The Springboro City Council has passed its 2019 budget and a five-year capital investment plan this month, setting the stage for the city government to save $700,000 in interest payments in coming years, according to staff projections.
The city decided to go ahead and pay off long-term debts over the next four years on its water and sewer plants and work done on the golf course clubhouse, avoiding additional interest payments, City Manager Chris Pozzuto said.
Finance Director Robyn Brown still expects to end next year with more than $5.5 million in general fund reserves. Pozzuto said this was enough to continue to fund operations for six months without having to make budget cuts.
“The savings will not be reflected in the 2019 budget, but in future budgets, as the savings will be shown in the 2020 and 2022 budgets when the debt is officially paid off early,” Pozzuto said in email responses to questions.
On Nov. 1, Springboro City Council approved a five-year, $24.6 million capital improvements plan, with Councilman Dale Brunner absent.
The budget was approved last Thursday by the city council, with council-members Janie Ridd and Carol Moore absent.
The budget and improvements plan chart the city’s financial future through 2023, including changes made to expedite debt repayments.
“The savings will go towards future capital — things like road improvements, park improvements, storm sewer improvements,” Pozzuto added via email.
Otherwise the city would have continued to pay down the debts on the sewer plant through utility rates and the clubhouse work through income tax.
As a result, in January, Pozzuto said the city will be able to “freeze” utility rates “until future notice.”
To make the savings happen, almost $5.5 million in additional water funds were set aside to cover the payments through the end of 2023, upping the revenue transfer from $1.6 million in 2018 to just under $7 million in 2019, according to the budget.
In addition, more than $5.6 million in additional funds were committed to cover sewer debt payments through June 2022, increasing the budget transfer from $1.7 million to $7.4 million.
This alone is projected to to save $663,750 in interest payments, according to the budget. The city expects to save $47,000 on the golf course debt.
None is to be saved on the water debt repayment, to be completed as anticipated, Pozzzuto said.
In the 2019 budget, revenues, primarily income tax collections, were projected to total more than $11.4 million, up more than $350,000 over 2018 projections.
Two police officers are to be added, yet projected general fund expenses are projected to drop $16,793, according to the 2019 budget.