Report lists ways Village can cut costs, increase revenue

A report by a financial advisory group charged with reviewing Village services lists at least 19 ways the Village can increase revenue and more than 14 ways the Village can reduce costs.

The options for increasing revenue include various onetime revenue enhancements and other more long-term items, including selling the Village’s residential properties, charging residents for swimming lessons, adjusting the income tax credit the Village gives other communities and increasing utility rates.

The report is just as broad when it comes to listing possible cuts, which include small budgetary options and larger service cuts. These cuts include selling the Village electric, water and sewer services and eliminating the public pool and other services, such as the Mayor’s Court, channel 13 and the Village Mediation Program.

Presented at Council’s meeting Jan. 21, the report also reiterates the huge amount of capital improvement projects and needs the Village has, which are daunting, considering that the report shows the Village will face flat or shrinking revenue in its five major budget categories over the next five years.

Village Manager Rob Hillard said the report is significant because it “identified potential reductions in services that are important to the community,” as well as “identifies potential revenue increases that could be important to the community.”

Reviewing the report

The purpose of the report, which was written by the blue ribbon finance committee, was to study the Village’s services and revenue as well as its capital needs, in an effort to help Village Council determine how the Village can continue to support the services it provides. Hillard, who served on the committee, said that the report was “a result of the uncertainties of the future,” including the local employment base and the Village’s extensive capital needs.

Hillard called the report “provocative” because of “the nature of what’s been identified to be evaluated.”

Council member George Pitstick said the options “do take you aback.”

“We hope the options give you some ideas on how to write the right budget for the Village of Yellow Springs,” Dan Young, a member of the committee, told Council last month.

Several options will be considered immediately. At a budget workshop last week, Village Council said it would consider postponing for this year at least one of three solid waste services the Village provides, to reduce the system’s costs. These options include not holding the spring cleanup, eliminating the brush pickup, which is part of spring cleanup, and eliminating the extra-item pickup services, possibly replacing that service with a single pickup.

Village officials stressed that the items listed in the report are only options and all the options will not necessarily be implemented. They also said that Council would review the options with input from local residents. The finance committee even said that the report “attempts to analyze these options from a financial perspective only.”

Hillard said the Village’s first step would be to evaluate the options identified in the report to determine if the community wants to continue those programs. Then the Village would consider how to continue to financially support those programs, he said.

Village staff will begin discussing right away some revenue-enhancing options, Hillard added. This would include possibly increasing the fees the Village charges to use the Bryan Community Center.

Council also intends to discuss the report’s details at future meetings.

Long list of needs

The report is the culmination of four months of work by the blue ribbon finance committee. The formation of such a group was one of Council’s goals for 2002.

Council charged the committee with reviewing the Village’s budget and helping create a forecast of the Village’s needs. Working independently of Council, the 10-member committee reviewed the services provided by the Village and recommended ways the Village could either increase revenue or cut spending. The report also includes a projected five-year budget, from 2003 to 2007.

When asked for his overall perception of the Village’s fiscal condition, Young, the CEO of Young’s Jersey Dairy, said, “We’re not in a crisis today.” However, if this type of review was being conducted two, three or four years from now, he said, the Village would be facing a crisis.

“You’re in a good position to make good decisions now without getting into trouble in the future,” Young said.

The committee also reviewed the Village’s capital needs, which are listed in the report.

According to information in the report, the Village has an estimated $11.7 million in total capital improvement needs.

“It was striking how much the capital needs of the Village were,” said Tom Haugsby, a member of the finance committee and the Yellow Springs school board. Those needs, he added, are “not going to go away.”

The report should help local residents “realize the gravity of what we’re facing,” Council member Joan Horn said.

The multi-fund, which includes most Village services except utilities, has $926,000 in identified capital needs, plus an estimated $4 million in road repairs that need to be completed in the next 10 years.

The electric system has identified nearly $1.7 million in projects. The water department has $495,500 in identified needs as well as an estimated $2.3 million in other projects, most of which are water main replacements. The needs are just as large, in terms of dollars, for the sewer system, which has $522,000 in identified projects, plus approximately $1.8 million in additional needs.

Several officials indicated that the report shows that the Village needs to encourage growth. Hillard said that the Village has to build up its “base,” or customers, which could help balance out a need for increasing revenue.

“We need to do something to replace the base and maybe even grow it,” Young said, referring to Vernay Laboratories’ plans to close its two local manufacturing plants, a move that will cost the Village several hundreds of thousands of dollars in annual revenue. This growth would help the Village continue to provide its services and amenities, Young said.

The report is striking in its projection of many village services’ near no growth of revenue. For instance, the report projects that the Village will not experience an increase in revenue for the multi-fund budget, the electric and water departments and the solid waste system from 2004 to 2007.

Expenses for these funds, however, are projected to increase during the same period.

While revenue for the waste water system is expected to increase during the next three years thanks to yearly increases in sewer rates, the system is not expected to see an increase in revenue in 2006 and 2007. But like the Village’s other major funds, the sewer department’s expenditures are expected to increase over the next five years.

Options to close ‘variance’

The report lists a number of options for cutting the gap between revenue and expenses, or what the finance committee calls the “variance.”

The Village, for instance, could reduce its expenses in the multi-fund budget by eliminating Mayor’s Court; channel 13, the local cable access station; and the Village Mediation Program, or by closing Gaunt Park Pool. The report says the Village could reduce the Bryan Center’s hours for recreational and community activities and cut back on the use of Council meeting announcements in the News. Another option would be to eliminate or reduce dispatching at the Police Department and replace it with Greene County’s system.

The options listed total nearly $78,000 in annual savings.

To increase revenue for the multi-fund, the finance committee suggested the Village could sell the Village’s residential properties, charge softball and baseball teams for the use of lights at Gaunt Park, increase fees at the pool and the Bryan Center and charge for swimming lessons.

The report also lists the option to adjust the income tax credit the Village grants to other communities, which would provide an estimated $100,000 in revenue alone. By adjusting the credit, the Village would receive income tax from local residents who work out of town, Hillard said. Those residents, however, would also continue to pay income tax to the municipality in which they work, if the municipality levies an income tax.

The tax credit needs to be “seriously considered,” but not until after expenses are reviewed, he said.

Many municipalities provide an income tax credit to their residents, Hillard said.

The report lists a total of nearly $300,000 in possible options to increase revenue.

The options in the report for the Village utilities are fewer, but still noteworthy. The report, for instance, says the Village could sell its electric system to Dayton Power & Light, and the water and sewer systems to Greene County.

Hillard, however, said that he was skeptical of this idea, saying that the Village runs “cost-effective operations.”

The report also cites other cost-saving options, including privatizing meter-reading services or sewer-treatment operations. It suggests that the Village could increase electric and sewer rates to fund capital projects.

—Robert Mihalek