LIMA — While Ohio’s economy has shown recovery from the 2008 recession, a closer look reveals there is the potential for financial stress for the state’s county and municipal governments.
The Ohio Auditor’s Office released its second annual Financial Health Indicators report, evaluating 17 different fiscal indicators to gauge the financial health of counties and cities in the state. Those indicators include factors such as unassigned fund balances, changes in general fund balances and changes in total revenue.
While Ohio Auditor Dave Yost said the vast majority of counties and cities are not experiencing fiscal stress, an increase in cautionary indicators suggest that increased fiscal stress could be on the horizon. While all counties, taken together, had a total of 36 critical outlook indicators in 2015, that number rose to 64 in 2016. Cities also saw an overall increase in critical indicators, from 275 in 2015 to 301 in 2016.
“Our cities and counties are generally well-managed,” Yost said. “Unfortunately, those leaders sometimes are challenged by financial factors beyond their control: A major employer downsizing or relocating, or reductions in federal or state funding. They’re working hard to be good financial stewards, but it’s clear there is elevated financial stress in many of our local governments.”
Allen County and Auglaize County had a critical indicator in the ratio of general revenue in governmental type activities to net expenses, while Allen County also had a critical indicator in debt service expenditures compared to total revenues. Putnam County did not have any critical indicators.
The City of Lima’s only critical indicator was a chance in general fund unassigned fund balances. Wapakoneta did not have any critical indicators.
In a Dec. 5 letter to Lima City Council, Finance Director Steve Cleaves said the city maintained its financial stability despite the recession.
“General fund revenues going forward into 2018 and 2019 are expected to grow to a level that will maintain a cash balance of 20 percent or more of general fund spending, which is at the upper range of best practice guidelines,” he said.
While Ottawa was not included in the report, Treasurer Barb Hermiller said the village has been able to stay afloat financially. The village is also working on adjusting its water and sewer rates to account for upcoming projects.
“We’ll be building a wastewater screening facility,” she said. “That’s still in the design stages. We have some big projects coming up in those areas.”
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