Summary:
- Elyria’s general fund improved in May thanks to a tax refund from RITA.
- The employee health insurance fund is nearly depleted, dropping from $3 million to $230,000 in two years.
- The city may need to adjust the health insurance plan to control costs.
- Elyria is actively pursuing income tax delinquents to boost revenue.
The city of Elyria saw its general fund improve in May after months of declining cash reserves, Finance Director Ted Pileski told the City Council on Monday. However, the city’s employee health insurance fund remains in serious trouble.
Between January and April, the general fund dropped by about $890,000. In May, it rebounded by nearly $600,000, leaving the fund down $302,700 for the year so far. This improvement came mainly from a large refund from the Regional Income Tax Agency (RITA).
Pileski explained that RITA withholds 3% of collected income tax to cover its collection costs. If the actual costs are less than 3%, RITA refunds the difference. For Elyria, the cost was only 1.05%, so the city received a refund of $679,498. Of that, $453,021 went back into the general fund.
Despite this positive news, Pileski warned that the employee health insurance fund is the city’s biggest budget problem. Just two and a half years ago, the fund held more than $3 million. Now, it has dropped to about $230,000.
Pileski said, “No pun intended, but the health insurance fund is bleeding cash.” The city started increasing contributions in April to help, but if that is not enough, the city may need to change the health insurance plan to make it more affordable.
When asked about income tax delinquencies, Pileski confirmed the city actively pursues people who do not file or pay their taxes. RITA staff are even present in municipal court to handle these cases.
