TWINSBURG -- Both revenues and expenditures in Twinsburg are expected to drop by about $2 million between 2016 and 2017, according to the 2018 tax budget being considered by City Council.
The tentative budget must be submitted to the Summit County Auditor by July 20. Council gave first reading to the legislation to approve the budget at its June 13 meeting.
The city's revenue has dipped in recent years due to the ending of the temporary quarter percent income tax. Residents passed this tax in 2009 and the city collected on it from 2010 to 2014 as a way to boost the city's coffers after the closure of the Chrysler Stamping Plant.
"We spent about $4 million into our reserves, which was, in essence, that which we lost from our quarter percent," said Mayor Ted Yates.
Council President Gary Sorace said June 22 he saw no initial concerns in a first glance of the 2018 tax budget.
"I started getting into it, and thus far I haven't come across any problems or concerns," Sorace said.
According to the budget, total expected revenues for 2018 are $23.4 million, respectively. Estimated expenditures in 2018 are $26 million.
Revenues in 2015 and 2016 were $22.83 million and $24.13 million, respectively, while expenditures in 2015 and 2016 were $28.83 million and $29.98 million, respectively.
The estimated ending unencumbered fund balance for for 2018 is $6.09 million. The unencumbered fund balances for 2015 and 2016 were $18.91 million and $13.1 million, respectively.
The estimated amount of funds anticipated in 2018 from the city's police pension, fire pension and park fund debt service is $1.19 million.
One resident said he had serious concerns about the city's spending.
"Under the expenditures for 2017, the estimated amount appears to be off by about $5 million," said Loren Sengstock. "That's a substantial amount, considering you are projected only to have $6 million left at the end of 2018. The city has spent, from 2015, $19 million in cash down to less than $1 million by the end of next year. Looking at your reports online, that's what I see."
The drop in cash in general fund "is something everyone should be alarmed at," Sengstock said.
"You could effectively have the city broke by the end of next year," he said. "I'm not saying this as an alarmist. I've spent a career helping cities get out of financial problems. I see a problem. You seven are going to be the ones who will have their fingers pointed at if this city runs out of money."
Yates said the city tries to keep costs in line. A large portion of the budget is salaries, and the mayor said he hoped [union] negotiations will help keep the city in good fiscal health in the long term. In addition, new businesses coming in and current businesses expanding will also help the city's bottom line, he added. In recent years, income tax revenue has been between $17million and $18 million for Twinsburg.
City Finance Director Karen Howse said the tax budget figures are projections and subject to change.
"If you look at our history at what we normally expense, we normally spend about 80 to 85 percent of our total projected budget," Howse said. "We have the ability to [amend the budget] every single year and every month. These are non-committal [numbers]."