MUNROE FALLS -- Without additional revenue, city residents could eventually see police officers from another community patrolling the streets, says Mayor James Armstrong.
"If it continues this way, we have to contract out the police," Armstrong told the Stow Sentry when asked what may happen if an income tax increase and police levy on the May 2 ballot continue to be rejected. "That would probably be the next step, that we would probably lose the police department. Not probably, we would. We wouldn't have the ability to fund it going forward."
Issue 4 on the May 2 ballot is a proposed increase in the city's local income tax rate from 2 percent to 2.25 percent. City officials estimate it will raise about $276,000 annually in additional revenue. Because of the city's 100 percent income tax credit, Munroe Falls residents paying a local tax of 2.25 percent or more to another community that they work in would not see a tax increase while those paying a rate of less than 2 percent to another community would pay the difference between the two tax rates.
Issue 5 is a 2.8-mill, five year police levy to pay for such police-related expenses as salaries, vehicle and equipment purchases and maintenance and building maintenance costs. City officials say it is projected to raise about $300,000 annually and would cost homeowners a little under $100 annually per $100,000 in market value.
Voters rejected both issues on the general election ballot in November. They approved a 2-mill, 10-year capital improvements levy, projected to raise about $214,000 annually specifically for road maintenance.
Armstrong said such a change with the police department would not immediately happen, that taking such action would be held off "as long as humanly possible," and he would want to try placing the issues on the November general election ballot if they fail in May. But if they do fail May 2, he expects to at least begin exploring such a move in the next few months by contacting other communities.
"I would probably start talking to people over the summer to find out what the costs are," he said.
Armstrong said both levies are "absolutely crucial." The police levy would provide some relief to the general fund, as the two fire levies do, and could even allow for an increase in full-time staffing in the police department. But, he said, the income tax increase is still needed, with both together stabilizing city finances, getting rid of the operational deficit, and securing financial health down the road.
"They go hand in hand with each other," he said.
If the police levy passes, but the income tax increase fails, Armstrong said he would not shut down the police department. He "would not want to be in the position" of doing so after the voters approve a levy for the department, he explained.
"The police department would survive," he said.
But, he added, that would still leave the general fund on shaky ground and he is uncertain how to deal with that.
Police Chief Jerry Hughes said he is concerned about the danger to his department.
"I just hope we don't get to that point," he said. "I really don't think that's what the public wants. I don't think the citizens want that. We're trying to avoid that, but if there's no other option available, it's a possibility."
Armstrong, who took office at the beginning of 2016, said it's not just him saying that the city needs more money.
"My predecessor said it as well," said Armstrong. "The Ohio auditor of state has told us we have funding issues. If the levies don't pass, these financial issues are going to get worse very quickly and it will result in us losing services because the only reason we've been able to maintain these services the last few years is by spending money that had been saved."
Budget is 'very, very tight'
"Our budget itself is very, very tight," said Armstrong.
This year's $4.4 million in budget appropriations includes a nearly $3.1 million general fund. "It's the general fund budget that's taking the biggest hit," said Armstrong.
It includes cash reserves of a little over $1.03 million. Armstrong said this reserve has been dropping in recent years. It was about $1.36 million at the end of 2016 and nearly $2 million two years before that.
Worse, said Armstrong, is the money is not being spent on emergencies, as a reserve fund is meant for, but to pay for ordinary operating costs.
"I'm just trying to fund the basic city services," said Armstrong. "You should not be using your reserve accounts to buy your salt, to pay your police department, to buy the cruisers, to replace the ambulances, to pay the electric bill, to pay the gas bill and that's what the city's been doing since before I got here."
The biggest expense in the general fund is the police department's operating budget, nearly $1.06 million appropriated for 2017. The fire department is primarily funded with two dedicated levies and ambulance transport fees, projected to bring in a combined $450,000 this year.
"The fire department does OK except when they need equipment or they need to increase their staff," said Armstrong.
But with the size of its budget and its reliance on the troubled general fund, the police department is vulnerable if massive budget cuts are needed. Armstrong said contracting services could mean a reduction in policing.
"Then you're getting the police protection you can afford and not what you believe to be required and that's my biggest concern," said Armstrong. "The other concern is the longer this continues, the bigger the hole it creates."
Armstrong said there have been cuts in full-time staffing to the police and service departments and staffing cuts at City Hall. The city will also not be hiring seasonal employees in the service department this year, handling such tasks as mowing in the parks with permanent staff as best as possible.
With only two full-time employees, the chief and assistant chief, the fire department is especially reliant on part-time fire fighters who are more likely to leave for full-time jobs elsewhere.
"Over the past 20 years we have been very successful in developing young firefighters (18) for full-time positions in other departments," wrote Fire Chief Lee Chafin in his March monthly report to City Council.
Councilman not in favor of income tax increase
While most members of City Council say they support both tax issues, Councilor Mike Barnes said he only supports the police levy because only a small portion of residents actually pay for the services they receive through income tax while the majority send tax dollars elsewhere. He said he believes the city is "leaving a lot of money on the table."
"It's just inequitable to have a small portion of the people pay the burden of the services in the city," he said.
Barnes said he has proposed other ideas in Council meetings, but never got anywhere with them. They include replacing the income tax with a fee charged to residents similar to what members of a homeowner's or condominium association pay and replacing the city's fire and EMS levies with a single "public safety" levy.
He said he has also suggested that the city look into selling pieces of property that it owns around the city, something that "may help at least in the short term." Barnes concedes that he has been unable to thoroughly research these ideas and he does not know if the fee idea is even legal, but he believes they should be explored.
"These are not ideas that are fleshed out in fine detail, but it's something we should consider as opposed to going to the taxpayers for a tax that doesn't apply to the entire city," said Barnes.
Armstrong said the city has known for years that it was heading toward some funding issues and managed to increase its general fund reserves by trying to keep costs down. A projected general fund deficit of nearly $500,000 was cut down to around $330,000 this year, but even getting to this point was difficult.
"If you don't have much staff to begin with, there's no place to really cut," said Armstrong.
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