Chardon Council considering $636,000 in cuts

More potential trims identified if COVID-19 fallout continues

Chardon City leaders are mulling major budget cuts in response to the coronavirus impact on city coffers.

About $636,000 has been identified for immediate budget reductions, while another $487,500 in expenditures have been put on hold until the actual impact of the COVID-19 pandemic becomes known.

Total income tax collections through May are down about 8 percent compared to the same period last year.

“At the end of the day, we’re still in the black,” Finance Director Mate Rogonjic, noting that the $2.1 million “rainy day” fund was left untouched.

Cuts were made across the board with department heads and the administration working together.

The biggest single-item savings comes from not opening the pool, which already was in doubt with the social-distancing measures required by the state. That saves about $63,000.

However, most cuts were designed to be felt as little as possible by the general public. Others ranged from deferring investment in economic development strategies, building improvements and equipment to slashing funding for Geauga Cable Access Corp (G-TV).

“There was no conversation or consideration with recommending any changes to the level of service either for anything that we do for our residents or businesses,

so all that should remain the same,” City Manager Randy Sharpe said.

Some other key findings in a staff report presented to City Council May 14 include:

• The potential reduction in income tax revenues is based on actual and estimated unemployment filings in Geauga County for 2020, compared to 2009, which reflects the impact of the Great Recession. Unemployment data at the city level is unavailable.

• The estimated reduction in income tax is $701,900. By comparison, the Regional Income Tax Agency estimated a loss of $450,915 in total income tax revenues for the city.

• In the General Fund, revenues from court costs and fines have been revised based on actual collections through May; collections in June, July and August being similar to May; and revenues in the remaining months being back to normal activity. Revenues in May comprised only 47.5 percent of the revenues in April.

• In the General Fund, interest earnings are projected to be $50,000 lower than the original estimate, based on actual earnings through April, remaining interest payments for noncallable

investments and declining interest rates.

• The base fees in the Water and Sewer Operating Funds are conservatively estimated to decline by 10 percent from the original estimate.

“Nobody likes to see these things,” said Councilwoman and Finance Committee Chairwoman Nancy McArthur. “So much time and thought went into the budget, and it was a great budget, and it just kind of got blown up. So I think these are really very prudent things to put in place now, and certainly they’re all important, but we can’t do it all.” Councilman and former Finance Director Jeff Smock expressed appreciation for the administration’s efforts.

“I think staff did a fantastic job identifying where we can make some cuts without hurting us too bad,” he said. “We can still function, and it’s nice to see that we can do this and not have to touch our reserve funds in the process. If things go really bad, we have those reserve funds to fall back on. … Hopefully, the light at the end of the tunnel is here.”

Legislation to amend appropriations and enact the cuts is anticipated at the June 11 meeting.