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City Finances: Update, 11.30.2020

Written by David Robinson on . Posted in City Budget, City Services, Local Business

Summary: the state of City finances is unexpectedly strong as we approach year-end.

When covid-19 first broke on to the scene last March, projections for city finances 2020 took a somewhat scary nosedive.  A 10% drop in income tax revenues was forecasted (and who knew what the bottom really was?).  And, since income tax revenues account for ≈ 75% of city revenue, this projected downturn cast a big shadow of uncertainty on a wide range of plans and programs.  Belt-tightening was obviously called for—a couple of painful notches for starters—but would that be enough?

Happily, as we approach year-end, we can now safely say that not only has the worst been averted, but that we will enter 2021 in a decidedly strong financial position.  This positive outcome is a result of 1) better-than-expected income tax revenue, 2) highly effective cost management by city staff, and 3) one-time receipt of state/federal funds.

Given remaining uncertainties, even as I look forward with great optimism to a post-covid 2021, I would suggest that continued financial prudence and a spirit of gratitude are most appropriate at present.  Here are a few highlights of the 11.30.20, Year to Date (YTD) financial report as presented at last Monday’s Council meeting:

  • YTD income tax Revenues are just 0.17% below budget ($19,525,556 actual vs. $19,558,186 budgeted), not the 10% projected back in April.
  • Total General Fund Expenses were reduced by a whopping $5.1 million from budget, a 17% reduction ($25.6 million actual vs. $30.7 million budgeted*).  These savings reflect the furloughing of part-time workers, unfilled staff positions, reduced programming, and deferral of various maintenance expenditures.
  • The result? Our General Fund Balance will in all likelihood actually increase for the year, and will be in the range of $16-17 million at year-end, more than 50% of last year’s expenditures (the upper end of the City’s target).
  • Lastly, because of ≈ $1.4 million in CARES Act funds received, the City was able to provide much-needed, direct financial assistance to community groups ($100,000) and small businesses through a ReBoot COVID Relief fund ($300,000). Read about this here: https://worthington.org/1943/COVID-19-Business-Support

The full 11.30.2020 financial report can be viewed here, pages 26-31: https://www.worthington.org/ArchiveCenter/ViewFile/Item/3616)

I’ll be glad to try and answer any questions prompted by this thumbnail sketch post, if you email me at davidwrobinsonblog@gmail.com

My earlier post (September, 2020) on the city’s finances can be viewed here:

https://davidrobinsonblog.com/2020/09/a-bit-of-good-news-amid-covid-19-city-of-worthington-finance-update-8-31-2020/

And, if you wish to see how the financial outlook appeared back in April, please go here (pages 48-52): http://www.worthington.org/ArchiveCenter/ViewFile/Item/3393

* The $25.6 million actual figure was derived by adding the Police and Fire expenditures ($432,620 and $796,817, respectively), that had been moved to the CARES Act Fund 222, back in to the GF Expenditures report (where they normally would be located in order to provide comparative information year-to-year), so that the $24,327,002 Total Expenditures figure on the GF Overview report became $25.6 million.

David Robinson

David Robinson lives in Worthington with his wife, Lorraine, and their three children—one who attends Kilbourne Middle School, one who attends Phoenix Middle School, and one who is a graduate of the Linworth High School Program and Otterbein University. David is President and co-owner of Marcy Adhesives, Inc., a local manufacturing company. David has served on Worthington City Council since January, 2018, and is deeply committed to 1) advancing resident-centered policies, 2) supporting responsible development that enhances our unique historic character, 3) endorsing environmentally sustainable practices for both residents and city operations, 4) promoting the safety and well-being of all residents, and 5) preserving the walkable, tree-filled, distinctive, friendly nature of our neighborhoods.