Dear Neighbor,                                                                                                                                    Summer 2013  In continuing with our commitment to keep you informed, we have prepared a snapshot of our City’s financial condition.  This review illustrates how our City Council and my Administration are assuring that your tax dollars continue to work to provide you with the quality services that we enjoy here in Lyndhurst.  This review is based upon our 2012 statements which have been independently audited as required by State law and which have received the Auditor of State Award.  Over the last year, Lyndhurst, as well as many of our neighboring communities in Cuyahoga County and across the country have continued to endure the effects of the financial storm.  We have relied on the expertise and cooperation of our employees to stretch every tax dollar as far as possible.  We have struggled with the hard decisions and have kept our focus on what we can do to maintain the vitality of our Community.  I am confident these choices have made us a better organization and a stronger community.    As you read through the 2012 Financial Review you will see where our revenues come from and how those dollars are spent.  You should note that for every $1.00 we pay in property tax, the City of Lyndhurst only receives 13.13 cents to be used to provide all of the services you receive.  As outlined in the financial review our revenues increased and our expenditures decreased. This sound financial planning is a combination of hard work and understanding between City Council and Administration.    As we have reported to you previously, our State Government has continued its assault on local governments and school districts across Ohio sending fewer and fewer of our own tax dollars back to our Community to directly provide you essential services and educate our children. The decisions made in Columbus have already reduced dollars coming to Lyndhurst by over $1.8 million dollars.  Additional changes that are still being discussed on the State level could increase that negative impact.  Rest assured we, and our counterparts across Ohio, have been working to educate our representatives as to what their actions mean to YOU. This year we were fortunate to receive one of the final payouts of Estate Tax, but as of January 2013 these revenue sources no longer exist.   I hope that you and your family have had an opportunity to visit the new Acacia Reservation of the Cleveland MetroParks.  While we have lost this acreage’s potential development value, we have indeed received a jewel of green‐space that will forever remain so.  We have been working with the Cleveland Metroparks in every way possible to make this an amenity that represents our Community well.  What the future holds is anyone’s guess but we will face those challenges with the same resolve and conviction that we have in the past.  Through sound financial planning, forecasting, and operational changes we have accomplished much.   Our employees and our Departments have helped us make these changes yet we have kept all of our service standards high.  The result of this effort is that we have reduced our spending to 2007 levels which has enabled us to keep pace with the challenges of lower property values, lower tax collections and far less State support.  But the bottom line is this….we need to generate more revenue for the future. As proposed last year there are a couple of ways of accomplishing this….the roll‐back of the existing tax credit or a general income tax increase…both difficult choices, but necessary for the ongoing financial health of our City.  These discussions are ongoing and we will be engaging input from you in the near future.  While we will not wait until our backs are against the wall, my Administration and our Council will do everything we can to hold the line as long as possible before bringing that discussion to you, our residents. 

Mayor Joseph M. Cicero, Jr. 5301 Mayfield Rd. * Lyndhurst, Ohio 44124 440-442-5777 * fax 440-442-1844

E-mail – ciceroj@lyndhurst-oh.com

Programs21.45%

Property Tax

22.28%

Income Tax36.65%

Local Tax0.60%

Inter-government

17.79%

Investment Other1.23%

Revenue Sources 2012Fig.1

CITY OF LYNDHURST2012 F INANC IAL REV I EW

Major sources of revenues include property tax, income tax and state-shared taxes. (See Figure 1.)

Where the Money Comes From…

Revenues at a Glance…

INSIDE THIS ISSUE Letter from the Mayor/Safety Director 1 Where the Money Comes from - Revenue 2 Where the Money Goes - Expenditures 3 City Directory 4

Property Tax in Lyndhurst is administered by Cuyahoga County. The County Fiscal Officer assesses your property on 35% of the appraised market value. This value is updated every three years based on average sale prices of properties sold in this area. Every six years your property is reappraised by the County. The County will update values again in 2015. For each one dollar ($1.00) in property tax paid the County distributed those funds as follows: (See Figure 2.)

School District - 63.31 cents Cuyahoga County - 20.70 cents City of Lyndhurst - 13.13 cents

Library - 2.86 cents The City operates on 13.13 cents for each dollar paid in tax and provides most of the government services to you including Police, Fire, EMS, parks, cultural facilities, street maintenance, tree maintenance, leaf collection, rubbish collection, and neighborhood preservation.

Cuyahoga County20.70%

City of Lyndhurst

13.13%

School District63.31%

Library2.86%

Property Tax Collections Year 2012Fig. 2

August 2013

Volume 1, I s sue 1

Revenues

Source: Audited Financial Statements

The following is an overview of the City’s financial position for the fiscal year ended December 31, 2012 and is derived from Generally Accepted Accounting Principles (GAAP). Mary Kovalchik, Finance Director

Property Tax

Source: Cuyahoga County Auditor

Revenues 2012 2011 Programs 4,573,430 4,519,451 Property Tax 4,749,772 4,919,422 Income Tax 7,813,145 6,415,588 Local Tax 130,038 144,493 Inter-governmental 3,792,301 4,063,931 Investments/Other 261,724 135,097

Total Revenues 21,320,410 20,197,982 Revenues for fiscal year 2012 increased by 5.6%over the prior year. Most prevalent was anincrease in Income Tax Net Profit. The Cityremains cautious to this increase which may laterresult in considerable refunds. It is important tonote that on July 1, 2011 Ohio repealed theestate tax effective January 01, 2013. Thischange in the tax law coupled with the County’sreduced property values will have an enormousimpact on future revenues for the City.

