Finance Committee debates 3-tiered plan

Published 12:00 am Wednesday, June 2, 2004

Next week, Ironton City Council will look at a financial fix that includes a $3 municipal fee but this plan does not appear to have much more council support than the twice voted down $10 version.

The council's finance committee met Tuesday to consider a three-tiered plan proposed by councilmen Jesse Roberts and Bill Nenni that would adopt a $3 per month municipal fee, reduce the city’s reciprocity agreement by 50 percent and raise water rates each of the next five years.

Since Councilman Richard Price resigned from the committee last week, it was left to finance Chairman Brent Pyles and member Chuck O'Leary to make a recommendation to council. They voted 2-0 to unfavorably recommend the ordinance.

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Regardless, the plan will go to council. It does not have the support of O'Leary, Councilman Jim Tordiff or Bob Isaac. Pyles could still vote for it, but his unfavorable vote may be an indication otherwise.

Nenni and Roberts said the first two parts of the plan is an attempt to fill the $500,000 gap between revenues and expenses in the city's general fund. They projected the reciprocity change and municipal fee would generate $460,000 and could balance the budget in 2005 after unemployment benefits for the nine laid off employees comes off the books.

The water rate increase would help balance that department and help pay for water improvement projects on the horizon that includes the construction of at least one new storage tank, Roberts said.

O'Leary asked the two councilmen what exactly the money would be spent on. Simply saying "to balance the budget" is not acceptable because that answer was not sufficient when it came to the $10 municipal fee, O'Leary said.

"Isn't that the same thing that we said and you said you wanted specifics," O'Leary asked. "Š When we said it was going to plug the deficit, it was not good enough. Now it is?"

Roberts and Nenni both responded that filling the void was the overall goal and that any additional revenues brought in could be used toward economic development or maintaining the city services.

"Remember, the fee is temporary," Roberts said. "It gets us through the next year as we try to balance the budget by raising revenue as well as cutting expenses."

Calling the explanations "hogwash" and saying that it "shackles the mayor," O'Leary outlined why he believes that altering the reciprocity agreement so that individuals who live in Ironton but work in other communities that have an income tax would have to pay half of Ironton’s 1-percent income tax as well is not fair.

Essentially, it would place a heavier burden on the person trying to work and make a living than it does on someone who receives a lot of government assistance, he said.

"I am tired of it. Let's give (the mayor) some tools," O'Leary said.

Roberts agreed that the plan may have some unavoidable inequities and pointed out that his household would be hit twice as well.

"I didn't say I like it," Roberts said. "I said we have to do it."

Their plan would reduce the city's reciprocity agreement with neighboring communities by 50 percent - generating $300,000 per year.

The $3 per month, per household municipal fee would generate $160,000 in a full year. The fee would expire on March 31, 2005, but could be renewed with another vote.

The third step would be a 5-year water plan that would increase the water rates. It was originally proposed as 25 cents per 1,000 gallons starting in July, another 10 cents in 2005 and an additional 5 cents per 1,000 gallons each year for 2006-2008. However, the councilmen asked finance director Cindy Anderson to see if the increases could be lessened but still generate enough money for the department.

As far as Councilman Bob Isaac is concerned, everyone is jumping the gun and he can not support any plan that includes fees or tax increases right now.

"We all agreed on a budget. It passed unanimously," he said. "We didn't give it a chance. We don't know what it will do next year."

Earlier Tuesday, Mayor Elam said he still believes that the $10 fee is the best option and that the proposed plan does not meet him half way as it is claimed.

As if the city's financial troubles were not bad enough, City Engineer Phil Biggs warned that a state-mandated sewer control plan could cost the city as much as $20 million over the next 18 years. Biggs estimated that half of that could come from grants.

To come into compliance, the city will need to come up with $750,000 by the end of the year to help with the purchase of a street sweeper, a new vacuum truck, engineering costs for a long-term plan and more, he said.

In other business, the committee favorably recommended an ordinance that would allow the mayor to advertise and re-bid the Center Street Landing flood gate improvements. The $424,007 project is entirely funded by grants but previous bids came in over budget.

The committee also favorably recommended an ordinance allowing the mayor to accept a $26,325 grant through Ohio Department of Rehabilitation and Corrections for the Municipal Courts community corrections program.