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STOW -- During City Council's Feb. 23 finance committee meeting, Mayor Sara Kline characterized this year's proposed city budget as "another balanced and appropriate budget."
"The more than $31 million that's reflected in our operating budget represents a wide and dizzying array of services that are provided to residents, to businesses, to visitors, as well as funds the actions and assistance of over 230 city employees to all residents in their daily lives," said Kline.
During Council's regular meeting, later that same evening, Council gave first reading to this year's permanent budget appropriations ordinance.
This puts Council on a schedule to give the ordinance second and third readings during its March 9 and 23 meetings respectively. Under state law, Council must approve the budget by March 31. Currently, the city is operating with a temporary budget.
"This budget," said Kline during the finance meeting, "once again represents a conservative and appropriate approach to the city's budgeting. It represents services that reflect the wide and diverse community that we operate in."
Finance Director John Baranek said, "As in the past, this budget was prepared with our continued stringent budgetary and spending restrictions due to the continued relative weakness of the national economy and prior loss of crucial operating reserves by the actions of the governor and state legislators."
According to figures provided by Baranek, this year's appropriations for all funds total about $107 million, including about $31 million in the general fund, the budget's primary fund. Last year's overall expenditures totaled about $63.37 million, including about $27 million for the general fund.
Baranek said the 2017 appropriations are much higher than the 2016 expenditures because they include transfers between funds which, for accounting purposes, are counted twice, once in the fund the money is transferred from and the second time in the fund they are transferred to.
Income tax collections were about $15.5 million in 2016, about what they are projected to be this year. By comparison, the city previously reported a little over $14.4 million in income tax revenue for both 2013 and 2014 and a little under $15.1 million in 2015.
"It is our top, most important revenue source for the general fund operations and for the capital [improvements] side," Budget and Management Director John Earle said during the Feb. 23 finance meeting.
The total cash balance left at the end of 2016 in all funds was about $22.35 million, including nearly $4.08 million in the general fund. The projected cash balance at the end of 2017 for all funds is a little more than $22 million, including nearly $3.74 million in the general fund.
These general fund balances do not include a $1 million rainy day fund that the city maintains within the general fund for emergency use.
Earle said the combination of the surplus and rainy day fund for the end of 2016 is the "highest general fund balance" we've ever had.
By comparison, the general fund ended 2015 with a $4.52 million balance, including the rainy day fund.
"On average, in the last 10 years the city has gained approximately $72,000 in the annual net general fund balance per year," said Earle.
Earle also said the reduction in the general fund balance between the ends of 2016 and 2017 is due to about $340,000 being used from the surplus to help balance the books.
"It's a standard procedure governments use," said Earle.
At the end of 2015, $550,000 was used from the balance to bring the city's books into balance.
Earle also said $313,000 in the general fund surplus at the end of 2016 was due to a "number of payroll factors," some of which are potentially repeatable for 2017.
These included lower overtime costs, thanks in part to a mild 2016 winter that cut down on the need to plow and salt roads, and savings related to retirement pay, workers comp claims and low health care claims. Earle said last year's mild winter also cut down on salt costs.
Earle said, "The most important goal is the maintenance of present services at a higher quality level. This year, we have limited capital improvements, but we have a sizable road program again. That's one of our emphases, to maximize the road program, and we've done that again this year."
Baranek said last year's road program cost approximately $1.55 million, but this year's cost has not yet been finalized.
The city's stormwater fund, which pays for stormwater infrastructure maintenance, as well as new projects, is expected to see a bump in revenue, said Earle. Its revenue is supplied by a fee charged to property owners, which until the end of 2016 was $3 per month for single-family homes and varying higher amounts for larger properties that brought in about $800,000 annually.
But starting in January, the fee increased to $5 monthly for single-family homes with equivalent increases for larger properties that is projected to bring in about $500,000 in additional revenue this year.
"The new funds for the stormwater should allow us to do the projects that we can get to this year," said Earle. "If it is needed, we could borrow.
On that note, Earle said the city's credit rating remains at Aa2, the third highest of Moody's 21 ratings.
"Our rating is excellent and we have a very sound credit situation in the national debt markets," said Earle.
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