Big Four Depot back on the table

November 19, 2013

Matt Echelberry

Inquirer Reporter

Those interested in preserving Galion history prepare to rejoice: The prospect of renovating the Big Four Depot has never been more likely. During the Nov. 14 Finance Committee meeting, city officials agreed that something needs to be done with the historic site.

The committee was discussing the Financial Recovery Plan and next year’s budget, and the Depot became a topic of discussion when Mayor Tom O’Leary informed the committee no new funding for the Depot was included, but he said a question to ask City Council at next week’s work session is: Should the city appropriate any funding for renovations?

O’Leary added there are several groups interested in using the site for various purposes, so the city needs to decide once and for all what it wants to do with the building.

Galion has a $10,100 grant from the Ohio Arts Council that has been sitting in a special account since entering fiscal emergency. In the past, the rhetoric was that the money could not be touched until the city was removed from fiscal emergency.

However, that evening Financial Supervisor Belinda Miller confirmed that it is “cash in the bank” that can be used at any time.

“You can spend money for projects like this while in fiscal emergency. That’s a big misconception,” she stated.

A more formal decision will be made at the budget work session on Nov. 19.

Most of the meeting was spent on the Recovery Plan update. Of most importance to citizens and utility customers was the portion on the utility funds.

Water Fund

Miller explained the city could consider lowering water rates. A one time reduction of 5 percent would still allow for a 10-month carryover (six months is the minimum). She recommended a maximum reduction of 10 percent. If the city decides to reduce the rate, it would not be uniform for all customers.

The Water Department is set to maintain the current staffing level and the Water and Sewer departments will pay their own electric charges, in lieu of being subsidized by the General Fund.

However, Miller cautioned officials to keep in mind the limited capital outlay in that fund. There is not funding for any major infrastructure improvement, such as replacing water mains.

O’Leary said the city needs to develop a strategy for capital improvements, in order to budget infrastructure projects.

Sewer Fund

The group discussed decreasing sewer rates by 5 percent as well. O’Leary noted that some distribution projects are coming, primarily to reduce back flow issues throughout the city. He said they need to identify the cost of that before deciding on a reduction percentage.

Electric Fund

In 2018, the fund is projected to have just over $2 million, or a 1 month carryover. Miller said it needs to be higher; she recommended around $7 million.

“The city is going to have to consider an electric rate increase before then,” she said. The Recovery Plan presented that evening projected a 12-15 percent increase in 2015. Note: This was the recommendation from the State Auditor’s office. City officials may or may not follow it.

There are several reasons an increase will be necessary. One of them is the Power Cost Adjuster, which is calculated twice per year. During a press conference earlier this month, the mayor and law director announced that the cost had not been adjusted since 2009.

That evening, Miller explained that was because of the 8 percent adder rate being charged. The adder was collecting more revenue than the rate adjustment would have, so there was not a need to adjust the cost of power.

City Council reduced the adder to 4 percent some years ago, and last year it took off the remaining 4 percent.

“The adder should have come off sooner than it did,” Miller stated. She estimates the city under-collected $1.8 million for electricity since 2009. If the adder had been taken off sooner and the city used the PCA instead, rates would have increased at that time.

Now that the adder has been removed, the PCA will be used to adjust accordingly.

O’Leary suggested that they wait on Sawvel and Associates to finish its rate study, currently being conducted for the city, and revisit the electric rate discussion then.

Here is the summary of the rest of the meeting:

By 2018, the city is projected to have an approximately $5 million carryover balance.

$730,000 in bond anticipation notes is coming. $75,000 is for a sewer project and the remaining $655,000 is the debt for the 598 widening project.

The city has a choice of paying it off or rolling it over to next year. The committee agreed they should pay down as much as possible to avoid accumulating interest.

The Recovery Plan and 2014 Budget will be discussed again at the Council work session on Nov. 19 at 7 p.m. (Although the meeting is open to the public, there will be no public input because nothing is being voted upon.) Legislation will then be presented at the Nov. 26 City Council meeting.