As 2017 comes to a close and we prepare for 2018, I’m happy to report that we had another great year here in the City of Fort Wright due to a strong team effort between our residents and businesses, our City Council, and our dedicated staff.
I am very happy to report that thanks to the vision, financial acumen, conservative spending habits, and dedication of our team, the city remains in a very strong financial position. We have no long-term debt obligations (except for the CERS pension, more on that later), a 5-year capital improvement plan that calls for paying cash for all capital expenditures, and a very strong and growing cash reserve that can help us weather any unforeseen circumstances that may occur. Council and I are committed to maintaining this financial posture for the foreseeable future.
Furthermore, last year’s financial audit continued a long trend of clean audits and we expect a similar result for this year’s audit which will be presented at the January 3rd, 2018 council meeting. A few highlights include: Fiscal Year 2017 expenses were $235,000 less than budget; revenues were $271,575 more than budget; the balance of all funds for the city was $7,280,727, an increase of $710,915 over Fiscal Year 2016. Council, Staff and I take the responsibility of managing your money in service to the community very seriously, and I hope that this snapshot of our financial condition illustrates our commitment. For more detailed information, I invite and encourage you to visit our Financial Transparency Portal (https://fortwrightky.opengov.com/transparency) and you can review the full audit which will be posted to our website once it has been accepted by Council.
This year, Council approved a property tax rate of $2.83 per $1,000 of assessed value versus a rate of $2.70 per $1,000 of assessed value in 2016. As Mayor, I can tell you that my goal, and the goal of Council, is to keep our tax rates as low as possible while providing the highest quality services. Unfortunately, we are facing headwinds on several fronts this coming year including increased healthcare costs and dramatic increases in pension costs. As a result, we felt it necessary to institute an increase in property tax rates to offset these uncontrollable expenses. The increase in pension costs are particularly daunting and disturbing. We have averaged roughly 11% of our total budget (around $465,000) in pension costs for the last 5 years. Late in 2017, we were informed that barring legislative changes in Frankfort during the upcoming session of the General Assembly, our annual pension costs will increase again by 50%. If the current mandates are implemented our pension costs in Fiscal Year 2019, July 2018-June 2019, will exceed $700,000. Put another way, approximately 15% of our total budget will be sent to Frankfort to cover pension costs. Our strong financial position will allow us to sustain these massive increases for a short period of time without impacting the services we provide to you, but such staggering increases will not be sustainable in the long run. We will be working with our legislators to find a more reasonable and equitable solution and will keep you apprised when new information is available. Despite the tax increase this year, our taxes remain in the lower third of Kenton County governments.
Faced with increasing costs for employee healthcare once again this year, Council made a bold decision to tackle this problem head on. Our costs increased by 12.5% which was a 9% increase over 2016 costs. We realized that it was time for a new approach and an innovative solution. After thorough analysis and review, we approved a plan that not only eliminates the 12.5% proposed increase but reduces our costs by approximately 10%. The reduction in costs was accomplished while maintaining a health insurance plan that is the highest quality for our employees and their families. As you can see, we do not intend to simply pass the burden of increased costs onto residents without exploring every possible way to control costs while providing the level of quality services you expect and deserve.
I’m also pleased to announce that the City of Fort Wright earned the Kentucky League of Cities’ Certified City of Ethics (CCE) designation in 2017. Of more than 400 cities in the state, only 18 have earned this designation which entails training and the implementation of policies and procedures that ensure the work of City Council and Staff is conducted in an ethical and transparent manner. I felt it important that we obtain this certification to further emphasize our commitment to ethics and the belief that we, the elected officials and staff, work for you, the residents and business owners of Fort Wright.
Another thing I want to mention is infrastructure. Like most communities in Northern Kentucky, our core infrastructure is aging and needs regular repair and replacement. Several years ago, Council made a commitment to focus on infrastructure which includes a rolling five-year street plan. In 2017, we allocated more than $500,000 to the resurfacing of Reeves Drive, Mt. Vernon Drive, Werner Drive, Kentucky Drive, Olivia Lane, Lorup and Kennedy Road. We also constructed a pier wall on Ft. Henry drive address a serious road slippage issue near the intersection of Pickett Drive. The cost of this repair was approximately $170,000 of which $40,000 was obtained through the Kentucky’s Emergency Road Aid Fund. As promised, we will continue to address infrastructure in 2018 as we to work through our street plan, which will be reviewed in Spring and can be viewed on our website.
