A copy of the ordinance, having been placed on the desks of each member of Council prior to introduction, was read by title.

Vice Mayor Byington explained that this is the second reading of a supplemental appropriation ordinance that will allow the City to make two expenditures not already included in the 2019 budget. One is the early payoff of a liability owed to the state of Ohio, and the other is the purchase of a vehicle for use by the Director of Engineering and Public Works.

The Ohio Police & Fire Pension Fund (“OPFP”) was created by the Ohio General Assembly in 1965 to replace hundreds of individual local police and fire pension plans. At the time, many cities including Oakwood had pension liabilities on paper exceeding the assets needed to pay future retiree benefits. In other words, once the state assumed control of local pension plans, many local governments owed money to the state. These liabilities were placed on a 65 year payment schedule, with payments beginning in 1970 and continuing through 2035.

The current payoff figure for Oakwood’s remaining liability is $422,137, which continues to incur interest at an average rate of 4.25 percent. Due to the difference between that interest rate and the amounts generated by city investments, Council has determined that it costs the city more to carry this debt, and paying off this liability early is the most prudent use of city resources. By paying off the liability now, the city will save approximately $175,000 in interest expenses that would otherwise accrue between now and 2035.

It should be noted that 0.3 mills of the city’s inside-millage property tax revenues, which amounts to approximately $96,000 annually, have been dedicated to servicing this liability. Once the liability is paid off, the Montgomery County Budget Commission has approved the reallocation of that money to the city’s General Fund going forward.

The other expenditure is for a vehicle for the Director of Engineering and Public Works. The city has not employed a full-time Director in that department since the previous Director resigned in the fall of 2014. Those duties have been assumed by the City Manager in the interim, but a full-time Director of Engineering and Public Works will be hired later this year. The city no longer has a vehicle available for use by the person in that position and needs to acquire one.

In total, this supplemental appropriation will authorize the transfer of $454,000 from the city’s General Fund, with $422,000 going to the Police Pension Fund and $32,000 going to the Equipment Replacement Fund in order to pay for these expenditures.

Thereupon, it was moved by Vice Mayor Byington and seconded by Mr. Epley that the ordinance be passed.

Upon call of the roll on the question of the motion, the following vote was recorded:

There being three (3) yea votes and no (0) nay votes thereon, said ordinance was declared duly passed and it was so ordered.

A copy of the ordinance, having been placed on the desks of each member of Council prior to introduction, was read by title.