Cincinnati's $16.6M windfall: Spend or save?
Council spent more than 90 minutes Monday debating how to spend the city's just-announced $16.6 million surplus, but City Manager Harry Black in a memo reminded council of its policy to save for a rainy day.
How much to save never even came up in the discussion.
If the spending plan -- money for heroin prevention, employee raises and for police programs among other things -- passes as proposed, the city's four reserve funds would stand at 10 percent of the city annual budget. Black wants to save $3.5 million more than what is being saved, per a council policy that calls for the reserves to eventually reach 16 percent of the annual budget.
Left out of the proposal: Money for the African American Chamber, which was promised earlier this year when the chamber was left out of the fiscal year 2017 budget.
"The city can no longer go forward consciously leaving people behind," Councilman Wendell Young said. "Their work benefits the entire city. African Americans are a significant part of this city. We don't spend enough time funding under this underserved community."
Young vowed not to vote for the spending plan unless the African American Chamber was included. Councilwoman Yvette Simpson agreed.
"Support needs to start with this council and it needs to start today," Young said.
The $16.6 million is what's left over from the city's fiscal year 2016 operating budget. The city's revenue came in $7.7 million ahead of predicted and the city spent $8.9 million less than budgeted. Budget years run July 1 to June 30.
City administrators gave Council a list of suggested spending Monday. A vote was set for Monday afternoon, but council tabled the vote in order, as Simpson put it, "to do the best we can to prioritize spending."
It's up to council to cut spending if they want to add in other expenses.
The list of possible spending includes:
- Estate tax repayment; $1.1 million
The Hamilton County Auditor's Office mistakenly gave the city $6.8 million in estate tax that was due to another city, meaning Cincinnati had to repay the auditor. The $1.1 million would go toward paying off that debt, leaving a balance of $1.3 million.
- Heroin epidemic; $46,500
Council already approved creating a program that would train citizens to respond to heroin overdoses. This money would pay for that.
- One time allocations; $1.5 million
This spending includes another $90,000 to combat heroin, half a million for policing, including the purchase of a shot spotter; $125,000 for extended recreation center hours; $250,000 for youth employment; $100,000 for the Shakespeare Theatre. "We thought here was merit to each one of these ideas," Assistant City Manager John Juech told council. "These are some of the most pressing needs that could be funded with one-time spending."
- Negotiated union contracts
Council this past summer approved raises for most city employees, which are expected to cost $2.7 million this year. Budget Director Chris Bigham said the city's fiscal year 2017 is not structurally balanced because of the raises, but his office is working to fix that by the end of the year.
A look at the budget:
The good news
- City income tax came in 2.1 percent over estimates.
- Admission taxes came in $1.3 million over estimates due to increased revenue from concerts, plays and sporting events, including the All-Star Game.
- Licenses and permit fees were up $770,000. Additionally, building and inspection charges were up $377,000.
- EMS billings and collections were up $1 million. That department has a new administrator.
The bad news
- Fines, forfeitures and penalties were off an estimate by almost $500,000.
- The parking meter program cost more than expected.
- Casino taxes ended $565,000 below the $8.6 million estimate.
- The local government fund, money given to the city from the state, ended $845,000 below estimates.
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