During the Vermilion City Council Meeting on Monday, April 20, 2020, Amy Hendricks, Finance Director, stated the Ohio Public Works Commission (OPWC) has announced they will not be collecting the normal July 1 payment toward any of their project loans due to the COVID 19 economic impact on local governments. This will give the city approximately the following reduction in payments for 2020:
Fund 602 WWTP $ 45,000 Fund 604 Storm $ 30,000 Fund 605 EPA $108,000
“They are adding this payment to the end of each of the amortization schedules without additional accrual of interest,” stated Hendricks. “A double payment is an option in January 2021; however, I suggest that we retain the additional funds due to the work that still needs to be addressed in the city.”
Hendricks reported that the $2.2 million bonds supporting the meter project were sold on April 16 after a couple weeks of delay to get some stability in the market.
“We are very satisfied with the outcome,” she said. “As a comparison, the City of Dublin (A+ rated) sold a one year note on the same day at a higher rate. There was premium generated through the transaction that covered all costs of issuance. One of the factors to consider in this project is that it is estimated that the inaccuracy of current meters represents a loss of $36,000 per month, so timing was very important.”
Hendricks said they did receive four bids on the bonds that were to be sold. The low bidder has a strong presence in Ohio at 1.983%. The city got a lower payment this year at $70,000 and next year it will be around $120,000, then it levels off at $250,000 for the next eight years.
Per city finances on an economic standpoint, she reiterated that the revenues and aid that is coming in is all for expenses for communities with populations over one million.
“Hopefully, there will be groups or counties that will apply that will get the city some of that funding,” said Hendricks, “but the issue is that it only goes for additional expenses, which to date the City has not had significant ones. There’s no loss of revenue yet. There was discussion on potential state revenues, such as the fuel tax, which the city hopes to get some growth from this year, but the ODOT traffic measurements so far are charting a 45% reduction in standard traffic levels, so this could have an impact overall going forward.
Hendricks stated they had previously discussed delinquencies in services and the courts, etc. and one issue the city will have is the fact they have so many residents working outside the city, so they’re not seeing those variations when it comes to withholding taxes. These are filed with estimated returns, so the city needs to be conservative through this period. It could be a year until the city knows the full impact.
“Thankfully, the city carried over an additional balance in the general fund, which should help with the cash flow situation, so they shouldn’t be scrambling to meet payrolls and things like that,” said Hendricks.