May 25, 2006

By Robert Mihalek

Village Manager Eric Swansen last week provided an informative presentation on services the Village provides, as part of the government’s efforts to educate the community about its deficit budget.

Swansen’s presentation broke the services down into groups of mandated services and services the Village elects to offer.

Three sources of law, the Ohio Constitution, the Ohio Revised Code and the Village Charter, dictate services that the Village government must provide, Swansen reported.

The report, which Swansen gave at Village Council’s May 15 meeting, focused on continuing services but not projects, or one-time costs. Swansen said the Village could cut projects to save $1 million this year, but the government would still have to address next year’s budget.

Swansen will give two more presentations, on revenue sources available to the Village and on possible cuts to Village programs, at Council’s next regular meeting, on June 5.

Council members requested that Swansen make these presentations to inform themselves and the community about the state of the Village’s finances, including services the Village is required to provide and options available to cut costs and raise revenue.

In a written report to Council, Swansen described the situation as an “unprecedented period of financial distress” that will likely lead to a reduction in services or a voter-approved increase in revenue, which will allow the Village “to fund services within our resources.”

Inadequate resources have led the Village to operate under deficits in its four main funds: the general fund and the electric, sewer and water funds. The deficits are caused by expenditures, including capital items, surpassing revenue.

In response to the financial problems, Council last week approved a plan to offer early retirement to employees. Council also is considering putting on the November ballot some kind of increase in revenue, such as a tax, for voter approval.

The following is a summary of Swansen’s presentation from last week’s Council meeting.

Required in-house services
The Village is required to provide some services in-house, with Village employees responsible or accountable for the services. These include:

• Legislative functions, provided by Council
• Financial management, including budgeting
• Financial auditing
• Land-use authority, which is the Village Planning Commission

Swansen reported that while Council cannot change the above list of services, it does have the authority to change the level of services provided.

He said that the Village receives “very little money” from the state for mandated services and “absolutely no operating funds from the federal government.”

Other mandated services
The Village is also required to provide some services that can be fulfilled through agreements with other agencies.

Like the other mandated services, Council cannot change the services listed below, although it can adjust the level of service provided or how the programs are provided, Swansen said.

These services include: accounts payable and receivable, records management, human resources and risk management, or insurance. Swansen said a search for municipalities that contract such services out was “fruitless.”

As a municipality, the Village also has to provide some legal services, including a Village solicitor (an appointed official who now works for a Dayton law firm), court services (Mayor’s Court, overseen by the Yellow Springs mayor), and a body to consider appeals of land-use decisions (Board of Zoning Appeals, as specified in the Village Charter).

In addition, the Village is required to provide a number of public safety services. The Police Department and police dispatching are provided in-house, although the Village contracts with Greene County for some dispatching support, such as 911.

Other public safety functions are provided by outside agencies: fire protection is supplied by Miami Township, emergency management comes from Greene County, and hazardous materials protection is provided by the Dayton Regional Hazardous Materials Response Team.

Swansen said the Village could contract with the county Sheriff’s Department for policing, or lower the level of service provided by the Village force.

The Village must also maintain streets. Swansen reported that the Village receives gas tax money from the state that can only be used for street repair, maintenance and improvements to sidewalks, lighting and signals. “The state funding hardly comes close to the cost of maintaining the streets,” he reported.

Mandated by Charter
The Village Charter requires the Village to provide only two services that are not mandated otherwise: the Board of Zoning Appeals and the Village treasurer.

As an alternative to the BZA, Council could serve as the body that considers appeals, although the BZA ensures a level of independence when considering land-use appeals.

Swansen said that the Village could cover the treasurer’s responsibilities in-house as an administrative function. The treasurer’s primary responsibilities are to co-sign checks, verify expenditures, reconcile the Village books and manage the Village’s investments.

The Village would need to seek voter approval to alter these Charter-mandated services.

Optional services now provided
The longest list in Swansen’s presentation was discretionary services that the Village provides. “These are services the Village provides but has no legal requirement to do so, either in the past, now or in the future,” he said in his written report.

These include:
• Bryan Community Center, including the gym, youth activities, meeting and art rooms, dance space, art gallery and restrooms
• Library building
• Parks; Swansen said the parks could be mothballed and minimally maintained to save funds
• Gaunt Park Pool
• Economic development; however, since income taxes are the largest general source of revenue, Swansen called this service the “ultimate solution” to the Village’s budget shortfalls
• Village Mediation Program; Swansen said VMP saves the Village money that would otherwise come from the police and planning budgets
• Cable access channel 13; franchise fees cover the cost of equipment, Swansen said
• Street lighting
• Public parking
• Animal control; now contracted through Greene County
• Leasing of property
• Social assistance funds, such as the coat fund and flour and sugar fund
• Pot shop
• Council’s boards and commissions, except for Planning Commission and the BZA

Swansen also said the Village is not obligated to provide water, sewer, electric and garbage services. However, if the Village sold these enterprises, it would have to pay off the utilities’ debts, he said.

In addition, portions of Village administrators’ salaries are paid for by the utilities, so if the enterprise funds were disposed of, the Village would have to find additional funding or reduce staff, Swansen said.

Village Solicitor John Chambers is researching whether voters would need to approve any plan to sell the utilities, Swansen said.

Swansen told Council that services in the list above could be cut or reduced to save funds.

He also noted that some services, such as the pool and the parks system, will not make money “no matter what you do.” But to help sustain those services, he said, the Village could review, and raise, its fees.

The Village, for instance, Swansen said, could create a sliding scale that charged an adult sports program more to use Gaunt Park than a youth program.

Debt obligations
According to 2006 Village budget documents, the Village has $2.032 million in outstanding debt. If the Village chose to get out of a service, Swansen said, it would still have to pay off the debt.

The budget documents showed that in March the Village owed the following debt:

• Bryan Center: $1.075 million bond; expires in 2016
• Electric fund: $375,000 for peak power contract; expires 2009
• Water fund: $172,757 for Dayton Street waterline; expires in 2016
• Sewer fund: $410,004 total

The sewer fund is paying off four loans, the largest of which totals $264,248 for the sewer treatment plant upgrade, which expires next year.

Contact: rmihalek@ysnews.com