October 26, 2006

By Diane Chiddister

If Issue 21, the Village property tax levy, passes on Nov. 7, the Village will maintain all current services, with the possible exception of police dispatching. If Issue 21 fails, the Village will cut services such as the Gaunt Park pool, maintaining the library building, and using Bryan Center as a community center.

Village Council members made that decision on a 3 to 2 vote on Monday, Oct. 23, at a special budget workshop on the Village’s general fund. Voting for the proposed service cuts if the levy fails were Jocelyn Hardman, Kathryn Chase and Karen Wintrow. Bruce Rickenbach and Judith Hempfling voted against the proposal to cut the services.

At the meeting Village Manager Eric Swansen reviewed three different approaches Council could take if the levy fails, including cutting some services, making across-the-board cuts and doing nothing. After discussion, Council members chose to eliminate the options of across-the-board cuts and doing nothing, and they asked Swansen to prepare two 2007 budgets, one if the levy passes and the other, if the levy fails.

About 15 villagers attended the meeting, which included 45 minutes of questions and comments from the public, facilitated by Fred Bartenstein. Some who attended expressed concern about the loss of services if the levy fails, and about how the 8.4 mill levy would affect low income people.

“I do not think for $10,000, it is enough of a burden on the Village that you can justify not opening the pool if the levy doesn’t pass,” said Ali Thomas, who referred to the amount Swansen had identified in a private conversation as the Village’s financial loss from the pool this year. In response, Swansen said that the more accurate figure was $17,400.

But that amount is also very small compared to the total general fund budget of about $2 million, said Council member Judith Hempfling, who stated that she opposed eliminating the human services if the levy fails.

“I believe I heard from the community that these things are as important as our streets,” Hempfling said. “Let’s try to come up with some compromise.”

But other Council members disagreed. Karen Wintrow said she could not choose the pool over other youth-oriented services, and the Village can’t maintain all of them if the levy fails. Council President Jocelyn Hardman said that the Village would need about $29,000 to start up the pool next season, and funding cuts, if the levy fails, might compromise safety.

“It would be frightening to send my kids to the pool with a couple of volunteers” staffing it, she said.

She also stated that if the levy fails, “low income people are telling us that they can’t afford” these services.

Villager Sue Abendroth supported Council’s decision, stating that the Village needs to get its infrastructure “house” in order before funding additional services.

The levy, if passed, could hurt low-income homeowners and renters, according to Marianne MacQueen, who asked Council members if they had considered how to address that problem.

“For me, the one clear choice to make Yellow Springs more affordable is to get economic growth and job growth,” Hardman said. “The best role for the village is to make sure we’re as economical and efficient as possible, and do everything we can to increase jobs as quickly as possible.”

Council has asked the Village Human Relations Commission to look into ways to address affordability, according to Hempfling, who stated that “A community like Yellow Springs, if it wants to be economically diverse, has to be proactive about how to do that.”

Villager Dave Goodman asked if utility rates would also increase if the levy passes. He stated that Swansen’s recent levy presentation to the Men’s Group identified significant capital needs in its utility departments.

“Clearly we have capital needs there,” Swansen stated, adding that “There is no way we can raise rates fast enough or high enough” to address those needs, and that the Village would need to take on loans to do so.

Maintaining the health of the general fund is especially critical in light of those needs, Hardman said, because if the general fund has a deficit the Village may have a harder time getting loans for capital projects.

Local police dispatch might end

In his presentation at the beginning of the meeting, Swansen recommended that the Village discontinue its local dispatching service whether or not the levy passes. The move is necessary due to upcoming capital expenses, Swansen said. To replace the local service, the Village would contract with Xenia police to provide dispatching. Council has not yet made a decision on the dispatching service.

“We’re at a critical point in the budget,” he said. “The capital improvements in dispatch would be considerable” and eliminating the service would eliminate a “critical one-time investment.”

Yellow Springs Police Chief John Grote stated that the move away from local dispatching is necessary because “we’re still operating in the early 1980s technology-wise.” The Xenia police department is currently upgrading its computer-aided dispatch service, he said.

“That system can offer some technology and increase in services that we can’t do,” he said.

Grote also said that the dispatch office will be down to two full-time employees in May, when longtime dispatcher Norma Lewis takes an early retirement option the Village offered as a cost-cutting measure.

