Northwood City Council on Oct. 14 continued to debate the need for more budget cuts, with some questioning whether further cuts could be made without having a serious impact on city services.
Council several weeks ago approved placing a .25 percent municipal income tax increase for three years on the November ballot to counter sluggish income tax revenue collected by the city in the last year. The revenue would provide funds for capital improvements, capital reinvestment and operating expenses.
The city, which currently has a 1.5 percent income tax rate, would see the rate rise to 1.75 percent if the proposal passes.
Council has made deep cuts in the budget and in personnel in nearly every department, including police, fire, and streets, this year.
As Election Day looms, Council President Jim Barton, who is opposed to a tax increase, thought more could be cut from the budget.
“To be honest with you, I just don’t know where the belt is going to get tightened at,” said Councilman Dave Gallaher. “For the life of me, I don’t know what else we can cut that’s not going to have a direct effect on our residents. Before this thing goes to the ballot, is there anyone here who specifically can share an area that we should cut that has not already been cut? Is there a line item we need to look at?”
Gallaher particularly noted that he has yet received a call from Peggy Barton, the wife of the council president, whom he offered to meet with to go over the budget to find more cuts. Barton has repeatedly urged council, in person and in a letter to the editor that appeared in The Press, to find more cuts.
Jim Barton said Gallaher was supposed to call his wife to schedule a meeting.
“You said you were going to get a hold of her and call her. She never received a call from you. She was waiting to hear from you,” said Barton.
Gallaher said he offered to meet with Barton’s wife at a previous council meeting.
“I spoke to her right out in the audience, that I would sit down with her at any time she would like, and go over the budget line by line,” said Gallaher.
“And that’s what she thought you were going to do – call her and set up an appointment,” said Barton.
“I will do that,” said Gallaher.
“Again, is there a line item we can look at?” Gallaher asked council.
“I think the cuts we’ve made are sufficient,” said Councilman Ed Schimmel, who is also against a tax increase.
“We are actually up from last year. I think things have leveled off. I don’t see things getting better. Certain areas of the economy are getting a lot better. Farming. Not a big area for most people, though. At any rate, our tax receipts are actually up. We cut a lot of stuff. We have gotten to a point where we are alright.”
Schimmel was referring to Mayor Mark Stoner’s report at the meeting that income tax collections for the year had increased by 2.6 percent compared to the same period last year, and that there was an estimated year end general fund balance of $500,000.
Since Norplas’s recent announcement that it would expand and add jobs, and news from the economic development committee of a potential business coming to the city, “I think we’re looking alright,” said Schimmel. “I don’t think there is a need to make more cuts at this point.”
“It is encouraging,” Gallaher said. “But we’re not out of the woods yet.”
Gallaher then asked Barton if he could find more cuts.
Barton noted that Stoner had made recommendations weeks ago to cut more positions. “There’s a few of them we did not take up,” said Barton. Those recommendations include cuts in the zoning and tax departments, and the city clerk’s position.
“The zoning [cut] is a department head,” said Gallaher. “And I would not suggest cutting the tax girl right now. At the end of the year there would be a lot of people in line before the tax girl. And the clerk’s position is under your supervision as president of council. So if you want to make that recommendation…” Gallaher said to Barton.
“The mayor and I talked about that…” said Barton.
“But the mayor is not in charge of the clerk,” said Gallaher. “The mayor wears a lot of hats, and I give him a lot of grief. He doesn’t have anything to do with this. It is the president of council.”
“I’m not going to make that recommendation tonight,” said Barton.
“Okay,” said Gallaher. “Let Peg know that you did not make that recommendation.”
Councilman Connie Hughes said it was misleading to point to the end of year balance as being $500,000 when that amount was merely transferred to the general fund from another account.
“I just want to remind everybody that just because in your report we have an estimated year end balance of $500,000, we borrowed that money to get to that point. We transferred money. It was from Peter to pay Paul, to make the bank balance look better. That figure keeps showing up, but it’s not a true figure,” said Hughes.
Raising the income tax rate is one of three options council considered as a way to counter further budget cuts and layoffs if city revenue continues to drop. Charging residents a monthly refuse collection fee of $10, and reducing the tax credit to residents who work outside Northwood, were later rejected by council.