Final budget session gets specific
Now that Warren City Council has heard from the departments that provide community services – police, fire, public works, etc. – Tuesday was the time to hear from finance.
So the discussion during the final budget session council held focused on budgeting, debt service and, unsurprisingly, taxes.
Finance Director Donna Risinger told council that the city’s pension contribution requirement is higher looking to 2020.
While the majority of that funding comes from the state, Councilman John Lewis identified the city’s portion as approximately $250,000.
New calculations of the city’s contribution could result in changes to the required amount the city must contribute but Mayor Maurice Cashman noted that the new rate “is not going to be dramatically different.”
Debt service calculations were presented to council as well and Risinger said the projections included costs for new fire trucks “if that’s the way we decide to go.”
She told council that the city’s other debt obligations include payments on a $1.5 million Streetscape loan that federal funds help cover and a $1.1 million loan taken out several years ago for repairs to the Clark Street Parking Garage.
Risinger said that the “parking fund is in a better position” and has been making the payments on that loan.
Fund balance was also discussed.
“Unfortunately, the way we’ve budgeted, our revenues and expenses do not match,” Risinger told council. “We need to fund the revenues from the fund balance which normally we do that for capital improvement projects. The last few years we have had to do that to balance the operations.”
The end result of that is that the “general fund balance is slowly decreasing.”
Risinger noted that “we seem to budget a little bit higher in our expenses than what we actually spend” and “should have around a $500,000 surplus in our operations where we had budgeted for a deficit.”
That budgeting for a deficit continues for projected 2021 – $597,681 – and 2022 – $757,327 – spending plans.
“This does not include any paving or CIP (capital improvement project) projects,” she said, noting that the city for the “last few years (has not) had a deficit. (We) have come out $300,000 to the good. I’m projecting about $500,000 to the good at the end of this year.”
That’s where the discussion shifted to taxes.
“I know where your $500,000 came from,” Lewis said. “It’s EIT (earned income tax). EIT is always increasing. We have an economy right now that is driving employment” and investment and is “doing everything in this town except real estate. Real estate is flat-lined.”
He suggested that “people don’t want to invest in town” because they think the city’s EIT rates are too high.
“If we throw another tax burden on the community, I’ve been told by a number of people ‘We’re leaving.’ They’ve already been leaving.”
“Leaving and going where?” Cashman asked.
Lewis suggested moving south into Pleasant Township.
“Why move south?” Councilman Paul Giannini asked, suggesting that presents a lack of reliable emergency services.
“You’re losing people,” Lewis said.
Councilman Gregory Fraser noted the situation isn’t as simple as Lewis suggested.
Giannini rattled off the services the city offered and asked why someone would “pay twice as much for a house and get no services. (You) gotta know that going into the deal.”
“We’re going to provide the services in the townships,” Lewis claimed. “You’re expanding your services out into the community right now.”
Giannini asked why the county raises taxes when it doesn’t own a road while Cashman challenged the WCSD raising takes when it won’t consolidate.
Cashman suggested that the surpluses “over the year” come from higher EIT “and the city defers various spending.” She asked if deferred spending has more of an impact than EIT and Risinger indicated that it does.
“That’s my feeling also,” Cashman said.
“We’re not seeing the increases in EIT like we had been,” Risinger said. “We’re pretty close to budget… We should get a good influx in November” when quarterly payments come in.
Department of Public Works Director Mike Holtz outlined another challenge.
“As time goes on, the projects we look at” get more complex, he said. “The complaints aren’t the asphalt streets” but rather the brick and concrete which are more expensive to repair.
Basically, his point was that the big ticket projects the city faces now have been deferred for quite some time.
“The fire truck is another example. The municipal building hadn’t had work… (We) actually addressed issues we’ve talked about since I was in college. To continue to do that costs money.”