The following is the latest installment of Mayor Jim Boroff's monthly updates on city issues.
Paint color. Although just a few comments and questions have come directly to my office, there certainly has been discussion on the street about the recently repainted Marvin's building. As part of a renovation effort to open a new restaurant downtown, the owners have painted the building a bright green.
Most of the questions center on the design review regulations for the downtown area and our building maintenance code -i.e., "Can the city dictate appropriate paint colors?" Neither set of regulations gives the city the right to prescribe "appropriate" paint colors. Indeed, we can enforce issues of peeling paint; but, the color is left entirely to the owner.
Years ago, there was an effort to craft a design review code that included (among other things) specifications for colors of paint, permitted types of interior window treatment and it even included parameters for allowable types of flower boxes. Public opposition to the proposed legislation was overwhelming -especially on the part of the building owners.
When the current legislation was adopted for design review in the downtown area, paint color and window treatments were intentionally left to the discretion of the owners. We had learned there is definitely a fine line between what the public expects to be "proper" versus the rights of expression by the respective building owners.
In actuality, when I asked those who called me if they were opposed to the green building, most said that they did not necessarily dislike the color. It was more the surprise of seeing a white building that suddenly turned bright green.
Controversy notwithstanding, it is my sincere hope any investors who open a business in Tiffin succeed in their efforts. We are ready to assist any endeavor as best that we can.
Revenue forecast. The administration and department heads are hard at work on the 2012 budget. Although income tax revenues are making steady progress toward a recovery back to the 2008 level, we will be facing significant cuts from the state that will more than offset any of these gains.
To prepare ourselves for making sound financial decisions, we are assessing just what we believe our general fund revenue will be for the next few years. In 2008, our income tax revenue was $7 million. Other revenue sources amounted to just about $4 million - giving us a total income of $11 million. In preparing the budgets for '09, '10 and '11, we used various benchmarks and indicators to calculate projected revenue loss for those respective years. In every case, we were right on target and able to make things work reasonably well by having these accurate forecasts.
New cuts in income from the state make it more difficult to estimate expected revenues, but we have to start somewhere. I believe that, even if the economy continues to improve, the city cannot expect income tax revenues to rise much above the $7 million figure in the foreseeable future. Consequently, all annual revenue projections are based upon $11 million in general fund income minus these revenue losses.
There are four major factors that will impact our city's general fund:
Scaled back Local Government Funding from the state.
City Council's stated intention of annually decreasing the amount of sewer revenue money used to pay sewer administration expenses and then budgeting more general fund money each year to cover that gap.
Phasing out personal property taxes.
The state's elimination of estate taxes.
Finance Director Gwynn Reinhart and I have calculated the approximate impact each of these four factors will have on the next three years' revenue stream. We have concluded that, if nothing is done, the city will be down about $1 million in annual revenue by the year 2014. This means that, unless the administration and city council find ways to enhance revenue streams, we will be working with 9 percent less income in 2014 than we are today.
Solutions? We do have some options.
In order to meet our commitment of providing quality services to our citizens, we must continue to watch our expenses. I believe we have all done a good job of that. During these past four years, we have reviewed contracts with utilities, made changes in administrative procedures, combined supply purchases throughout departments, thoroughly researched capital purchases and have found many other ways to keep costs down. Collectively, we have achieved $2 million in direct savings to the city during this four-year period.
Secondly, all employees - union and non-represented - are working closely with the administration to find ways to lower our employee expenses. Everyone understands we are in financial times that are entirely different from what anyone of us has experienced before. Everything is subject to discussion and review from health care to vacation time to overtime policies - and we will all participate in the decision-making process.
Our employees recognize that any degradation in city government directly affects them as residents. The collective goal is to hammer out solutions that are palatable to everyone and to continue to provide the best of all services to our residents without significantly diminishing our quality of life.
Finally, the administration and city council need to take a good look at the hard issues, i.e., revisiting the council's policy on the sewer administration fees, reducing allowable income tax deductions for residents who work in other communities, and adjusting service and license fees to cover our true costs. None of this income will fatten the city treasury. Every dollar is vitally needed and will (and has always been done in the past) be spent prudently for the benefit of the people of Tiffin.
No one wants to pay more for services than they have to, but if we are to continue to operate effectively and efficiently for our residents, everyone will need to be prepared for some significant changes.