2018 budget, recovery plan discussed

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By LYDIA BAULER
Staff writer

Fostoria City Council made quick yet careful work of passing two amendments to the fiscal year’s permanent appropriations and financial recovery plan for the city on Tuesday night.
In a less than five-minute meeting, the ordinances were read for the third and final time before being passed by the council — an important step in passing and finalizing the fiscal recovery plan and budget for 2018.
Moments after the special meeting adjourned, 2nd Ward Councilman Greg Flores raised questions about the procedure since the amended version had been read without the original ordinance being read first in the meeting. However, Legal Director Tim Hoover confirmed via telephone that the procedural order was sound and the ordinances stand.
Though business was kept brief and action may have appeared swift in the meeting, the administration has been collaborating with representatives of the State Auditor’s Office since August to formulate this year’s budget.
Further, the amendments consisted of minor language changes rather than “anything substantial”, according to Mayor Eric Keckler.
The primary focus of the fiscal emergency plan remains to keep the number of safety personnel while getting out of fiscal emergency, said Keckler. Further, he said it was a difficult balance since both are important for the city.
“The thing that we identified to accomplish was to get our safety forces back to a level that people are used to,” he said. “What council has just voted on should continue to move us in that direction.”
The 6-mill property tax levy passed in November, goes a long way in supporting this objective by allowing administration to avoid making substantial cuts to the city’s safety forces.
“The original five-year recovery plan is based on us passing that levy,” he said. “So had the levy not passed, we’d be talking about a different situation.
The general fund, which was going to have to cut spending, is mostly your police and fire departments. We knew if we didn’t pass a levy, we would have to make a lot of cuts.”
City officials intend to help offset the cost of capital needs, such as radios for safety personnel, by applying for grants and assistance.
The updated recovery plan hopefully projects the city’s funds recovering from a million dollar deficit to a positive balance in 2018.
The budget utilized the results of the 2017 fiscal year to make adjustments in the current budget as the city works toward better financial health.
Income taxes produced less revenue than expected in 2017; however, there was still a positive and productive increase of over $600,000 in income taxes compared to 2016.
The $600,000 generated by the income tax came back to the community through city funds for parks and recreation, city clean up, infrastructure, community development, beautification and capital needs.
Looking forward, the recovery plan made more modest estimates of income tax revenue growth.
According to a copy of the 2018 recovery plan, important actions carried out by this year’s recovery plan include:
• The 6 mill five-year property tax levy for operations was approved by voters in November 2017, collection beginning in 2018.
• The city will continue to utilize Regional Income Tax Authority (RITA), a third-party tax collector, which the administration has contracted to collect any taxes owed to the city.
• Increase income tax revenue with projections based on the assumption that income will grow at an annual rate of 2 percent from 2018 through 2022.
• The city will enhance revenue in the Parks and Recreation Fund, Beautification Fund, and City Clean Up Fund by transferring resources annually from the General Fund as needed.
• Utility rates for water and sewer usage will be reviewed annually and rates will be adjusted as needed. A revenue enhancement is anticipated in 2019, 2020, 2021, and 2022 in both the Water Fund and Sewer Fund.
• The city will obtain a grant to acquire an ambulance in 2018. The ambulance will be purchased with grant proceeds and a donation. If a grant is not received, the ambulance will not be purchased.
• The city will receive a Safer Grant which will provide for three firefighters. Salary/benefit costs covered will be 75 percent for 2018 and 2019 and 25 percent for 2020.
• Salaries will be adjusted in accordance with union agreements when approved.
• Health care costs are projected to increase 16 percent in 2018 and 2019 and 10 percent from 2020 through 2022.
• The city did not operate the pool starting in 2017 and will not restore operations until there are sufficient resources to do so. Operations not expected to be restored through 2022.
• Contractual services are projected to increase 2 to 5 percent per year for the next five years.
• Supplies and materials are projected to increase 3 to 5 percent per year for the next five years.
• Capital outlay costs have been based upon specific department needs as identified in the forecasted capital needs.
• Monthly transfers will be made from the General Fund to the Police Pension and Fire Pension funds to pay for the balance of the pension costs not funded by property tax collections.
The 2018 recovery plan and budget must also be passed by Fostoria’s Financial Planning and Supervision Commission. The financial commission includes representatives of the state treasurer’s office, the Office of Budget and Management, the mayor and city council president, and three members appointed by the governor.
The next regularly scheduled council meeting is 6 p.m. Feb. 20 in city council chambers.

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