LIMA — Both Allen County and the City of Lima are heading into 2021 with multi-million dollar increases in their rainy day funds thanks to a combination of budget cuts and CARES Act dollars propping up revenues in 2020.
More specifically, Allen County expects to add $1.9 million to its cash balance bringing it to $4.3 million. The City of Lima is on track to add $8 million to bring its total to over $10 million.
In March, the two local governments expected to see major revenue reductions due to the coronavirus pandemic, but as cuts were implemented, they ended up making back their dollars. Allen County, for example, requested that each department find ways to cut 10% of their expenditures. Similarly, the City of Lima implemented a hiring freeze to lower spend through attrition.
Then CARES Act money started to flow toward their coffers. Throughout the year, each organization received an extra $5 million roughly in federal funds shuffled through the state, which paid for many of the pandemic-related expenses, including safety service payrolls.
“That’s a big swing in our year end position,” Lima Finance Director Steve Cleaves said. “With that extra money that came in, we should have about $10 million in cash carryover at tend of the year.“
Heading into 2021, budget information for the new year has just been released, but the two local governments expect the new year to come with some challenges as projections show that revenue will be down in the next few months. The significant cash balances held by both the city and county, however, should help with any unexpected issues.
Cleaves said the city plans on using its increased fund balance to start reversing the attrition it began in 2020 by hiring more people. Plans are also in place in 2021 to hire 12 more safety service personnel — six firefighters and six police officers — which is expected to use some of the city’s saved up cash balance over the next few years.
Additionally, Cleaves said the city has some major projects in the works, including a major overhaul to Lima Police Department software systems to remain state compliant.
“We’re going to start that software replacement program. That’s going to cost us $3 (million) to $4 million over the next three to four years. It’s good thing we got (the additional dollars), because we have a lot of requirements with manpower and software,” Cleaves said.
He expects city revenues to catch up to the additional expenditures over the next few years.
As for the county plans, Noonan said 2021’s budget is very similar to 2020s overall, but there are a few caveats.
Due to its expanded cash balance, the county plans on doling out one-time bonuses for county employees. During a meeting laying out the budget for county department heads held Friday morning, Noonan explained that the county’s salary budget lines would be increased by 3%, which would be handed to employees depending on each department head’s preference.
“The elected officials in each department over the course of 2021 can choose how you would like to offer those to your employees — whether you use it at the end of the year, whether or not you do half in June, half in December — how you apportion that money will be up to each office,” Noonan said. “But again, that is for a bonus and not for an increase to your wages.”
Both the city and county will be approving their budgets for the new year within the next few months. On the city’s front, Lima City Council will begin its finance hearings in January, and the final budget will be approved after councilors have a chance to dive into the city’s numbers in more detail. The City of Lima is currently on track for a $34.3 million general fund budget in 2021, which would be a slight decrease from 2020.
Noonan said the county will vote on its 2021 general fund budget at the beginning of the year, and then, commissioners will have to consider its needs on the capital budget. Currently, the county expects 2021 expenditures to be close to $30 million, or an increase of about $200,000 from 2020’s $29.8 million budget.
“We are very fortunate to have a very fiscally conservative budget commission, and I commend them on the numbers every year that they provide,” Noonan said.
Reach Josh Ellerbrock at 567-242-0398.