Council recommends tax budget that could result in estimated 21-percent cuts to general fund departments

The Hillsboro City Council voted to permit Hillsboro Auditor Gary Lewis to prepare the city's tax budget with the intent to preserve a $450,000 carryover into 2012, a vote that could mean a 21-percent cut to general fund departments. 

Council's finance committee met Monday prior to the regularly scheduled council meeting. During the meeting, with all members of council present, along with Lewis, and Hillsboro Mayor Dick Zink and Safety and Service Director Ralph Holt, and voted to make the recommendation to council. 

It was not recommended what would be cut.

Lewis told The Highland County Press that was roughly a 21-percent reduction, though the percentages vary in places from department to department. 

Th committee had reviewed financial scenarios Lewis prepared at their request, which showed figures if the city had a carryover of $350,000 into 2012, and a $450,000 carryover into 2012. Lewis told the committee that he would be comfortable with a carryover somewhere between those two numbers. 

The city is currently facing a projected deficit of $269,000 by the end of 2011, according to Lewis. The projected deficit has been as high as $730,000 and as low as $164,000 during the month of July. 

Finance committee chairperson Peter Pence told council that the move was not one the committee was happy with, but cuts have to be made to balance the budget. 

Pence said that there are "some variables" regarding the budget that will not be known to the city until a later date, such as the outcome of negotiations between the city and employee unions, and the increase to the cost of the city's health insurance. 

Finance committee member Bill Alexander posed several questions regarding expenditures, including on overtime for the Hillsboro Police Department, which currently show overtime hours the same in 2011 as they are in 2010. He asked if that was feasible, considering the department will be losing two officers to retirement, and they will not be replaced. 

Chief of Police Nick Thompson said it is hard to say because they never know how much overtime is needed until they face certain situations. "As you know there are things going on right now that could increase it. But we're trying to hold it down as much as possible."

Alexander also questioned wage increases in the fire department, and various increases in certain line items for the fire department, such as uniforms, which went from $8,000 to $22,000;  small tools and hose and nozzles, and costs for education and re-certification.

"In fire and life squad together," Alexander said. "Why is it that with these reductions, we're facing a possible increase in that amount, in the budget for 2010 and the ... requests (for 2011)? ... I see the largest area is wages for fire department being up by a very substantial amount, from $754,000 to $919,000. Now I'm assuming the part-time people ... for the most part ... are causing that increase."

Holt said there are some items that must be replaced for safety issues, such as the hoses, and finance committee member Dave Shoemaker agreed with that statement. Alexander asked if the uniform allowance was tripled in anticipation of more part-time firefighters. Lewis said he would get those numbers to Alexander. 

"Overtime is substantially lower," Alexander said. "Overtime for life squad is also substantially lower. But when we look at all of the figures ... I was hoping to see a reduction in the total requests by the fire department, rather than an increase."   

Holt said those numbers are proposed at what Hillsboro Fire Chief Jerry Powell requested them to be. "The carryover budget is not that high," Holt said. 

"We are going to be making some rather substantial cuts somewhere," Alexander said. "And I am just trying to look through and see where we are going to be able to make cuts, and knowing some of the history about why these requests are being made would help the finance committee in making recommendations to the council."

Shoemaker agreed with Alexander that he was concerned over the regular wage increase. 

"What explanation do we have for that?" Shoemaker asked. "Chief Powell, do you have an explanation?"

"I'd have to look at it," Powell said. "I'm thinking of the total wages and overtime, we've changed the way we operate. The overtime goes down because of the part-timers saving money in that regard, so I think it was incorporated into the wages ... On the operational part of the budget, the budget we had this year, the cut we had - a substantial cut - while some of it was taken out of wages, a larger portion of it was taken out of the operational side of the budget. That's why you'll see the increases in 2011 was to restore some of that back to what we really needed."

Powell and Holt said that education and re-certification and education was staggered from year to year, and a required part of the budget. 

Alexander asked if the city was anticipating any full-time firefighters retiring in the coming year who could be replaced with part-time firefighters.

"Not anymore," Zink said. "We've gone to part-time far enough."

Holt said that due to the present state of the economy, there are items the life squad will have to pay for that previously hospitals covered, such as bags and certain drugs. 

"Would you agree every year our costs become more?" Holt asked the committee. "It's just a part of life. Everyone pays more for things."

Alexander questioned if the city had considered how much would be saved if the fire department no longer covered runs outside of the city, noting that there would be some loss of revenue, but perhaps some substantial savings. 

"Last year there was $900,000 more billed than was received," Zink said. 

A contractual increase to the cost of providing those services to the townships has been submitted to township officials by the city, and the city is waiting for a response. 

"That is one of those variables we have to look at, at the end of the year," Zink said. "We can sit here and throw all this stuff out as long as you want to, but we won't know anything until toward the end of the year whether our projections are close or under or over. We just don't know that."

In 2010 the city retained a collection agency to work on unpaid EMS billing. 

Shoemaker said that if the committee looked at "The combination of the fire department and the life squad wages and overtime 2011 budget compared to 2010 I think you're only going to find there are about $47,000 difference instead of the huge amount we see, the $919,000. If you combine that, which is what they actually have to do since they are in the same building, the same residency, if you look at the amount of overtime that has decreased in 2011 ... You're going to see a $47,000 difference. So it's not as bad."

