SALEM - The general fund carryover into 2014 from 2013 totaled $1,583,901, but city Auditor Betty Brothers said it's important that everybody understands the source of that amount.
Some of those sources won't be available this year, such as the estate tax which ended in 2012 but still accounted for $174,359 of income to the city in 2013, all from previous estates. There's also the SAFER grant which accounted for $301,000 last year.
The grant had been for two years, but when money was still left over last year, the city received permission from the Federal Emergency Management Agency to continue spending it until it was gone, which wasn't until October. The money continued to be used for the wages and benefits for two firefighters.
Those two items alone accounted for nearly half a million dollars that won't be available this year.
"We need a hefty carryover to carry us through with all the cuts," Brothers said.
She said part of the current carryover also includes the carryover from the previous year, which was more than $2.3 million. She noted that actual revenue for 2013 totaled $4,998,801 while the actual expenditures totaled $5,809,479. With the actual cash income for the year at $7,393,381, that left the carryover of $1,583,901.
"We needed it because when the budget was done, the budgeted expenses were higher than the revenue expected," she said.
For 2014, she's predicting pretty much the same situation when it comes to revenue and expenses, with expenses exceeding revenue, but in smaller amounts. She estimated revenue for 2014 as $4,679,801 and expenses as $5,323,222. She also pointed out that $25,486 has to come out of the carryover for general fund bills, or encumbrances, left from 2013.
With the Local Government Fund which comes from the state, they had another 25 percent cut last year and received $87,800. She's hoping the LGF income will be about the same this year.
Another source of income from the state is a tax paid by utility companies which has been dwindling down to nothing the past few years. In 2011, Brothers said the city received $47,335. In 2012, the amount was cut to $14,695. Last year, it was down to $8,163. She's not expecting much this year.
Already this year, the health insurance costs have increased by $36,000 from fees and taxes charged as a result of the Affordable Care Act. The city's health insurance isn't up for renewal until mid-year and she's not sure what that's going to look like. She's already been told the cost for dental insurance could go up 10 percent, which she's still trying to negotiate. The city also has the contracts for all four labor unions representing city employees expiring this year, creating another unknown for the budget.
She was happy with the carryover amount.
"We need it. I feel better going into all those unknowns with the carryover," she said.