The Village of Lyons last week instituted a one percent income tax after a mandate by the Ohio Environmental Protection Agency to upgrade its water tower helped to wobble the village finances.
The income tax gives Lyons the distinction of being the last Fulton County municipality to issue one.
Village Administrator Tanya Lumbrezer said fulfilling the OEPA mandate to install an aeration and blower system in the water tower cost over $100,000. It was funded by a $66,000 Community Development Block Grant loan through the Fulton County Commissioners and money taken from the village water fund.
The system and blower were installed in July 2015. After what Lumbrezer called “careful consideration,” the village council approved three readings of an ordinance over the summer to initiate the income tax. Municipalities are permitted under Ohio law to approve a tax of up to one percent without voter approval.
The income tax will take from earned income only. It will not affect Social Security, retirement or pension incomes.
Its collection and distribution will be overseen by the Cleveland-based Regional Income Tax Agency (RITA) which provides services for Ohio municipalities.
Lumbrezer said the cost of the mandated project was a blow to village coffers, since the state continues annually to decrease its financial support. That said, the village likely could have remained without an income tax had the OEPA not mandated the water tower project.
“But the state slowly keeps taking money away from the town and villages,” Lumbrezer said. “There just isn’t as much coming in as we need. It’s just one of those things, that it’s not going to be easy to replenish.”
Lyons receives its water from the City of Wauseon, and hoped a similar mandate the city received from the OEPA would have made the village water tower upgrade unnecessary.
“We were trying to work it out to not have to do it,” Lumbrezer said.
OEPA spokesperson Dina Pierce said Lyons had numerous violations for exceeding the maximum contaminant level for total trihalomethanes (TTHMs). The chemical can develop as drinking water is disinfected, and exposure to high levels over about 20 years can cause serious health issues.
The village was ordered in 2011 to address the problem. After commissioning a study, it received a recommendation to install a water tower aeration system. In January 2015, it received a reminder from the OEPA of its obligation to resolve the TTHM situation.
Pierce said while the agency recognizes the costs involved with the aeration project, its priority is making sure public water systems provide safe drinking water.
“We can work with communities on funding options, including low interest or interest-free financing from Ohio EPA,” she said.
She added that Lyons was included on a list for potential funding through the OEPA’s loan program, but withdrew the water tower project.
Village Fiscal Officer Luann O’Hara said the income tax also was initiated because the village’s share of government funds distributed by the county has not increased over about the last five years.
“Expenses continue to go up, and so the only other income we have is our water. So it was either raise the water bill or implement the tax,” she said.
The village anticipates that the income tax could bring in approximately $90,000 annually after a period of three to five years. The revenue will be used to maintain village streets, vehicles, equipment, and sidewalks.
Future tax credits for residents could become available if revenue from the tax is sufficient.
Lumbrezer said the idea of a village income tax was tossed around in previous years but was deemed unnecessary until now.
“We’re small enough. We don’t have all the projects as the bigger towns. But we do want to keep moving forward and update things,” she said. “(And) to save up for anything that needs to be updated or replaced – you’re not going to be able to get grants for that.”
Among future projects will likely be a new water tower, which Lumbrezer calls “a huge undertaking.”
Lumbrezer said complaints about the income tax were received from several residents after both the village and RITA sent out notices. Most, however, took it in stride.
“Most of them have actually been very good at saying, ‘I’m surprised you didn’t have one,’” she said. “For the most part, everybody’s been pretty understanding.”
David J. Coehrs can be reached at 419-335-2010.