"I was hoping they would be $100,000 less in wages and overtime, because we have the part-time people," Alexander said.

Holt said, "That question can't be answered yet. We haven't traveled far enough down the road to see," the cost savings implemented by the staffing changes. 

Pence said that the purpose of the meeting and all the data collection is to "Get a sense of direction going into next year, the rest of this year and through next year. We know there are a lot of things that could change, for the good or for the bad.  The purpose of this is so the auditor can prepare a tax budget and get that submitted."

Pence made a motion to recommend to council that Lewis prepare the tax budget working toward the scenario that leaves the city with a $450,000 carryover into 2012. The motion was seconded by Alexander. 

"The reason for recommending the $450,000 number is, we know we have to be between the $350,000 and the $450,000," Pence said. "We know it's not going to be fun. It's going to be painful to be honest with you. But we need to try to put ourselves in the best position to have a carryover for 2012."   

Shoemaker said he wanted to point out the committee is "Not recommending  any cuts at this time. We have looked at this and as of last Friday, we're talking double-digit (percentage) cuts. I think think we need to sit tight on where we're at. Because the situation is we are going to carry over (into 2011) $323,000. Which is not a comfortable figure, but it is not a negative. One of the factors that is going to determine," the amount of percentage cuts is the medical insurance increases.

Council member Mary Brown Turner told the committee that "I respect my fellow councilmen and all the folks who are here. But I am just wondering, I see a challenge to that. Isn't there a possibility of making money. I mean we need so many thousands of dollars, but what about creating an idea to make the money we need, rather than go down and say we have to accept what we have. Why can't we find this as a challenge?"

"It certainly is going to be a challenge," Pence said. 

"Ok, we don't have the money ... How about getting some ideas to make the money," Turner said. "I mean, I don't think we should give up ... I can't believe there aren't possibilities for us to raise that money."

"I don't think anybody is giving up," Pence said.  

Zink said that the problem is, "We're trying to put a Band-aid on a gusher. We can look at 2011, look at 2012, but we're still not addressing the real problem. You can cut 15 percent this year, 15 percent next year. Where are you going to get 30 percent? What are you going to do? What services are you going to completely do away with and tell people, 'We can't support you, taxpayers, cause we can't cut more than 30 percent.' That don't leave us with any people to work with. I don't know how we're going to get out of it. But this isn't a fix."

"No, it's not intended to be a fix," Pence said. "It's intended to give a direction. You know where we stand. You look at the numbers every day just like I look at the numbers. This brings me no joy to have to make these decisions. I can certainly think of a lot of other things I would rather do. The reality is unless you want the state of Ohio operating your city government, you have to have a balanced budget and you have to be able to pay your bills. That is why I am recommending we work toward the $450,000 carryover. I know that is going to be hard to do. There's going to be a lot of sacrifices. I can tell you I'm not happy about it. This committee's job is to look at all the information and make the recommendation they feel is necessary. This is just a starting point. There is going to be a lot of work to do. Certainly we will be willing to help and look at whatever we can do to be more efficient ... When you're talking about a budget at big as the general fund, $100,000 in each department really isn't that much. I would rather be a little more on the conservative side , and those numbers can be adjusted. Obviously if we see a $450,00 carryover is not necessary, we can adjust accordingly." 

Pence said the committee will keep meeting on a regular basis. 

Looking at the numbers presented by Lewis, Holt said he wanted to make sure the situation "is clear."

"That means that , probably the police, a $230,000 reduction in budget. About the same for fire fire," Holt said. "The only issue I have with that is fire, with the apparatus they have, the amount of trucks they have and the cost of maintenance on those vehicles. You are basically going to cut their budget by $200,000."

Pence said the city could either, "Look at is as cutting the budget, or you don't have the appropriate adjustments and money appropriated, you'll get to be in debt that much money. As it goes right now, there won't be money to pay for it."

"Well, let's put it this way, the money won't be there," Holt said. 

"It won't be there," Pence said. 

"If the equipment breaks down, what are you going to do pull it over to the side and park it when we can't fix it?" Zink said. 

"Those are certainly issues that are going to have to be dealt with," Pence said. 

Pence renew his motion, which had been seconded by Alexander, all three committee members voted for the recommendation.  

During the meeting of a full council, held later that night, council voted 7-0 to approve the report of the finance committee, thus accepting the recommendation. 

Council president Lee Koogler noted that once Lewis prepares the tax budget a public hearing will be scheduled, and then it will be presented before council for consideration for approval. 

  Lewis said he "does not have the authority" to recommend specific changes or cuts. According to a printout of the $450,000 carryover budget scenario shows a 21.41 percent cut to the HPD, which is a reduction of $230,590; a 21.13-percent cut to the fire department, which is a $263,927 reduction; 21.80-percent cut in life squad, which is a reduction of $19,830; a 97.56-percent cut in community environment, which includes public access television, and did not show a reduction figure; a 25.78-percent cut in general government, which did not show a reduction figure; a 36.70-percent cut in Hillsboro City Council, which is a reduction of $8,323; a 21.83-percent cut in Hillsboro Municipal Court, which is a reduction of $62,016; a 25.89-percent cut in land and buildings, which is a reduction of $13,029; a 21.04-percent decrease for the auditor's office, which did not show a reduction figure; a 30.61-percent cut for the tax office, which did not show a reduction figure; a 21.81-percent cut for the law director's office, which is a reduction of $27,689.