council approval…Funds used for any other purpose require council action to identify…”
When asked what the projected balance is for the rainy day fund for the end of 2020, Carr said, “The ordinance council passed requires allocation of $150,000 per year be allocated until a maximum of $2 million is met. The ending fund balance at Dec.31, 2020 will be $1.84 million.
Unrestricted carryover balance
Carr noted the rainy day fund is a separate fund from the general fund.
Per city financial policy, the city sets aside 20 percent of the prior year ending cash fund balance as an additional reserve.
“The ending unrestricted carryover fund balance (reserve) at Dec. 31, 2019 is $2.24 million and the estimated projected unrestricted carryover fund balance for 2020 is $2.7 million,” said Carr. “This amount will be updated mid-year and is only estimated at this time.”
Carr said the money in the unrestricted carryover balance “may be used for any proper public purpose, however, prior to expenditure it must be appropriated by council. This reserve is unappropriated funds.”
In a written report to council, Carr noted, “When including the rainy day fund balance of $1.84 million, the city has $4 million in unappropriated money that requires council approval prior to expenditure.”
Other proposed budget changes
Other amendments to the 2020 budget noted by Carr include: $4,253 for the purchase and $2,478 for the lease payment of two new body cameras for the police department; $4,919 for the city’s annual Halloween event (total in budget of $7,919); $2,088 for increase in SCAG mower purchase; $20,000 for Durapatcher cost increase; $45,000 for grant for the purchase of a new van under the ODOT Transit Program as well as $15,000 for the city’s share of this van; and $61,000 increase per anticipated funding for the Higgins Boulevard project.