City will exercise conservatism with $1 million carryover

SALEM – The city government ended 2012 with a more than $1 million carryover to start 2013, but city Auditor Betty Brothers said being conservative is still the game plan she’s recommending for this year.

“My advice is to do business as usual and be conservative. We can’t throw caution to the wind now that we have this carryover,” she said Friday.

According to the final calculations, the carryover actually totaled $2,394,579, but to be fair, she said the $1,352,053 received for the oil and gas lease should not be counted since its a one-time windfall. There’s also encumbrences or bills left over from 2012 totaling $10,067 which have to be subtracted out, leaving a true carryover of about $1,032,459.

Brothers said that’s an amount $119,390 higher than last year’s carryover.

“This is a lot higher than I projected,” she said.

She pointed out that the estate tax which is no longer being collected this year can’t be budgeted because there’s no way to know how many estates will be processed to affect the city. In 2012, the city received $225,352 in estate taxes. She said the city will likely receive some estate tax funding this year, too, but only for estates left over from 2012.

Brothers called the carryover this year very healthy, but added “you have to keep in mind all the revenue we’re losing.”

She was referring not only to the estate tax, but also to the Local Government Fund cut and the fact that the SAFER grant used to bring back two firemen from layoff a couple years ago ends in April.

The budget approved by council last month took that into account, with the salaries to be covered by the fire department appropriation.

Income tax revenue also exceeded expectations, with total income tax receipts at $4.3 million for 2012. She had projected an income of $3.9 million for 2012, but bumped the estimate for this year to $4.1 million.

In looking at actual expenses for 2012, she said the final total was $4,785,735. Actual revenue for the year, not considering the carryover from 2011 or 2012 or the oil and gas lease money, totaled $4,905,126.

No decision has been made by council regarding what to do with the $1.35 million from the oil and gas lease deal. She said it will likely come up during a Finance Committee meeting of city council.

She said she would like to see the money used to pay down the city’s debt.

City council approved budget appropriations for 2013 last month, with expected general fund expenses of $4,787,641 for this year, total revenue of $4,414,541 and a carryover estimated at a little less than $1 million that has already come out higher.

During the next city council meeting at 7 p.m. on Jan. 15, Mayor John Berlin is expected to talk about the city’s finances and will deliver his State of the City address.