In 2017, City Council decided to make strong commitment to the upkeep and maintenance of sidewalks throughout the City. In the early fall of 2017 we entered into a contract with Precision Concrete Cutting to complete a citywide sidewalk inventory and repair program which has been successful in several neighboring cities. We anticipate having the results of the survey by the end of January and will use those results to implement a multi-year plan to address the issues that were discovered.
We were also very fortunate to receive an 80/20 grant from the federal government in 2016 to redesign and rebuild Amsterdam Road between Redwood and General Drive. This project is estimated to cost a little over $3 million, but thanks to the grant funds, the city’s portion will only be about $625,000. The design work on this project began in the spring of 2017 and we anticipate construction will begin by 2020.
2017 brought many changes to our team. Long-time Councilmember Joe Averdick resigned when he retired and moved out of the city. Police Chief Dan Kreinest retired after 39 years of service. Public Works Director Tim Maloney retired after 25 years of service and City Clerk Joyce Woods is retiring December 31st after 25 years of service. The loss of each of these dedicated, exceptional public servants is difficult, but we wish each of them a long, happy and healthy retirement. Dan and Joyce will continue to make Fort Wright their home, if you see them out and about in the community please thank them for their service and congratulate them on their retirement. Sadly, the ongoing Kentucky pension crisis played a role in the loss of several of these long-time team members.
While it’s always tough to lose such talented and dedicated team members, we are fortunate to have some top-quality folks who will be taking their place. Long-time resident and volunteer Margie Witt was selected to fill the Council vacancy. Captain Marc Schworer was promoted to replace Dan Kreinest as the Police Chief. Marc has 27 years in law enforcement and more than 20 years with the City of Fort Wright. He hit the ground running and is already doing great things within the department and for our community.
Jeff Bethell was recently promoted to replace Tim Maloney as the Director of Public Works. Jeff has 12 years of experience with the City and was serving as a Senior Maintenance Worker in the Public Works Department. Jeff is excited about his new role and is already making an impact.
Susan Ellis will be promoted to replace Joyce Woods as the City Clerk. Susan currently serves as our Assistant City Clerk and came to us with experience as a small business owner. Susan has an extensive background with technology and accounting that will prove beneficial in moving the city forward as we look to automate more services as a convenience to residents and to cut costs. If you see Marc, Jeff or Susan, please congratulate them on their promotions, and get to know them, you’ll be impressed with their professionalism, knowledge and dedication.
As we move into 2018 and beyond, economic development continues to be an important part of our focus and our success because we derive a substantial portion of our revenues from business related taxes and fees. We have been blessed with many successes on this front in 2017 including: the expansion of the Christ Hospital facility, the relocation of Von Lehman and Company to the Wright’s Summit Complex, the opening of Planet Fitness, and the Infinity dealership that is currently under construction on Dixie Highway. Additionally, we reached out to local business owners to resurrect the Fort Wright Business Association, and we look forward to working with them to ensure that Fort Wright remains a great place to do business. We will continue to seek high quality businesses and I anticipate more businesses choosing Fort Wright as their home in 2018.
In closing, I would like to thank my colleagues on City Council for their hard work, dedication, and support. It is an honor to serve with the six members of Council, each of whom continues to display a deep commitment to making the City of Fort Wright a great place to live, work and play. I would also like to thank our staff for their hard work and dedication, we are blessed to have top-notch people who are dedicated to serving our wonderful community!
I encourage you again to check out our financial transparency portal and our website where you will find our audits, Capital improvement Plan (CIP), 5-year Street Plan and various other important information. We strive to keep you informed and to operate with the highest degree of transparency and openness. To that end, I also encourage you to follow us on Facebook and Twitter, which we use as a conduit to provide timely and topical information for our residents and businesses.
Finally, please don’t hesitate to contact me, Council, or staff at any time if you have questions, concerns, or ideas, and know that you are always welcome at our Council meetings which occur on the first and third Wednesday of each month.
It is my distinct honor and privilege to serve as Mayor here in my hometown, may God bless you and the City of Fort Wright, and let me wish you and your family a very happy, safe, and prosperous 2018.