Tallmadge city budget reflects COVID-19 impact
TALLMADGE – The coronavirus and a global pandemic affected the finances of the city in 2020 with unemployment, virtual work environments and a reduction in revenue among other things and 2021 will be a challenging budget.
The budget had a first reading Oct. 22 with a workshop on Nov. 4 and will have a second reading and discussion Nov. 12 with a final reading and vote Dec. 10.
The General Fund revenues are being estimated cautiously with a decline in income tax for 2021. The total revenue for the General Fund is estimated to be less in 2021 than in 2020.
The beginning balance for the general fund in 2021 is estimated to be $6.6 million with expenses of $15.8 million exceeding the revenue of $15.2 million and projecting a loss of $578,056 for an ending balance of $6 million in the general fund, according to Dr. Donald Cooper, director of administration.
The General Fund 2021 appropriations total is $15.8 million. Other large funds include $3.75 million for the Fire/EMS Levy; $1.5 million for the Safety Services Income Tax; $3.56 million for the SMR Fund; $1 million for Bond Retirement; $4.3 million for SAN Sewer Operating; $2.2 million for Water Operating; and 15 other accounts for a total of $35 million for the 2021 budget.
The overall financial state of the city is healthy with fund balances currently exceeding their required minimums but expenses must be closely monitored and economic development and business retention are important for 2021, Cooper said.
Capital projects in 2021 are estimated to cost $4.4 million, Cooper said.
On the revenue side, the JEDD estimate income for the city of Tallmadge in 2021 would be $876,800 at the 1.5% rate which will increase to 1.75% in 2022.
The city received some one-time funding from the Coronavirus Aid, Relief, and Economic Security Act which helped to partially fill some revenue gaps during 2020 and helped to maintain carryover fund balances into 2021, said Mayor David Kline.
The 2021 expenditures and revenues will be monitored closely and reported back to council, Kline said.
“This budget does reflect some structural imbalances where expenditures exceed revenues in some funds,” Kline said. “But the fund balances that we have managed to build are sufficient. We are very aware that this cannot continue, and we have made strides with some countermeasures, including the passage of the Safety Services Income Tax in 2020. Currently, we meet and exceed all required Minimum Fund Balances for the major operating funds.”
The minimum fund balances were established years ago with a minimum fund balance of 25% of the operating expenses for at least two months, said director of finance Mollie Gilbride. The city has been able to meet or exceed the 25% minimum fund balance.
“When we get low, we look at expenditures and where we were going with revenues and build the balance back up,” Gilbride said.
The year 2021 brings some new, larger projects that have been planned for years, Kline said. Work will begin on the new replacement for Fire Station #2.
“There are no funds appropriated at this time until the architect has been selected and the city has good estimates on the cost of the building,” Kline said. “The finance director will be issuing a note for that construction and those costs will be budgeted when the expenditure and revenue numbers are determined.”
Also, budgeted in 2021 are the improvements to the police station that is 41 years old and the East Avenue and Washburn intersection improvement construction project that will begin in 2021, Kline said.
Tallmadge Recreation Center has losses:Tallmadge parks facilities experience revenue losses due to COVID-19
“The recreation center revenue estimates are still lagging in 2021 as we realize it will take some time to capture the memberships that were lost during the coronavirus,” Kline said.
Gannett reporter Laura Freeman can be reached at firstname.lastname@example.org