MINGO JUNCTION - Officials believe the village will be in a fiscal emergency and under the financial control of the state auditor's office come 2014.
Declining revenue has plagued the village in the past several years, mainly from the shutdown of the RG Steel plant.
The village had hoped to transfer $250,000 from the community complex fund to cover budget shortfalls, but were informed the state auditor's office won't allow it because the money comes from the income tax. Village officials said the state auditor's office believes the distribution formula of the income tax money was voted upon by residents and the transfer won't be allowed.
Council met Monday to discuss the village's financial condition.
Village Clerk John Angelica said the village anticipated receiving $913,000 in revenue this year but only collected $806,000 to date. He said the village will only receive about $766,000 in revenue in 2013. The village's general fund budget totaled $1.27 million this year, which was boosted by a $487,000 carryover from the previous year. With the decrease in revenue next year, council will have to cut 40 percent from the general fund budget.
Village Administrator Charley Bowman outlined several options for council to consider in trying to balance the budget. Bowman, who has served as a city manager or village administrator in several Ohio communities, said Mingo Junction's financial condition is the worst he has seen in 25 years.
"The village is limited in the choices it can make," he said.
Bowman's recommendations included laying off two firefighters and four police officers, leaving only the police chief. He suggested the village try to get with other nearby communities and form a fire district that will handle fire and emergency medical services calls.
Bowman also suggested eliminating the part-time village administrator's secretary and the health program at the senior center. Operations at the swimming pool and the senior center also face cutbacks, he said. He said council should ask residents to approve a property tax to pay for all of the garbage services. The garbage fund now is subsidized with about $60,000 in income tax money.
Bowman said council also should consider reallocating how the income tax money is distributed. The general fund receives two-thirds of the amount, The bulk of the remaining money goes for garbage collection, capital improvements and recreation.
The village administrator also is recommending combining the water and sewer departments into one utility department. Staffing will go from 11 workers down to six. Bowman said there will be a change in how the water and sewer plants are staffed, but he said he has received tentative approval of the plan from the Ohio Environmental Protection Agency.
Bowman said he advised Mayor Ron DiCarlo to send a letter to the state auditor's office informing the office of the village's financial condition.
"I am recommending the mayor send them a letter requesting analysis of our present situation. This well may result in placing the village in either fiscal caution, watch or emergency. Certainly, unless we are able to find more revenue by 2104, Mingo Junction will be in fiscal emergency," Bowman said.
Council members offered comments on the financial picture of the village.
Councilman John Bracone suggested the village turn off all the streetlights, instead of a portion as previously discussed by council. Councilman Michael Herrick, who chairs the council committee for streetlights, said the village spends about $50,000 a year on streetlights.
"It will be up to council if they want to shut them all off," Herrick said.
Councilman John Fabian said, "That's a good combination - turn off all the streetlights and lay off all the policemen."
DiCarlo said the recommendations from Bowman give council and the administration "a lot to think about."
"(Bowman) is laying out the options. Now it is up to council to make the decisions." he said.
Angelica said the financial condition of the village shouldn't come as a surprise, as he has been warning council of the budget problems all year.
Councilman Chuck Dickey said services to residents will be drastically impacted by the pending budget cuts.
Bowman also said water and sewer rates will have to be increased every year during the next decade. He said improvements will have to be made to the water and sewer systems and plants, in addition to the village making its loan payments on the water plant. The state is mandating sewer projects, he said.
Bowman is recommending sewer rates be increased 8 percent every year for the next 10 years. He also said water rates should be increased 6 percent in 2013, 7 percent in 2014, 8 percent in 2015 and then 5 percent to 2 percent increases through 2022.
Council was scheduled to meet in regular session at 7 p.m. today.