Mayor presents 3-year financial plan

DAVE MOSIER/independent editor

Van Wert Mayor Don Farmer and his administration have come up with, while not exactly a plan, at least with financial projections they feel are realistic for the next three years.

During a Finance Committee meeting scheduled specifically to discuss a city financial plan, the mayor provided details on what he believes city budget figures could look like through Fiscal Year 2015. Although he first noted the difficulty of trying to project what where revenues and expenses would be in three years — something city school treasurers already know — Mayor Farmer said his administration created two different financial scenarios, although he added that city officials have taken “a very conservative approach” to predicting the city’s financial future.

One three-year budget projection calls for zero revenue growth and a 3-percent growth in expenses, while the other budget estimate includes a 3-percent increase in both revenues and expenses. Mayor Farmer said he felt the 3-percent revenue increase was realistic, since income taxes increased nearly 5.2 percent in 2012 over the previous year.

Budget revenue estimates for the current year include a final $150,000 payment from inheritance taxes from 2012, but none after 2013, because of the state phase-out of the estate tax. The 2013 budget revenue numbers also include the reimbursement by the state of $500,000 of reserve funding “loaned out” to the Jobs Ready Site infrastructure project, and $74,373.23 from an Atrazine settlement received by the city.

The 2013 projection also includes a 5 percent increase to the reserve fund that would add an additional $246,000 to the fund and an estimated carryover for 2014 of $1.231 million, as well as a reserve fund of $516,943, which would provide a total of $1.748 million additional money available for appropriations in 2014.

With revenues totaling $6,352,282 in 2012, Mayor Farmer and his administration are projecting revenues of $6,932,490 this year, $6,615,013 in 2014 and $6,432,754 in 2015. Appropriations in 2012 totaled $5,386,032.68, with appropriations for this year estimated at $5,348,381.28, for 2014 at $5,547,961 and at $5,715,000 in 2015.

The mayor did note that budget projections were hampered by the fact that no one yet knows what impact upcoming state legislation and the Patient Protection and Affordable Care Act (Obamacare) — as well as health care costs in general — will have on the city’s budget in coming years.

Other than negotiated pay raises for city bargaining units, other increases in expenses would include the additional of a police officer, which is necessary because of a city ordinance that mandates both police and fire departments maintain minimum staffing, which is 21 officers for the police department. The police department currently has 20 officers.

When questioned about the minimum staffing numbers, Police Chief Joel Hammond said during Monday’s meeting that the 21 officers is four fewer than staffing minimums set when took over as police chief more than a decade ago, and noted that crime has increased since then. “I don’t think we want to go backwards,” he said of current crime-fighting efforts.

When questioned about overtime increased in the police department, the mayor said that hiring an additional officer would not eliminate all overtime, but should help hold those costs down.

Mayor Farmer said he also advocated moving $100,000 from the General Fund each of the next three years to reimburse Fund 305, which contains revenues from the .22-percent income tax adopted for safety permanent improvement expenditures. Voters approved using up to two-thirds of that money to pay salaries and benefits for police and fire employees during the recession, and the mayor said he would like to begin paying back the fund when money is available. City Auditor Martha Balyeat suggested, though, that the city should just not take as much out of the fund, if it is not needed, and use money currently unappropriated to help pay back the fund.

An additional parks employee is also in the budget this year to help better maintain the city’s parks system. That would help replace a parks position cut when revenues dipped during the recession.

Mayor Farmer told City Council that his administration’s financial strategy includes continuing the current policy of keeping budget expenses under revenues, while also increasing revenues through fee increases, such as recent legislation that approves an increase in EMS fees.

Council President Gary Corcoran pointed out that increases in expenses, coupled with the need to maintain a reserve fund, would mandate an increase of more than 3 percent in revenues, something the mayor agreed with.