City of Lyndhurst, Ohio Finance Committee
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September 19, 2012: Finance Committee
AGENDA:

 
The Finance Committee met Wednesday September 19, 2010 at 7:27 p.m. Present were Council members Frey, Gambatese, LoPresti, Marko, Packard, Schlessel and Ward. Also present were, Mayor Cicero, Finance Director Kovalchik, Law Director Murphy, and Chief Porrello. The purpose of the meeting was to discuss current and 2013 budget issues.
 
Finance Director Kovalchik distributed graphs depicting General Fund Revenue Historical Data, General Fund Revenue vs. Expenditures Historical Data and General Fund Cash Balance carry forward (both with and without Estate Tax figured in) historical data looking back over 10 years.
 
Mrs. Kovalchik bulleted many of the cost-saving and revenue generating initiatives the City Administration and this Council have undertaken over the past several years and the role those actions have played in keeping our funds healthy in spite of anemic revenue growth. She further enumerated some of the significant challenges that have and will continue to impact the health of our various funds - especially the General Fund and the Capital Reserve Fund - for the foreseeable future.
 
As of today we can estimate us taking a $1.2 million hit at the hands of the economy - which has eaten away at our property values - and especially at the hands of the numerous changes the state has made with lowering Local Government Assistance, eliminating the Estate Tax and so on along with others under consideration. These actions by the State have severely impacted our City, our neighbors, our school district and those across the state. This all translates into a greater burden that will be borne by average taxpayers without question.
 
While the changes that we have initiated in our own operations, and with the cooperation and assistance of our employees, have carried us forward they cannot fill the hole that the economy and the state have presented us. With Acacia Country Club land apparently being sold to a conservancy, a non-profit organization that will pay no property tax, that has no plans or intention to develop the land there will be a loss of property tax revenue currently received and no potential for income in the future.
 
Mayor Cicero recommended Council consider eliminating the income tax credit in order to make up some of the lost revenue and to keep City services at a level our residents are accustomed to. Mrs. Kovalchik presented some figures that a variety of actions would generate but there is clearly more study required in that regard. A spirited discussion ensued.
 
A question was raised as to whether eliminating the tax credit would be a "band aid" but it would be a steady source of revenue (even though Council could reinstate the credit at a later date should things improve). A question was raised as to whether we "have done enough" to trim operations and the Mayor replied that it is something the Administration asks every single day. A question was raised as to whether the Finance Department could present Council with a variety of "Budget Scenarios" for consideration as had been done one time several years ago at the behest of a previous Council. Chairman Ward indicated that will not be done, it was a fool's errand from which that previous Council made no decision because the decision had to be made for them. The Finance Department presents Council with a line item budget for consideration delineating every single department's activities from which Council can examine, deliberate and decide what funds are needed to provide the level of service to our residents that Council deems adequate. From that line-by-line breakdown, including historical references for every line, Council has more than enough information to make adjustments as it sees fit.
 
The Finance Committee will convene at a later date to consider the tax credit question.
 
With no further business to discuss, the meeting adjourned at 8:00 p.m.
 
Respectfully Submitted,
 
Patrick A. Ward.
Chairman
 
September 19, 2012: Finance Committee
MINUTES:

 
The Finance Committee met Wednesday September 19, 2010 at 7:27 p.m. Present were Council members Frey, Gambatese, LoPresti, Marko, Packard, Schlessel and Ward. Also present were, Mayor Cicero, Finance Director Kovalchik, Law Director Murphy, and Chief Porrello. The purpose of the meeting was to discuss current and 2013 budget issues.
 
Finance Director Kovalchik distributed graphs depicting General Fund Revenue Historical Data, General Fund Revenue vs. Expenditures Historical Data and General Fund Cash Balance carry forward (both with and without Estate Tax figured in) historical data looking back over 10 years.
 
Mrs. Kovalchik bulleted many of the cost-saving and revenue generating initiatives the City Administration and this Council have undertaken over the past several years and the role those actions have played in keeping our funds healthy in spite of anemic revenue growth. She further enumerated some of the significant challenges that have and will continue to impact the health of our various funds - especially the General Fund and the Capital Reserve Fund - for the foreseeable future.
 
As of today we can estimate us taking a $1.2 million hit at the hands of the economy - which has eaten away at our property values - and especially at the hands of the numerous changes the state has made with lowering Local Government Assistance, eliminating the Estate Tax and so on along with others under consideration. These actions by the State have severely impacted our City, our neighbors, our school district and those across the state. This all translates into a greater burden that will be borne by average taxpayers without question.
 
While the changes that we have initiated in our own operations, and with the cooperation and assistance of our employees, have carried us forward they cannot fill the hole that the economy and the state have presented us. With Acacia Country Club land apparently being sold to a conservancy, a non-profit organization that will pay no property tax, that has no plans or intention to develop the land there will be a loss of property tax revenue currently received and no potential for income in the future.
 
Mayor Cicero recommended Council consider eliminating the income tax credit in order to make up some of the lost revenue and to keep City services at a level our residents are accustomed to. Mrs. Kovalchik presented some figures that a variety of actions would generate but there is clearly more study required in that regard. A spirited discussion ensued.
 
A question was raised as to whether eliminating the tax credit would be a "band aid" but it would be a steady source of revenue (even though Council could reinstate the credit at a later date should things improve). A question was raised as to whether we "have done enough" to trim operations and the Mayor replied that it is something the Administration asks every single day. A question was raised as to whether the Finance Department could present Council with a variety of "Budget Scenarios" for consideration as had been done one time several years ago at the behest of a previous Council. Chairman Ward indicated that will not be done, it was a fool's errand from which that previous Council made no decision because the decision had to be made for them. The Finance Department presents Council with a line item budget for consideration delineating every single department's activities from which Council can examine, deliberate and decide what funds are needed to provide the level of service to our residents that Council deems adequate. From that line-by-line breakdown, including historical references for every line, Council has more than enough information to make adjustments as it sees fit.
 
The Finance Committee will convene at a later date to consider the tax credit question.
With no further business to discuss, the meeting adjourned at 8:00 p.m.
 
Respectfully Submitted,
 
Patrick A. Ward.
Chairman


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