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Montpelier Village Council Hears Of Impending COVID-19 Induced Budget Cuts

By: Timothy Kays

The financial impact of the COVID-19 pandemic on the community weighed heavily at the April 27 teleconferenced meeting of the Montpelier Village Council. Village Manager Jason Rockey addressed the issue in his report to Council.

“I know that’s of interest to everyone involved in the call here,” Rockey said, “…and the short answer is: we don’t have a lot of answers. What we do know is electric load is down significantly. Our electric load has dropped about 40% across the AMP footprint. That’s extremely high.”

“The Northwest Ohio area in general is down much more than the rest of the AMP footprint…the Northwest Ohio service area is down about 20%. Much of that is anchored by like BGSU and organizations like that that are shut down. In Montpelier, our situation has been even worse than that; we’ve seen about a 40% reduction in load since this has taken hold.”

“Across the AMP footprint, the average is like 8%, so we’re particularly hard hit by the businesses that aren’t producing right now. What we don’t know, and there’s really not any prediction to, is what it’s going to do to us in the area of income tax collections.”

“Obviously electric is an enterprise fund,” Rockey continued, “…but we do have the kilowatt-hour tax that is put back into the general fund. So as electric usage goes down, so does the collection of the of the kilowatt-hour tax. But that’s just a small part of the general fund. Overall, most of it comes from income tax collections, and when people are on unemployment, they don’t pay local income tax.”

“So we know we’re going to see a reduction there. But what the federal and state bailouts are going to do for our local companies isn’t known to us yet. Whether we’re still going to see those tax dollars coming in, or…we really have no idea what that’s going to look like.”

“So we’re beginning to make preparations for pretty severe cuts, and it’s not anything that we’re going to see. We’re not going to know the answer to this by the end of June, or even by the end of July. This is something that…we’re going to see the effects of for quite some time.”

“I think it’s just a ripple effect with all the farms too,” said Village Finance Director Nikki Uribes, “…because when you consider gas tax, that’s going to hit the street fund and the general fund. The Street Department is paid out of street fund and general fund, and they’re apportioned that way by a percentage, the street fund is 86% funded by gas tax.”

“If that goes down too far, I’m going to have to completely change how the Street Department is paid, and push more into the general fund that could already struggle because of income tax and kilowatt-hour tax. So it’s just going around everywhere.”

“Nikki,” Mayor Steve Yagelski asked, “…would it be safe to say, a few years ago when we went into the recession, that we’re going to kind of follow the same trend a little bit?” Uribes answered, “I would anticipate that, yeah. Because with all the factories and all the businesses that have been shut down or are running at very minimal, that’s withholding tax we’re missing out on, and withholding tax is 80% of our income tax collections.”

“So if we’re not collecting in the withholding tax, that is going to be a huge hit…which is scary for the Park Department, the general fund, which is police, fire, street and the sewer tax.”

“The numbers we kind of look at as our indicators,” continued Mr. Rockey, “…at least in our minds, the electric is kind of the driver there. We’ve looked at water and sewer, and as far as the enterprise funds are concerned, water and sewer is looking much better than what electric is.”

“There’s been a decrease in water and sewer usage, but not near what we’ve seen in electricity, which would be an indication that our factories aren’t running at full production. So if the factories aren’t running at full production, that’s obviously going to affect the income tax. So those are the things that we don’t know until the numbers are in.”

“There’s no organizations out there that give us a good benchmark; it varies every place…from village to village, according to whether you’re primarily residential, whether you’re primarily industrial and whether you have a really strong commercial base. Whatever that might be, it varies.”

“Any place you go, nobody’s footprint looks the same. AMP is working on giving us some numbers and looking at what we can do…what the financial impacts are going to be of the load reduction on the electric side. But as far as income tax, that’s a totally different story. So…nobody has a crystal ball; it’s really difficult to predict right now.”

“We’ve already been talking to our supervisors, and (Electric Department Supervisor) Kevin Mercer especially is looking at some pretty steep cuts to things that were budgeted this year as far as trucks and improvements to the facility, and different things like that.”

