Tiffin deficit could hit $1m by 2011
Finance director predicts additional $650,000 if ballot initiative failsBy Kevin Risner, krisner@advertiser-tribune.com
Finance Director Gwynn Reinhart was not present Monday for the Tiffin City Council meeting, but she sent a message that could not be ignored: Tiffin could experience a deficit of more than $1 million by the end of 2010.
The projection marks a starting point for developing a budget for the new year, according to a statement read by Mayor James Boroff.
"Mayor Boroff and I have decided that a projected 7-percent decrease in income tax revenue from the total 2008 receipts is an appropriate starting point for the 2010 budget," Reinhart wrote. "That means a decrease in revenue just from income tax receipts is $507,500. At the start of the budgeting process, we were projecting the general fund to be in the negative at the end of next year, 2010, by more than $1 million."
Reinhart continued her statement by offering a case for passage of the Tiffin ballot initiative appearing on the ballot today. The ballot initiative would keep the allocation of income tax at a minimum of 10 percent to capital improvements for six more years. City council would maintain authority to appropriate any additional amount for capital projects. The ballot initiative does not create a new tax, but only addresses the allocation of an existing tax.
"If we do not have this renewal of the capital allocation for budgeting purposes in 2011, it would mean another $650,000 would be automatically added to the budget deficit," Reinhart wrote. "We would be starting 2011 at a projected deficit of approximately $1.65 million."
If the ballot initiative is not approved before the end of 2010, the $650,000 would be the additional amount of the income tax allocated to capital improvements that could not be spent as part of the general fund.
In another budget-related issue, the city is waiting to learn the amount of health insurance increases for 2010. Boroff said each 1 percent increase in health insurance costs would amount to about $12,500 more to be paid by the city. The information is needed before a new budget proposal can be finalized.
Boroff said he hopes to have a budget proposal ready for council members to review by next week.
Council approved a resolution after a final reading recommending the dissolution of the Tiffin Improvement Corp. and thanking the board of trustees of the corporation for its service.
Boroff said there is no longer any work for the corporation because the Seneca Industrial and Economic Development Corp. now fills the need.
Council approved an ordinance after suspending the three-reading rule amending a previous ordinance to appropriate funds for a refund for copier lease, proceeds from the city auction, an insurance claim for fire/rescue division gear, and donations for trees as memorials for loved ones.
