minfin 06-15-20 - Laserfiche WebLink

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Director Rancatore gave an overview of the report, with the main point being that the city is currently $3 million off pace compared to last year's budget and timeline. Withholding tax makes up 40% of this year's total budget and was found to be the most positive component of the budget news, as it is down only about 7% in total compared to last year. Individual income tax is down about 33% compared to last year at this point, however this is likely due to timing differences in collection dates. June's tax receipts are expected to be ugly due to the timing difference. June is usually the second strongest month of tax collections over the last couple years. Director Rancatore explained differences in collections for the state of Ohio homestead rollback program and noted that locally collected property taxes levels may see a slight decrease. Chairman Bullock and Director Rancatore discussed the gaps in the budgeted versus collected licenses and fees amounts. It was found that rental licenses for residential properties are not due until November, which should indicate an increase in collections toward the end of the year. As an aside, the funds received from the local government fund are down 36% from last year. Discussion of Ohio Senate Bill 310 Director Rancatore gave an overview of the state legislation, noting that it allows municipalities to receive funds provided by the CARES Act. Funds are distributed using the local government fund formula, and Lakewood is anticipated to receive $2.3 million. Senate Bill 310 has now become House Bill 481. Chairman Bullock noted that the ultimate source of the funds is the federal government, but the state disperses them. Chairman Bullock asked if the funds are to be a grant or loan and whether there are any strings attached to those dollars. Director Rancatore stated that the funds are a grant for coronavirus related expenses and that the original language of the CARES Act prevented the money from being used to backfill revenue holes. He did note that the city can justify using funds on safety force expenses from March 1St up to December 31St of this year and that the administration is keeping track of the expenses. Councilmember Litten asked if the city would have any issue filling COVID related expenses and spending down the funds provided by the state legislation. Director Rancatore stated that the city should have no problem spending the money and that the guidelines for its use are very general and the hope is that there will be a later loosening of restrictions. Most of the city's budget is police and fire. Councilmember Litten followed up and asked where the city can go for guidance on expenditures. Director Rancatore indicated that he anticipates more guidance from the state auditor's office. Councilmember Neff asked, under the aforementioned plan, if the city was backfilling holes to cover the salaries of first responders and if that would include overtime costs. Director Rancatore noted that overtime is included in Finance's calculations and that the funding cannot be recorded as revenue in the general fund. He added that the governor made the state shut down and the city's essential services had to keep running.The large chunk of what the city attributes to COVID expenses are police and fire.