Macedonia -- City finances are limited but on track to be in the black for the remainder of the year, officials say.
Macedonia stands to carry over approximately $728,000 into 2017, said Finance Director Rhonda Hall at a Sept. 27 meeting of Council's Finance Committee. The city's 2016 budget, approved in March, included $11.8 million in the general fund, which was $2 million less than 2015. The $2 million difference was due to money being transferred from the general fund to the capital budget to complete road work performed last year.
City officials say there is no money for road work this year or next, and they have been looking at options all year to fix the problem, including a failed 0.5 percent income tax increase on the Aug. 2 ballot.
The city is going to the voters again in November with Issue 18, a 0.25 percent, 10-year income tax increase that would raise about $1.5 million per year specifically for roads.
The streets and highways committee worked with Engineer Joe Gigliotti to plan on repairing the city's 25 worst streets if Issue 18 passes, rated in a report as poor to very poor.
During a town hall meeting hosted by Council Sept. 15, Hall had equated the $1 million needed to work on roads to numbers of city employees that it would take to free up those funds, stating the city would have to lay off up to 14 workers if it wanted to come up with that amount of money.
Mayor Joe Migliorini told the News Leader Sept. 23 that "No city workers will lose their jobs" if Issue 18 fails.
In his report in the city's monthly newsletter for September, he said other avenues would be explored to fix roads.
"If the 0.25 percent tax increase fails, the city will need to look at increasing the millage for real estate tax, assessing residents for road repairs or removing the tax credit."
The tax credit he is referring to is a credit the city gives taxpayers who work and pay taxes in other communities. Council could revoke all or part of the credit on its own initiative, which would mean those taxpayers would also have to pay Macedonia, in addition to the communities where they work.
Hall told Council Sept. 27 that the city is on track to cover its expenses for the remainder of the year but the low carryover is not a good thing. The city will carryover less than half the $1.4 million it brought into 2016.
She said that annual payments covering construction of the recreation center are ending next year, but added it doesn't mean the city will be in much better shape.
"Everybody keeps talking about this year is our last year for this $1 million debt payment and that may be true, but things change next year," Hall said. "About 45 percent of that debt payment comes out of the general fund, so say the general fund could have $500,000 potentially next year, but our other debt is going up by $250,000 so the end result is we will only have a little over $200,000 available not the $500,000 originally thought."
Hall said the debt increase is due to equipment such as the new ambulance purchased this year. She said there is an outstanding bond issue from 2010 the city was previously paying $70,000 per year that will increase to an approximately $245,000 per year in 2017.
"Not all of that is paid out of the general fund, but 70 percent of it is," she added.
The remaining portion of the current debt payment comes from the recreation center tax currently in place, which is scheduled to expire June 30, 2017.
The city is asking voters to approve Issue 19, a 0.25 percent renewal of that income tax measure earmarked for recreation.
The 2016 capital budget was at $864,000, which was to fund an ambulance purchased in 2015 as well as a skid loader and two skid steers the city bought this year.
Service Director John Hnottavange said he anticipates needing approximately $30,000 to fund repairs of equipment with five department trucks aged 14 years or older. He said six out of 11 big trucks are presently down.
"We typically get about 15 years out of a truck," he said.
He also estimated the department would need $10,000 for road patching.
According to Councilor Jan Tulley, who chairs the finance committee, the city's 2017 budget will not be prepared until the first quarter of 2017, as the city must learn the fate of Issues 18 and 19, as well as the outcome of negotiations with city union and health insurance providers.
Briana Barker: 330-541-9432