Finance Director Gives City Financial Update

During the Vermilion City Council Meeting on Monday, May 4, 2020 Amy Hendricks, Finance Director, submitted a Finance Update to City Council as follows:

"We have not had enough time to detect a significant impact on our revenues with the 3-month extension on the 2019 income tax filings and 2020 estimated payments. We have had the bonus of a rebate from BWC in the amount of $89,100 to assist with COVID 19 related impacts. These funds have been prorated back to the funds the premiums were originally paid from. 

"Right now, our largest pandemic related expenses are approximately $10,000 in unemployment claims for people who are on our payroll part time for the rec department and fire department who have been laid off from their primary employers. As a reimbursing employer, we do not pay a premium, but are billed for the claims based on the City’s share of earnings in the base period. 

"Carry-over at December 31, 2019, was $2,245,000 in the General Fund which will be utilized to offset cash flow delays from changes in tax deadlines, delinquencies, etc. 

"Originally adopted 2020 appropriations and revenues indicated an operating surplus of $476,786 at December 31, 2020. 

"General Fund estimated two-year loss of just under $1.1 million is: 

  • Income Tax 20% $447,185 Misc. Other various - 122,000 Est. Revenue Loss 2020 $ 569,185 2021 $ 527,630 
  • Delay of income tax due date will not give us a complete look at 2019 until fall, which will be mixed with 2020 estimates and withholdings. Actual 2020 returns will be reconciled until Summer, 2021.

"General Fund savings are currently estimated at $207,000 as follows for the remainder of 2020: 

  • Reduced Personnel expenses $ 70,000 Delay parking lot development $122,000 Delay water tower repairs $ 15,000 
  • Streets All 200 Funds projected balance $800,000 
  • Income Tax 20% - 279,000 State Funding 20% - 201,750 Est. Revenue Loss $ 480,750

"Urban paving program projects are currently set to start next year and that will require carry over to support local funding from the street department. In an Ohio Municipal League (OML) finance call this morning, the Auditor of State cited that ODOT measured a reduction of 45% from standard traffic levels. 

"Other funds are likely to have impacts from decreased services, increased delinquencies, and other areas of funding that can’t be estimated at this time. 

"Unfortunately, by the time we can fully measure revenue losses, it will be too late in the year to change course at that time. Income tax estimates will be complicated with many residents working out of town, so we are not seeing ongoing payroll withholding trends for those individuals but will not be measurable until as late as next summer. 

"Most of our capital projects are being paid for from other funds that have restricted use that are already underway."