Budget shows struggling general fund

City officials met for two hours March 13 to discuss the proposed budget for 2017.

The balance in the general fund has declined since 2012, and even with the temporary income tax increase from last year, it is still not enough to cover all of the city’s financial needs, officials said.

However, Elyria City Council’s Finance Committee voted to pass the proposed budget as it stands.

Last year, voters approved a 0.5 percent income tax increase that is expected to bring in $6 million, but the funds are specified for roadway improvements, parks and recreation, the police department and economic development.

The money is not designated for the city’s general fund.

“The Issue 6 money is great because it is allowing us to do some proactive things we wouldn’t otherwise be able to do, but it hasn’t solved the general fund dilemma,” Mayor Holly Brinda said.

In 2012, the city ended with about $3.22 million dollars to carry into the following year. In 2013, it grew to about $3.54, but has been declining since with $2.28 million in 2014 and $1.13 million in 2015.

In 2016, the city ended with $920,576.

The city is spending more than is being brought in, according to Finance Director Ted Pileski.

“We are spending ourselves in a hole, basically,” Pileski said. “We were at $725,351 by the end of February. That is not even enough to cover one payroll in the general fund.”

One reason the city is spending more than it’s receiving is the rising cost of health care for employees.

“In 2013, the general fund was paying about $2.8 million for health care,” Pileski said.

“In this year’s budget, it is paying $3.5 million.

“Health care is rising considerably and it’s one reason we are spending more than what we are bringing in.”

If the city continues to spend more than it receives, there will come a time where the budget is going to be limited to just the revenue coming in, possibly as soon as next year, Pileski said.

“Everybody has to understand the general fund is struggling and we need to make some changes,” he said.

Ward 5 Councilman Marcus Madison questioned what they city is doing to prepare for the future.

“If we are still doing the same thing, we are going to be stuck in the same spot,” Madison said. “So what conversations have taken place so we are preparing for the future?”

Brinda responded saying, “We can’t spend as much.”

When you combine the $920,577 in 2016 carry-over cash to the $28,879,905 in 2017 estimated revenue, the city has $29,800,482 available to spend for the proposed 2017 expenditure budget.

Council will vote on the budget March 20.

By state law, the city has to pass the budget by March 31.