Introduction | Economic Development Insight | Business Survey
Economic Development InsightIntroduction | Financial Considerations | History of Economic Development | Master Plan | Commercial Districts | Mixed-Use Development | Market AnalysisFinancial Considerations- Financial Policies- Funding Sources - Annual/Ongoing Expenditures - Income Tax Comparison to Other Communities - Franklin County, Ohio Real Property Tax Rates (pdf file) - Looking to the Future Financial PoliciesManaging the finances of a City is a complex and detailed matter. In recent years, Upper Arlington has reaped the benefits of sound financial management and long-term planning.This was most notably realized in 2003, when the City’s financial rating from Moody’s Investors Service was upgraded to Aa1. UA is one of just a handful of communities to have achieved this distinction. The report from Moody’s cited the reasons for its decision: “Moody’s expects the City to maintain its solid financial position given a demonstrated record of prudent management, operating surpluses and considerable reserves.” Cognizant of several financial challenges our City continues to face as it works to provide a high level of services within a finite set of resources, City Council has put several financial policies in place that achieve just that: - City Council adopts balanced annual operating budgets. Using achievable revenue projections, the budget is then set within those projections. This has consistently enabled the City to successfully conduct its operations without relying on reserves, and has helped strengthen the reserve fund during years when revenues exceeded projections. - At City Council’s direction, the City has maintained conservative Estate Tax projections as part of the budgeting process, with unanticipated revenues dedicated to supporting capital improvement projects such as road improvements. - The creation of a Debt Policy has provided a set of criteria to help determine when to fund special projects using existing reserves or by seeking loans. Over the course of several years, these policies have served their purpose well, resulting in a sound financial picture. As a result, the City is able to undertake long-range planning and to address significant projects outside the norm of day-to-day operations. One significant example pertains to the City’s Capital Improvements Program (CIP). Several years ago, UA voters were asked and chose to support a $10 million bond issue that would enable the City to develop a five-year CIP addressing infrastructure improvements, with $2 million dedicated each year. As a result of the City’s solid financial planning, the CIP was extended to seven years with $5 million dedicated per year, without the need to go back to voters for additional support, and bringing the total dedicated to CIP projects to $35 million. The financial upgrade from Moody’s was tied to the City’s $10 million Capital Improvement Bonds, Series 2003, issued last December to support funding for the CIP. With an excellent financial rating and at the recommendation of the City’s Debt Policy to issue bonds while interest rates were favorable, the City was able to secure a 3.988 percent interest rate on the 20-year bonds. Another example is funding for the Hastings Pool renovation. Estimated to cost approximately $3.4 million, the City has been able to identify the funds to support this project without the need for additional support from residents. Upper Arlington is wise to continue on its path of conservative revenue projections and expanded efforts to seek alternate revenue sources. Three main components of the City’s revenue stream continue to be at risk: - Changes in Estate Tax law have already decreased the resulting revenues reaching the City, with the possibility that it could be eliminated completely. - The Local Government Fund, approximately 10 percent of the City’s revenue, has been reduced and discussions continue at the State level regarding the possible elimination of this fund. - The City’s income tax make up a significant portion of revenues, yet we are reliant on a small number of larger employers as a result of the limited amount of land dedicated to commercial use. Recent economic challenges have impacted that revenue stream. Maintaining the financial wherewithal to be able to seize economic development opportunities is key to maximizing the City’s long-term income tax revenue potential. Many of the economic development incentive tools available to communities require short-term financial investment to support such projects. With strong leadership from City Council and the professionalism of our Finance Department, the City is in a strong position to continue providing top-notch services to its residents while taking the necessary steps to plan ahead for our future. Matt Shad Deputy City Manager-Economic Development City Manager's Office City of Upper Arlington 3600 Tremont Road Upper Arlington, Ohio 43221 Phone: 614-583-5046 www.ua-ohio.net |
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