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Mount Vernon, Knox County, Ohio

Local Government

City finance group hears options for 1/4% and 1/2% tax increase


By Cheryl Splain, KnoxPages.com Reporter

MOUNT VERNON — City Auditor Terry Scott presented five-year budget scenarios to members of the finance group charged with evaluating the city's financial status for the next 10 years. Scott projected numbers for a ¼ percent and ½ percent tax increase based on a zero-growth income forecast as well as a 1 percent annual income growth forecast.

City residents currently pay a 1.5 percent income tax which will generate an estimated $10.1 million in revenue in 2017. In a no-growth scenario, a ¼ percent increase generates an additional $1.683 million (total $11.785 million) each of the next five years; a ½ percent increase generates an additional $3.367 million ($13.469 million).

At an income growth of 1 percent annually, the ¼ percent increase generates an additional $2 million in 2018. A ½ percent increase generates an additional $4 million.

A ¼ percent tax increase does not generate enough revenue to keep pace with expenses in any of the growth scenarios. “The ½ percent [increase] would clearly get you there, but not in the first year,” Scott told the group, adding that with a ½ percent increase “we will start to have some significant net residuals left over.”

Scott said that the expense calculations for roads and bridges in the five-year forecast do not include any real money for brick streets. Calling this an “under served” area, Scott said, “If we do nothing else with the residual, we should put it into roads and bridges for the brick streets.” He suggested the following breakdown for allocating the extra money generated: 40 percent for roads and bridges, 20 percent for capital improvement projects and 40 percent for other general fund expenses.

Scott said the core taxes at 1.5 percent cover the core expenses with a $3 million carryover to cover the first three months of the next budget year. “It's the incremental needs that aren't being met,” he said. Incremental needs include the deferred maintenance or purchase on roads, bridges, equipment, water/wastewater plants, buildings, etc.

He cautioned that although with a ½ percent increase there would be extra money available after basic expenses are accounted for, there are a number of projects that need to be done that will take up that excess. One project looming in the next five to 10 years is the Plaza Building at 1 N. Gay St.

Discussion included establishing a stabilization fund, often referred to as a rainy day fund. “Some communities require a specific amount be put into a rainy day fund,” said Scott. “Mount Vernon council has never done that. Our general fund could never sustain a rainy day fund because our income is taken up by our current expenses.”

In the 1-percent-a-year growth, ½ percent tax increase scenario, Scott said there would be money available for a rainy day fund. “It would be something for us to have some sort of thought process about,” he said.

Mayor Richard Mavis said he wants to make sure city residents understand that with a tax increase, the city is not going to go out and hire a bunch of new people, although the city may fill a few vacant positions.

The finance group will meet again on June 12 and July 10. Aug. 9 is the deadline to submit ballot language to the Board of Elections for a November vote.

Scott presented the same information to city council members during a finance committee meeting on Monday night.



MV Council holds off on rezoning N. Sandusky St. property

 By Cheryl Splain, KnoxPages.com Reporter

MOUNT VERNON — Council gave one reading on Monday night to legislation rezoning 660 N. Sandusky St. from R1, single-family residential, to general business.

The owner, Aaron Oakley, spoke to council during a public hearing held prior to council's legislative session. He said the house is unlivable and the Mount Vernon Fire Department has used it for training exercises. He plans to demolish the house and make a parking lot that he will lease to Amato's Wood Fired Pizza located next door.

Charles F. Winter Jr. opposed the rezoning on behalf of his father, who has lived at 658 N. Sandusky St. since 1964. Winter said his concerns were increased foot traffic, the type of privacy barrier required, light pollution coming over the privacy barrier, litter and crime. He said the rezoning will have a significant impact on his father's property and make it an unattractive place to reside.

Oakley said that the barrier will be solid, will not allow light to penetrate and there will be no foot traffic through it. The lights are on a timer and will go off at 10 p.m. on weeknights. Security lights on the side of the restaurant will be pointed down to the parking lot. He also plans to incorporate green space on the lot in accordance with code.

Councilman John Booth pointed out that if the rezoning occurs, a broad category of businesses could locate on the lot in the event the restaurant closes for some reason. A parking lot could be constructed under the current zoning, but a privacy barrier and green space would not be required.

According to the Ohio Revised Code, current parking is inadequate for Amato's Wood Fired Pizza. A new lot at 660 N. Sandusky would accommodate 24 parking spaces. Two other residents spoke in support of the rezoning during the MPC meeting; family members spoke in opposition.

Councilwoman Nancy Vail, who chairs council's Planning and Zoning Committee, gave the measure one reading. Another public hearing will be held at council's next meeting on Monday, May 22.


