VW City Council looks at budget concerns

DAVE MOSIER/independent editor

Van Wert City Council heard some budget concerns from City Auditor Martha Balyeat, along with some opposition to proposed legislation that would allow, with some restrictions, alcohol sales on public property.

Balyeat noted that, with revenue projections running behind estimates, the city could have some problems making ends meet in the General Fund by 2018, with some fiscal issues arising as soon as next year.

The auditor noted that initial projections were that city income taxes would grow 4 percent, which was later revised downward to 3 percent. Unfortunately, income taxes had grown by just 2.5 percent by the end of August, which could “cause some problems going forward.”

While Balyeat noted that, while income tax revenues were better than last year, they didn’t meet projections, while other revenues, including revenues from the state, were down for the current year.

One positive, she added, is that the city has spent $85,000 more in revenue that it has spent, which is better than projections that indicated the city would spend more than it received. Balyeat warned, though, that, since many General Fund revenues, such as real estate taxes, have already been received for the year, the city could see deficit spending soon.

“So, I think probably next month we’ll see that we have spent more than what we received,” she added.

Balyeat said she is currently working on the 2017 tax budget, and also recommended that the city use the full two-thirds of the 0.22-percent safety income tax revenues this year to help the city’s bottom line in 2017.

Moreover, while she said the city should be okay next year, it will also likely spend all available revenues, including the reserve fund, leaving the city without enough revenues to pay expenses in 2018.

“So, 2018 becomes a huge problem you need to start working on now,” Balyeat told City Council. “I think we should have started the 2018 conversation when we did the tax budget, but we didn’t.

“The way the projections are right now, we can make the ‘16 budget, and we can make the ’17 budget, but ’18 is going to be a real problem,” the auditor explained. “You have two choices, you can raise your revenues or cut your expenses, or you can do a combination of the two.”

The problem with cutting the budget, Balyeat noted, is that most city departments in the General Fund turned in budgets this year with no increases, while expenses in the primary two General Fund departments: fire and police, also don’t have much wiggle room.

Fringe benefits are also estimated to increase, with a 15 percent rise in health insurance costs alone.

With little opportunity for budget cuts, that leaves either cutting services — never a pleasant alternative — or increasing revenues through a tax increase, the auditor said.

Since it usually takes several times on the ballot for a tax levy to pass, Balyeat said City Council needs to come up with a plan as soon as possible to avoid budget problems in two years.

“Historically, any change in income tax takes at least three times on the ballot,” Balyeat noted. “There is no quick fix.”

A meeting of Council’s Finance Committee is planned to further discuss the issue.

Later in the meeting, City Council also approved county tax revenue estimates for the current year, as well as a then-and-now certificate.

Also Monday, City Council held committee meetings to discuss legislative changes that would allow for alcohol to be sold by non-profit groups during events held on public property, although with a number of requirements to provide adequate safety and security for the public. That proposal saw some opposition on Monday from local resident Linda Hartman.

Jon Tomlinson, who chairs Council’s Judiciary and Annexation Committee, provided information on the proposal, including an application required by the Ohio Division of Liquor Control for temporary liquor licenses, and a possible timeline for organizations to follow in requesting temporary liquor licenses, if such a proposal is approved.

More meetings will be held on that subject before any legislation would be prepared to address the issue, Tomlinson said.

Council also looked at changes to a city ordinance dealing with derelict buildings to ensure the city meets requirements needed to establish a local land bank, with the possibility of receiving grant money that could be used to purchase and demolish derelict buildings. Tomlinson said Council members need to review proposed changes to the legislation before the measure comes up for consideration.

Mayor Jerry Mazur reported on efforts to get city trash and recycling collections on the same day to eliminate trash being left out at the curb, sometimes for days. City officials and trash collection companies met last week to discuss the issue.

Safety-Service Director Jay Fleming reported that brush pick-ups for the year are now over, and that anyone who didn’t get brush out prior to the final pick-up will have to take steps on their own to remove the brush. He also noted that legislation would be needed for the city to participate in the Ohio Department of Transportation’s bridge inspection program. A committee meeting will be scheduled on the issue.

The next meeting of Van Wert City Council will be at 7:30 p.m. Monday, September 26, in Council Chambers on the second floor of the Municipal Building, 515 E. Main St.