Riley Scott

Building a Budget

2/27/2019

A look at making the yearly budget in Athens

Abby Miller / Staff Writer

Kathy Hecht sits in an office riddled with paper. Stacks of manilla filing folders line her desk. Her bookshelf is filled with rows of binders, and boxes on the floor have even more files. The desktop of her office computer is just as crowded. Small icons virtually take up the entire screen.

“I should clean some of that stuff out,” Hecht said. “But who has time?”

Paper floods Hecht’s office, and with just the city’s expenditures budget stacking up to be 43 pages long, it’s no surprise why.

As city auditor, Hecht’s time is devoted to the numbers. One of her largest jobs is helping create the city’s yearly appropriations ordinance. In order to create a realistic city budget, Hecht must look at projections, compare past numbers and estimate city revenues. The work is time consuming, but necessary and is done by various city officials as early as six months in advance.

Ohio law requires that municipalities have their yearly budgets passed by Jan. 1. Formal meetings to discuss the appropriations ordinance begin in September and stretch until mid-December.

For Hecht, the process begins as early as June.

Hecht’s main responsibility lies in creating the revenue budget, she said. That includes making estimations on how much the city will spend within various departments. Mayor Steve Patterson creates the expenditure budget, which tries to pinpoint how much each department will spend in the year. To uphold her end, Hecht uses revenue data from past years. She has a large spreadsheet file on her computer that outlines her process. Some boxes are highlighted in bright yellow, and they all contain figures.

Hecht said she took the city’s actual revenue from 2017 and 2018 and used it to project how much the city would bring in this year. She highlighted items she was unsure about and included the money from last year that carried over, which amounted to $1.3 million.

Hecht and Patterson are not the only ones bringing data to the table during meetings. The city finance and personnel committee and City Council President Chris Knisely are also included in that process.

Jeff Risner, D-2nd Ward, heads the finance and personnel committee. He describes his role in creating the budget as “very involved.”

The finance committee meets weekly with the city auditor, mayor, service safety director and president of council, Risner said. Departments will have meetings on their own as well.

“The departments in turn look at, again, what are their capital needs, what equipment replacement might there be, what do you need for fuel, what do you need for any equipment that has met its useful life supplies,” Patterson said. “So there’s a lot of other things to think about.”

Hecht said that sometimes departments don’t give themselves much room between the money they have to work with and what’s budgeted. That may require Hecht to step in.

“We have to make any adjustments and say, ‘you have to reduce your expense budget because I don’t think you’re going to get all that revenue,’” Hecht said.

The appropriations ordinance that requires City Council approval deals with all sources of expenses that the city may encounter. All those expenses are listed under the yearly expenditures, letting the city know how much money needs to be allotted for that year. Once all the appropriations are made, they are put into an ordinance for council approval.

Risner describes the appropriations ordinance as a living document. Even when the budget gets passed by City Council, it is still subject to change through amendments.

Rilee Lockhart | ILLUSTRATION

If a department is spending more money in a month than it normally would, it becomes short, Risner said. Meanwhile, when another department isn’t spending as much, that money can be transferred. City Council has a formal way to obtain those fund transfers.

“You can’t just simply go and take it,” Risner said. “There is a process you have to go through to do that.”

Any changes to the city appropriations must be made through an amendment. Those amendments go through council in the form of ordinances, which originate in Risner’s finance and personnel committee and then work their way back to the Athens City Council.

Much like Hecht’s work, all of the budget is built off estimates. The goal of the appropriations ordinance is to anticipate the needs of the city and where money will need to be allocated.

“You know, you do the best you can with the information that you’ve got,” Risner said. “I can make some assumptions. Revenues will be a certain amount. You know that you’re going to be spending more money in the coming years.”

Even then, some changes cannot always be anticipated. For example, Patterson said there was a recent sewer line collapse on College Street. That project was not included in appropriations.

“That was something that wasn’t anticipated and it was (a) really deep dig,” Patterson said. “So we’re going to have to appropriate monies and likely transfer some monies from one account to another to cover the cost for that project.”

Risner said one of the most problematic funds is the Community Center and Recreation department. The estimated community center expenses for 2019 is $1,105,376, according to Athens’ 2019 expense report. The revenue for the center is only estimated to be $1,062,100. On top of that, an additional $50,000 is allocated for “Phase II” of the community center, which will also bring in a revenue of $19,000.

“We’re trying to break even,” Risner said. “That’s a difficult department. There’s so much flux going on. One little thing can really change everything. Chemicals for the swimming pool can go up.”

This year, Athens’ appropriations ordinance totals to about $45 million, Hecht said. A significant amount of that money is put into the general fund. The general fund is an umbrella fund that encompasses most of the city’s day-to-day expenses. That includes items such as vehicle maintenance and postage. This year, there is about $15.9 million budgeted for the general fund, according to the 2019 expenditure estimate.

Income taxes are the largest source of city revenue, Hecht said. Those dollars are mostly put into multiple funds in the general fund.

“The tax revenue goes into several different pots,” Patterson said. “Everything from the general fund, which is our largest fund … but then we also have the arts, parks and recreation levy that’s going into capital improvements.”

The first area that is budgeted is the payroll of city government officials, Hecht said.

Some of the most costly expenses in the City of Athens’ general fund include paying for fire service and police enforcement. Those two services account for almost half of the general fund’s expenses, Hecht said.

“(Police and fire) are 24-7 operations, so it’s costly,” Hecht said. “But we’ve got to have it.”

The police department costs about $4.7 million each year, according to the 2019 expenditures. The fire department costs more than $3.6 million.

Personnel expenses also account for about 60 percent of the total $45 million budget, Risner said. Within covering personnel, multiple facets for which must be accounted. Wages, benefits and health insurance all add up, Risner said.

Some Athens residents have specific concerns about what should be highlighted more in the city’s budget. Among them, Wolfgang Suetzl said the city should spend more money on its infrastructure for pedestrians and cyclists.

“Prioritize that,” Suetzl, an Athens resident and assistant professor of media arts and studies, said. “They’re doing some great things, and they should just continue those.”

Risner said Athens’ yearly budget is nothing compared to that of Ohio University’s. The university’s 2019 budget is estimated at about $770 million, according to OU’s budget book.

Nonetheless, there is much to be analyzed by the City of Athens before and after appropriations are approved. It’s a constant cycle of reevaluation and estimation. Formally, the budget process lasts only about seven weeks. Although the process is much longer on Hecht’s end, she’s still glad that an entire team helps put it together.

“Budget process has been better the last couple years,” Hecht said. “It is a collaborative process. It has to be.”

Development by: Megan Knapp / Digital Production Editor