It’s not rocket science.
The Lawrence County Budget Commission reported last month three City of Ironton funds — recreation, flood and water treatment equipment replacement — would all end the year in the red.
Ironton Mayor Rich Blankenship said using money from the general fund to supplement such enterprise funds is not only common but also necessary.
“The flood and recreation funds are funded by levies that were put in place years ago,” he said. “Neither levy is at a level to sustain itself. Fuel costs, parts and everything these have increased in price and the levies have stayed the same.”
The budget commission report stated the recreation fund, which started the year with a prior year deficit of $14,716, is slated to have a deficit cash balance of $4,263. The flood fund, which started 2013 with a deficit of $6,334, is slated to end the year $16,864 in the red. The water treatment equipment replacement fund, which started 2013 in the black with a cash balance of $80,951, is scheduled to end the year $7,948 in the red.
County auditor Jason Stephens and deputy auditor Chris Kline both said the Ohio Revised Code requires budgets to end and begin the year with no deficits.
“The city is allowed to transfer funds from the general fund to an enterprise fund to erase a deficit but not the other way around,” Kline said. “Money also can’t be transferred from one enterprise fund to another.”
Blankenship said donations from businesses and individuals were once used to supplement the recreation fund, but even those have all but disappeared.
“We used to get donations in the past,” he said, “but even they have nearly diminished altogether. Donations would be used to buy equipment for parks and things like that. I can’t buy a swing set for a park like I can for my house. They have to meet all kinds of regulations and cost thousands of dollars.”
Overall, Blankenship said, when he took office much of the city’s equipment was dilapidated and unsafe.
“It was to the point that most of our equipment and things didn’t even meet the minimum requirements to be insured,” he said. “Fixing, updating and maintaining that equipment cost a lot of money.”
If Blankenship is willing to decrease the amount of money allocated to an enterprise fund in his proposed budget to council, it’s not going to be the flood fund.
“Our pump stations are old and cost about $5,000 to fix,” he said. “We have four pumps in each station and when one tears up, we are going to fix it no matter what. The other option is to let the people flood and I’m not going to do that.”
Money from the general fund used to subsidize any enterprise fund is used strictly for operating expenses and maintenance, not salaries.
“The last several years we have been in flood operation more than normal and when we are in flood operation our employees work 24/7,” he said. “We had one instance when we were in flood operation for two weeks and two weeks of 24/7 work really eats up flood money. We used to have two flood employees, but now we only have one.”
Blankenship prepares his proposed budget with the help of finance director Kristen Martin. His first draft is submitted in October of the prior year.
“There’s still three month left in the year after I submit the first draft of my budget to council,” Blankenship said. “A lot of things can happen in 90 days.”
The payout from levy revenues is another reason the general fund has to balance other funds.
“Levy money is only allocated twice a year,” he said. “We won’t get the second part of our 2013 money until May or June of this year.”