Lorain County mayors prepare for economic downturn

Just as most Lorain County municipalities passed a 2020 budget, they are now bracing for an economic downturn when the impact of COVID-19 and Ohio's stay at home order hits. Many municipal leaders said it's too soon to tell exactly how severe the decline will be, as it hasn't been fully realized yet. Several larger cities have put a freeze on hiring nonessential employees and are looking at what projects can be put on hold. Amherst After seeing tax revenue boom in the past year, freeing up cash for public works projects, now Amherst Mayor Mark Costilow is worried about his city's budget. "All big purchases have been put on hold, if they can be," he said. "I just don't know about collections. They've been good so far, until now, but I don't know how they're going to be. ... I don't know what the new normal is going to be." Unnecessary maintenance has been pushed off and now Costilow said he's looking at reducing city worker shifts to six hours during the crisis. Protecting the workers who keep the city running is his priority, he said. "We have to be able to pay our employees and pay our bills and deal with emergencies as they happen," he said. "We all need to work together. This is the time when we really need everybody to be on the same page and keep things going." Avon Avon Mayor Bryan Jensen said the coronavirus outbreak is developing so fast that "every hour is like a day." As of Tuesday afternoon, he said the city is looking at longterm projects set to be started in the fall and evaluating whether they should go forward. Sanitary sewer projects — one on Elizabeth Avenue, Puth Drive, Joseph Street and part of Detroit Road, and a pair of projects at French Creek Road and Century Lane — will continue for sure. However, some repaving projects are up in the air. Jensen said the city is going to have to look at plans for French Creek Road, which was going to be repaved from the Sheffield border to Detroit Road. "We are going to look at every avenue in terms of ways we can save some money," he said. This month should be fine for city finances, Jensen said, but "the following month is the one I think will tell us exactly where we are at." He foresees some insulation from economic impact because of Cleveland Clinic Avon Hospital being within the city, but he acknowledged that the "impact of the restaurants (being closed) is still going to be seen." "It's a little scary," he said. "I think at the end of the day Avon is going to be OK." Avon Lake Avon Lake Mayor Greg Zilka described the economic impact of the coronavirus outbreak as "a looming issue for us," but he said the city's plan as of Tuesday evening is to continue with the current budget for this year. Still, he said large numbers of people have been laid off in the city, and the temporary closure of Ford's Ohio Assembly Plant will hurt economically. He hopes to see it reopen as soon as it is safe to do so. "This could really cause our economy to be slowed down. We are going to do our part to keep it going and hope for the future," Zilka said. "We have been through dramatic shutdowns before, but this is very special and very unusual." He added that even when the plant reopens, potential car-buyers who find themselves without work or facing uncertain times are less likely to consider a new vehicle. "If they're not sure what tomorrow is going to bring, they are only inclined to buy the necessary," he said, but deferred to experts on economics and production on any specific predictions. The first thing that needs to happen, Zilka said, is to stop the spread of coronavirus. There were seven confirmed cases in Avon Lake as of Tuesday evening, he said. Elyria Finance Director Ted Pileski said a memo from Mayor Frank Whitfield distributed March 19 told all department heads to suspend major purchases if possible. Any purchase more than $10,000 will be reviewed by Pileski and Safety Service Director Derek Feurstein. Some projects through the Engineer's Department will not be put on hold, Pileski said, as they are mandated by the Environmental Protection Agency. Those projects are funded by water and sewer fees and Ohio Department of Transportation loans. Pileski said most of those are under contract and have to go forward. Large purchases that were outlined in the 2020 budget will need to be discussed with Pileski. "It's just going to be a matter of time before this begins affecting us," Pileski said. "... Income tax revenues are going to be down, that's for sure. We're looking at all these projects and seeing which ones we can put on hold." The city already was taking a close look at finances with the impending loss of the city's second largest employer, Bendix Commercial Vehicle Systems, in 2021. City Council members passed the 2020 budget March 16. There are several retirements coming up in the city, and Pileski said city officials will think carefully before replacing them. Feurstein said that they are looking at any empty positions and whether to fill them. "We'll err on the side of not hiring at this point unless it meets a critical