December 4, 2003

Village expenses rising, revenue flat, budget shows

In 2004 the Village plans to conduct more than 20 capital projects totaling over $940,000, the draft 2004 Village budget shows.

The majority of the proposed capital projects would involve the Village’s multi-fund budget, a general fund of 17 activities supported heavily by income tax revenue, and the water system. The multi-fund, which includes the Police Department, streets, Village administration, the Parks Department and Council activities, lists more than 10 projects of over $400,000, and the water system has proposed about seven projects totaling over $425,000.

Several of the proposed projects for 2004 were budgeted for 2003 but not completed.

The number of projects, and their costs, however, is sobering when compared to the 2003 capital improvement plan, an inventory of capital projects identified by Village staff. The inventory, which was released last summer, includes more than 125 projects, totaling over $13 million, which the Village wants to complete over the next 10 years.

The inventory lists 53 projects in the multi-fund budget, totaling over $6.5 million; 19 in the electric fund, totaling almost $1.1 million; 27 in the sewer fund, for $2.23 million; and 42 in the water system, for almost $3.3 million.

According to the draft 2004 budget, which Village Manager Rob Hillard released last month, the Village’s expenses are projected to increase almost 11 percent, or $689,000, to $7.24 million in 2004 from $6.45 million in the 2003 budget.

Revenue is expected to remain flat, decreasing by 0.2 percent, or $12,600, to $6,322,000 in 2004 from almost $6,335,000 in the 2003 budget.

The draft 2004 budget is what Village officials consider “balanced” — in other words day-to-day expenditures do not exceed revenue. In fact, all five of the Village’s major funds meet this standard, when capital projects are not factored into total spending.

Hillard said this week that the capital projects proposed for 2004 represent a “good start.”

“ I’d like to do more but given the overall situation I think it’s prudent to wait till capital improvement discussion,” he said, referring to Council’s plan to further discuss the Village’s capital projects inventory.

Council president Tony Arnett said that the draft budget shows that the Village has “far more challenges than solutions.” He noted that with the exception of the electric system, all of the Village utilities will face challenges this year or next year, and that the needs of the street department are adding “pressure” to the multi-fund. The capital inventory lists $4.64 million in road or drainage work.

He also said that while income in the multi-fund is holding steady, “steady doesn’t make progress on the accumulating list of things out there.” Arnett said that Council must have a “conversation with the community” about Village services and how to pay for them.

Though the numbers are important, the biggest story of the 2004 Village budget may be the time frame in which Council is now reviewing the 57-page document.

Council has held two budget workshops, on Nov. 24 and Dec. 3, the latter taking place after press time for this week’s News. During the workshops, Council members discussed the budget with Hillard and Village staff members.

Arnett said that he expects Council to adopt “some form of budget” by mid-December, a feat various Councils have strived for in recent years. What may happen, Arnett said, is Council and the Village administration could come to an agreement on budget numbers after the workshops are complete.

For many years, Council has approved the annual Village budget after the year has started. For instance, Council approved this year’s budget in February 2003.

Hillard said that because Council is now considering the 2004 budget, the Village would be able to start planning for projects earlier, which, he noted, could help the Village secure lower bids.

The multi-fund budget

Expenditures in the multi-fund budget are projected to outpace revenue by $403,744, or 16.5 percent. The discrepancy between expenditures and revenue is the result of 13 capital projects that the Village has proposed for 2004 for budgets supported by the multi-fund.

The multi-fund budget is projected to end 2004 with a fund balance, or reserve, of $468,735, a decrease of $403,744, or 46 percent, from 2003’s anticipated reserve.

The 2004 reserve is 19 percent of the multi-fund’s operating and maintenance costs. Next year’s operating costs, which include day-to-day expenses but not capital spending, is projected to be $2,440,276.

Over the last three years, Council has said that it wants each of the Village’s five main funds to end the year with a balance of 25 percent of operating costs, or three months of basic expenses. Hillard has advocated an 8 to 12 percent year-end balance.

