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Agency funds at issue
City obligated to fund some outside groups

Wednesday, April 16, 2014

By MICKEY POWELL - Bulletin Staff Writer

Most of the money that Martinsville City Council gives agencies outside city government goes to ones that the city has legal or contractual obligations to support, according to city officials.

Therefore, the city could not stop funding outside agencies altogether, as Councilwoman Sharon Brooks Hodge recently suggested.

The city’s fiscal 2015 budget proposal includes $1,735,522 for 24 outside agencies and programs. That amount is up $9,017 — a half-percent — from the $1,726,505 they are receiving this fiscal year.

About $1.5 million of the total proposed in the next fiscal year is for agencies that the city must help fund, noted Vice Mayor Gene Teague.

For example, the city is legally obligated to help fund Henry-Martinsville Social Services, the Henry-Martinsville Health Department and the joint city-county 911 emergency communications center, officials said.

“They provide a function on our behalf” that the city legally would have to provide and fund on its own if it did not take part with Henry County in those efforts, said city Finance Director Linda Conover.

“It’s much more efficient” to take part in joint ventures whenever possible, Conover said, because it reduces costs to the participants.

Agencies that the city has contractual obligations to help fund include the Blue Ridge Regional Library and the Martinsville-Henry County Economic Development Corp. (EDC), officials said.

Teague recalled that the city once had its own economic development office.

“It cost us way more” to operate that office, he said, than the $279,500 that the EDC is getting from Martinsville in the current fiscal year and is budgeted to receive in the new year that will start July 1.

And, in terms of attracting companies, the city did not “get as much bang for the buck” with its own economic development office, he added.

City Manager Leon Towarnicki said that as far as he can determine, the city has no legal or contractual obligations to fund any other agency proposed to be funded again in fiscal 2015, such as the Boys & Girls Clubs or The Launch Place (formerly the Southside Business Technology Center).

In a letter emailed to the Martinsville Bulletin on Friday, Hodge wrote that she questions “whether it is necessary to raise rates, particularly when the city gives roughly $1.7 million to outside agencies (per year) that do not provide services critical to the operation of the municipality.”

Water and sewer rate hikes are part of the budget proposal.

Later that day, Hodge said via phone that the city should not fund such services and she would vote against the spending plan “as it stands right now” — with funding for agencies — if the rate hikes are not removed from the budget.

Hodge said Tuesday that she did not think about the city’s commitments to fund certain agencies before she made her comments to the newspaper.

Still, she said she thinks the city should quit funding agencies that it has no legal or contractual obligations to support.

Funding such agencies “gets into the debate about what’s the purpose of government,” especially when city finances are extremely tight, Hodge said.

Other council members said they do not necessarily think the city should stop funding agencies providing useful services, regardless of whether the city has committed to funding them or not.

“Each outside agency should be looked at on a case-by-case basis ... as to what it offers citizens,” then a decision should be made on whether to fund it, said Councilman Mark Stroud.

“The vast majority of outside agencies provide very critical services to our citizens,” Stroud said.

Those services “help advance the city’s strategic priorities” to improve the local quality of life, said Mayor Kim Adkins.

Councilman Danny Turner said some outside agencies, such as the Blue Ridge Regional Airport and the library system, use their shares of local funds to leverage state and/or federal dollars.

He agreed that some agencies provide valuable services.

For instance, “we definitely have to have an airport” to be able to attract businesses and industries, Turner said.

But “an agency that can raise its own money (to support itself) ... should be low on the list of (ones) getting taxpayer money,” he said.

Teague said that although he generally supports funding outside agencies due to budget constraints, “I’m not a big fan of adding new ones” to the list of those being funded.

The Piedmont Virginia Dental Health Foundation, which runs a dental clinic that serves indigent people, is the only agency proposed to get city money in fiscal 2015 that is not already receiving some.

The council has made no commitment to the foundation.


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