Reynoldsburg City Council named five people May 23 to a special ad hoc committee to explore possible permanent budget fixes for the city.

Reynoldsburg City Council named five people May 23 to a special ad hoc committee to explore possible permanent budget fixes for the city.

The recommendation was made by Mayor Brad McCloud, city auditor Richard Harris and council president Bill Hills.

Harris said having a committee that is not involved in the city's day-to-day operations could provide an honest appraisal of how to fix the problem. The five people appointed to the committee Brad Sprague, Dave Reidel, Linda Smith, Bill Shorthill and Larry McGrath have expertise in banking, investment, finance and business ownership.

One item the committee could discuss is a suggestion Harris made at Monday's council meeting to transfer $2 million from the city's capital improvement plan (CIP) fund to the general fund in order to provide an adequate budget balance at the end of 2012 to cover the city's day-to-day operating expenditures.

Harris said Reynoldsburg could lose $1.75 million from its tax budget over the next four years, according to early calculations on the state budget.

Council discussed the proposal but took no action on it.

Hills asked how much would be left in the CIP fund if the transfer were to be made.

"About $1.25 million," Harris replied. "At this point, we're only putting, on average, $200,000 a year in the CIP and if you look at what other cities about our size are putting in, we're putting in 2 percent of income tax money and Hilliard puts in 30 percent."

Even so, Hills said, the city has still been able to maintain fairly substantial road and building improvements over the past few years.

"We've gotten a lot of credit for that, but it only stretches so far, and we've stretched those excess savings account dollars about to the point where we can't stretch it any more," he said.

Harris said when Abercrombie & Fitch left Reynoldsburg 10 years ago and moved to New Albany, the city lost between $1.5 million and $2 million per year in tax revenue.

"We've never really recovered from that," he said. "And our cost of medical insurance in the last 10 years has gone up $1.2 million.

"The last time this city had a tax increase was Jan. 1, 1982, when gasoline was 56 cents per gallon, and today, it's almost $4 per gallon," he said.

Harris said Reynoldsburg officials have made tough decisions over the last 30 years, but the way the state budget is shaping up, the city may not be able to avoid making major cuts.

"With these changes the state is making, it's now a choice between finding additional sources of revenue or cutting off our parks and recreation department, or cutting off 10 or 12 police officers," Harris said.

"Very tough decisions are going to have to be made as to which direction we want to go," he said. "We've kicked this can down the road for the past 10 years. We're clearly at the end of the road and something's going to have to be done one way or the other."

Hills said the ad hoc committee will announce soon when it will meet; the meetings will be open to the public.

He said the committee will review, evaluate and discuss the existing city budget, including all known or anticipated modifications to expenses and revenues, and will recommend short-term and long-term solutions to the budget issues faced by the city.

Hills said the committee will report back with recommendations to city council at its first meeting in July.