Published Friday, July 19, 2002
budget shortfall
as 'grave concern'
Herald Staff Writer
Officials in Sharon have to figure out how to dig the city out of a $239,261 deficit.
Council members learned of the shortfall Thursday when they heard the city's 2001 audit report from John Mastrian of Black, Bashor & Porsch, CPA, Sharon.
The city budgeted a beginning fund balance of $75,000 in the 2002 budget but the actual fund balance had a $164,261 deficit, according to the audit report.
Mayor David O. Ryan said the deficit was a "grave concern." He said he knew there were going to be some financial problems but, "I never envisioned this."
The city is planning to refinance some bond issues which could give officials another $100,000 to work with, Ryan said.
To bring the budget back in line Ryan said he plans to hold spending as much as possible, project future expenses and send letters pleading for people to pay their taxes.
Delinquent taxes are contributing to the city's financial woes. Taxpayers owe the city $841,000 in unpaid taxes, Mastrian said. He added that many people pay their taxes late so the city may still get some of that money.
The city also had a shortfall of about $87,000 in other uncollected revenues, including utility and police grants the city expected to get but didn't, Mastrian said.
On the plus side, the city's sewer fund collections are increasing, Mastrian said. However, the fund still owes the city's general fund $500,000 that was used to start the fund, he said.
Councilman Lou Rotunno said he wants to see the city start making a profit from the sewer fund. He said the general fund budget "always seems to be in turmoil because no one wants to make the sewer fund pay for itself."
Councilman Raymond Fabian said he thinks there should be a small sewer fee increase every year to get the fund caught up.
Though the city received a clean audit report -- figures were reported accurately and money wasn't misappropriated -- Mastrian suggested council members try to do some long-range planning. He said 80 percent of the budget is salaries which makes it easier to predict the future cost of a large portion of the budget.
Mastrian also suggested doing an actuarial study on post-retirement benefits to see how they affect the budget.
You can e-mail Herald Staff Writer Kristen Garrett at kgarrett@sharon-herald.com