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Upper Arlington reports $5 million positive variance; council weighs bond sizing and police/fire pension levy
Summary
Finance staff reported roughly a $5 million positive variance in the December 2025 report and proposed using the funds to reduce planned 2026–27 bond issuance; council discussed implications for the upcoming five‑year police and fire pension levy and whether to use reserves to lower property taxes or preserve long‑term cash flow.
The city’s finance team told Upper Arlington City Council on Feb. 2 that income tax receipts were up about 3–4% year‑over‑year and that the city recorded roughly a $5 million positive variance relative to projections.
Director Lewis said the surplus offers an opportunity to reduce the amount the city hopes to borrow for upcoming capital improvement projects, potentially lowering the planned bond issuance for the 2026–27 CIP. He added the city is preparing for ratings meetings and expects bond pricing work in the coming weeks.
Council members debated whether to use the windfall to reduce the police and fire pension levy that the city is scheduled to place on the ballot in November. "We could reduce the police and fire pension levy," one council member said, urging the city to show residents relief on property taxes. Lewis cautioned that pending changes to state pension rules and other uncertainties could shift obligations, making a conservative approach prudent.
City staff described reserve policy changes that cap unrestricted reserves at 50% with excess funds directed to a facilities maintenance reserve and capital needs. Staff said the $5 million variance is being considered as part of that framework and that an early budget adjustment may be brought forward to reflect the change.
Council did not take immediate action; staff said they would return with updated projections, bond timing and analysis of the levy implications.