function," Feurstein said. Feurstein said city officials will be closely monitoring costs to make sure essential services are maintained through the coronavirus pandemic. "Anything we can do to slow the spending before things pick back up," Feurstein said. "And we don't know when that will be. It could last months." Grafton Mayor David DiVencenzo said the village isn't expecting any significant changes in revenue until the second quarter around June. "It's on our radar," DiVencenzo said. "We've made some estimations for at what point we need to be worried. We think we're gonna make it all right because we've budgeted." Grafton's large revenue stream comes from the Grafton Correctional Institute, which DiVencenzo said likely won't see significant changes. The village just passed its budget, and DiVencenzo said it has a rainy day fund that could be tapped if needed. "We can tolerate some downturn without major adjustments." Kipton Kipton does not have an income tax and no major industry or retail, so Mayor Bob Meilander said he doesn't anticipate the "stay-at-home" order affecting the village budget too seriously. "We maintain on a shoestring anyway," he said Friday. Village Council canceled its April meeting and closed the village playground to promote social distancing. There aren't many pressing issues "except to appoint who cuts the grass," Meilander said. Residents are "maintaining common sense" through the COVID-19 pandemic, he said. "We'll all get through this without a doubt, and things will come back and start booming again," Meilander said. LaGrange Mayor Kim Strauss said at this point in time, he's not worried about the impact COVID-19 will have on LaGrange's budget. Lorain Mayor Jack Bradley and Auditor Karen Shawver sent out a joint memo asking departments to only use overtime under extreme circumstances, anticipating the fallout of COVID-19 and U.S. Steel idling its factory. City officials have also frozen hiring nonessential employees and limited capital projects. City Council passed the budget on Monday. North Ridgeville North Ridgeville Mayor Kevin Corcoran said the city is foreseeing a financial impact from the coronavirus outbreak that could be severe, depending on how long it persists. "We're talking about things like limiting overtime and delaying purchases despite some of them being already appropriated," he said. Corcoran sent a message to the heads of all North Ridgeville city departments, as well as staff, informing them of that fact, and now many are working on lists of expenses that could be moved around or that may not be necessary right away. No final decisions have been made on whether any open city positions would or would not be filled in the wake of the impending financial uncertainty, he said. As for the Center Ridge Road widening project, Corcoran said the latest word is that construction will continue as planned, for now at least. The contractor leading the work, Fechko Excavating LLC, informed the city over the weekend that they would be working on the project this week. Construction is considered essential work and is permitted to continue under the state order. In fact, he said work on the road has been moving faster than normal because of reduced traffic. "We are, just like everybody else, taking things one day at a time," Corcoran said. Oberlin "The city is prepared to weather a storm, whether it's a recession, an economic downturn in general or the results of the COVID-19 crisis," Oberlin Finance Director Sal Talarico said. All major funds have reserve policies and there is enough money to get Oberlin through "a reasonable short-term," he said. Property tax payments are received twice a year. The first came two weeks ago, reflecting collections from before the world was plunged into the coronavirus pandemic. The next will come in six months. "So if this continues long enough, we might see some folks have trouble paying their property taxes," Talarico said. The city doesn't collect much in the way of property taxes — Oberlin College owns nearly half the property in town and is tax-exempt. Income taxes are another story. Talarico said he's bracing for a dip from restaurants and retailers, "but at this point, it's too early to tell what that might be." Rochester Mayor Cindy Kurpely said the village doesn't have an income tax, so the "stay-at-home" order won't have a negative effect on the village's budget. "It really isn't going to affect us in that way," she said. Who the orders have affected are some Rochester residents, many of whom are at the lower end of the income scale, Kurpely said. She has created a list of people willing to help families and individuals in need if requested. That's anything from groceries to opening homes to children needing to use the internet, to tutoring "or just about anything you could name at this point," Kurpely said. In one instance, she said she took a loaf of bread to someone in need, who declined the help but knew of someone else who might need it. Little things like that matter in a small town, Kurpely said. "It's that kind of little thing that's going to get everyone through