Reynoldsburg Mayor Brad McCloud submitted an interim budget for 2012 to city council's finance committee on Nov. 21 that shows projected general fund revenue of $12.4 million and expenditures of $13.5 million, leaving a $1.1 million shortfall for 2012.
Reynoldsburg Mayor Brad McCloud submitted an interim budget for 2012 to city council’s finance committee on Nov. 21 that shows projected general fund revenue of $12.4 million and expenditures of $13.5 million, leaving a $1.1 million shortfall for 2012.
City auditor Richard Harris said early estimates for 2012 general fund revenue were for $11.7 million, but thanks to net profit and attendant taxes for an unidentified “large corporate citizen,” the city’s projected revenue for the year increased to the $12.4 million mark.
“Additional revenues did come in from a large corporate citizen here for net profits,” he said. “Some of it was a timing issue, some of it should have come forward last year, but it all came forward this year,” Harris told the finance committee. “Not everybody uses a calendar year as their fiscal year so we can get income tax payments based on a fiscal year that doesn’t necessarily match up with our calendar year, and that is what happened.
“We feel the revenue projection going from $11.7 million to $12.4 million is reasonable É for what we can reasonably expect for next year, unless there is some economic meltdown like we had in 2008,” he said.
Harris said the total city budget for 2012 shows anticipated expenditures of $33,277,504 against total revenue projections of $30,560,317, a difference of $2,717,187.
He said that difference includes the $1.1-million general-fund deficit, plus another $1.6 million connected to the city’s enterprise.
Enterprise funds pay for such things as water, sewer or street projects.
“Those funds are self-sufficient, the enterprise funds, which means they have to be self-supporting, so with projects next year, we’ll borrow the money to make up that ($1.6 million) difference,” Harris said.
“The general fund is the big one. It’s supported by taxes, and that is why everybody looks at the general fund because that is the one we have the problem with,” he said.
The budget will be discussed further during the finance committee’s next meeting on Monday, Dec. 5.
McCloud said the interim budget he submitted is a “working draft” at this point, but is one he hopes council can adopt. He said it lays the groundwork for what should become a permanent budget by the statutory date of April 1, 2012.
“We have some tough decisions to make, and I’m willing to make those, but I would prefer to make those deliberately and thoughtfully rather than quickly,” McCloud said.
Finance committee chairman Doug Joseph encouraged all council members to spend some time reviewing the proposed interim budget before Dec. 5.
Since the city’s 1-percent income tax increase proposal was rejected by voters on Nov. 8, McCloud planned on submitting an interim budget for the first quarter of 2012.
He said doing so would allow more time for city officials to figure out what can be done to eliminate the estimated shortfall in revenues for next year.
Prior to the Nov. 8 vote, McCloud indicated cuts being considered in 2012 if the tax increase were rejected included police personnel, parks and recreation programs and the senior center.
Harris said options to prevent those cuts for 2012 include transferring up to $2 million from the capital improvement fund to the general fund or lowering the tax credit, currently at 100 percent for residents who live in the city but work in and pay income taxes to another municipality.
McCloud said it is likely no cuts will be made for at least the first half of the year.