Toledo finance committee hears mixed first-quarter receipts; ARPA allocations fully obligated

At its regular monthly meeting, the Toledo Finance, Debt and Budget Oversight Committee received first-quarter revenue and expenditure reports showing overall income-tax receipts up 8.4% through March even as withholding for March fell by about $4.5 million, committee members were told. Finance staff also reported that Toledo’s American Rescue Plan Act (ARPA) allocations are fully obligated, with roughly $145.7 million spent through March and about $39.3 million remaining. City Auditor John Revolsky said he is revising the annual internal audit plan and expects to issue a performance-measure audit in early May.

Commissioner John Zavisha, who presented the income-tax figures, said, “For withholding for the month of March, the city of Toledo was down $4,514,000 or about 2.9 percent.” He told the committee the March shortfall largely reflects timing and a single top-20 employer that was down for the month; he said April returns will reflect February activity and staff expected additional clarity after next month’s filings. Zavisha said that, through March, withholding is up about 4.6% year to date (roughly $1.5 million) and overall income-tax collections were up about $3 million, or 8.4%, through March.

Zavisha told members that business net profits drove much of the year-to-date increase and that more than half of the business-net-profits gain came from five large companies in the city’s top-five list. He also reported the tax department is expanding electronic filing and lockbox payments and cautioned that some of the early increases could reflect timing of payments rather than sustained growth.

On federal-related receipts, Zavisha said the IRS collection category was up about $48,000 year over year through March and had seen a near $1.1 million increase from 2023 to 2024; he said staff would monitor federal reporting and timing changes that could affect receipts.

The committee also reviewed the general fund revenue and expenditure reports. Director (name not specified) told the group that general fund collections were at about 18.3% of the annual budget estimate at the end of the first quarter, ahead of last year’s 17% for the same period. Key details reported by staff included:

- Property taxes: roughly 54% of the expected annual receipts, driven by semiannual payments received in February. - Licenses and permits: about 28% of budget, including an annual street-permit payment of roughly $350,000. - Intergovernmental revenues: about 18% of budget; Homestead and rollback funds arrived in March this year, compared with April last year. - Charges for services: about 18% of the budget. The director noted a county payment for EMS/BLS transport of about $4.5 million (annual for 2025) and total billing for EMS/BLS in the budget equals about $5.3 million; BLS collections year to date were reported at about $1.8 million. - Other financing sources: monthly transfers from the tow lot of about $2.3 million and a budgeted $3.3 million transfer from ARPA interest earnings for 2025 were cited; combined transfers noted by staff summed to about $5.6 million.

On expenses, staff reported labor and overtime costs were running under budget year to date and that employment-tax and health-care expenditures were slightly over the year-to-date pace (about 25.4%) because of health-care costs. Other labor expenses were running at about 60% of the budget by timing of contractual payments. Supplies and services were ahead of the year-to-date pace because of scheduled annual purchases — for example, the city’s annual taser payment and several quarterly or semiannual contractual obligations (Regional Council of Governments, CJCC, health department) — and encumbrances for summer mowing and blight programs.

The director summarized capital spending and ARPA program status. Staff told the committee that the Toledo Recovery Plan totals $185 million and that all ARPA funds were obligated by the statutory deadline. The director said approximately $145.7 million had been expended through March and about $39.3 million remained to be spent before the program period ends in 2026. Staff projected roughly $250,000 in interest earnings on unspent ARPA balances for 2025 that could be transferred to the general fund under the city’s plan.

Committee members also received the capital improvements program (CIP) report through March. Staff reported the total CIP budget for 2025 is about $198 million and noted a $24 million transfer to the general fund included in the planning figures. Director comments noted that the CIP total includes city-funded projects, debt service, and projects funded by grants or loans.

City Auditor John Revolsky told the committee he is “working through the annual internal audit plan” and is seeking input from councilmembers. He said he added a section to the performance-measure internal audit and anticipates releasing that report in early May. Revolsky also said outside auditors are on site and are not expected to return until mid-June after the annual filing is complete.

Councilwoman Gattis asked about providing input to the auditor; Revolsky said councilmembers may email or set a time to meet. Several councilmembers asked clarifying questions about revenue timing, EMS/BLS billing, and overtime trends for public safety.

No formal votes or motions were recorded on the items presented. The committee adjourned after the presentations and questions.

The committee will next review later-month receipts and the auditor’s forthcoming performance-measure report; staff said April collections will provide additional clarity on withholding and income-tax trends.