State budget cuts and increasing drug problem force commissioners to raise county sales tax

By Cheryl Splain, KnoxPages.com Reporter

MOUNT VERNON — The county commissioners will increase the county sales tax from 6.75 percent to 7.25 percent in October. The decision stems from the impact of recent state budgets, as well as requirements from the Ohio Legislature, on the county's general fund. The one-half percent increase equates to 50 cents for each $100 spent.

“This is not something we've done easily or without thought,” said Commissioner Thom Collier. “We've been looking at this since February.”

In 2008, Knox County received a little over $1.4 million in state funding. Funding declined beginning in 2009, reaching a low of about $825,000 in 2012. It rose to about $1.25 million in 2016. Projections for 2017 and 2018 are $1 million and $750,000, respectively.

The reduced funding comes from cuts in local government funds, the commercial activity tax and a tax on Medicaid managed care providers. Additionally, interest income declined and state projections from the casino tax did not materialize. At the same time, the Ohio Legislature increased the requirements for public defender offices, county election boards and presentencing investigations, driving up those costs.

In looking at funding for counties, the state evaluates what is called “capacity.” The capacity formula looks at whether a county has reached its taxable limit, whether raises were given and the carryover amount from year to year. “We've been fiscally responsible and not raised taxes, our raises have been relatively minor, and all counties have to have a carryover because you need money to function in January and February until tax revenue starts rolling in in March and April,” said Collier.

“The sales tax capacity is looking at whether we are taxing as much as we can. If not, we are penalized,” said Commissioner Teresa Bemiller. “The state is looking to make themselves whole. The state's not wanting to revenue share with counties.”

“It'd be one thing if our costs continued to decrease like the funding, but our needs continue to increase. So it's impossible to keep our nose above water,” said Commissioner Roger Reed.

“The rainy day fund went from 87 cents when Gov. Kasich took office to $8 billion,” said County Auditor Jonette Curry.

“And they won't touch it,” said Reed. “They call it their stabilization fund. I asked Kasich's representative why not dip into it? I asked him how do we stabilize our fund?”

Another factor on the expense side is that since the recession hit in 2008, the county has deferred capital improvements on its buildings. “We have $5.7 million worth of capital improvements needed; that's an alarming number,” said County Administrator Jason Booth. “With revenue going down, you are never going to get to these core issues.”

“In 2009 and 2010 we cut [budgets by] 20 percent,” said Bemiller. “We have never gone back and restored that. We at that point felt we were tightening our belts and felt people were, too. We tried to do what was needed to keep departments operating.”

The general fund has discretionary (optional) and non-discretionary (required) accounts and supports more than 30 departments. Alternatives to a one-half percent increase include moving some discretionary spending out of the general fund, reducing county services and enacting just a one-quarter percent increase.

Discretionary spending accounts for about $500,000 and includes departments such as OSU Extension and Knox Soil and Water. They could be moved out of the general fund and paid for through an agriculture levy. Bemiller said the commissioners are reluctant to do that because those organizations are important to the county.

“We cut their budget 20 percent in 2009 and again in 2010,” she said. “While we cut them, we still maintained them at a high level. Many counties discontinued funding completely.”

“When we start talking about reduction in services, now we're talking about cutting the things that we really need, like deputies,” said Collier, adding that with the exception of the judicial departments, most offices are at the same staffing level or lower than what they used to be.

“A quarter percent rate might help us to get through the tax cuts from the state, but it won't allow us to do what we need to do,” said Collier.

“We will be dedicating a certain amount of these funds to the permanent improvement fund,” said Reed. “The money from a higher sales tax is not for general consumption, and we've made that clear to department heads.”

“The commissioners have been very fiscally conservative; they have done everything to keep their neck above water, but you just can't do that anymore,” said Booth.

“Once we use this one-half percent option, we have no other options,” said Collier, noting that many counties have already increased their sales tax.

“We don't want to see some of these options, but we'll still be conservative in our spending, even with a higher tax,” said Reed. “We'll take care of the things we truly need to take care of.

“I've always looked at that one-half percent as our savings account,” he continued. “You don't like to dip into your savings account, but now we have to, and we have to be very careful how to spend that money.”

The earliest the tax could go into effect is October, and the county will not receive any money until December. The one-half percent increase is projected to raise $2 million to $2.5 million. “Like any revenue stream, until we get a couple of months into it we won't know exactly what we've got,” Curry. “It will take us a year to see what the revenue will be.”

The commissioners set public hearings for Thursday, May 25, at 11 a.m. and Thursday, June 1, at 5:30 p.m. to hear public comment on the sales tax increase. The hearings will be held at the commissioners' office at 117 E. High St., Suite 161.

The Details
Booth compiled a fiscal analysis for the county showing revenue and expenses between 2005 and 2018. Following are the areas affecting the county the most.

