Fostoria council targets 6-mill hike

FOSTORIA — Fostoria City Council approved an amendment to the city’s fiscal recovery plan Tuesday that calls for a 6-mill property tax increase.

After the city was placed in fiscal emergency in May, three proposals were presented. The options include a 4-mill, 5-mill or 6-mill property tax increase. Any increase must be approved by voters in November.

A fourth option, which would take effect immediately if the tax increase is rejected, would include layoffs.

During the March 7 meeting, council agreed to pursue a 4-mill property tax increase.

Tuesday, council changed course.

During public comment, resident Kevin Magers said police and fire services are important, but he also stressed the importance of other issues.

“I use streets every day. I flush my toilet every day. I use tap water every day,” he said. “Don’t kick the can down the road further. Take care of our problems.”

Magers said council needed to confront the issues, including infrastructure problems. He called the roads in the city horrible.

“We’re patching the patches,” he said. “We can’t continue to do that. If it takes 5 mills or 6 mills, whatever.”

Councilman Brian Shaver, who was not at the March 7 meeting, said he agreed and said he did not support the 4-mill plan.

“Only one (of the plans) accomplishes the goal to get us out of fiscal emergency,” he said. “The 6-mill levy gets us into the black.”

The plan approved by council March 21 must then be approved by the state auditor’s special committee March 29.

Belinda Miller, of the auditor’s office, said if a plan is not adopted, the city risks having its General Fund budget cut by 15 percent.

Shaver said if citizens agree to the 6-mill plan, projections show it would take five years to be free of fiscal emergency status.

Mayor Eric Keckler said the 6-mill proposal would cost the owner of a $100,000 home about $210 per year in property taxes. The 4-mill plan would cost the same homeowner $140.

Shaver said he doesn’t want to pass the 4-mill plan and later have to ask for another tax increase.

He said he hopes taxpayers will approve the 6-mill plan, which he said would cost the owner of a $100,000 home about 58 cents a day.

“I believe in our voters. I believe in our constituents. I believe in the people of Fostoria,” he said.

Councilman Mathew Davoli said the 6-mill plan could deter businesses from locating in the city.

“I’m concerned about economic development,” he said. “If the 6-mill plan becomes a repellent to business, it could hurt in the long-term fiscally.”

Davoli said he would like to hear a statement from Fostoria Economic Development Corp. endorsing one of the plans.

Keckler, who said he supported the 4-mill option last week, seemed to change his opinion after speaking with several residents.

“We’re cutting it tight with a 4-mill levy,” he said. “I know some of council were pretty adamant for a 6-mill levy.”

Councilman Doug Pahl, who voted against the amendment, said the 4-mill option may be more palatable to residents.

Councilman Greg Flores disagreed, saying he thought the benefits of the 6-mill plan were worth the extra cost.

According to information from the state auditor’s office, the 6-mill property tax increase would create a projected carryover of $1,946,297 after five years. The projected carryover after five years for the 4-mill plan is $786,297.

The city must have a three-month carryover after five years to restore its fiscal health. A three-month carryover based on the 2017 budget is about $1.8 million.

Councilman Jonathan Hay said the only difference in the plans is the carryover.

“The 6-mill and the 4-mill plans are the same,” he said. “They won’t fix the roads, they won’t buy new cars, it’s just more money in carryover.”

Hay said continued positive momentum in economic development could increase projections.

“This can be adjusted as we go. I don’t think we need to take more than what’s necessary from the people,” Hay said. “The idea we can take and give back later is a fallacy. Our budgets adjust to the money we have at hand.”

Hay said under the 4-mill plan, the city’s carryover is projected to rise above zero in about two years. He said it was unfair to move directly to a three-month carryover when many residents likely don’t have three months of income in the bank.

Shaver said he wants state auditor’s representatives out of the city as soon as possible.

“(The 6-mill option) is the only thing that gets us to our goal,” he said.

Shaver said it was important to continue to watch finances closely, even after a plan is approved.

“Pass the 6 mills and think about ways to improve. Four doesn’t achieve the goal. Five doesn’t achieve the goal, but six is close,” he said.

Council approved the amendment’s first reading, 4-3, with Hay, Davoli and Pahl dissenting. A second reading is scheduled for Thursday and a third and final reading is set for Tuesday.