this," she said. "Our residents have been fantastic as far as that's concerned. The concern is, how long is this going to last? How bad is it going to get?" If the need is there, all residents need to do is call Kurpely at (440) 320-4794. She said all requests for aid would remain confidential. "It's so nice to be in a community where if you need help, all you have to do is put the word out and pretty soon there's someone there to help you," Kurpely said. Sheffield Sheffield Village Mayor John Hunter said he and his staff have been preparing for the possible effects of the coronavirus outbreak since January or December. New protective equipment for first responders was ordered, a contingency plan for a crisis was drafted, and last month, a company disinfected every village complex, car and work station. "We are looking at ways we can lessen the impact on us to do things," Hunter said. Although Council took a fiscally responsible approach to this year's budget together, he added, city staff are still looking at areas they can cut back without withholding any essential services. The village will use its rainy day fund as needed during the outbreak. Around $1.4 million was carried over from last year, Hunter said, and a month of basic operations costs around $400,000. "It's more than a rainy day. It's pouring outside," he said. "We are on top of it here in our village." Sheffield Lake Sheffield Lake is more of a "bedroom community" than many others in the area, Mayor Dennis Bring said, so budget and financial concerns are lesser than some other cities. "We don't have a tremendous amount of businesses," he said. "Without the people being employed, some of the income tax stuff will directly affect us, but right now everything is fine." Still, the city is taking steps to address the coronavirus outbreak. Council passed an ordinance Tuesday allowing Bring to enter into rent-deferral agreements with tenants at the Shoreway Shopping Center so they can pay their rent over a period of time. Also, city staff are on rotations and working to clean everything they come into contact with. Police officers are working to minimize interaction when possible, Bring said. "We are a little bit more lucky than some of the cities, but I feel bad for everybody," he said. "I don't think anybody is going to come out unscathed with this thing." Vermilion Vermilion Mayor Jim Forthofer said there are really two sides of the city, each which will be affected differently by the coronavirus outbreak. On one hand, there is the downtown area, known for its shops and restaurants. On the other hand is the city's east side, revolving around the U.S. Route 6 corridor. Downtown is expected to be hit more heavily by the governor's order to halt all nonessential business, Forthofer said, as many of the establishments there do not fall into exception categories and have closed for now. Some restaurants still are offering takeout service, and Forthofer joked that he has "gained more than a few pounds" supporting those particular businesses during this time. The future of many downtown businesses will likely depend on their health before this crisis began, he added. More businesses on the east side, however, continue to be operational due to their essential nature. As for specifics on financial impact and budgetary changes, Forthofer said city departments are assessing the situation and considering slowing down some construction projects. "We are making some estimates right now, but they are almost impossible to accurately guess at," he said, adding that a fuller idea of the damage done will become clear after the order is lifted and the dust settles. Construction projects that are supported partially or fully by grants or outside sources will continue, including work on Highbridge and Vermilion Roads, as well as construction on Firehouse 1, which is funded by a bond and capital fire fund. However, projects like a paving and beautification of the Fulper Lot downtown will be getting a second look. Forthofer said the city "might want to hold off on that until we see all the dice land." Wellington Mayor Hans Schneider said the village will not be making any cuts right now. "Most of the money from our capital projects is already appropriated," he said. The village is focused on a ground storage tank replacement and raw water pumping improvements. "We really have to get these done," Schneider said. "They are long overdue and we're going to push ahead on those." Both projects will total about $44,000 a year. "Currently we have debt service of $80K that comes off at the end of 2020," he said. "We're going to see a net gain of around $36,000 between the debt service falling off and a new one coming on." Schneider said that if the coronavirus crisis continues through June or July, causing a decrease in income tax collections, the village could scale back appropriately when looking at spending for 2021. "We understand people have lost jobs and income," he said. "We will continue to evaluate. "We want to be good stewards of the money we get and we'll make the right decisions if and when that comes."