Investment Revenue
Investment income rose from $1.1 million in 2006 to just under $1.4 million in 2017. It declined to $200,000 for 2010-2012, dipped under $200,000 in 2013 and 2014, and rose to $300,000 in 2016. “There was a slight uptick in 2015, but it's not forecast to be at pre-recession levels,” said Booth.

Discontinued Tax on Medicaid Provider Organizations
The county lost $500,000 a year due to the federal government deciding that the Medicaid provider tax is unconstitutional. Because of the capacity formula, the state is proposing a one-time payment of $472,792 to Knox County to make up the shortfall. “We were told to spend it wisely,” said Reed.

Beginning in 2006, the state phased out the tangible personal property tax and replaced it with a commercial activity tax. In 2007 revenue was just under $400,000; it declined to $300,000 in 2010 and $150,000 in 2011. The county has received no CAT revenue since 2011.

Local Government Fund
From a high of $1.5 million in 2006, this revenue stream dropped to $500,000 in 2016.

Casino Tax
Projections were for the county to receive $900,000 in 2013, rising to $1.25 million in 2014 and thereafter. Actual revenue has been $700,000 from 2013 to now. “This was put in place to replace some of the other taxes they were dropping and to 'make you whole,'” said Booth. “You can see that isn't happening.”

Public Defender Office
Expenses increased from slightly over $300,000 in 2010 to an estimated $500,000 in 2017. State reimbursement was at 35 percent between 2010 and 2012, 40 percent in 2013 and 2014, and peaked at just under 50 percent in 2015 and 2016. Reimbursement for 217 is at 40 percent. “Reimbursement was never supposed to be below 50 percent; it's never gotten to 50 percent,” said Collier. Last year, the state required parity between public defenders and county prosecutors but did not provide any more funding.

Justice Departments
The expenses for the county's justice departments (common pleas court, juvenile court, sheriff's office, public defender and county prosecutor) increased over $2 million between 2010 and 2017. “We really don't anticipate that plateauing,” said Booth.

“The opioid problem is driving a lot of our problems with the judicial system,” said Reed.

When the state changed the requirements as to who can handle presentence investigations, the county had to hire an additional adult probation officer; the increased caseload also required an additional detective. “I've always said we're partners with the state; we collect fees and taxes for them, but most of the time they give us unfunded mandates,” said Bemiller.

Kasich's upcoming budget calls for felony 4 and 5 offenders to be treated locally rather than going to state prison. The state will reimburse counties $23 a day; Knox County's daily cost for an inmate is $63.

“We have reached capacity in 2016 in the Knox County Jail due to opioid problems,” said Bemiller. “So we don't know what we're going to do. Contract with other facilities? Expand our jail?”

“If you reach the point of capacity in our jail, 110 percent is capacity, then the judges or the sheriff could release someone from the jail,” said Reed.

Curry said the county will also lose federal dollars because space is used by local F4 and F5 offenders rather than having space available for federal prisoners. Federal reimbursement is higher than the $23 proposed by the state.

“The state says yes, we will reimburse you, but when you're only reimbursed half or one-third, that's not reimbursement,” said Collier.

To deal with the drug issue, the county has added a nurse and mental health professional to the jail staff and bought a scanner to identify hidden contraband. “The liability if you don't have those things in place is huge,” said Collier.

Justice department expenses total more than all other expenses in the general fund. “The other departments are really holding their own,” said Booth.

“It points out where the problem is,” said Reed.

Collier noted that the opioid problem is not unique to Knox County.

Board of Elections
Election costs in 2010 were around $375,000; in 2017, the estimated cost is $500,000. In 2016, a presidential election year, costs were just under $700,000. “The costs have skyrocketed, and the commissioners have no control,” said Booth.

“The state constitution says the state shall provide, but it is the counties that bear the burden,” said Collier, noting that the state sets mandates on ballot availability, hours the BOE is open, staffing and other issues, but provides no funding for those mandated costs.

The state has yet to set reimbursement rates for voting machines the county bought in 2016 for $500,000. Collier said a bill introduced in the state legislature calls for $1 million in reimbursement to be divided among Ohio's 88 counties. Another proposal calls for each county to receive $25,000.

Capital Improvements
Collier said that in the early 2000s, the county spent $2 million on improving and maintaining buildings. That dropped as low as $200,000 in 2010. “This is the area that has suffered,” said Bemiller.

Booth's analysis showed the county buildings need over $5.7 million worth of capital improvements. Upgrades and improvements include HVAC, boiler and elevator replacements; electrical, plumbing and sewer; flooring, plaster and lighting; security systems, jail appliances, flooring, parking lot upkeep and concrete work; and a new roof for the Service Center Building (117 E. High St.), which received an F rating three years ago.

