Finance Committee Member Warns Park Hills It Could Become Insolvent
This article has been updated to include a reference to Cooper Ambjorn-Olsen expressing her opinion as a private citizen and not as a representative of the city's finance committee. The headline has been corrected to reflect that a member of the committee spoke, as an individual citizen, and that the committee itself did not offer an opinion.
The financial situation in Park Hills is dire, according to a member of the city's finance committee who warned city council this week.
Following a presentation of the annual city audit by an outside firm, and a presentation about the city budget by an outside consultant, Cooper Ambjorn-Olsen shared her concerns.
"In six to eight months we will start spending our reserve," Ambjorn-Olsen, who spoke as a private citizen and not in her capacity as a representative of the finance committe, said. "In forty-eight months, the city will go bankrupt."
In a fast-paced report aided by slides and numbers, Ambjorn-Olsen alluded to the auditor's concern about the lines for revenues and the line for expenses coming closer together.
"Revenues are flat and expenses are up, mostly due to large, non-anticipated expenses," Ambjorn-Olsen said. "Looking forward, it is like knowing your kids are going to college next year, the roof needs replacing, and the driveway needs replacing. We have a problem here and now. The math is the math. We're not moving fast enough, there is no urgency."
Ambjorn-Olsen advised the audience to stop accepting waffling from the council and to demand to know what the city government is doing to fix this projected insolvency.
"We need to put aside the bickering," she said, "or in five years we won't be living in Park Hills. We'll be living in Fort Wright or Covington because our city will be insolvent."
Ambjorn-Olsen cited forthcoming large expenses such as new emergency radios, increased pension contributions, and the Audubon Forest project.
"This fiscal year we are in the black," she said. "But with the accelerated pension costs and other costs we will start spending our cash reserves next year."
Councilwoman Pam Spoor acknowledged that the city faces higher pension costs as well as high legal costs but she said she didn't agree with the dire report, which council agreed to post on the website.
Another resident, a real estate agent, also disagreed with the report and urged the city not to post it to the website. The real estate agent said that she has sold twelve houses in Park Hills in the past year and that buyers complain about high taxes and that homes are highly priced.
Resident Carl Gerrein asked Ambjorn-Olsen about where the money is going.
"The issue is revenue," Ambjorn-Olsen said. "Our city is not taking the compensating rate, or compensating plus four, so our property taxes have not kept pace with other cities. It doesn't matter how well you manage your checkbook if your paycheck gets smaller and smaller."
Auditor John Chamberlin said at the beginning of the meeting that a problem Park Hills and other smaller cities have is a segregation of duties, and he said Park Hills has worked on its problem.
He reported that the city should have a fourth of its unrestricted funds on hand in cash, amounting to $523,000, and that the city had $639,000. He said that the general fund was higher than it had been and explained that the income line on the graph was relatively flat, and that there was concern that expenses would keep rising.
City budget consultant David Baker confirmed what Chamberlin said, and explained that under his guidance, the capital Improvement plan was being worked on, and would help better prepare the city for major purchases like fleet vehicles.