The cities of Wapakoneta and St. Marys finished 2012 with the highest income tax collections either city has had in the last four years.
The city of Wapakoneta collected $2.21 million in 2012, the highest total since the city collected $2.27 in 2008. The highest total came the previous year when collections totaled $2.29 million in 2007.
“We are very fortunate, very ecstatic and it is a positive sign that the city is moving in the right direction,” Mayor Rodney Metz said. “I think this is a clear indication that we have a skilled and hard working work force and we have businesses and companies making wise decisions in this tough market.”
The 2012 collections eclipsed the $2.11 million collected in 2011, which was a slight drop from the $2.12 million collected in 2010. The lowest total in the past eight years was the $2.06 million collected in 2009, during the teeth of The Great Recession.
For the past three years, the city of Wapakoneta has used approximately $1.6 million of its cash carryover since 2010. It has dwindled from $2.1 million to approximately $500,000, but most of the money has been used to leverage state dollars in the form of grants.
The majority of the money has been spent on the $2.7 million Bellefontaine Street project and two East Benton Street projects, totaling approximately $2.1 million. The city’s share was 20 percent of the projects, with the last East Benton Street project costing the city a little more since they used the money to finish reconstruction of the street from Bellefontaine Street to the CSX railroad tracks to match up with an earlier reconstruction of a small portion of the street when Willipie Street was reconstructed.
The city has spent more than $1 million on those three projects and expects to spend approximately $400,000 on the $2.3 million East Auglaize Street reconstruction project in 2013.
“It is going to change and we obviously cannot continue to use carryover to fund projects that we have elected to do in the past,” Metz said of using the cash carryover. “Most of the cash carryover we have used has gone toward projects and those projects have been primarily grant funded with a requirement of matching funds. Typically those were 80 percent paid by the state or federal government and the city had to come up with 20 percent.”
The mayor said the city has projects slated for the next two to three years and he would like to see how much they could get accomplished before the state and federal funds cease to exist and before those projects would have to be totally funded with local dollars.
“We are not going to look to do any extra projects and we do not intend to pursue any extra projects at this point in time,” Metz said. “We have current plans for a restroom facility near the gazebo at Harmon Park, but we will have to wait and see what income tax revenues look like this year before we make any decision.”
Metz also has indicated a desire for the city’s Finance Committee members to review its policy of income tax credits.
In the future they may charge people the city’s 1 percent income tax for those people who work outside the city but live in the city. He said they still benefit from safety services.
The city of St. Marys followed the same trend as Wapakoneta in income tax collections.
Last year, the city of St. Marys collected $3.99 million in income taxes, which eclipsed the $3.74 million it hauled in during 2011. The $3.99 million also surpassed the $3.60 million it collected in 2009 and the $3.9 million it collected in 2010.
The city of St. Marys collections are higher because voters passed a 0.5 percent income tax in addition to the 1 percent imposed by city council while Wapakoneta only imposes a 1 percent income tax.
Metz said St. Marys income tax collections are higher because of the 0.5 percent difference and they may have more people paying — but those numbers are never shared.
St. Marys Mayor Pat McGowan told The Evening Leader he is in the process of reviewing the city’s financial situation. As part of that review process, he is taking a closer look at the city’s major funds to determine if there are ways to keep them from running on razor-thin margins.
“We are doing an analysis of the last five years to find out why the funds are going down,” McGowan said, explaining the review will cover the general fund as well as their Street Maintenance and Capital Improvement funds. “We want to take a look and see if there is anything we can do to manage those.”
Like Metz, McGowan said last week the city’s general fund has been in deficit spending. The city of St. Marys has been using its cash carryover for the past five years to the tune of approximately $1.3 million to balance its books.
“It isn’t because people are spending money frivolously,” McGowan said. “It’s because operating costs are just going up. It will take a lot of though to figure this thing out.”
The St. Marys mayor said they are starting to see the effects of cities and villages instituting income taxes or disallowing credits on their general fund.
“One of the things that has hurt us with that is that other cities have enacted income taxes, and that lowers that fund,” McGowan said. “The state also has cut funding.”
Once the reports are compiled, McGowan said it is critical for city officials to make any changes that are necessary to keep the city’s finances healthy.
“We are running so close in those funds,” McGowan said. “We have been living out of our reserves and you can only live out of those for so long until it’s gone.
“The time to take corrective action is not four or five years down the road, the time is now and that’s why the citizens elected us,” he said. “You don’t fall off the cliff and then try to climb back up. We need to address it now.”
The Evening Leader Managing Editor Mike Burkholder contributed to this story.