Fiscal officer Cindy McKay presented the Marble Cliff Village Council May 17 with a five-year forecast of village finances.

Fiscal officer Cindy McKay presented the Marble Cliff Village Council May 17 with a five-year forecast of village finances.

If things remain "business as usual," the projection is that by the end of 2015 the village would have a deficit of $308,258.

But that projection does not assume further redevelopment of the NiSource property or take into account several potential revenue-generating options, any of which could help reduce or eliminate the projected deficit, McKay said.

"I wanted to be very conservative in what I presented council," she said. "We don't want to count on any eggs before we have them."

The forecast is a tool the council will be able to use to consider options "to make sure we don't get to that point (the deficit)," McKay said. "

The general fund projections include an outline presented by village engineer Louis McFarland showing the village addressing every capital project some that will be needed and some that are optional, McKay said.

The forecast shows that total revenue for 2010 is expected to be about $822,695, a decrease of about $200,000 from last year.

An unexpected boost in inheritance tax revenue was the main cause of last year's revenue increase, McKay said.

The removal of that one-year bump is partially offset by an increase in income tax revenue resulting from Time Warner moving call center and accounting operations into a portion of the front building at the NiSource property, she said.

Total village revenue is projected to increase slightly each year to $929,395 in 2015.

Total expenditures for 2010 are expected to be about $1,154,729.

Slight variations are projected for each of the next five years, depending on such factors as whether the village is undergoing an audit, McKay said, but expenditures are anticipated to be in the range of $1.1- to 1.2-million each year.

Thanks to the foresight of council nearly a decade ago when it successfully sought voter approval of a 2 percent income tax rate, the village has a large cash balance from which is can make up the projected annual budget shortfall, she said.

"They were really smart to do that," McKay said. "They recognized Marble Cliff was reliant on one major taxpayer" and needed to create a rainy day fund.

Drawing on that contingency fund will mean the village's cash balance will decline each year.

McKay's projections show that at the end of this year, the village's cash balance will total $1,795,126 and will continue to decrease to $72,729 in 2014 before ending up with the deficit of $308,258 in 2015.

One option the village might consider is establishing enterprise funds for sewer and water services.

"Enterprise funds are funds established for specific purposes with a unique revenue stream," McKay said. "The example we floated here is a enterprise fund for sanitary sewer and a separate one for water service funded by a fee attached to your water bill."

The enterprise funds would have a dramatic impact on village revenues, she said.

Projections show that implementing the funds would turn the deficit in 2015 to an estimated $154,391 surplus, McKay said.

At the May 17 meeting, council asked McKay to gather more information about the enterprise fund option.

Council also asked for more information regarding the potential options of seeking the collection of the remaining inside millage in the village or mandating the filing of income tax returns in Marble Cliff.

The council is formally considering any of those options at this time, McKay said.

"We're only in the information gathering stage at this point," she said.

One option the council agreed is not on the table is seeking an increase of the income tax rate.

Council members expressed a hope that maintaining a 2 percent income tax rate will be attractive to developers and businesses as other communities, including Grandview and Columbus, have increased their rate to 2.5 percent.

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