Plain City officials are working to maintain a balanced budget as the village continues to grow.
During Thursday’s Personnel and Finance Committee meeting, which was held in conjunction with the Capital Improvements Committee, Village Administrator Nathan Cahall discussed budget projections through 2025.
He said the goal of the meeting was to consider, “How do we advise council what future investments make sense?”
Cahall noted that “we currently stand in a solid financial position as a village,” especially in regard to the general fund and operating expenses.
He said the village expected a 20% decrease in income tax collection due to COVID-19.
Through Memorial Day, he said collection was near that estimate but, after the filing deadline in July, Fiscal Officer Renee Sonnett said it is down only 1.89%, or $25,000 to $30,000, from where it was last year.
“I don’t know that we’ll collect our exact original projection, but I think we’ll be very close to what we originally projected,” Sonnett said.
Despite the good news, Cahall said the committee will likely need to consider long-term changes to budget surrounding capital expenses.
He said the village deferred most capital improvement projects “for many, many years” and is now trying to incrementally catch up.
To do so, he said the village initially set a “very aggressive five-year capital plan.” However, he said Plain City may not be able to consistently pursue as many capital improvements as they have in the past couple years.
“The message I want to communicate is that… the amount of horsepower we’ve been utilizing for capital improvements – we can’t be revving the engine that hard and fast beyond this budget cycle,” Cahall said.
If every project planned through 2025 was executed, Cahall said “we run into some concerning scenarios with our capital funds into 2023.”
He said “the biggest thing that breaks the bank long-term” is the street capital fund. He said the village has spent recent years investing in improvements in its northeast quadrant, including Noteman Road and Shepper, North and Converse avenues.
Things could “run afoul,” he explained, when the village tries to move to the reconstruction of N. Chillicothe Street, as it will incur significant roadway paving, storm sewer, curb paving and sidewalk expenses.
Funding those projects could be problematic, he said, because the street capital fund’s only revenue source is a transfer from the general fund or a 0.5% income tax transfer.
Similarly, he said there is “an incredible amount of deferred capital improvements at the parks and no good revenue source for it.” For that reason, he said nearly all spending for parks has been “postponed in totality.”
Cahall said the situation is further complicated because the village has recently accepted or issued debt or loans for larger projects, which grows each year.
After 2021, he said a “large chunk” of the 0.5% income tax revenue will be “locked into debt service for previous obligations and projects.”
To remedy potential problems, Cahall said staff is considering what can be done over time to draw out the reduction of fund balances so they have time to be replenished.
He said council could consider charging more for debt service to the sewer and water capital funds, which “have healthy enough fund balances and dedicated revenue sources,” that allow them to replenish over time.
Additionally, aside from the wastewater treatment plant expansion project, he said staff is not likely to recommend taking on any more debt obligation in the near future.
Cahall said staff would also like to break up larger projects into “multi-year components.” He said drawing out the projects could also help change the timing to better align with third-party funding cycles, like those of the Ohio Public Works Commission (OPWC).
He also noted that the model budget is created under the assumption that “we are going at it 100% alone,” but modifications will be made if grants or loans are received.
He said the village’s budget could also be boosted by income tax from new developments.
“I truly believe, minus the pandemic turning into something that drags on for years or… something else crazy going on, I truly believe we will see continued housing growth and development activity that will get us where we need to be, over the 2022-2023 bump,” Cahall said.
He said if the community gains about 500 residential units by 2024, on top of developments already approved or in progress, the revenue would sufficiently boost areas of concern within the budget.
Cahall said it would be substantial growth, considering the village now has about 2,000 dwellings.
“As a community, we’re kind of that awkward, gangly teenager in a lot of ways,” he said.
The committees plan to hold another joint meeting via Zoom at 6:30 p.m. Sept. 10 to dive into specifics of the proposed 2021 budget.