What’s In Store for the Mariemont Permanent Improvement Fund? Do the Math!
In the January 2014 Mayor’s Bulletin the Permanent Improvement Fund (used for street improvements, capital equipment purchases, trees, swimming pool, tennis courts, municipal building, etc.) was highlighted as an indicator of the strength of Village finances, having a $715,453 balance in the fund at the end of 2013. Now we find out in the February 24, 2014 Council Committee of the Whole meeting to discuss the 2014 Permanent Improvement Budget that the balance included $455,500 already reserved for future expenses ($255,500 for the 2015 payment of the fire truck and $200,000 for improving the Village Administration Building). The real picture of the ending balance for 2013 was the fund actually only had $260,000 in unreserved funds available. Also acknowledged in the meeting was that $83,500 in encumbered funds (committed funds not yet paid) for the 2013 dump truck ($78,500) and auditor fees ($5,000) had to come out of the total, leaving $176,500! This is far from the rosy picture painted in the Bulletin. By adding the anticipated revenue of $350,000 for 2014, this gives the Village $526,500, so everything seems fine, right? Let’s look at the math.
At the February 24 meeting, the department heads outlined their capital and equipment needs for 2014. What’s the impact on the Permanent Improvement Fund and its balance if they are all approved?
| Department | Request | Cost | Fund Balance |
|---|---|---|---|
| Balance 12/31/2013 | $715,500 | ||
| Fire Truck Reserve | 2015 Fire Truck Payment Reserve | 255,500 | $460,000 |
| Admin. Bldg. Reserve | Admin. Bldg. Improvement Reserve | 200.000 | $260,000 |
| Maintenance | Power washer, front loader, leaf vacuum, trees ($30K) | 66,000 | $194,000 |
| Police | Car, revolvers | 34,100 | $159,900 |
| Fire | 2014 Fire truck payment and misc. | 276,200 | ($116,300) |
| Tax | Computers and software | 17,800 | ($134,100) |
| Recreation | Tennis court repairs and misc. | 13,600 | ($147,700) |
| Streets | Infrastructure improvements | 85,000 | ($232,700) |
| Encumbrances | 2013 Dump truck payment , auditor fees | 83,500 | ($316,200) |
| 2014 Levy Revenue | Estimated revenue from levies | 350,000 | +$33,800 |
Reserves, encumbrances and current needs overwhelm the funds available. Will Village leaders fulfill requests and drop the reserve funds all the way down to $33,800 or will they start deferring maintenance, delaying replacements, picking and choosing which needs get funded? Maintenance stated in the February 24 meeting that it needs to replace two dump trucks. It requested one at $75,000 but the request was deferred to have the fire department purchase a Gator (golf cart style vehicle) for use in the South 80 acres in the event of a need to transport a patient.
What will happen to the fund in 2015 and beyond? Will the Village have the funds to sustain the ongoing needs for improvements and new equipment? Hard thought needs to be given to where the Village is headed, if you do the math.
Mike Lemon
Mike, thank you for summarizing the big ticket items coming up.
It would seem to me that deferring certain costs, if needed, would be perfectly OK. For example, the $200K for upgrades to the Village Administration building: Are those improvements a 2014 need, or has Council put that number in as a placeholder … to consider as funds are (or are not) available each year?
I am glad to see that we have plans for replacing the dump trucks, one now, one later. And kudos to the Maintenance Department especially this past (I hope!) winter, you did a GREAT job!
I don’t see a huge ‘rainy day’ fund, but if substantial capital needs were to arise, I feel like we’d be ready to respond positively.