Options, with and without levy

This year, the Village’s general fund had a deficit of about $366,000, Swansen said in his opening remarks. However, the Village had a balanced budget because monies were drawn down from other funds to cover the shortfall, leaving the general fund with a surplus of $189,000.

The general fund budget was “only balanced on paper,” Swansen said.

Next year, the general fund is projected to have revenues of about $2.3 million and expenses of about $2.7 million, according to Swansen. Currently, the general fund receives more than half its funding (53.5 percent) from the Village income tax. The other sources of general fund revenues are intergovernmental revenues (17.6 percent), property tax (15.2 percent), miscellaneous fees (6 percent) and interest (4.3 percent).

The property tax levy, which will provide the Village with about $743,000 annually for five years, is necessary because Village income tax has declined 15.7 percent in the past two years, and with inflation, the decline is actually a 21.5 percent decrease, Swansen said.

Swansen presented four options for how the Village can address the declining revenues, starting with doing nothing. If the Village does not take action to address the deficit in 2007, the Village would draw down its general fund balance to $23,828, which is less than 1 percent of its operating budget. That strategy would “leave no room for emergencies,” lead to significant Village cuts in 2008 and present “a high likelihood of going on fiscal watch,” Swansen said.

A second option involves the Village making across-the-board cuts to all services with no new revenues, should the levy fail. However, Swansen recommended that local police (aside from the dispatch service) not be cut, since staffing is already down to a minimum level, he said. Consequently, the Village would have to cut other services by about 41 percent. While that option would balance the budget and meet the minimum operating reserve, it would mean providing services at a minimal level and possibly not doing them well, he said.

Council rejected both the do nothing and across-the-board cuts options.

The third option involves service cuts to people-oriented services and assumes no new revenue funds, and is the option Council chose if the levy does not pass. It would eliminate the general fund subsidies to the Gaunt Park pool, the community and youth services at the Bryan Center, the parks and funding for repairs to the Yellow Springs Library building.

According to Swansen, it would also “reduce street funding to a sustainable level,” and would probably involve the elimination of one roads department employee.

This option would also balance the budget and leave adequate reserves, but would reduce local services. However, Swansen said, it’s possible that villagers will find creative ways to keep the services going.

“It’s saying the Village lacks the resources to be a direct provider of those services. It doesn’t mean the services” will discontinue, he said.

The fourth budget option assumes passage of the levy and the continuation of Village services, with the possible exception of police dispatching. At the meeting, Hempfling emphasized that Council has not made the decision on the dispatching service.

The levy passage would ensure the Village an annual additional revenue source of about $743,000. While he originally stated that that amount would address the current deficit and add about $400,000 for a new road maintenance program, Swansen stated Monday that the additional new amount the Village would spend on roads would be about $262,000, due to a miscalculation in available funding. Swansen recommended that the Village hire a special consultant, at a cost of about $18,000, to travel over Village roads in a computerized van which would identify the most cost-effective street repairs.

All in all, according to Council member Bruce Rickenbach, “We don’t have much choice at this point,” about whether or not to pass the levy. Doing so, he said, “will give us some breathing room to do things in a more creative way.”

Issue 21

Issue 21 is the Village’s 8.4-mill property tax levy, which will be on the Nov. 7 ballot. The five-year levy will raise about $743,000 yearly for Village operating expenses.

Issue 21 will raise property tax for homeowners by about 16 percent, according to the Yes for Yellow Springs Committee. A homeowner who currently pays about $2,400 a year in property tax will pay an additional $384 per year if the levy passes.

The revenues raised will be used to address the Village’s current general fund deficit of about $366,000, and will also provide additional funds for a new road maintenance program. Council has stated that levy revenues will go half toward funding Village community services, such as the parks and pool, and half for street maintenance.

The levy will not address the Village’s current deficits in its enterprise funds, nor will it be used for capital projects in those funds. In an Oct. 10 meeting on the enterprise funds, Council members said that they will address utility fund rates after the beginning of 2007. At the Oct. 23 Council meeting, Swansen said that the Village will need to borrow to meet utilities capital needs, and that the Village must keep its general fund solvent in order to borrow.

According to Swansen and Council, the levy is necessary because income tax revenues, which provide more than half of the general fund monies, have been declining in recent years at a rate of about 15.7 percent per year. The decline can be linked to a loss of local jobs and an aging population, Council members have said.

Contact: dchiddister@ysnews.com