“So as these numbers start to come in, and until we see kind of a trend of things returning to normal, we’re going to continue to be happy to have these conversations with everyone.”

“The only project that I have to update you folks on,” Rockey continued, “…was shortly after the last meeting…we learned that OPWC funds are not going to be released on July 1 as anticipated. That was a grant we applied for to rehabilitate the Randolph Street lift station.”

“So at this time, that project would be on hold until we figure out what the state is going to do with those grant funds. They sent us a letter, basically of uncertainty. The only thing they could tell us is that funds would not be released on July 1. Until they have a new budget from the state legislature, they aren’t going to know when those funds can be released.”

“So right now, we’ve got some engineering involved in that the we’ve worked on, but other than that we haven’t had a lot of money put out in order to get to this point. We have not gone out for bid yet, so we’re not under contract to complete that project. Until we hear more about the $175,000 in grant funds that we’ve been anticipating on July 1, we won’t be moving forward that project.”

There were uplifting moments in recognition of high achievement at the meeting, beginning with the recognition of Ms. Uribes for achieving her Certified Public Finance Administrator (CPFA) Certification. “I’d like to have the honor of recognizing Miss Nikki Uribes for achieving her Certified Public Finance administrator certificate, Nikki, congratulations. I know that’s a lot of work especially with everything that’s been going on.”

“Everyone’s already said it, but we really appreciate how quickly you respond back to a lot of our questions within 24 hours. That speaks very highly of your work ethic, so thank you and congratulations.” “Nikki, thanks for all your work,” added Councilor Dan Willis. “Sorry, we can’t do this in person. Nikki had some big shoes to fill with (former Village Finance Director) Kelly (Hephner), and you’ve done a wonderful job.”

The next recognition was that of the Montpelier Electric Department, which was the recipient of RP3 Platinum Designation from the American Public Power Association (APPA). The RP3 program recognizes utilities that demonstrate high proficiency in reliability, safety, workforce development and system improvement.

There are three levels of designations…Diamond, Platinum and Gold. Montpelier’s Platinum designation is for a three-year period starting in 2020. Criteria within each of the four RP3 areas are based upon sound business practices and recognized industry-leading practices.

The Montpelier Electric Department was also recognized with the Certificate of Excellence in Reliability, which recognizes utilities that placed in the top 25 percentile of reliability nationwide in 2019, as measured against the U.S. Energy Information Administration’s (EIA) data.

The APPA helps public power systems track outage and restoration data through its eReliability Tracker service, and compares the data to national statistics tracked by the EIA. AMP covers the cost of subscription to the eReliability Tracker service for all of its members.

Finally, the Montpelier Electric Department earned an APPA first place Safety Award for 2019. The APPA Safety Awards recognize utilities with the lowest safety incidence rate within their group of like sized utilities in 2019.

“Montpelier’s commitment to the safety of their employees and reliability of their electric service is commendable,” said Jolene Thompson, AMP president and CEO in a prepared statement. “These recognitions show how dedicated the Montpelier Municipal Utility is to serving its customers and maintaining best practices for employees.”

AMP also recognized Alison Lamontagne of the Montpelier Class of 2020 as a recipient of the Lyle B. Wright Scholarship. The $3,000 scholarships in this program are awarded to graduating seniors whose household receives electricity from an AMP member utility.

Thirty-one students were nominated for the Wright Scholarship this year, and only five were selected based on their scholastic record, personal achievements and test scores.

Alison, the daughter of Kimberly and Brent Friend, and Amber and Stephen Lamontagne, is a member of the National Honor Society and participated in student council, cheer, cross country and track. She plans to attend North Carolina State University to study microbiology.

“It is great to have a strong municipal electric community like Montpelier as home to one of this year’s scholarship recipients,” staid Ms. Thompson. “I commend Miss Lamontagne for her outstanding achievements and wish her the best of luck in her future endeavors.”

Finally, Council agreed to a request to move Collin Houk from probationary status to full-time status.

Timothy can be reached at tim@thevillagereporter.com


The post Montpelier Village Council Hears Of Impending COVID-19 Induced Budget Cuts appeared first on The Village Reporter.


Source: The Village Reporter

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