MANSFIELD — Feeling the loss of income tax revenue largely tied to the COVID-19 pandemic, the City of Mansfield may have to dip into its “rainy day fund” during 2021.
That was the message from city Finance Director Linn Steward during an hour-long City Council finance committee meeting Monday evening as local lawmakers continued work on the 2021 temporary budget.
Steward described several revenue areas that have declined in 2020, including income tax, which accounts for about 60 percent of the city’s annual funds.
Based on current collections, estimated income tax revenue is down about $1.7 million in the general and safety services fund, Steward said.
2021 Mansfield temporary budget comparison
When the pandemic reached Ohio in March, resulting in shutdowns of businesses the state deemed “non-essential,” Steward estimated the general and safety-services funds could stand to lose nearly $3.7 million.
As a result, she said, the city may need to appropriate $1.3 million from its $5 million budget stabilization fund for 2021. The budget doesn’t have to be finalized until the end of the first quarter of the year.
If the stabilization fund is used, the city is required to have a plan to replenish it, according to an ordinance passed in 2013 setting up the fund.
“This is a temporary budget,” she said, “and things are very fluid, changing every day.”
Steward said the 2021 temporary budget includes relatively the same appropriation amounts found in the 2020 final budget, with the exceptions of contractual salary and benefit increases.
“Additionally, there are no capital outlay requests in these funds. After year‐end cash balances are reconciled, we can determine if any funds are available for capital requests with the final budget,” the finance director said in her budget notes.
The total 2021 temporary budget in the city’s general fund is $31,132,789, about $135,759 more than the 2020 actual budget. The temporary budget for the city’s safety forces is $27,519,325, estimated about $1.8 million less than 2020.
The city did put about $1.3 million of its $4.2 million in federal CARES Act funds toward salaries and benefits in the police and fire departments, Steward said, which will help the city maintain a financial carryover into 2021.
All goods and services purchased with CARES Act funds must be received by Dec. 30, Steward said.
3rd Ward Councilman Jon Harlingen, who said the administration had done well in holding down expenses in 2020. He also complimented the work done by Steward and her staff in preparing the 2021 temporary budget.
“That paints a pretty clear picture of what the city is facing now,” Van Harlingen said. “2021 is going to be different. It’s going to be a real challenge.”
David Falquette, an At-Large member of council, asked Steward if transfers from the “rainy day fund” could be made monthly in 2021, as opposed to a single lumpsum.
Steward said, “We will only do a transfer when it gets to the point we have to do it. If we don’t spend it all, we may not need to appropriate it. But we have to budget for it in the temporary budget.”
