Breaking down city's record-breaking budget

SANDUSKY — For the fourth straight year, Sandusky officials backed a record-setting budget. During a recent public meeting, city commissioners authorized the local government's everyday operating budget, which totals $32 million. Some also call this the general fund. It's an account funding the most important services Sandusky offers — think police, fire, parks, recreation, road maintenance, trees, parks as well as salaries for employees to carry out their civic duties, among others — to residents, community members, tourists and others. At the time of approval, early in a given calendar year, this $32 million figure represents the highest amount in Sandusky's general fund history, topping the previous marks originally set in 2024, $30.7 million; in 2023, $29.3 million; and 2022, $25 million. The 2024 number, however, ended up totaling $34 million, as Sandusky's government received more-than-expected money through local taxing sources and federal funds, including through the American Rescue Plan Act, a stimulus plan that helped communities rebound from COVID-19-related factors. In total, from 2021 through 2024, Sandusky received and spent about $18 million in stimulus dollars in various ways, such as public transportation improvements, neighborhood revitalization projects, housing initiatives and more. The stimulus package stipulated local governments must earmark all dollars, committing them to projects by early 2025. Because of this, city officials expect the 2025 budget to not waver much at all from this $32 million figure. Regardless of the federal funding source drying up, going forward, city officials emphasized how the booming budget still provides enough flexibility to aggressively, yet efficiently, carry out public services Sandusky provides through this fund. For instance, many people still vacation in Sandusky, which generates more taxes. Sandusky does manage other budgets for items like utilities and capital, or large-scale, projects. Officials continue to work on those accounts in preparation of approving them or 2025. The four financial takeaways John Orzech, the city manager, and Michelle Reeder, the city's finance director, presented this budget to commissioners. They highlighted four major takeaways. 1. Why the increase? Beyond inflation, nearly all full-time employees received a wage increase this year — ranging between 2% and 3% more compared to 2023 — and health insurance premiums also went up. Wages make up 52% of the general fund budget for 2025. 2. How many people work there? At the end of 2024, the city employed 248 full-time employees, they said, noting the city "budgeted for 255 full-time employees in 2025. The difference from the 2024 year-end figure and the 2025 budgeted figure is primarily four police officer positions that we have been looking to fill for the police department." 3. What's the surplus? The city expects to close out its 2024 books and end with a $6.6 million cash balance, up from $6.1 million in 2023. "We target to have a cash balance equal to 15% to 20% of our annual expenditures," Orzech said. At $6.6 million, this would equate to being just about 20% of Sandusky's $32 million general fund. "This cash balance helps the city maintain operations and provides stability during difficult times," Orzech said. "Our credit rating is also affected by the amount of cash reserves. This cash reserve provides necessary reserve funds in times of need." 4. What's a cause for concern? The two summed up a situation possibly presenting a problem. "The city relies heavily on the summer tourism industry to provide the majority of our revenue needs for the year. There are many projects and initiatives in place to help create Sandusky into a destination city all year long, but those initiatives will take some time to come to fruition. We have seen declining population since 2010 and would love to see our population numbers rise. We are not alone in facing a current housing shortage, however, our community development team has secured grant funds and created partnerships to help bring home additional housing opportunities to our city."