By Jason McFarley, Truth Staff
jmcfarley@etruth.com
Cities across Indiana are struggling to figure out the effect of property tax caps on their budgets. Elkhart is no exception. Mayor Dick Moore estimates that the city will have to cut about $2 million from its 2009 budget and $5 million from 2010 out of a budget that totals about $58 million this year.
Today we begin examining some of the "extras" in the city of Elkhart's budget -- items that go beyond basic services provided by municipal government -- by looking at the New York Central Railroad Museum.
Later this week we'll analyze three parks properties outside the city limits -- Oak Hills Golf Course, Elliott Park and Boot Lake Nature Preserve -- the Elkhart Municipal Airport and the Elco Theatre.
ELKHART -- The freight train passing by on the Norfolk Southern tracks through the city's downtown rattles the stationary train cars at the National New York Central Railroad Museum.
Ron Troyer, who manages the city-owned museum, says it feels like he is really riding the rails as he sits in the immobile observation car on the east end of the grounds.
"We need to point out the importance of that train going by on those tracks right there," he says, raising his soft voice above the clamor of the locomotive laboring through the Main Street crossing.
He likes telling kids who visit the museum on field trips that exactly 39 cars a day travel along that rail line carrying processed Idaho potatoes to McDonald's restaurants in New York City.
"Elkhart wouldn't be what it is today without the railroad," he says. "This is the icon of Elkhart. This is what Elkhart is all about."
In underscoring the significance of trains here, Troyer is also making a case for the importance of a museum that chronicles that history.
Supporters see the museum as a unique jewel among the city's assets, but over time its position has slipped in favor of other spending priorities.
No one expects that to change much in the lean years that likely lie ahead for the city.
Elkhart predicts it will have at least $2 million less to spend in 2009 than it did this year because of the so-called circuit breaker impact from House Enrolled Act 1001, which the Legislature passed in March. The shortfall could approach $5 million in 2010 -- the year that local governments expect to incur the full effects of the new state law.
In the next two years, the circuit breaker will cap property taxes at 1 percent of an owner-occupied home's assessed value, 2 percent for rental properties and farms, and 3 percent for businesses.
"I think we're heading down the road of a local government crisis in 2010, 2011," says Matthew Greller, executive director of Indiana Association of Cities and Towns, an organization that advocates interests of municipalities around the state. "It's going to make providing services more difficult."
Greller suspects that in 2009, local governments will cope with property tax reductions by instituting hiring freezes, shutting down some non-essential services or selling minor assets.
The larger cuts, such dropping 200 jobs and closing numerous park facilities as South Bend proposes doing, would come in 2010.
"I think that's probably the extreme case," Greller says of South Bend, which estimates it will lose more than $21 million in the next two years. "But it's a sign of what local governments are facing."
In Elkhart, Mayor Dick Moore's administration is not yet considering layoffs or selling properties such as the railroad museum. The EnviroCorps environmental education program is ending, but a three-person division likely will continue much of that work.
"You have to look at how much a department is spending and how much it's bringing in," Moore says, adding that he considers the railroad museum an important part of the quality of life here. "That's what (the circuit breaker) is making us do."
The mayor has asked departments to cut back as much as possible next year and even to conserve as much as they can in this year's budget. His hope is to cushion the blow in later years.
The administration will deliver a 2009 operating budget to the Elkhart City Council for approval in August. Moore and his aides were still tweaking it last week, trying to find a way to afford pay raises and increased health insurance costs.
One step Moore is taking to free up money in the budget is to allow departments to spend money on equipment and building repairs only as needed. Rather than estimating a year in advance how much to set aside for maintenance projects, Moore says he would prefer that department managers go to the city council for funding when the repairs become necessary.
"No more speculation about what me may need," he says. "We're only going to budget for what we know we need."
Another step the city is pondering is to bill residents for trash pickup or other services now paid by property taxes. It is all part of going through the budget "line item by line item to see where we can save," Moore says.
The museum's Troyer, who also is a councilman, says he will seek a budget increase for the facility, though that's partly because the museum will take back some of the expenses that had been folded into a larger budget with the Elkhart Parks and Recreation Department. At various times, other departments have picked up some of the museum's costs, such as utilities.
The museum will once again become a stand-alone department next year with its own budget "that has the numbers all in one place," Troyer says.
The museum's budget is not all he hopes to get back on track.
Like managers before him, Troyer says the museum must build a following beyond the enthusiasts who come from across the country to see its model trains, interactive displays and three dozen pieces of rolling stock -- railroad speak for train cars, cabooses and engines.
About 85 percent of visitors are from out of town, Troyer says.
"We need to make local people aware," he says. "A lot of people don't know this is here."
Last week, retired railroad workers from Kentucky and Florida spent hours snapping photos inside the museum and filming freight trains rumbling across the nearby tracks. An Elkhart child-care center brought 40 students to the museum for a tour and brown-bag lunch.
Troyer led half of the student group. Volunteer Dave Overton, president of the museum foundation, led the other half.
Including Troyer, there are three employees to do everything from running the gift shop and popping the complimentary popcorn to maintaining the equipment and processing the payroll.
He could use more staff, Troyer says, but eight or nine volunteers fill the gaps whenever possible.
The museum is working on a five-year plan that will focus on marketing strategy and generating more income. Troyer hopes another boost will come from a restaurant expected to open in the museum's kitchen later this summer, offering daily meals and a catering service. He also sees potential for renting the museum for private events such as birthday parties.
In the meantime, the museum foundation is trying to regain its footing after losing much of its authority in the past several years. The foundation, which is not affiliated with the city, once played a major role in the running of the museum but now supports the venue by raising money and seeking artifact donations.
"We want to be more active in seeking various gifts and grants," says Overton, the foundation's head and a longtime volunteer at the museum.
Councilman David Henke, R-3rd, wonders whether the city needs a museum that cannot pay for itself as officials once hoped it would. He called the museum "a money loser."
He suggested reducing the museum's hours and letting demand from visitors determine how much the city should invest in it.
"There are things you must indulge in for the benefit of the community," he acknowledged, "but the public has indicated what it is interested in, and that's not a railroad museum.
"We should read the signs: If the public's not coming, then stop."
Greller, who leads the statewide cities and towns group, says these are discussions that local governments will weigh more often in the coming months and years. He foresees trouble for many recreational and entertainment outlets that are government-owned.
"You just can't cut public safety. You can't cut the services that are most vital to the community," Greller says. "So it's those other amenities, those kinds of attractions that make someone want to live in a community ... those might be under additional scrutiny."