Last night’s council meeting
Two important items from last night…
Passing an annual budget is one of the most important things that council does. We began the discussions on 2016 last night.
In 2014, we had a $235K deficit. In 2015, we ended up with a $245K surplus. In 2016, the administration is budgeting for a $554,364 deficit.
It’s only a budget, and there is a lot of uncertainty-particularly on the revenue side. Last year, for example, we projected a 1% increase to income taxes. Instead, there was a 4.6% increase. So that’s how we had a surplus.
This year, we are projecting a 1.5% increase, which is less than the 10-year average of 2.2%. If we indeed have 1.5% growth, then our deficit will result in a carryover balance (i.e., saving account balance) of $4,208,000 at the end of 2016.
Why the deficit? One major reason, as stated above, is a conservative estimate on income tax receipts. Another is the anomaly that the City will make 27 payrolls in 2016, as opposed to 26 in every other year. It’s just the way that the calendar works; every 12 years or so, we have an extra payroll. It has an effect of $525K on our budget.
For some good news, you should be aware that since I arrived on council, the city’s debt has dropped from $34 million to $20 million. Our bond rating is AA2–very strong– and two notches higher than it was in 2003.
Council will continue to discuss the budget in coming weeks.
Proposal to increase storm-water fee
Mayor Drew proposed to council an increase in the storm water fee — an extra $5 per month for every water account. For residents, this will mean a total of $8 per month. It would raise an extra $650,000 per year for use on storm-water infrastructure projects.
This fee was created about 10 years ago and not indexed to inflation. So it hasn’t kept up with increase labor costs. Also, as Stow completes a project, that project must be maintained–and that creates a recurring liability from year to year.
Everyone on council agrees that we need more money for these projects, because we need to prevent catastrophic damage to residents’ homes. The question is, how? And do we liquidate city assets to do it–or just rely on taxpayers to contribute more?
Stay tuned. This will be discussed heavily in the coming weeks and months.
Council will meet next on March 10.