ELYRIA — Income tax revenue in the city was up last year, breaking $21 million after failing to hit $20 million the previous year, according to the city’s finance director.
City income tax revenue was up 7.18 percent in 2018, Finance Director Ted Pileski said. The city’s general fund carryover climbed to $3.3 million by year’s end, up from $1.6 million the previous year.
“That’s actually a special year, I would say,” he said. “I think a lot of it is attributable to the amount of construction in the city. You have the schools being built, and the city is doing a lot of sewer work, street work and water work.”
Those workers, such as those who completed Elyria Schools’ Mercy Health Field at Ely Stadium last year, provided some of that additional income tax revenue.
According to numbers Pileski recently provided to City Council and shared with The Chronicle-Telegram, 2018’s total income tax collections amounted to $21,352,646, up from slightly less than $19.8 million in 2017.
Pileski said taking a “conservative” approach to estimated income tax revenues helps, as does maintaining a target of about $3 million carryover in the city’s general fund. A good accounting practice is to have at least a quarter of your annual general fund budget on hand, he said.
Elyria’s general fund budget is approximately $30 million, Pileski added.
Mayor Holly Brinda said city officials are “obviously very pleased” about the increase in collections. She also said she is grateful to taxpayers for their willingness to fund public infrastructure projects and for private investment in the city.
“Our business and industry are doing very well,” she said Thursday, with plant expansions at several industrial facilities. “Our business climate is very positive right now.”
Pileski said city has submitted a 150-page Comprehensive Annual Financial Report to the Government Finance Officers Association every summer since 1985. Every year since 1986, it has received a Certificate of Excellence for those reports, Pileski said.
Another recent bright spot for city finances was when Moody’s Investors Service on Jan. 8 announced it had upgraded the city’s bond rating to A2, removing the negative outlook it had previously attached. Bond ratings typically are calculated on a scale of AAA (best) to C or D (worst), affecting borrowing rates.
“The city’s previously deteriorating tax base has stabilized and, combined with an income tax increase, has resulted in revenue growth for both the general and special revenue funds,” Moody’s wrote in its Jan. 8 announcement. “The city’s net direct debt burden is average, although net pension liabilities exceed Elyria’s national peers due to exposure to two underfunded state cost-sharing pension plans.”
Pileski called the A2 rating “an upper-medium grade, upper mid-grade” rating.
Another bond rating service, Standard & Poor’s, has rated Elyria AA- since at least May 2014, according to the city’s 2017 Comprehensive Annual Financial Report. While Moody’s removed the negative outlook from its rating, Standard & Poor’s has yet to do so, Pileski said.
He said he will be in touch with Standard & Poor’s soon and expects it may re-evaluate. He also said he remains “cautiously optimistic” about the city’s financial outlook.
“It was a good year, I’m very pleased,” Pileski said. “You take the good years and then approach the other years cautiously.”