Hillard said that he is “comfortable” with the multi-fund’s year-end balance for 2004, noting that he anticipates the reserve to actually increase once the 2003 books are closed, since the Village expects to finish the current year under budget. The Village “can still meet the targets Council has set up,” Hillard said, referring to the year-end balance for 2004.

Income tax revenue, which makes up 58 percent of the multi-fund budget’s revenue, is expected to increase $92,000, or almost 7 percent, to $1,417,000 in 2004 from $1,325,000 in the 2003 budget.

The largest number of capital projects are planned for the streets department, which has proposed five projects, including resurfacing Dayton Street, between Stafford and Wright Streets, for $60,000; drainage improvements in seven areas around town, for $38,200 total; and constructing a storage area for road salt, for $36,000. The Village also wants to reconstruct Walnut Street, from Dayton to Elm Streets, for $75,000. The project would also include an upgrade of the waterline on the street.

The Police Department has proposed purchasing two patrol vehicles, to replace two existing vehicles, for $50,000 total, and purchasing mobile cameras for the three cruisers, for $18,000 total.

The Village utilities

Expenditures are expected to increase and revenues decrease next year for three of the Village’s four utilities, according to the draft budget. Expenses also are projected to outpace receipts in those same three utilities: electric, water and waste water.

For the electric and water systems, the increase in expenses can be attributed to proposed capital projects. The electric system, for instance, has proposed projects to upgrade the Dayton Street electric distribution section, for $27,555, and the distribution system for YSI Incorporated, for $60,890.

The water system’s most significant project is painting one of the two water towers at Gaunt Park, for $300,000. Troy Slone, who supervises the water treatment system for the Village, said at last week’s budget session that the paint on one of the towers is deteriorating, causing the tower to rust on the outside. If the rusty condition is allowed to continue, Slone said, it would eventually move to the inside of the tank. The Village’s project would involve painting the inside and outside of the tank, which would “take care of the rust problem,” Slone said.

The water system has also proposed replacing a water line on Walnut, between Dayton and Elm, for $50,000. The project would correspond with the reconstruction of the street.

The Public Works Department, which includes streets, electric, water and waste water, will jointly pay for several projects in 2004, including remodeling the Public Works facility, for $44,000, and replacing overhead doors at the facility, for $6,000; purchasing a street truck, for $35,000; and purchasing a utility truck for meter reading, for $24,000.

The electric system’s expenses are projected to outpace revenue by $86,139, though the system is expected to end 2004 with $599,261, or 26 percent of electric’s operating costs for the year.

The water system is expected to fare even better. Though the system’s expenditures are budgeted higher than revenue by $311,280, the fund’s year-end balance of $171,727 is 35 percent of operating costs.

The waste water system, however, remains a different story. Despite few capital expenses for 2004, the sewer fund continues not to generate money for capital projects, or to provide the year-end cushion Council desires. The fund’s anticipated year-end balance of $79,754 represents 10.7 percent of the system’s operating costs.

Last week, Hillard said that the fund is the “most concerning” of the Village’s utility systems. Arnett said the status of the fund “almost reaches the point” at which one must ask, “can you afford to stay in this business.”

The system’s expenses could increase if Council agrees to add to the budget a project to repair the sewer system on Corry Street near Xenia Avenue and Kieth’s Alley, where a manhole has deteriorated. The project is estimated to cost $32,750. Harold “Dunie” Hamilton Jr., who supervises the sewer system, said last week that the manhole’s condition has compromised the system, allowing waste to leak into the ground.

Expenses and revenue for the Village’s fifth major fund, solid waste, are both projected to decrease this year. It is likely, however, that the fund’s budget could change. The Village has formed an ad hoc committee to review the system’s services and rates. Over the last two years, the system could not support itself and had to borrow money from the multi-fund.

In September, Council agreed to extend its garbage-collection and recycling contract with Rumpke to give the Village more time to study the solid waste system’s rate structure.

The 2004 budget currently does not include funds to pay for spring cleanup and brush pickup.

— Robert Mihalek