TALLMADGE – Now that voters have agreed to raise the city income tax rate by one-quarter percent, what will that mean for the city and safety forces?
Council members met Wednesday for a budget meeting, and Mayor David Kline reviewed the detailed 2020 Annual Appropriations Budget.
Issue 45, which gives the city an additional 0.25%, was approved Nov. 5 with 2,450 votes in favor and 1,636 votes against, according to final but unofficial results from the Summit County and Portage County boards of elections. The results will be certified by the boards of elections later this month.
The income tax increase from 2% to 2.25% is for the purpose of funding fire/EMS and police protection and related safety services and will raise an estimated additional $1.2 million annually for the needs of the safety forces.
According to RITA, it will take three years for the city to see the full effect of the tax increase.
Council members could vote on the city ordinance to enact the tax increase at its Nov. 14 meeting. A public hearing on the budget is scheduled for Dec. 12.
The first purchase for the safety forces could be a ladder truck, but council would have to approve the expense.
Kline said Wednesday it takes a year for a ladder truck to be built and he would like the authority to enter into a contract to start building one. That would make payment due in 2021, and the city would look at a 10-year note for financing it.
"The length of time to finance is determined by the life of the item purchased," said Director of Finance Mollie Gilbride.
Financing would be through a bank, which would allow 10 years for the vehicle debt, Gilbride said. Buildings can be financed for 20 to 40 years.
The budget reviewed did not include the 0.25% increase and Kline said numbers for 2020 should be higher as money comes in.
Gilbride said the budget was prepared without the increase in income tax even though they knew it was possible. If it had not passed, they would have had to take a "hard look at operations."
The general fund for 2020 will see a decrease by $716,788 from a beginning balance of $5.9 million to $5.2 million at the end of the year. The general fund is required to maintain a $3.29 million minimum which is its "rainy day fund." The general fund has been higher in 2013, 2016 and 2017 but lower in other years. Income tax has increased nearly every year but 2018.
The overall ending budget for 2020 is $11.3 million, $2.2 million lower than the beginning total of $13.5 million.
Council member Craig Sisak (Ward 1) said the city shouldn't be debit spending.
Kline said they're transferring $1.66 million from the general fund into the fire fund now to maintain its $183,572 minimum. The $1.2 million increase will change that.
In 2019 the city began using a Fleet Management Program for purchasing and trading-in vehicles to lower the average age of the fleet, reduce operating costs and maintain a consistent, manageable fleet budget.
Instead of denying requests for new vehicles until they fall apart or going into debt to replace multiple vehicles, the program puts purchases on a schedule, Kline said.
"In the past we ran vehicles into the ground," Gilbride said. "That was the reason I wanted to introduce Fleet Management. I wanted to implement a system to maximize trade-in and keep maintenance low."
If the fire department buys a $1.2 million truck, it's coming from the income tax increase, Kline said.
"I'm also committed to building a fire station," Kline said.
Safety capital projects for 2020 include four police cruisers for $75,000; fire station #1 repairs for $96,500; and a Fire First Responders Tahoe for $10,000.
Other capital projects include Pour in Place at Maca Playground for $145,000 to replace pea gravel that no longer meets ADA standards; Interstate 76 improvements for $100,000; asphalt paving program for $500,000; and engineering for a waterline on Southwest Avenue where breaks are frequent and water floods local businesses.
Next year, Gilbride said, she would look at updating the model for water rates because of a decrease in the water fund from $2.4 million to $2 million in 2020. The last water rate increase was in 2012.
"The model accounts for our costs and forecasts five years out," she said.
Council member Dennis Loughry (at-large) said it would be good to do small increases every couple years instead of a single large increase.
The JEDD revenue is estimated at $890,000 for the city of Tallmadge in 2020 and the rate of 1.5% is the same as 2019.
The city will review the impact of the 0.25% income tax increase on the budget in the first and second quarter of 2020 as well as major capital needs. Kline said they city will increase its focus on economic development.
Reporter Laura Freeman can be reached at 330-541-9434 or firstname.lastname@example.org