2005 Actual = $(290,933)
2006 Actual = $301,115
2007 Actual = $(647,540)
2008 Actual = $508,033
2009 Projected = $199,778
During 2008, the City established Reserve Balance Accounts to create a way to set-aside portions of positive fund balances for known future or possible expenditures such as separation pay outs and other "rainy day" issues that may arise.
Although a balance of over $500,000 appears significant, it is only slightly more than 1% of overall revenues in 2008. To put this amount in perspective, this would not cover even one General Fund pay period expenditure, which is nearly a $800,000 pay out 26 times a year. And $800,000 per pay period only is the amount for salaries; it does not include benefits like health insurance and retirement.
The General Fund receives almost 50% of its revenues from Income Tax collections, and in 2008 collections were slightly down by approximately $53,000 from the 2007 total. Property Tax revenues were also down slightly by $18,000, but the largest decrease in revenues was in interest earnings and estate tax receipts which combined were over $650,000 lower than 2007 amount.
On average over the past 20 years, the City would realize 2% growth in General Fund Revenues each year. Due to the challenging economic climate, the 2008 actual General Fund Revenues were lower than 2006 receipts.
To be structurally balanced, 2008 expenditures were reduced nearly 2005 levels. The General Fund supports the core operations of the City with over 50% of expenditures funding Public Safety, over 25% supporting Public Works, and the remaining 25% support General Government, Human Services and Administrative Costs.
General Fund Public Works (Parks, Refuse, Fleet, Forestry, Engineering) operations experienced the greatest reduction in overall expenditures from 2007 to 2008 of nearly $800,000. Human Services (Aging, Youth and Early Childhood) saw the next largest decrease of nearly $525,000, and General Government (Mayor's Office, Court, Finance, Planning & Development, Law, HR) decreased by over $275,000. Public Safety (Police, Fire, Building & Housing) increased slightly by nearly $55,000, and Administrative Costs (primarily city-wide insurance and professional services) were $8,000 higher than the 2007 levels.
Capital Investment & Debt Retirement
Many ask why the City of Lakewood can continue to invest in reconstructing roads or purchasing new equipment when it is reducing General Fund expenditures. The reason is that the General Fund does not support these types of expenditures, since the General Fund's purpose is for salaries & benefits and operating costs of the core services detailed above.
The City of Lakewood has a dedicated property tax amount that supports the debt service payments for bonds, leases and loans. As long as the City can afford the debt service payments, it can continue to invest in its Streets, Parks, Buildings, Vehicles and Equipment. For example, a $1.0 million street improvement has an approximate debt service payment of over $80,000 a year over 20 years. The City has to budget for the $80,000 not the $1.0 million.
In 2008, all types of debt service principal and interest payments totaled $10.245 million for current and prior year infrastructure improvements and vehicle and equipment purchases.
Enterprise / Revenue Funds
The City of Lakewood has five separate enterprise or "business" operations: Water, Sewer, Wastewater Treatment, Parking and Winterhurst Ice Rink. These are supported solely by the fees charged to operate these enterprises. These operations also support the debt service for improvements in the water and sewer lines, the wastewater treatment plant, and parking meters.
In 2008, the City of Lakewood leased its Ice Rink to private firm for operation. In 2009, the City will undergo utility rate studies to determine the rate structure required to continue operations, while meeting EPA regulations and to support past and future capital investment debt service.
Other Major Funds
The City has several other special revenue funds with dedicated revenue sources for dedicated purposes. The City receives Community Development Block Grant Funds from the Federal Government. Most of these funds are used for street improvements, economic and community development, and to fund community organizations, and have many restrictions on how the funds can be used. The Lakewood Hospital Fund receives funds from the City's lease with the Cleveland Clinic and from EMS billing. This fund primarily supports the City's paramedics and EMTs, and other health-related endeavors. The Street Construction, Maintenance & Repair (SCMR) Fund comes from gasoline excise & motor vehicle license taxes, and supports the City's Streets department and road salt purchases.