Page 3 2012 Financial Review

Expenditures incurred by the City of Lyndhurst, to provide all City services, are shown by function.(See Figure 3.) By far, Police, Fire and EMS are the most important and represent the highest cost ofthese services. The Police Department consists of28 sworn in full-time officers and the FireDepartment consists of 26 full-time firefighter /paramedics. Basic Utility includes the cost ofrubbish, recycling, trees and sewers. Costs increased in 2012 as a result of an enhanced sewerprogram and accelerated funding for the tree

Where the Money Goes…

Expenditures at a Glance… Source: Audited Financial Statements

“Mission Statement”: To protect and to enhance the fiscal integrity and efficient management of the city while maintaining citywide programs and initiatives.

removal program to prevent the spread of theemerald ash borer. General Government representsnumerous Municipal Departments and Court. Costsfor this function decreased and is attributed toadditions to capital assets. Transportation is thecost for streets, sidewalks and snow removal.These costs decreased significantly as a result of achange in capital policy. Community Environmentis the cost to assist in preserving ourneighborhoods comprised of planning, buildingand housing. Leisure Time Activity are the costsassociated with parks and pools. Reclassificationto Capital Outlay created the increase in 2012. Capital Outlay resulted in $714,296 in new capital.A citywide objective to reduce costs, maintainservices and a strong financial grasp was thecontinued scope of the capital plan.

Debt Management

Fund Balances5

Expenditures

Expenditures by Function 2012 2011

Police, Fire & EMS 7,769,933 8,127,370 Public Health & Welfare 53,764 56,532 Leisure Time Activities 1,543,350 688,798 Community Environment 709,496 465,723 Basic Utility Services 3,775,943 2,801,308 Transportation 1,409,816 3,043,461 General Government 3,958,427 4,175,399 Interest and Fiscal Charges 67,985 81,208

Total Expenditures 19,288,714 19,439,799

The City of Lyndhurst is a AA2 Bond RatedCommunity. This category is made up of Citieswith strong economic and financial character.Annual debt payments for the City of Lyndhurstinclude principal and interest totaling $1,008,796for the year. At year end the City had $1.305million in bonds outstanding. These bonds wereissued in 2003 for the Lyndhurst Swim Park andwill be paid over fifteen years. Additionally the Cityissued $800,000 in Street Improvement notes to bepaid in full in 2013.

0% 10% 20% 30% 40% 50%

Police, Fire & EMS

40.3%

General Gov't 20.5%

Basic Utility19.6%

Transportation 7.3%

Leisure Time8.0%

Community Environment

3.6%

Interest & Fiscal0.4%

Public Health & Welfare

0.3%

2012 Expenditures by FunctionFig. 3

Fund Type Fund

Balance 12/31/2012

Fund Balance

12/31/2011

Increase (Decrease)

General 6,235,153 4,911,025 1,324,128 Bond

Retirement 1,361,207 836,547 524,660Permanent

Improvement 3,311,410 2,851,025 460,385 Capital Reserve 3,094,000 3,090,120 3,880 Other

Governmental 4,038,796 5,041,266 (1,002,470)

Total 18,040,566 16,729,983 1,310,583

2012 Financial Review

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CITY OF LYNDHURST 5301 MAYFIELD ROAD, LYNDHURST, OH 44124

PRSRT STD US POSTAGE

PAID CLEVELAND, OH PERMIT NO. 1

Financial Review – 2012 MAYOR, Joseph M. Cicero

CITY COUNCIL

David A. Frey Ward 1 Joseph A. Gambatese Ward 2 Lane A. Schlessel Ward 3 Patrick A. Ward Ward 4 Keith C. Packard At Large Joseph A. Marko At Large Charles LoPresti At Large

CITY ADMINISTRATION

Mayor/Safety Director Joseph M. Cicero Finance Director Mary Kovalchik Law Director Paul Murphy Police Chief Rick Porrello Fire Chief Mike Carroll Service Director Rick Glady Building Commissioner Thomas Kunz Community Center Melissa Weldon Engineer Jeff Filarski

PHONE DIRECTORY

Municipal Offices 440-442-5777 Service Department 440-473-5100 Building/Housing Dept 440-473-5108 Police (non emergency) 440-473-5116 Fire (non emergency) 440-473-5139 Community Center 440-449-5011 Municipal Court 440-461-6500 Partnership on Aging 440-473-5138 SELREC 216-382-4300