Category 26 – Original Writing – Featured Story
– By Jasmine Cupp – The Beacon –
The City of Port Clinton’s finances and state of being have been a hot topic for some time among residents, part-time residents and frequent visitors to the area. The condition of City streets and infrastructure are a concern for residents and visitors. With a decreasing population and just under half of Port Clinton’s population being retired and not contributing to income tax revenue, the City is receiving less and less to keep up with day to day operations.
Being the county seat, it is said that the economy in Port Clinton has a direct effect on the rest of the county. City of Port Clinton Auditor Cole Hatfield and Port Clinton City Council Finance Committee Chair Mike Snider explain how the City gets its revenue, how the budget is created and just how much money the City really has.
How much money does Port Clinton really have?
“The City budget is established by historical record. Out of the $12 million plus budget, $9 million of it is set in stone. That only leaves $3-4 million for day to day operations in the general fund. For the general budget there are 17 categories that the funds go; police department, street department, mayor, etc. In 2014, the general fund was $3.5 million and of that $3.5 million all but 6.48% was allocated towards specific things; equipment, contracted services, wages, etc.” said Snider.
“So, when we look at the budget, yes, its $12-13 million, but we are only able to control a small portion of that because it’s allocated to specific tasks and functions. When the administration brings a budget proposal to the financial committee they look at the 6.48% and decide where that goes,” said Snider.
The things that comprise as discretionary are the fireworks fund, incidentals (such as if a window in the Senior Center breaks), recreation programs (such as open gym at the high school), sponsorships (such as if a fishing tournament comes to town) and this year park improvements; the addition of restrooms at Portage Park. All these things need to be done, but they are not part of the day to day operations.
“It would be nice to have heated arguments in the finance committee meetings, but there is not much to argue about because there is not much to allocate,” said Snider.
Where does the money come from?
In the allocation of expenditures, the City auditor looks at the revenue. City revenue is made up of three things: real estate tax, bed and dock tax and (what revenue is mostly made of) income tax. From 2009 to 2014 revenue expectations have gone down $600,000.
“The only way to tell if the calculations are correct is if at the end of the year when the actual money comes in. We can only project,” said Hatfield. “The projections and revenue have gone down. Right now we are looking at a 6% decrease from last year.”
“Everyone thought we’d see a boost in the spring due to the Davis Besse maintenance. In reality, we haven’t seen the numbers go above last year. What that is telling us is that if it weren’t for Davis Besse we would be even lower than last year; Davis Besse actually helped us maintain,” said Hatfield.
“The fire department is not in the general fund, it is funded by levies. Port Clinton Fire Chief Kent Johnson has been great at using funds to update equipment and to take action to improve the longevity of the pumpers and trucks at the station,” said Snider. “He is only able to do that because he knows he has a source of revenue to count on. No other department in the City can plan for that type of long term viability because the revenue streams aren’t there. For example, even though the police department has gotten some new vehicles, the other vehicles that need replaced need maintenance and that drags down the budget.”
How is this affecting the City?
“The streets and infrastructure is a big issue. One mile today costs $1 million to update; that includes new streets, curbs, sewers and waterlines. It’s about $50,000 per block (which is roughly 1/10 of a mile) to grind and pave the street. It is suggested that streets be repaved every 20 years and to keep up with that the City should be paving 1 ½ miles every year. This year only 100s of yards were done,” said Snider.
“Now, unfortunately, we have to rely on grants to accomplish these repairs and those are very competitive,” said Hatfield.
“To do basic “keep the lights on” services, we need more revenue. We are already at bare bones, making more cuts would have serious implications on the City,” said Hatfield.
If property taxes are going down, real estate tax goes down and if people are not working who live inside the City limits then the income tax revenue goes down. We are already experiencing a “perfect storm” of revenue streams going down,” said Hatfield.
“We have been blessed in the past to have carryover, but that is lessening because of ongoing projects; carryover can only last so long,” said Snider. “We are trying to even out expenditures with revenue. The margins are getting smaller and smaller.”
We are doing the best with what we have, but we need additional revenue. Looking long term, we need to do something. We are looking to maintain, at this point we cannot expand. We are not near bankruptcy by any means, but we need to do something,” said Hatfield.
How can the residents help?
Councilman Snider explained that anyone spending money inside the City will help with revenue.
“Even something as easy as going out to eat one time a week in the City is helpful,” said Snider. “It sounds simple, but all the small things really add up.”
“Council is looking to make Port Clinton more business friendly, but government cannot solve all the problems.”