Upper Arlington's top administrator said capitalizing on recent momentum in economic development and the continued streamlining of municipal operations are among the city's highest priorities in the new year.

Upper Arlington's top administrator said capitalizing on recent momentum in economic development and the continued streamlining of municipal operations are among the city's highest priorities in the new year.

Upper Arlington had banner years in economic development and income tax collections in 2011 and 2012, but that won't keep the city from aggressively recruiting new businesses in 2013 and working to aid in the retention and expansion of those already here, according to City Manager Theodore Staton.

Staton last month said the city will seek to build on recent projects such as Lane Avenue Redevelopment LLC's planned development of the former Lane Avenue Baptist Church site, which is expected to yield a five-story hotel and restaurants with bars, including a J. Liu restaurant and bar.

The goal will be to continue to increase income tax collections, which in 2012 were projected to exceed $15 million for the first time in UA's history.

Staton said that - along with the likely continued reduction of city staff - will be needed to offset revenue losses Upper Arlington will face in 2013 and 2014 due to the elimination of the estate tax and continued cuts in local government funding by the Ohio General Assembly.

"Certainly, we hope the year brings progress in terms of economic development," Staton said. "We're hopeful the Lane Avenue project will stay on schedule and the hotel will open mid- to late-summer, and the retail and office space will open shortly thereafter."

City officials have estimated the Lane Avenue project could generate more than $711,000 in new, annual property taxes and tax-increment financing deals with the developer to help fund road and other infrastructure projects with private dollars in lieu of tax payments.

That infusion is coupled by the rebirth of the Kingsdale Center in recent years; Staton said the city is positioning itself for more commercial and office growth.

Lane Avenue will continue to be a focus, where Upper Arlington City Council established a community entertainment district (CED) in 2011.

Last November, Upper Arlington voters passed Issue 24, which made each parcel in the 39-acre CED eligible to sell alcoholic beverages. Staton said that move made the corridor even more marketable.

"We know there's more interest along Lane Avenue," he said. "Anyone at all that was reluctant because of (the alcohol issue) no longer has that reason."

Last March, the city hired Bob Lamb to lead Upper Arlington's economic development efforts.

Business growth is a perpetual challenge for the city because it's landlocked and has no new land for development. So, Lamb this year will target Upper Arlington's top-50 business taxpayers in hopes of assisting their retention and expansion needs.

However, business growth alone won't fill the estate tax and local government gaps, Staton said.

Ohio's estate tax, imposed on the transfer of a "taxable estate" of a deceased person, was eliminated by the Ohio General Assembly on Jan. 1.

Upper Arlington traditionally directed the first $2.1 million in estate taxes collected to the city's general operating fund, and the balance went to capital improvements such as road and water line maintenance.

Last month, Staton said the city was on pace to collect approximately $9 million in estate taxes in 2012, another record. He said UA generally collected $3.5 million to $4.5 million in annual estate taxes.

"On a less positive note, we're going to spend a lot of time in 2013 figuring out what life after the estate is going to be like," he said. "It's unfortunately clear the infrastructure needs more investment than it's seen, and we're going to lose one of the primary sources of revenue for capital improvements."

Upper Arlington Community Affairs Director Emma Speight said the city - which has an approximately $28.8 million operating budget in 2013 and about $13.2 million in reserve funds - expects to conduct a community survey this year to poll residents' priorities in regard to municipal services and programs.

The survey also is likely to address declining revenues and gauge if residents favor service reductions or an income tax increase as a possible solution.

Regardless of responses, Staton said the municipal workforce is expected to see continued reductions in 2013 as a cost-cutting approach.

"We, for example, are75 positions smaller than we were 20 years ago," he said. "That's gigantic.

"I think there will be another 10 positions targeted for elimination (in 2013, hopefully, through attrition, but we're not promising that."

Other proposals for reducing expenses include merging the city's 911 dispatch center with those of Dublin, Hilliard and Worthington; reducing costs to mow and maintain city parks; and launching a municipal advertising program in which UA will solicit paid ads in publications, on its website and selected public spaces.

"We still have a strong balance-sheet organization," Staton said, noting the city has three triple-A financial ratings. "It's just that picture changes rapidly with the loss of the estate tax and local government funding. "