Westerville officials knew the city would see cuts in funding from the state when a new budget was passed by Ohio legislators this year, but the cuts were not nearly as bad as expected.

Westerville officials knew the city would see cuts in funding from the state when a new budget was passed by Ohio legislators this year, but the cuts were not nearly as bad as expected.

During the city's budgeting process last fall, staff and council members braced themselves for significant cuts to the amount of money the city receives through the state's Local Government Fund.

"The staff had planned appropriately from the September budget. When they planned the budget, they planned for the drop-off," city finance director Lee Ann Shortland said. "We try to err on the conservative side. We knew Local Government Funds would be decreasing."

The city anticipated a decrease of about $350,000 in the Local Government Fund for 2011, Shortland said, but that number actually will be closer to $10,000.

"We're doing a little better than we expected, which is normal for Westerville, but it is going to be lower than it has been in the past," Shortland said.

The city receives about $1.7 million from the Local Government Fund each year. The money goes to the Westerville's general fund to pay for things such as public safety, public works and other basic government functions

The city does forecast losing another 25 percent of its Local Government Fund money in 2012, she said.

One area the city knows will be hurt is in the estate tax, Shortland said.

Effective in 2013, that revenue will be pulled out of the city's budget.

Shortland said the estate tax generated $460,000 in 2010 and $250,000 thus far in 2011.

Westerville will begin its budgeting process for 2012 in September, when Westerville City Council returns from its summer break.

Between now and then, Shortland said, the city's staff will be looking more closely at the state funding numbers and what impact they will have on Westerville's next annual budget and its five-year financial forecast.

"Throughout the summer, we'll be putting together additional information to update that information," Shortland said.

Overall, the state budget numbers for Westerville are positive because the city took proactive measures to prepare for cuts, such as reducing the amount of money being spent on capital-improvement projects, she said.

"We budgeted conservatively," she said. "We cut the budget. It looks like we're going to hit the mark for Local Government (Fund money) and exceed what we projected."