Learn about Stow's 2014 budget - Mike Rasor's blog

We discussed three important topics last night at the committee meetings:

Stow-Kent Shopping Center – As you have heard by now, there is a proposal on the table to redevelop Stow-Kent Shopping Center.

As background, Stow-Kent Shopping Center includes the former Stambaugh’s and the current Macy’s, as well as other retail. Developed in the late 1950′s, the plaza has been a source of consternation for many residents, who consider it an eyesore.

One of the owners, Rob Risman, has promised through the past few years to do something about it. In the past few months, the plans have come together. Much of the retail will be demolished and replaced with modern-style townhouses and apartments — 152 residential units in all. It’s a $20MM project that could break ground as soon as Spring 2014.

Council will hold a vote on the site plan on Thursday. From the comments voiced last night, it’s very likely the plans will be approved. I will provide more opinions on this after the vote.

Firefighter hirings – The city has one vacancy in the fire department, but it expects three more in the coming months. Chief Kalbaugh requested authority to hire four firefighters.

As you’ll read a little later in the post, the city is operating in the red. Plus, the police department is understaffed (those problems didn’t go away just because the tax levy failed). I’m not saying we shouldn’t replace the firefighters, but I am saying that we should be methodical and prudent about it.

In 2000, the city passed a property tax levy, in which there were promises made to hire 15 firefighters. But, as Brian Lowdermilk pointed out, when the property tax levy passed in 2000, the city planned to provide EMS and transportation for Stow AND Silver Lake. The city has since lost the Silver Lake contract.

Three years ago, Stow received a two-year grant from the federal government to hire five firefighters. At that time, we were told there would be no requirement to keep the five positions after the grant money expired. We were assured that the department would go back down through attrition. If these five firefighters are replaced, then we will have changed course.

I made a motion to hire one firefighter now, and to address the other vacancies as they actually arise. That motion failed by a 4-3 vote (Riehl, Rasor, Lowdermilk). The motion to then hire all four firefighters passed unanimously.

2014 budget — Council discussed the 2014 budget for the first time last night. Here are some facts for you:

The mayor has again proposed a budget that is unbalanced. There is a gap of $146,212 between revenue and expenses. At the end of 2014, we are expecting to have a reserve balance in our General Fund of $4.05MM. The National Government Finance Officers Association says we should have at least $3.5 to $4.3MM set aside. If we dip below $2.1MM, the State Auditor can put us on fiscal watch.

For each year between 1996 to 2005, the reserve balance grew by between $300K or $400K because the city was making smart fiscal choices and the income tax base was growing steadily. Then came 2005. The economy continued on the same path. The only difference was that, instead of storing away that $300K-$400K per year, we paid that same money on debt service to purchase Fox Den. The good news is, Fox Den was profitable (operationally) in 2013, with expected earnings of $60K. But the debt service payments of $371K will continue to haunt Stow’s balance sheet until year 2032.

Employees are, as you might expect, our greatest cost. We have 235 full-time employees. The mayor proposes only two new hires — two police officers sometime during the second half of 2014. Our overall employee expenses will go up because of raises passed by council in 2013.

The revenue side of the equation has improved. Income tax receipts increased by 6 percent this year, and we’re anticipating 3 percent growth next year. The city took a big hit between 2008 and 2010, but in the years since 1996, the city has averaged 2.86% annual income tax growth. (Now is a great time to be thankful the income tax hike did not pass. Just think — we gained substantial momentum with economic development and with the economic conditions improving … and we could have turned right around and destroyed that same tax base with an income tax hike. I still can’t believe that was proposed. Thank you, voters, for making the right choice.)

A lot of folks complain (rightfully so) about the condition of their neighborhood roads. Well, you aren’t imagining things. The roads truly have gotten worse since 2009. In the past six years, we have taken a total of $850K from the Capital Fund (which is used for road improvements). In 2010, we had 21 road workers. Today, we have 14. You get the roads you pay for — and the current mayor and her predecessor have chosen to pay for a lot less than years prior to 2009. I would restore the roads funds if I were putting the budget together, and you would notice the improvement in the quality of our roads.

So, as you can see, this budget has some flaws, but economic conditions have made things a little more palatable. If the budget was balanced and if it provided for more roads funding, then I’d give it a passing grade. As it stands, it’s yet another budget that ignores the future of our city.