A near capacity crowd of around 123 Centerville and Washington Township residents crowded the meeting room at the Centerville Police Department last Monday night to hear the draft report findings from the joint financial study conducted by the University of Toledo Urban Affairs Center in cooperation with Wright State University Center for Urban Affairs. “At the end of the day, what matters is ‘what’s good for you?’ stated Mark Kingseed, mayor of Centerville, in his opening remarks to the public. Though he stated that the study was done “soley to provide information to the citizens” and that the report “is not a step in the merger process” he then went on to explain how a merger process works.

A citizen-initiated petition signed by 10 percent of City of Centerville residents (about 1,100) and 10 percent of Township residents (about 1,400) who voted in the last gubenatorial election would have to be submitted to the Board of Elections by August 15, 2008 to have the formation of a merger study committee be put on the November ballot. If that ballot issue passes, a committee comprised of five Centerville residents and five Township residents would have up to two years to study the pros and cons of a merger. The committee would have to have a majority agreement about its recommendation and that recommendation would once again be put before the voters for approval or rejection.

Joyce Young, Trustee President called Kingseed’s merger remarks “premature in the opening remarks” and admonished the audience to “ask questions.” Dr. Hugh Hinton, Director of the Public Administration Program for the University of Toledo called the study “purely an academic process to provide objective information” to the two entities so that residents and leaders can decide “whether, or how, to proceed with a merger.”

There would be both reductions and increases in general fund expenditures should the city and the township merge. The most obvious reduction would be in eliminating duplicate positions, namely, having just one city administrator/manager, one public works director and one finance director, for an approximate savings of $350,000. An additional $550,000 in expenditure reduction could be realized by reducing duplicate facilities, eliminating township memberships in regional agencies and auditor and treasurer fees and reducing general administrative overhead. Estimating the police protection expenditure needs of a merged community was termed “problematic” because “it is difficult to determine the cost of replacing the services currently provide by the Montgomery County Sheriff.” According to the “Expenditure Changes in a Merged Community” table the current city of Centerville expenditure for police services is $6.1 million and the Washington Township police services expenditure is $3,1 million for a combined total of $9.2 million. The estimated merged community cost of police protection is $9.6 million due to step increases and replacing services presently provided by the Montgomery County Sheriff’s Office. Significant increases would be seen in public works and capitol expenditures due to assuming responsibility for an additional 48.15 miles of roads with 12 signalized intersections and 28 bridges that are currently maintained by Montgomery County resulting in an estimated expenditure of $1,494,000. The income tax services and engineering services would be an additional cost of $525,000. In summary, general fund expenditures would decrease but public works expenditures and capitol improvements would increase by just over $1 million dollars. By eliminating the township levies that fund most of the township services, about $14.5 million would be added to current City general fund expenditures so general fund revenue would have to increase by that same amount. Public works revenues would need to increase by about $5 million while eliminating township property taxes. The township government is funded entirely by property taxes while the City of Centerville government is funded mainly through an earned income tax. According to the study, “under our assumptions, the City’s 1.75% income tax and 2.35 mill property tax would be retained and extended to the residents, employers, employees, and property in the unincorporated areas of the Township. The Township’s general, fire, and recreation district property taxes would be abolished, as would also the millage for the police and the road and bridge funds.” Both the City and the Township share revenues for road-related public works services ( gasoline excise tax, cents per gallon tax, and motor vehicle license fee) and different state, county, and federal grants but in a merged community these revenues would not be enough to cover the shortfall in Street Construction and Maintenance and additional capitol expenditures. The study proposed three different alternatives to making up the approximately $3.5 million shortfall in these revenues. The first alternative would be reducing public works expenditures, the second would be using available reserves, and the third alternative would be transferring about $2 million from the general fund balance and adding a temporary “earmarked property tax” to cover the deficit. In summary, if the City of Centerville and Washington Township were to merge, revenue from the general fund would be approximately $33.9 million from increased income tax revenues from the 1.75 percent earned income tax applied to residents, employees, and businesses in the unincorporated township and increased revenues from local government fund. In both the city and the township 5.9 mills in property taxes for fire, recreation and parks would be eliminated and 4.0 mills in property taxes for township residents would be eliminated. The City’s 2.35 mill property tax would be retained and extended to unincorporated residents and other city and township revenues would also be retained. “The most important financial challenge would be to secure sufficient revenues to fund these additional services and to shift financing the existing Township and special district services from a property tax levy to a City income tax.” In examining the likely effects on the communities, biggest issues are would be gaining sufficient revenues to cover increased services responsibilities and shifting township and district services from a property tax levy to an earned income tax. The study states “A merger would shift financing of most services in the current Township and some in the City from a reliance on property taxes to a predominant reliance on an income tax. Many government services costs therefore would be transferred from property owners, primarily residents, to employed persons, both residents and non-resident.”

The floor was opened to the city council members and township trustees for questions and comments following the presentation. City council member Brooks Compton expressed his concern about the township’s reliance on property taxes as he asked “will real property tax valuation continue to go up? My concern is that as the township develops out more real estate levy funds will be needed.” He warned that “citizens will reach “a level of tax overload so before we reach that point leaders need to talk seriously before the crisis.” Tom Zobrist, Washington Township clerk treasurer states “It’s been said that earned income taxes are more flexible than property tax, and indeed that’s true. However, that principle cuts two ways. Earned income tax rises when resident’s’ salaries rise, but also falls more quickly than property tax during times of economic hardship such as recession.” The township’s reliance on the County for its road improvement would “have a significant impact on development” according to the mayor. Township trustee Lee Snyder cited the planned expansion of Social Row Road and improvements to Clyo Road for an estimated cost of between $32 million to $37 million. Snyder states that “while townships have the same ability as cities to improve roads, townships are not required to assume the financial burden if they choose to rely on the county to make road improvements.” Trustee Terry Blair explained that one of the reasons for doing the study was to “look at cost savings of economy of scale.” He continued, stating “I want to run the numbers myself.” Then he questioned Hinton, ” I have seen cost increase; is that correct?” “Yes.” stated Hinton.

The vocal majority of Washington Township residents in attendance had many negative comments that ranged from “just say no” which drew a round of applause to criticisms about the study that had “too many assumptions and very little substantiation.” Many citizens are happy with the status quo as expressed by a 50-year resident of Washington Township who asked why “every 20 to 25 years this merger issue is brought up again?” There was one voice of moderation as one man explained that “most people are afraid to leap, that they’d rather take it in steps. A leap might divide us so let’s keep stepping forward rather than leaping” into conclusions based on emotion or self-interest.

Hinton told the audience “One of the pleasant things about the township and the city is that they don’t have to do anything. There may be some advantages (to a merger) but there are some disadvantages and the township and city do not need to make a decision immediately.” Young summed up the lengthy meeting when she said “the issue is in the hands of the voters at this point.”