Bay leaders work to manage revenue challenges

The financial challenges faced by local municipalities have been well-documented and editorialized in recent months. As residents of the city of Bay Village, and of our West Shore and greater Cleveland neighborhoods, we each see the difficulties first-hand. 

We are reminded daily of the ongoing challenges of the financial markets, including high unemployment and sluggish residential real estate markets, coupled with deficit concerns at the federal, state and local levels. As Bay Village City leaders, those funding challenges are direct, coming clearly into our view over the past several years.  

Historically, Bay Village has been very fortunate to enjoy a consistent flow of primary and recurring revenues, ones funding vital and essential municipal services, which make Bay Village the great place in which our residents live, enjoy and raise their families.

Going into the 2012 calendar year, there will be a fundamental shift in the way our City, like others, budgets reducing resources. Traditional revenues, such as the Local Government Fund, have been reduced through the recent State of Ohio budget process. In the year 2013, the Ohio estate tax will be eliminated in entirety. These two items alone have comprised almost 10% of our City’s revenues in previous years. 

Given the prognosis for a yet-to-be sustainable recovery in home prices, municipalities cannot budget for higher residential property values, and hence corresponding property taxes, going forward. Any increase in this income stream will likely be muted; it will occur only when the County’s property revaluation process is complete, and yielding higher home valuations. This would provide some potential revenue relief beginning in 2013.

Over the past few years, Bay Village City Council has been keenly mindful of the economic challenges faced by all our residents. We’ve worked individually and in tandem to provide tangible benefits to everyone, providing utility savings to households through adoption of an electricity aggregation program; converting mid-contract our traditional trash collection to an automated collection program without any cost increases to homeowners and commercial businesses; and eliminating in entirety the renewal of a long-standing operating levy. 

In fact, the one and only recent expense increase to our taxpayers, approved by Council in June 2011, was to raise the quarterly sewer charge to Bay residents, which funds normal operations of the Crown Filtration Plant. This was the first cost raise for this basic service since 1995.

The City has been very fortunate to draw from general reserves to fund city operations and municipal services, primarily for the 2010 and 2011 calendar years. Looking to 2012, we will, with a high degree of certainty, no longer benefit from the resources of this reserve. Bay Village City Council and the Administration will be faced with creating a balanced budget, one which will require considerable foresight and difficult expense decisions. 

We have already made several funding cuts to our originally-approved 2011 budget, some of which have not and will not be popular choices for the Bay Village public. As your elected leaders, we pledge our best to aligning revenue challenges with the expectations necessary to meet the exceptional service, financial, safety, infrastructure and community benefits for which our residents have traditionally been accustomed. 

Dwight A. Clark, Bay Village Councilman-at-Large

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Volume 3, Issue 15, Posted 3:36 PM, 07.26.2011