Column: Financial impact of caps, fees

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Commentary by Rick Taylor and Greg O’Connor

Taylor

Taylor

For more than 20 years the City of Noblesville has facilitated trash pick-up for the community.

And during those 20 years a debate has ensued regarding our citizens paying for a portion or all of this service. The “can” has been kicked down the road over and over and now we believe it has reached the point where a decision must be made on the fiscal soundness of our current trash program.

In January, the city council plans to vote on making trash collection a cost-neutral program by having homeowners pay the contracted amount of $10.57 per month. The city would continue to manage and negotiate the trash contract on behalf of the residents, which results in lower pricing per household and allows the city to control the timing of trash collection.

A bit of history may help frame this issue. In 2008, the cost of providing trash collection was approximately $1.56 million compared to $2.6 million now. While the rate per household has increased slightly, the household growth within the city has caused the total cost to double over the past 12 years.

O’Connor

O’Connor

In 2008, council reviewed the trash collection process. There were some of us who envisioned the day where the city’s revenue and expense lines would cross with the enactment of the property tax caps. We’re now six years into the property tax cap era, and the impact on the city’s revenues are being felt. In 2014, council passed a “red” budget with cash resources to support it.

In the end, because of frugal management by the administration and department heads during the year, we were successful in achieving a “black budget” for 2016. Although the efforts of city leaders were admirable, 2015’s “red” budget was a warning sign that revenue was not keeping pace with expenses. Further, it should also be noted here, the city is operating today with at least 20 less employees than in 2009, which enhances productivity. As an example, in 2009, the planning department had 19 employees and processed a total of 965 permits or 51 permits per employee. In 2015, the department had 13 employees (via attrition) and processed 2,876 permits – 221 permits per employee. This is just one example of productivity gains across all city departments. As our population has grown, we are “doing more with less.”

As further evidence of the impact on revenues mentioned above, according to a Dec. 8, 2015 article in the Indianapolis Business Journal on property tax caps, it was reported Noblesville lost approximately 18 percent of its property tax revenues due to the caps. In the 2016 budget, it is anticipated there will be a loss of approximately $5 million from property tax caps, and the cumulative effect since 2009 is approximately $30 million.

We’ve been successful managing through this revenue reduction during one of the worst economic environments any of us have experienced and did not ask the taxpayers for support. It is prudent and necessary for us to ask for that support now to insure we are able to provide the services our citizens expect and deserve.

The fee is a way to continually reinvest in Noblesville. It is our intent to manage the revenue generated to improve the downtown infrastructure (including alleys that have not been repaired since 1995), tree replacement program, increase our support of law enforcement and their crime prevention efforts and increase our funding of road repaving and sidewalk repair throughout the city. These dollars will be placed in designated funds and appropriated by the council based on administration’s recommendations. Moreover, the city will be able to replenish its COIT Fund (essentially our Rainy Day Fund). We have been using 100 percent of our COIT revenues year after year to balance the budget and are seeing that fund balance trend downward. It’s imperative we maintain a sufficient COIT balance to fund emergency situations or large projects. (i.e. Ind. 37 interchange improvements or the creation of Pleasant Street as an east-west corridor). Having cash on hand also supports our AA- (Standard and Poor’s) bond rating which minimizes interest costs to taxpayers on bond issues for projects in Noblesville.

The city’s contract with Republic Services for trash and recycling is in place for the next three years; however, at expiration of the contract, the city could remove itself from providing trash service. This would mean homeowners would be responsible for negotiating and contracting their own trash service as is currently done in Fishers. Your cost would most likely increase and trash collection could take place every day of the week in your neighborhood instead of the coordinated plan currently in place. We do not believe this is an option our citizens are interested in, but it is an option and must be considered.

In summation, we support the implementation of the fee. It is our belief by making infrastructure investments the city will be a more attractive destination for new businesses and residents alike. This investment will allow us to grow the commercial tax base and helps us avoid asking the taxpayers for additional financial support. Infrastructure is a proven economic development driver and will attract businesses and people to move to Noblesville.

We want our downtown to be the “heart and soul” of the City of Noblesville. We want to increase the walkability of our community. We want better roads and connected trails. We need to invest in these infrastructure assets. This fee is intended to insure we have the financial wherewithal to make this happen today and into the future. We believe the time is NOW to move Noblesville forward.

Rick Taylor served as president of the Noblesville Common Council in 2015. Greg O’Connor will serve as the nine-member Common Council president in 2016.

Trash fee COIT

Trash fee Cost Chart


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