By JAN LARSON McLAUGHLIN
BG Independent News
Stagnant revenue and increasing expenses have Bowling Green City Council looking at ways to bring more money into the city’s general fund. Some of the options include canning city provided garbage collection, trimming the city arborist, reducing police and fire staffing, or increasing taxes.
The city’s gains in income tax revenue have been eaten away by state and federal funding cuts in the past decade. The budget for 2017 lists revenue of $14,996,197 and appropriations of $15,623,253 – which means it is cutting into the balance by $627,056, and is not sustainable.
So on Monday, the council’s finance committee listened to options – some more painful than others – from Brian Bushong, city finance director.
“Some are more appealing than others,” Bushong said.
Though the task is unpleasant, action must be taken, stressed council member Bob McOmber, chair of the finance committee. “This might even be the most important decision we make this year,” he said.
“We must address it before it becomes a crisis,” McOmber said.
As he presented the status of the city’s finances, Bushong had a request of council.
“Don’t kill the messenger. I’m the messenger,” he said.
The city’s overall revenue continues to be flat, as costs continue to escalate. While income tax revenue is up, the city continues to take hits from interest revenue, intergovernmental fund cuts such as estate tax losses, and the end to its cable franchise income. Local government funds shrank from 18 percent of the general fund a decade ago, to 7 percent now.
“We’re just trying to replace the money the state and federal government have taken away from us,” McOmber said.
The local government fund loss was about $600,000 annually, the loss of the cable franchise fee was about $300,000 a year, and the loss of estate tax averaged about $700,000 a year.
McOmber added that there is no guarantee that the state won’t come knocking for the other half of the local government funds that they didn’t take before.
“We hope we’ve hit bottom with the intergovernmental transfers,” he said. “There are further threats on the horizon.”
So Bushong presented eight ideas for generating revenue for the city general fund:
- Redistribution of the city income tax. This would not be a tax increase, but would require a public vote since it would switch how the funding is used. This would likely increase water and sewer rates, which are “extremely low” because so much funding from the general fund is now used for those services, McOmber said.
- Reduction in police and fire staffing, which are the largest part of the general fund. The negatives of such cuts could be longer response times, decrease in safety for citizens and staff of the police and fire divisions, and increased overtime costs. It was also noted that citizens have always supported fire and police levies at the polls, and cuts to services could jeopardize accreditations and push up insurance rates.
- Increase income tax rate. That option would “send a wrong message” to businesses if the city went above its current 2 percent tax rate, McOmber said. “I do not consider that myself to be a realistic possibility.”
- Cut funding assistance to other entities, such as the county airport, annual fireworks, convention and visitors bureau, and surrounding townships. That option could result in strained relationships in the long run.
- Privatize garbage and recyclable services, which cost $693,000 a year. Several other cities in the region have already privatized their refuse pickup or charge a direct fee for the service. The city could seek bids for garbage collection and could sell its equipment. Each of the five recycling trucks cost $250,000 and last about 10 years. The negatives of this option include four city employees being laid off, the need for the public to pay a fee, and the loss of local response to citizen concerns.
- Privatize refuse collections, but keep the four employees who also do other jobs like plow snow. Those employees could shift over to offer some city services that had previously been cut, like monthly brush pickups and crack sealing of pavements. That option could save about $371,000.
- Cut the city arborist. However, Bowling Green officials are very proud of their long-running Tree City status, and the arborist handles disease management and plantings.
- Institute a special assessment for tree services and the arborist, like a street cleaning assessment that is charged on property taxes.
McOmber suggested that council “let this thing simmer a while,” before any decisions are made.
“We want to give people a chance to show up at lobby visitation and tell us what they think,” he said. The options will be discussed next at a May 15 committee of the whole meeting.
City Council President Mike Aspacher also asked that the city’s entire fee structure be examined.
Bushong also pointed out that in response to the revenue losses, the city is already down by 20 employees from 10 years ago. The cuts were made through attrition and not lay-offs, which left some uneven staffing. Public works has taken the brunt, he said.
Meanwhile, the city worked hard to not cut services to the public – despite spending reductions from $17.1 million in 2008 to $15.6 million this year, Bushong said.
The city came up with budget balancing strategies through improved productivity, cooperative efforts with entities like ODOT, shifting funds, using reserve balances, increasing fees such as ambulance rates, trimming brush and heavy trash pickups, and increasing the city income tax from 1.92 percent to 2 percent.
“You’ve given us a lot of food for thought,” Mayor Dick Edwards said after Bushong’s presentation. “We have a lot of work ahead. We’ve been dealt with some severe blows and some major challenges.”
