Chester Township Trustees face difficult numbers in the township’s 2014 budget due to declining revenues from the state and continued financial support of the road department.
The bottom line: Deficit spending in the general fund and financial backing of the road department at historic levels are not sustainable.
“Last year, there were conversations that said the general fund supporting the road department at its current pace of one inside mill — $350,000 — is essentially unsustainable,” Trustee Ken Radtke said during a special morning meeting/workshop last Saturday. “If we supported the road department and continued to operate at the deficit level that the general fund is at, we would be at $0 carryover in about two years.”
The township’s general fund began 2014 with a carryover of $1,914,705, with expected revenue of $483,512. Total expenditures are estimated at $847,856.
The township’s carryover, therefore, will have to absorb the more than $360,000 budget deficit, leaving around $1,550,360 in the township’s coffers at the end the year.
At the current rate of deficit spending, the township will be at $0 carryover in five years, Radtke said.
The trustee chairman identified a $640,000 reduction in specific revenue sources to the general fund as a cause of budget problems.
Between 2008 and 2013, he said the township received an average of $640,000 per year from estate taxes and local government funds. Those revenue sources, however, have been eliminated or substantially reduced.
“So from a revenue side, we’re operating with $640,000 a year less, essentially, than we have in previous years,” Radtke said. “So we’re down to $483,000 (in general fund revenue).”
As a result, the township is deficit spending at a rate of roughly $330,000 to $350,000, he said.
Last year, the general fund transferred $352,000 to the road department, Fiscal Officer Craig Richter said.
Even with renewal of a five-year, 1.5-mill road levy in November — which should generate $146,000 in revenue — the department will still see a budget shortfall of roughly $31,000 this year.
Radtke asked if a $100,000 transfer from the general fund to the road department this year would be “manageable and doable, and helpful.” But he reiterated the township has five years to “fix” its problem.
Trustee Bud Kinney said it was important to provide additional dollars this year, even though he understood the need to get road department funding resolved, long term.
“I was thinking more of $150,000 to $170,000,” he said. “I don’t want to take an entire mill, but I think if we took half of that and moved it, I think that would probably be at least a reasonable start to get to the (road) repairs.”
While no asphalt resurfacing of roads is planned, Kinney said it was important to maintain and service “good roads.”
“The good roads and the roads that are just beginning to see the first signs of degradation, these are the roads that every dollar you put in avoids more dollars in the future, significantly,” Kinney said. “As a road continues to deteriorate, the repair cost goes up substantially.”
He advocated buying “intermediate repair equipment” to maintain and service the “middle third of roads” that can be “salvaged.”
“This is not going to help us for the 30 percent of roads that we have that are in a critical state,” he said. “Those roads we will probably triage and maintain so that they’re safe, but we basically will suspend … intermediate investments on those roads and we’ll wait for an opportunity to do major investments.”
Repair of those roads likely would require passage of a levy going forward.
A five-year analysis of the road department show a budget shortfall of close to $900,000, trustees said, assuming the department is supported at the same rate as its five-year historical average.
“What it’s doing is it’s allowing us to degrade our infrastructure,” Kinney said. “We reached a high point of infrastructure condition and we’ve been sliding since then.”
In other business, trustees discussed renewing the township’s membership in Chagrin River Watershed Partners (CRWP) at a cost of $4,414.
“I think that the (CRWP) is a good value proposition for the township,” Kinney said, acknowledging concerns were expressed in prior discussion among trustees regarding a potential “overlap” in services between CRWP and Geauga Soil and Water Conservation District (GSWCD).
After speaking with CRWP Director Amy Brennan, Kinney said the group focuses its services on specific activities for its member communities such as erosion management protection, agricultural uses and sedimentation control. Its services are coordinated so they are complementary to those that GSWCD offers, he added.
For example, Kinney said he would like to see the township road department utilize some of CRWP’s strategies and tools such as sensible salting and better roadside ditch practices.
He also noted Russell Township recently renewed its membership following a similar discussion about whether there was a “value proposition that was associated with the CRWP.”
Radtke, who voted against membership last year, said CRWP is a good organization with a good mission, but he needed to consider the value to township taxpayers.
Citing deficit spending in the township general fund, Radtke said trustees needed to take a very critical look at these expenditures and decide “whether each of us sees the value in membership.”
Even though CRWP and GSWCD have slightly different missions, Petruziello said he felt GSWCD did as good a job as CRWP.
Trustees then voted, 2-1, not to renew membership in CRWP, with Radtke and Petruziello voting against it and Kinney for it.