Politics & Government

Stow 2013 Budget Reviewed by Council

$28.4 million in expenses planned for this year

Stow City Council took a preliminary look at the city's $28.4 million operating budget for 2013 Monday during the finance committee meeting.

Like many communities, Stow is operating with a budget deficit.

John Earle, assistant finance director, said the deficit is projected to be about $264,000 in 2013.

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Earle said the city has battled with cuts in state local government dollars, declining property values — and thus lower property tax revenue — and meager returns on the city's investment portfolio.

The city did see an increase in income tax revenue in 2012 above 2011 numbers of 5.9 percent, but that doesn't make up for declines in those three major revenue sources.

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"We’ve lost a whole lot of revenue," Earle said.

Earle said almost all of the city's primary revenue sources are relatively shaky due in large part to the national economy.

Stow's biggest revenue sources, and their percentage share of the city's total income, are:

  • Income tax — 50-plus percent
  • State local government fund — 7.2 percent
  • Estate tax — 3.8 percent
  • Investment earnings — 2 percent

"Every one of these sources is declining, being eliminated or in trouble," Earle said. "Every single one."

Stow will continue vacancies at several city jobs to keep the 2013 budget tight.

In 2009, the city employed 276 full-time workers. In 2013 the city is budgeting for 232 full-time employees, a figure that represents a drop of 16 percent or 44 full-time employees in four years.

Also for 2013 the city is "holding back" $875,000 from its capital improvements fund to bolster Stow's general fund. So money that in flush years would have paid for infrastructure updates will instead be used for general operations.

Stow started a "hold-back" policy in 2009 from the capital improvements fund in order to stabilize the general fund, which was waning due to falling revenue from the recession fall-out.

Stow Finance Director John Baranek said the city made a conservative forecast for revenue in 2013.

"We have to make sure that we look at what could occur nationally or even statewide depending on budgets that are submitted by the state, or the lack thereof action in Washington, D.C., as to how it will trickle down to the local level," Baranek said. "We’ll have to make sure that we keep our ear to the rail that leads to Washington, D.C., and stay in tune with what’s going on in Columbus."

Stow leaders are already paying close attention to talks in Columbus among state legislators about possibly starting new income tax collection policies statewide for Ohio communities and how that might effect municipal income.

Revenue may be lean, but there also are some positive notes in the city's 2013 budget.

The Stow Municipal Court is operating in the black, and the city's storm water system and storm utility management are running efficiently. The city-owned Fox Den Golf Course saw a profit of $72,000 in 2012 after an operating loss in 2011.

And the city's road resurfacing program is back to levels prior to 2009, when that portion of the budget saw one if its lowest years.

Stow Mayor Sara Drew said the 2013 budget reflects a need for the city to maintain services and infrastructure, make necessary investments and work toward long-term stability.

"The (city) has obviously weathered significant hits financially when it comes to resources, human resources," Drew said. "As in every year, certainly fiscal responsibility and being a steward of taxpayer dollars is foremost in our minds. This budget does also reflect an investment in what we need to be a sustainable organization."


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