All options on table for Delphos, after income tax defeat

HEATHER RUTZ 419-993-2094 •

November 7, 2013

DELPHOS — Just about everything is up for discussion among Delphos officials, in the wake of a failing income tax increase request. And just about everything might be needed to close a $1.2 million hole in the city budget.

Delphos voters rejected an increase of 0.25 percent Tuesday in the city’s income tax, with 58 percent voting no. City council placed the measure on the ballot to increase the income tax from 1.5 percent to 1.75 percent. It would have raised an additional $400,000 a year for the city’s general fund.

Officials hoped to raise revenue with an income tax increase. Now, they will consider multiple options, including going back on the ballot for the same or a modified income tax request, utility rate increases, repealing the income tax reciprocity agreement and making further cuts. The city has already cut staff, implemented furloughs and pay reductions.

Mayor Mike Gallmeier said the city has to continue to run, and it has to balance its budget. The city needs to make up $1.2 million lost from major employers leaving the city and a cut in the state’s local government funding.

“I think people are tired of being taxed. I can’t say I disagree, but the city still has to run,” Gallmeier said. “I don’t want to get into some kind of fiscal emergency situation, where the state auditor comes in and runs the city. I think we’re better off if we can take care of this ourselves. We’ll come together and get through it.”

By the end of this year, the city will be down 13 employees from where it was at the beginning of the year, about 50. Most of those cuts have come from people retiring or quitting and not being replaced. A few have been laid off, and more could be, Gallmeier said.

The city is also negotiating with employee unions for concessions, said Safety Service Director Greg Berquist.

The furlough that came earlier in the year resulted in three hours a week reduction, equal to a 7.5 percent decrease in pay. Removing reciprocity would mean people who pay income tax in Delphos and another community would no longer receive a 75 percent credit on Delphos taxes. The city is also applying for federal grants to help maintain fire and emergency medical services.

The measure failed by 200 votes. Berquist and Gallmeier said they consider that a close margin and didn’t hear a resounding mandate either way. Because the books have to be balanced, the city will explore and most likely employ multiple options that include raising revenue and cutting staff and services.

Gallmeier said one thing that won’t change is the city having a safety-services director. Berquist announced his retirement, effective at the end of November, because of changes in Ohio pension law. Delphos is not a charter city, and by Ohio law it must have a director of safety and services. The law says the city can have separate people for each job or can combine the jobs into one position. After speaking with council members individually, Gallmeier said he has a sense they want to maintain the combined position.

Council’s next scheduled meeting is Nov. 18, but Gallmeier is also considering asking council about a special meeting devoted to city finances.