“If you defer maintenance, you start getting interior damage,” said Reed. “It's something you can't put off forever.”

Overall Expenses vs Revenue
In 2008 and 2009, expenses outpaced revenue. From 2010 to 2016, revenue was higher than expenses. “In 2017 and 2018, it's starting to go back to the trend of expenses outpacing revenue,” said Booth, adding that when revenue topped expenses between 2010 and 2016, no raises were given from the general fund and vacant positions were not filled. “Now expenses are outpacing revenue and we don't have any surplus to cover it.”

Sales Tax Breakdown
Of the current 6.75 percent tax, 5.75 percent goes to the state, .75 percent to the county's general fund and .25 percent to the Knox County 911 center. The county has not increased its general fund portion since 1994.

The state's portion of the sales tax increased from 5.5 percent to 5.75 percent in 2013. In his upcoming budget, Gov. John Kasich is proposing an increase from 5.75 percent to 6.25 percent.

Councilman Francis puts bicycle drug dealers on notice

By Cheryl Splain, KnoxPages.com Reporter

MOUNT VERNON — At Monday's council meeting, Councilman John Francis put drug dealers who travel by bicycle on notice that the city will use the full weight of the city's bicycle ordinances to keep them off the street.

Chapter 3 of the city's codified ordinances covers regulations such as brakes, lighting, obedience to traffic rules, speed, parking and sidewalk operation. It also provides for licensing fees and regulation. Francis said the city will start enforcing those regulations as a method to catch and deter drug dealers.

Law Director Rob Broeren said the Mount Vernon Police Department already cites cyclists traveling without proper lights at night. “We have good success pulling people over at night and finding all sorts of contraband,” he said.

Council authorized the safety-service director to enter into a contract with Strand Associates Inc. for engineering work related to the phosphorous removal in the city's wastewater. City Engineer Brian Ball said the Ohio Environmental Protection Agency has ordered the study be completed by Dec. 1. The $49,000 contract will cover the testing of wastewater, a written report and evaluating the secondary effects of phosphorous, such as the amount of sludge and whether the city will have to reclassified from a Class 3 to Class 4 wastewater facility.

Ball said the city currently discharges 70 pounds of phosphorous into the system a day. The OEPA wants the city to cut that by two-thirds.

In other business, council:
Approved the appointment of Jim Meyer and reappointment of Kathryn Burley to the Shade Tree and Beautification Commission; the appointment of Corby Wise and Eric Diehl as alternates to the Municipal Planning Commission; the reappointment of Stephen Rhoades to the Board of Zoning Appeals; and the reappointment of Kelly Bailey to the Knox County General Health District.
Authorized the city auditor to pay bills and appropriate $2,500 from the VFW Post 427 for the MVPD's bike patrol
Authorized the safety-service director to sell a 2009 Chevy Impala to the Knox County Airport to use as a courtesy car; the city's insurance carrier will no longer insure the vehicle.
Authorized the administration to apply for a grant to be used for a bike path on the south side of the Mount Vernon Avenue bridge
Postponed indefinitely an ordinance annexing 3.249 acres from Clinton Township as the township trustees have not yet approved an agreement

Debra Reedmiller of 607 E. High St. spoke to council about being awakened at 4:20 and 4:46 a.m. by a trash hauler making its rounds in her neighborhood. Safety-service Director Joel Daniels said he contacted the hauler, who will look into the matter.

County buying E. High St. property to house office for additional court personnel


By Cheryl Splain, KnoxPages.com Reporter

MOUNT VERNON — The Knox County Board of Commissioners will sign the purchase papers tomorrow to buy the property at 118 E. High St. Joel Tilmant of Oak Leaf Mortgage currently owns the house.

The county is buying the house because the Court of Common Pleas needs more space for personnel, testing and training. Plans call for the Adult Probation Office and Adult Parole Authority to move into the East High Street location.

“The house is contiguous to our property and it makes sense,” said Commissioner Thom Collier. “The building can accommodate the kind of things [Common Pleas Judge Richard Wetzel] was looking for.”

County bldg 118 e high

Building at 118 E. High Street in Mount Vernon the county will purchase on Friday - KnoxPages.com photo  

“They're going to add probation officers at the Common Pleas Court. A lot of it has to do with the drug problem [the county's facing] and relocating office staff,” Commissioner Teresa Bemiller added.

Tilmant said that Oak Leaf Mortgage, which has been at the High Street location since 1999, will relocate to 401 W. High St. by June 1st. “We have some [renovation] work to do once they're gone, so it will be a couple of months before the [county offices] move,” said Bemiller.

KnoxPages.com was unable to reach HER Real Estate and Premier Home Health Care, two other tenants at 118 E. High St., for comment as to where they might be relocating.


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