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Bay Village finance committee reports about $1.6 million surplus and rising investment yields
Summary
Pete Wenzig, chair of the Bay Village Finance Committee, opened the May 5 meeting with a review of the village’s four-month financial report, which staff said showed about $1.6 million in revenues over expenditures and a weighted average investment return near 3.5% as of March.
Pete Wenzig, chair of the Bay Village Finance Committee, opened the May 5 meeting with a review of the first four-month financial report and copies of the packet for committee members.
The committee heard that the village’s weighted average rate of return on investments was about 3.5% as of March and that roughly $3.5 million of low-yield investments (under 2%) will roll off the balance this year, enabling reinvestment at higher rates. "The weighted average rate of return for our investments is about 3.5% as of March," staff member Jim said during the presentation.
Why it matters: higher yields reduce pressure on the general fund and give the village options for funding, but staff said they planned to be conservative when selling existing securities because realizing some sales now would show investment losses upfront and could skew annual financial statements.
Key figures discussed included about $3,228,000 in municipal income tax reported through April on one report and $3,035,000 listed as fiscal activity in the budget-to-actual report; staff explained the difference results from an automatic revenue allocation rule that directs 94% of municipal income tax to the general fund and 6% to general capital.
The report showed an approximate $1.6 million surplus in the general fund for the first four months, described in the meeting as "revenues over expenditures." Staff also flagged an expected near-term cash outflow to pay a bond anticipation note of about $1,300,000 that will be drawn from bond-retirement funds.
Other items reviewed included capital-project accounting (encumbrances and remaining balances), an example reimbursement: the interurban bridge project produced a reimbursement to the village of about $78,000 after ODOT closed out final accounting, and the Bay Point project shows multiple grants recognized on the revenue side. Committee members asked staff to expand the capital-project report to better capture sewer projects held in separate funds so council and the public can more readily see sewer-related work and funding.
The meeting also touched on the tax budget process and insurance-renewal timing; staff said they would present the tax budget to council soon and that an insurance-quote process must complete before mid-June. On reserves, staff said the village has roughly $2,750,000 in the general reserve fund and noted an annual limit that lets the village add up to 5% of the previous year’s estimated revenue to that fund.
Committee members raised contingency planning in case of an economic downturn; staff and members discussed the reserve balance and possible measures other cities have taken, such as hiring freezes or delaying nonessential capital projects. Staff said priorities for this year remain sewer work and the fire-station project.
The committee did not take formal votes during the review; staff said they would bring specific ordinances or requests (for example, approval to bid projects or to approve insurance renewals) to council for formal action.
