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Berlin urges council fund state’s audit

SALEM

January 16, 2013
Morning Journal News

Mayor John Berlin delivered his State of the City address Tuesday, publicly urging city council to have a performance audit done, despite the state pulling loan funding which would have delayed payment of the cost.

"We need to instill confidence in our constituents that their tax dollars are being spent wisely and a State of Ohio Performance Audit is necessary before I can back any other course of action taken to balance the city's budget and provide the additional services that I believe to be necessary," he said.

Berlin outlined the city's current and expected financial status to support his argument, pointing out the city auditor has projected a deficit within the general fund of more than $350,000 by 2015.

Income tax collections increased by 4.1 percent in 2012, but he said that doesn't cover projected expenses this year which are estimated at $4.8 million with anticipated income of $4.4 million for a shortage of $400,000. The reported carryover of just over $1 million from 2012 will be reduced to $660,000 by the end of 2013.

He also mentioned cuts to the Local Government Fund, the elimination of the inheritance tax income and the end of a grant paying for the salaries of two firefighters, all contributing to the shortage.

He addressed the one-time check of $1,352,023 the city received for the negotiated land lease contract with Chesapeake Energy, saying the auditor has recommended it be used to pay down the city's debt. He explained that the debt payments have risen from $196,000 in 2002 to just under $290,000 in 2012. The loans taken out to pay for construction of Bentley Drive, Cunningham Road and the East Pershing Street extension will need to be reconverted to long-term debt, adding another $30,000 or more to the debt payments.

Berlin said that since 2002, the amount of the income tax split contribution to the capital fund has dropped from $717,680 to $334,877 in 2012. He said that money to maintain city services paid through the general fund has been the result of appropriating less and less to the capital fund.

He compared it to borrowing from savings to pay every day expenses, noting that eventually, the savings are gone.

"I believe that city council should reconsider a performance audit to be performed by the State of Ohio without significant restrictions on their findings of savings in Salem city government," he said.

When asked what he meant by "significant restrictions," he explained he was referring to some of the limitations to what could be counted for possible savings, such as the idea of sharing services with another entity. As an example, he referred to what he proposed earlier this year for Salem to provide fire services to Perry Township. He never got a response. He was also referring to negotiated compensation.

The city had sent the state a response to tighten up the language for the terms of the audit in November, clarifying that any savings identified would exclude negotiated compensation, defining that negotiated compensation included, but was not limited to, wages, benefits and other fringes as specified in the union contracts.

The city had been concerned about the state claiming the savings to pay for the audit could come from something the city couldn't control.

Berlin said he doesn't believe any department in the city is overstaffed. He said the city needs one additional patrolman on each shift in the police department, two more people on the streets department and at least part-time secretaries in both the police department and in housing, planning and zoning.

He referred to 2012 as a transition year but listed some reasons for optimism for the future, such as the capital investment at Salem Community Hospital, new members added to the Salem Area Chamber of Commerce, ribbon cuttings for several new businesses and new projects in the works by private investors, such as a new hotel, renovation of the former Timberlanes and a proposed housing complex.

He offered thanks to the four unions covering city employees for working with him on a new hospitalization plan to guarantee a two-year rate on premium costs and an outcome of savings for employees and taxpayers.

He thanked all city employees for making his job easier.

Mary Ann Greier can be reached at mgreier@salemnews.net

 
 
 

 

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