Summary: The citys economic arrows may be pointing the right direction now but the outcome of the negotiations on the state budget may change that assessment very quickly.
When the members of the Wooster City Council Finance Committee sat down for the first of its bimonthly reviews of the citys financial condition in late March they learned that the difficult decisions made last year to cut 15 percent of its workforce through the Voluntary Separation Plan are paying off.
Looking across all the citys funds, revenues and expenditures are right on track with where they were expected to be when council passed the 2011 budget last December.
According to Finance Committee Chair Jon Ansel general fund revenues are up year to date for the first two months about four percent on an adjusted basis while our expenses are down 12.5 percent.
Funds dedicated to caring for the citys streets, which are funded through gas taxes and vehicle registration fees, are up as well according to Finance Director Andrei Dordea.
Enterprise funds such as the Water, Water Pollution Control, Storm Drainage and Refuse funds are also beginning to come in to balance, as they are required to be under state law, through the implementation of rate increases for the water related funds and a rate decrease for the Refuse Fund.
According to Ansel there are some optimistic indicators for sure but the message is not that things are very good and very positive and healthy. Its were holding our own and its not catastrophic like were seeing across the state.
Ansel believes that the aggressive cost cutting measures undertaken by the city last year has allowed the city to stabilize its budget.
Were not gaining ground and were not losing ground as fast as we anticipated but thats because we cut our operating expenses by 15% going in to this year, said Ansel adding if we had done nothing it would have been disastrous at this juncture.
Fortunately we took the pre-emptive strike and we began to see reductions in force through the Voluntary Separation Program. That has given us some levelness in terms of the balance between revenues and expenses but we cant forecast all of those and we dont know where revenues are going to finish through the balance of the year versus expenses, said Ansel.
While all the citys economic arrows are pointing in the right direction now, all that could change very rapidly depending on the final outcome of the negotiations on the states biennial budget.
According to Dordea if the General Assembly were to pass the budget proposed by Governor John Kasich as is, the city stands to lose just over $1.6 million in state funding between July, 2011 and June, 2013, over $350,000 of which would be felt in 2011 alone.
The citys general fund, which is used for the day to day operations of the city, would take the hardest hit at just over $911,000 due to a fifteen percent reduction in local government funds, the acceleration of the tangible personal property tax reimbursement phase out, the elimination of the Kilowatt and Natural Gas Tax and the redirection of the citys portion of liquor permits to the states coffers. The remaining $690,000 in cuts will affect street repair funds.
Given the fact that the city has already aggressively trimmed its expenses through the implementation of the Voluntary Separation Plan it wont be easy coming up with a way to absorb this level of state funding cuts.
Were going to work through this budget issue and with the forward thinking and the aggressive management that we continue to embrace were going to get through this but its not going to be without hard work, said Ansel.
