Authorities reject Fostoria financial recovery plan

Jan. 05--FOSTORIA -- A city financial recovery plan was rejected Wednesday by a financial planning and supervision commission that oversees Fostoria's finances, with the mayor citing the plan's heavy reliance on tax increases as a major reason for its rejection.

City council in December approved a five-year plan that called for the city to place a quarter-percent income tax and a 6-mill property tax on the ballot. A financial recovery plan needed to be approved because the city was placed in fiscal emergency in May by State Auditor Dave Yost.

But council also approved at that December meeting the phase out of income tax reciprocity for residents who work outside the city, with reciprocity reduced 50 percent Jan. 1 and eliminated the same date in 2018.

The reciprocity elimination wasn't included in the financial recovery plan, Mayor Eric Keckler said, and city staff have also continued to look for potential cost reductions, meaning the tax increases called for in the plan may not be necessary.

"The objective is to put together a plan that doesn't call for such drastic tax increases," he said.

The 50-percent reduction in reciprocity would give the city an extra $250,000 in revenue next year, Mr. Keckler, money the recovery plan hadn't accounted for this year.

The financial commission includes representatives of the state treasurer's office, the Office of Budget and Management, the mayor and city council president, and three members appointed by the governor.

If approved by voters, the income tax increase would raise about $700,000 annually for the city, while the property tax would raise about $890,000. The property tax levy would mean a taxpayer with a $100,000 home would on average pay $210 more a year if approved.

A special city council meeting has been scheduled for Feb. 16 for council members to discuss a new recovery plan. The financial commission is scheduled to meet Feb. 22 to vote on the new plan.

Contact Nolan Rosenkrans at: nrosenkrans@theblade.com or 419-724-6086, or on Twitter @NolanRosenkrans.

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fostoria, dave yost, Eric Keckler, City Budget, financial crisis, financial planners, Financial outlook

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