BUCYRUS, OH (CRAWFORD COUNTY NOW)—The Bucyrus City Council Finance Committee met Thursday evening to discuss the city’s approach to a million-dollar water fund deficit and funding the upcoming South Sandusky water line project.
Kurt Fankhauser addressed the council as a citizen and also in his capacity as Council President to outline the results of a meeting with Cindy McCafferty, a local government services representative of the Ohio State Auditor’s office. McCafferty reported that the water fund was in a million-dollar deficit as of December 31, 2024.
Fankhauser told the committee he had been sounding the alarm about the deficit and got pushback from the council and the committee, saying no one would know the deficit before May. Fankhauser expressed his concerns in December over the pay raises approved in mid-month. He, Councilwoman C. Aaron Sharrock, citizen Greg White, and Robert Taylor (council candidate) have called for pay freezes, and Sharrock has suggested pay cuts for council members in the face of the financial crisis the city faces. Dishon has voted against pay raises in the past.
The council is set to vote on a sweeping set of manpower raises. Employees are set to receive a $4.25 per hour wage increase retroactive to January 1, 2025. The manpower raises were held to a second reading at Tuesday’s council meeting.
Councilwoman Vicki Dishon interrupted Fankhauser, thanking him for his input but advising him that the auditor Kali Lewis was prepared to give a full report. Dishon has expressed displeasure in having to listen to Fankhauser and citizen Greg White repeatedly address the same concerns over and over. White has told the council their inaction and unwillingness to listen to constituents’ concerns drives him to keep coming back for answers.
Fankhauser told Dishon: “Everything I said was true. I want it in the record that I was right about everything.” Dishon replied: “We’ll give you a pat on the back for that.” Fankhauser returned to his seat.
Before giving her report on the meeting, Lewis told the council that she based her December figures on information she had at the time and that she stood by her report. The GAP conversion process will be completed in May, giving an exact amount. It’s now expected to be at least one million dollars.
Lewis reported to the committee that a meeting attended by Bucyrus city leaders and financial advisors took place on Tuesday to discuss the issuance of General Obligation (GO) bonds aimed at funding the waterworks fund deficit. The meeting was attended by Mayor Bruce Truka, Kurt Fankhauser, Council President; Brandon Gobrecht, Law Director; and others.
The meeting focused on the possibility of issuing both 10-year and 15-year bonds, funded by revenues generated from the Waterworks Fund. Bond Counsel from Squire, Patton, and Boggs, including Senior Attorney Heather Vlasuk and Partner Christopher Franzmann, provided insights into the bond process and the benefits of municipal financing.
One key point discussed was the Ohio Revised Code’s provision that allows municipalities to reimburse themselves for expenses incurred on previous projects, provided this is done within a reasonable timeframe after project completion. This could potentially streamline financing for ongoing and future waterworks initiatives such as the South Sandusky Street water line projects. Those lines are over 100 years old.
The bond counsel recommended that the municipality approach larger banks, such as Huntington Bank, which have more experience with municipal bonds. Indicative taxable interest rates were requested for bonds ranging from $900,000 to $1,000,000, revealing a 10-year bond interest rate of 5.84% with prepayment options, and a 15-year bond interest rate of 5.99%. Both options allow for prepayment with certain penalties, depending on the timeline.
Next steps include obtaining a Fiscal Officer Certificate and passing a Bond Ordinance for the Water System Improvement Bond scheduled for 2025. The finance committee passed a resolution to allow the bond counsel to prepare the legislation. Bond counsel indicated that they would require a couple of weeks to prepare all necessary documentation. The proposed terms for the bond ordinance are set at $1,050,000 with a suggested interest rate of 7% and a 15-year term length.
In order to pay the bond, the water fund will have to generate revenue. That translates into another hike in water rates. Lewis cautioned the committee to consider what residents can afford to pay in the form of a rate hike. Myers told the committee he is dedicated to doing what is fair in regards to the rate hikes and the reduction or elimination of the out-of-town worker tax credit. Myers asked the auditor to prepare a report indicating the various revenues to be expected with stages of reductions in those tax credits as well as the revenue generated by its total elimination.
Crawford County Now will continue to cover this developing news story.