Mason: High Quality of Life at Low Cost per Resident

“Quality of life” is a phrase often heard when discussing how cities are ranked on a “Top 10” or “Top 100” list. When deciding on rankings, the list maker often looks at public safety, green space, infrastructure (roads, sewer and water service, stormwater control, etc.), schools, neighborhoods, downtowns, public events, park amenities, cultural opportunities, and services provided by the local government.

Few would disagree that residents in Mason enjoy a fairly high quality of life. The streets are safe and clean, seven parks provide a variety of recreational opportunities, roads are improved as necessity demands, water and sewer service are very reliable, schools are top-rate, neighborhoods and boulevards are attractive and well maintained, and public and cultural events provide a variety of entertainment opportunities.

Many of the quality of life items mentioned above would not be possible without real estate or income tax dollars to fund them. In Mason, top quality city services are provided with one of the lowest income tax rates in the tri-state area. (See sidebar)

Rather than trying to compare parks and roads from community to community, a less subjective way to compare the value of your tax dollar is perhaps to look at the average dollars spent for each resident to provide those amenities. In other words, what is the cost per capita for city services?

A quick look at the chart below shows that for the seven cities for which data was collected, Mason is on the low end of the spending per resident. Through conservative forecasting and budgeting, careful use of resources, combining projects to conserve tax dollars, and other financial management practices, residents are receiving an extraordinary value compared to the rate of tax paid.

Being selected as number 81 on Money magazine’s Top 100 Cities list in 2007 was nice, and getting such good value for our tax dollars is even nicer!

City Continues Stable Financial Outlook

Many cities and other local governments are faced with rapidly declining revenue and major reductions in public services due to the current recession. With strategic financial planning, conservative budgeting, and continued commitment to economic development, the City of Mason continues to have a stable financial outlook.

The City of Mason’s Popular Annual Financial Report appears below. The information shown represents an overview of the city’s governmental operations for the fiscal year ended December 31, 2008. A decline of 2.5% in operating expenditures offset a decline of 2.1% in revenues. While the closing of four local manufacturing businesses in 2008 has brought the effects of the economic conditions to the local community, Mason also saw new investments reported for 2008 of over $49 million as 151,000 square feet of new corporate and industrial space were added, bringing over 729 announced new jobs to the community.

City employees continue to find ways to reduce operating expenses while limiting the impact on public services. Mason continues to be committed to have balanced budgets and to operate within the resources available.

During budget season, Mason City Council typically forecasts very conservatively. This strategy of predicting very moderate increases in revenues and holding expenses as low as possible has placed the city in a stable financial position. Over the years, many projects have been paid for with existing funds, reducing the need to issue debt. Even though debt grew in 2008 as long-term bonds were issued, the city has a relatively low debt-to-income ratio. Further, a significant portion of the debt is at a fixed interest rate well below current market rates, protecting it from future increases as the market recovers.

In addition, a long-term, aggressive economic development strategy that has attracted a diverse and strong business community to the city has contributed immensely to the city’s financial strength and quality of life. These businesses generate 80% of the city’s income tax collection, which pays for many of the services that residents and employees of businesses enjoy.

These strategies, along with other factors, have maintained the city’s high Aa2 credit rating from Moody’s. Credit ratings help investors determine the strength of their investment when the city sells bonds to finance capital improvements. The stronger the rating, the better the interest rate.

City Council’s history of sound financial planning has placed the City of Mason in a good position to continue to be an attractive location for families and businesses for years to come.

Popular Annual Financial Report Gives Summary of Comprehensive Data
2009 Financial Review

Each year, the City of Mason prepares a Comprehensive Annual Financial Report in accordance with generally accepted accounting principles. This detailed report is over 150 pages long and presents a complete financial picture of the city.

While this report is significant to the government and financial community, many residents do not have the time to study it in its entirety. As a result, the Government Finance Officers’ Association encourages governments to produce a Popular Annual Financial Report (PAFR) that is a quick summary of information in the detailed report. The data included in the Popular Annual Financial Report below provides a summary of the city’s governmental activities.

Where the Money Comes From . . .

The City of Mason receives the funding it needs to provide services to the community from a variety of sources. The table below presents a summary of the city’s revenues by primary type for 2009, 2008, and 2007. Even though revenue was down 4% due to the economy, tax reductions, and interest rates decreasing, Mason continues to be a community with stable revenue sources for providing services to the community.

The pie charts at right depict the significance each source of revenue has to the city’s overall financial health. Taxes are the largest sources of revenue for the governmental funds. The second largest source of revenue is intergovernmental funds that are from the State of Ohio.

75% of the total tax revenue comes from the city’s 1% income tax. The second largest source is the 5-mill property tax levy for fire and emergency services.

Where the Money Goes . . .

The three-year comparison below for the city’s governmental expenditures shows a slight increase in operating expenditures ($27.1 million for 2008 compared to $27.4 million for 2009). The decrease in total expenditures is from paying short-term debt by issuing long-term financing in May 2008 and a decline in capital outlay. The City of Mason continued its investment in capital improvements to improve the city’s transportation system, parks, and assets that benefit its residents and businesses.

EXPENDITURE TYPE DEFINITIONS

• Public Safety – Police, Fire, EMS, Disaster Services, and Street Lights
• General Government – functions serving the entire city including City Council, Administration, Finance, Tax Collection, Court, and Engineering
• Transportation and Streets – Public Works activities to clean, repair, and maintain public streets, traffic signals, traffic signs, and right-of-way
• Leisure Time Activities – Parks, Park Maintenance, Recreational Programs, and Lou Eves Municipal Pool
• Community Development – Community Planning, Building Inspections, and Economic Development
• Utility Service – Expenditures for city utilities paid by governmental funds
• Capital Outlay – Investment for the city’s capital improvements such as road improvements and equipment replacement

The pie chart shown at right provides a view of operating expenditure types (excluding debt service and capital outlay). Public Safety (such as Police and Fire services) continues to be the largest share of the city’s operating expenditures.

Capital Projects

The following are major capital projects completed or started that are included in the 2009 capital investment:

• Western Row Widening (completed) $6.9 million
• U.S. 42 North Truck Sewer 2B (completed) $1.7 million
• Mason Road Widening (started in 2009) $3.5 million budget
• Fire Station 51 Relocation (started in 2009) $2 million budget
• Community Center Expansion (started in 2009) $19.5 million budget

Note: Some of the costs of completed projects were paid in 2007 and 2008.