Mayor sends council a balanced 2013 budget
Mayor Ben Kessler's administration has presented city council with a balanced budget for 2013, the first since the 1990s, Kessler said.
Kessler presented the budget at council's Sept. 11 meeting. Council is expected to spend much of October reviewing and fine-tuning the document.
"In many ways, this budget process started last year, when a round of cuts over 2011 and 2012 amounted to over $930,000 in cuts, almost 10 percent of the city budget, as part of a long-term plan to stabilize the budget," Kessler said. "These cuts were put in place in light of the compound impact of the loss of the estate tax and the cuts in the state's local government fund, and in conjunction with the 2.5 percent city income tax."
Kessler said council and the administration successfully reduced costs over the past year.
"Throughout 2012, we've continued to hone our expense side, and cutbacks in spending at the city mid-budget in 2012 have resulted in year-to-date (through August) expenditures being down by more than 5 percent over the 2012 budget," he said.
In spite of that, Kessler said he is more concerned about the city's long-term challenges.
"The longer-term challenge has become more difficult, as we've seen the worst year of estate tax collection in recent Bexley history for this final year of the tax, resulting in lower than anticipated total income," Kessler said.
A line-by-line review of the 2012 budget was necessary to meet expense reduction goals.
"This summer, city directors and I started a line-by-line budget review process. The rule-of-thumb was to look for reasonable reductions in line items unless directors could justify the need for a comparable budget to last year or an increase," he said. "This exercise yielded savings of around 5.3 percent over this year's adjusted budget. These changes, in addition to the cuts that were already made through 2011 and 2012, have allowed for us to bring a balanced budget to council for 2013."
Kessler said a conservative approach was taken while preparing the 2013 budget.
"Notably, we also eliminated the estate tax income line item for 2013, despite the likelihood of having some trailing income after the 2012 expiration of the tax. This adjustment was made to help us start to create a new baseline going forward without the estate tax."
However, capital expenditures remain an unsolved challenge.
"One area where this budget compromises unsustainably is capital expenditures -- this budget does cut back capital expenditures to a degree that will not be sustainable in the long-term. In 2013, the shortage in the capital allotment will most probably be compensated for by estate tax receipts. Looking past 2013, the capital budget will require further work on our part by either seeking out additional expense reductions, or via alternative non-tax revenue innovation. Most likely, we will use a combination of the two to make this happen."
The process now involves a thorough review of the document by council.
"After about three internal revisions, we presented the budget to council on Sept. 11, and council will take the next several weeks to review the budget and make note of questions and concerns prior to delving fully into the councilmatic budget review process starting in October," Kessler said.
The 2012 budget (adjusted for changes in appropriations to date) shows expenditures of $11,358,270.
The 2013 budget, as presented to council, includes expenditures of $10,756,661.
Bexley has received only $195,229 in estate tax revenue in 2012.
"The expectation is that this is the lowest in recent history," Kessler said.
The previous low was $482,045 in 2007 and the high was $4,128,137 in 2009. The average over the past 12 years was $1,567,894.
To date, Bexley has received $443,362 in local government funds in 2012.
The budgeted total was $626,105. Kessler said the city anticipates $446,885 in local government funds in 2013.