Worthington City Council sets preliminary levy increase of 17% in a special meeting
City Administrator Steve Robinson identified several areas to increase revenue streams; offered ideas for budget cuts.
WORTHINGTON — A week after announcing a potential 21.53% levy increase for the city of Worthington, council members met in a special session late Wednesday afternoon, during which they set a preliminary levy increase of 17%.
Municipalities have until Monday to set the preliminary levy. Once set, their final levy — determined in late December — cannot exceed that amount.
At the start of the nearly hour-long meeting, City Administrator Steve Robinson said he and staff came up with ideas to either increase revenues or reduce expenses.
Transferring another $100,000 from liquor store revenues into the city’s general fund. During the first seven months of this year, the liquor store showed a net profit of more than $174,000 — and that’s after pre-set monthly transfers to the city’s general fund. Robinson noted they will also stick to the loan repayment schedule, rather than pay additional principal in 2023.
Transferring $200,000 from the city’s safety promotion loss control reserve funds to the general fund. The city receives a refund at the end of each year on its general liability property insurance premium, based on claims. The refunds are placed into reserves for use when the city’s general losses are not covered by insurance.
This was the first year the city met its deductible, due to storm-related damage to Chautauqua Park and the municipal airport, as well as water damage at the Center for Active Living and the loss of a K-9 in the Worthington Police Department.
“Typically we don’t tap into this fund,” said Deb Olsen, city finance director, of the account, which has a cash balance of $901,000, with $673,000 in reserves. Another $200,000 was anticipated to be added to reserves this year.
Robinson told the council this was the first time in his tenure that the city has looked at reserve fund balances as a potential source of revenue for the general fund.
“It’s something we can look at every year,” he added.
Pulling up to $117,000 from the Worthington Rediscover program, a little-used incentive available to homeowners in a specific corridor of town. The program has not had applicants — or awarded funds — for several years. The program was initially established with $250,000, with money used to purchase dilapidated houses and tear them down, with the expectation that the property owner will build a new home on the lot. Mayor Mike Kuhle said he knew of just three or four instances in which the fund had been used.
Robinson said the program would remain in existence, and be funded again in the future.
Wage reallocations for city staff. Robinson said at least one individual will be deployed in 2023 for a six-month period.
“We do not pay wages or benefits (during that time),” he said. “Our obligation is to preserve the position, which we most certainly would.
“That’s a savings, plus, we are reallocating some wages into revenue producing areas like the street and public works departments,” he added.
All together, those changes amount to nearly $500,000 in added revenues for the city, bringing the levy down to 12.69%.
“I would caution council this is still a fluid budget,” Robinson said. “We don’t have our insurance renewals. We used an 8.5% increase for budgeting purposes. There are still several budget items that are not cemented yet.
Robinson also introduced a couple of ideas for budget cuts, including not hiring a communications and community relations individual, which the council had previously authorized. The second idea is to delay the paving of Sunset Park’s parking lot until 2024, giving the city two years to set money aside to fund the project.
“Those are items for discussion as we move along,” Robinson said.
With concerns about insurance costs, Robinson told the council his comfort level for precertification was between 14% and 15%.
Olsen said she is concerned that their insurance could go up as much as 10% to 15% for 2023, which led to the council’s decision to add more of a cushion to the precertification levy, resulting in the decision to set it at 17%.
Coincidentally, the city set its preliminary levy last year at 17.08% before setting a final levy last December of 12.44%.