West Chester Trustees Begin Process for November Safety Levies

At the June 26, 2020 West Chester Township Trustee Board Meeting, the Trustees began the official process of placing a 2mil Fire and 2mil Police levy on the November ballot.

I’ll start by agreeing with you that “the timing is horrible” because of Covid-19, business and school closures, peaceful protests turning violent and general uncertainty about “where do we go from here”. However, we still live in a wonderful community and we must continue to plan and diligently maintain our government operations with fiscal responsibility.

Two items were on the June 26, 2020 agenda, dealing with the Police and Fire 2 mill levies. They were 5 (Fire) and 6 (Police) and read as follows:
• 5. Motion to approve Statutory Resolution No. 15-2020 declaring the necessity of levying an additional tax in excess of the ten-mill limitation and requesting the County Auditor to certify matters in connection therewith
• 6. Motion to approve Statutory Resolution No. 16-2020 declaring the necessity of levying an additional tax in excess of the ten-mill limitation and requesting the County Auditor to certify matters in connection therewith

The resolutions can be found here: https://www.westchesteroh.org/government/west-chester-elected-officials/resolutions/-folder-1243

For those inclined to watch the discussion in the meeting, it can be found at https://vimeo.com/432145165 starting at time 06:27. Township Administrator Larry Burks introduces the agenda items with some background information, then at time 08:53, I begin the discussion followed by thoughts from Mr. Wong and Ms. Becker.

As with all agenda items, the Trustees were required to vote to approve or disapprove Resolutions 15-2020 and 16-2020. The vote happened at time 19:45 and it was unanimous to APPROVE, thus beginning the process of adding the levies to the November ballot.

Here are some facts:

1. The last Fire Levy passed in 2006 and is for 6 mils.
2. The last Police Levy passed in 2010 and is for 7 mils.
3. Both levies are still in effect today and are collecting revenue in the form of property tax.
4. The new levies will NOT REPLACE but be IN ADDITION TO the current levies.
5. For every 1 mil of tax, property owners pay $35 per $100,000 of valuation.
6. These levies will ADD $140 per $100,000 of valuation to your tax bill.
7. Passage or failure of these levies is entirely up to the residents of West Chester, not the Trustees.

As noted above, I voted to approve and move forward with placing the levies on the November ballot. The basis for that decision is relatively simple when considering the following:

• When a tax levy is passed, the money collected year after year is always based on the ‘value of money’ the year the levy passed. It’s never adjusted for inflation. Over time, costs and expenses go up, but collection of tax revenue remains the same. Using the Consumer Price Index (CPI) which is published by the US Bureau of Labor Statistics, we can calculate amount of inflation from year-to-year. If we look at an ‘Inflation Rate Calculator’ found on-line (see below), all we do is input the from and to dates and some dollar value for the starting year. In this case, since the last Fire Levy passed in 2006, I input April 2006, April 2020 and $100. The calculator returned 27.24% as the inflation rate and $127.24 current monetary value. This means that what used to cost $100 in 2006, now costs $127.24 in 2020! The Police Levy passed in 2010 so I input April 2010, April 2020 and $100. The calculator returned 17.6% as the inflation rate and $117.60 current monetary value. Due to inflation, we can’t sustain our Police, Fire & EMS Departments at the levels we’ve come to enjoy and require, if we don’t make an adjustment, i.e. tax levy.

• Add to this the fact that since 2006 West Chester’s population has increased by 17%! This means more demand for services, equipment, facilities and 911 calls. In 2019 the WC Police responded to 49,700 calls for service, made 1,750 arrests, provided educational programs to 29,000 – all with 101 police personnel. Likewise, the WC Fire Department responded to 7,100 calls for service and made 4,000 inspections from 5 fire stations with 111 personnel.

 

• The Combined Police and Fire & EMS Carryover slide below shows that this year the carryover for Police drops to $7.1M and for Fire & EMS drops to $8.1M (carryover is the amount of money left over in the Police and Fire & EMS funds at the end of each year to cover future expenses. This is normal and expected due to the inflation I spoke of earlier). As I considered drastic measures to avoid a tax levy, I realized that even if we did across the board pay cuts of 20% or had a 20% reduction in force, it still wouldn’t eliminate the need for a tax levy. Here’s the math:

The 2020 Budget slides below show that 78% of 2020 Police Budget is for personnel and 76% of 2020 Fire Budget is for personnel. This equals department expenses of $11,122,988 and $10,792,000, resp.

 

 

Reducing either pay or personnel by 20% would save approximately $2M in each department. If we add these amounts back into carryover in 2020, it raises the Police to $9.1M and Fire & EMS to $10.1. These amounts won’t even extend the current levies one year and the inflation dilemma remains.

Concluding, the infusion of revenue into the WC Police and Fire Departments with the additional 2mil levies, will extend the life of the current levies by increasing the carryover for at least five more years, as indicated in the chart below.

One last point, you may ask “why not just do a whole new replacement levy, why monkey around with an additional 2mil levy”? Property taxes are not only complicated and hard to comprehend, but changes in Ohio laws also add considerations. Our previous levies qualified under Ohio Revised Code (ORC) for Homestead Rollback Exemptions of 10% and 2.5% reductions in property tax for residents who qualified, i.e. seniors over 65 and disabled persons. The township is made whole and still gets the full property tax payment because the State of Ohio pays the difference. A few years ago, Ohio changed the law and eliminated the Homestead Rollback program. Any new West Chester levy will not have the 12% reduction which the township believes is a nice benefit for the 15% of our residents who have “retired in place” and are on fixed income.