Council moves step closer to income tax on fall ballot

by PAUL MORTON

Associate editor

Oberlin city council last week heard first reading of an ordinance to place a 10-year, 0.2 percent income tax levy on the Nov. 4 ballot, but the issue that eventually appears on that ballot could be different.

The levy would be used to pay for various capital projects and associated general expenses, including part of the cost of the renovation and expansion of the fire station. It would represent no increase in taxes, because it would replace a 0.2 percent income tax levy used to finance improvements to the wastewater treatment plant, which expires at the end of this year.

The city similarly converted a five-year, 0.2 percent income tax levy originally passed in 1999 to help pay for the Lorain County MetroParks SplashZone. In 2004, when the levy expired, voters approved a new 0.2 percent levy for general operating expenses.

Council member Sharon Soucy said she had received a number of phone calls from residents concerned about the proposed levy. She said some of those residents expressed worry about the city's income tax rate ever going down.

"In my two terms on council there have been two levies come before us that have actually been extensions of previously voted levies," Soucy said. "And there is some appearance, and I think we need to be sensitive to it, that any time we pass a levy in Oberlin it has the danger of becoming a perpetual levy."

She said two of the telephone calls she had received from residents in the weeks prior to last week's meeting expressed concern that the 10-year term of the proposed levy is too long. Council member Ron Rimbert said he was also uncomfortable with the 10-year term.

"I think we have an obligation to go back to the taxpayers every five years," Rimbert said. "If we do a good job, we can get their approval again. Right now I feel we're just trying to stretch it out so we don't have to do that. Personally I think 10 years is very alarming. You can stretch it out too far."

Finance director Sal Talarico said the longer term is necessary because funds from the levy would help to pay for the renovation and expansion of the fire station.

"When we go to sell the bonds for the fire station, the investors are going to want to see a dedicated source for repayment," Talarico said. "That doesn't mean that is city council wants to change the term that that's going to be an issue. We could still sell the bonds if we have five years of guaranteed repayment source. Is it better to have 10, 15, or 20? Yes."

He said if council chooses to reduce the term, they would have to ask for a renewal of the levy or find money to make the bond payments from other sources. He said the latter choice would leave less funds for other projects.

"Once you issue the debt, you have to repay it," Talarico said.

Council approved first reading of the ordinance by a vote of 5-1, with Rimbert dissenting. They will hear second reading at their meeting on Monday.

The ordinance must pass and be in effect before the Aug. 21 deadline for filing issues with the board of elections for the November general election.