City Budget and Tax Levy

27 Jan 2014

This Power Point Presentation is a working draft. It may contain information that upon further revue and research turns out to need significant refinement. The residents of Huber Heights and beyond are given this presentation in this form so they can help contribute to that refinement process. The intention of the final product, once presented, is to allow the Mayor to convey his knowledge of the discussion as of Monday Jan 27, 2014 and to provide a context for further discussion as the issue evolves.

City Budget and Tax Levy

1. Is a tax levy necessary?2. If a tax levy is necessary, at which

election should a tax levy appear?3. If a tax levy is necessary, which is better

an income tax or property tax?4. If a tax levy is necessary, how much

revenue will the City seek?5. If a tax levy is necessary, what is the

duration of the levy?

Is a tax levy necessary?• 2008

– The City reduced the income tax from 2.25% to 2.0%. The beginning cash reserves in the General Fund have gone from $7,057,510 in 2009 to $3,211,036* in 2014. (draft budget discussion documents in Admin meeting)

• May 2011 and since– City income tax levy on ballot– Both men that held finance the director position have

been concerned of systemic deficits. • Nov 2013;

– *The Finance Director tells us the 2014 budget will result in a $2.1 million reduction in the General Fund.

• Dec 2013– *Reconciliation of 2013 Budget returns $1,457,913.52 to

the General Fund. (item 12W of Dec 9 council meeting)

Budget - additionalIncluding the General Fund there are 45 city funds. The cash balances change daily. A snapshot near the end of 2013 the total cash reserves were about $32 million dollars. Most of the funds have restrictions on usage. The Water and Sewer funds have strict restrictions. About $19 million of $32 million dollars were in funds associated with Water and Sewer.

What has been done since 2011?

• How the city pays for salaries has been adjusted so that the number of hours a person works helping a department helps determines what fund the salary comes from. For instance the city manager use to get paid only from the General Fund, however, the City Manager does spend time working on issues dealing with Streets. Now part of the City Manager’s salary gets paid from the General Fund and part of it is paid from other funds like the Local Street Operating Fund

• The city has changed the way it keeps track of its water usage. Previously, the city received a water bill and paid that water bill from the General fund. Last year the city decided to rebate all previous water bills back to the General Fund. Current and future water usage is now intended to be tracked but no bill is generated.

• City has examined projects old and new and when possible changed the charges so the payments were made from funds other than the General Fund

Budget - Additional

• Manning levels for Police, Fire and other city departments are lower since 2008

• A portion of the current income tax which is dedicated to Police and Fire expenses expires in 2015.– - A renewal levy likely will likely be initiated

before 2015 to replace this loss of revenue.

Budget – Future Influences• Salaries

– Effectively, had 3 years of pay freezes– All 6 labor agreements expire this year

• Economic Development– Short term affects due to the start up of the Music

Center have not been released publically– Long term influence is presented to be $400,000 in

profits every year.– The Heights is presented as providing a billion dollars

to the economy– Increase need for Police and Fire Services in new

development areas.

At which election should a tax levy appear?

• May 2014– Council must approve and submit to Board of

Elections by 4:00pm Feb 5, 2014

• August 2014– Special Election

• November 2014– City staff concerned the details required to

plan the 2015 budget and beyond will not be available until after the election.

An income tax or property tax?

• What groups / individuals are affected by one or the other?– Working or Retired– Renter or Homeowner – Resident or Non-Resident– TIF or Non-TIF– Montgomery or Miami County

Income Tax

• What is the income tax credit?

How much revenue will the City seek?

What about the duration of the levy?

What is the Way Ahead?

• Information gathering and dissemination:– Professional Survey– Public discussion at City Meetings– Organizational outreach– Social Media