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Five year budget shows modest increase in revenue and need to reduce carryover

by Laura Freeman | Reporter Published: September 18, 2016 12:04 AM
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Hudson -- As Council reviews the five-year budget, it will have to decide how much of a percentage to maintain in the rollover each year and how much to spend on roads.

In the general budget, which Council reviewed Sept. 13, the projected revenues for 2016 are a little better at $20 million instead of $19.4 million. A gradual increase is expected in the next five years with $20.3 million in 2017; $21.5 million in 2018; $22.3 million in 2019, $22.6 million in 2020 and $23 million in 2021.

Expenses in the general budget also are expected to be higher at $22.6 million in 2016 instead of the budgeted $21 million. That creates a negative run rate of $2.5 million but carryover from 2015 maintains a positive ending balance of $6.87 million or a 30.4 percent ratio ($6.87 million divided into $22.6 million).

In the past Council unofficially set the ratio at 40 percent, but the current Council agreed to go lower because of low interest rates on the carryover and needed funding for city projects.

City Manager Jane Howington said Council may have to shift priorities to maintain a 30 percent ratio, or $6.87 million, in carryover.

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"Twenty-five percent is a pretty safe level," Howington said. "But very foreign to Hudson."

One of the items discussed was dispatch. Although Council agreed to maintain Hudson's local dispatch at the police station, the state's new requirements for upgrading the system would costs $472,353 with possibly more expenses in the future.

The road reconstruction/resurfacing program is a 30- to 40-year program with the $1 million annually spent. More money would be needed to reduce the program to a 20- to 25-year cycle. Council had proposed a reduction in income tax credit to raise the additional funds, but Council members did not approve placing the change on the November ballot.

The city had 11 years of road reconstruction projects, and Council voted to use a $5 million bond to reconstruct them in less than three years, said City Engineer Thom Sheridan. The roads are better today than five years ago.

The $1 million is less than money spent in the past on roads in order to pay off the $5 million bond with approximately $561,688 paid annually. Finance Director Jeff Knoblauch is looking into extending the bond to 20 years and reducing the payment.

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In addition the reduction in reconstruction of roads is to help fund other projects like the Downtown Phase II and YDC property on Hines Hill Road, Howington said.

"We may want to cut the road program a bit temporarily or refinance debt," Howington said. "We're going to make these investments and go down in our ending fund balance but by 2021 we go back up to 30 percent."

The state Route 303 and 91 intersections will be discussed in more detail in 2017. In 2012 Council would not let engineering cut back the curbs to improve the radius for trucks turning at the intersection, Sheridan said. The five-year budget shows design costs of $1 million in 2018 and construction in 2020 with a grant.

"We were restricted to moving curbs [back]," Sheridan said. "If we want to make radius improvements, we could. We would take the tree lawn and sidewalks. Curbs would be moved back a foot or two."

The sidewalks' depth was made to be 8 inches because the city knew the trucks couldn't make the radius turn and would ride up on the sidewalks, Sheridan said. Some Council members in the past argued the greens could be not reduced, but Sheridan said they are public right of way.

Howington asked Council for feedback, and they could discuss the intersection next year.

Email: lfreeman@recordpub.com

Phone: 330-541-9434

Twitter: @LauraFreeman_RP


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