The Financial Planning and Supervision Commission for the City of Galion met on July 23. It welcomed LaMar Wyse, the former CEO of Galion Community Hospital, as the third citizen appointee to the commission (Ken Barker and Jim Graff are the other two).
Wyse was appointed by the governor to replace Jack Weishite, who passed away late last year. In August, the city will officially recognize Weishite for his service to the community.
Other commission members are the mayor, city council president and officials from various state offices. Financial Supervisor Belinda Miller (from the State Auditor’s office) went over revenues and appropriations, which were both on target for the halfway point in the calendar year.
Afterward, Wyse asked the question that has been on the minds of citizens for a decade: “What needs to happen to get the city released from fiscal emergency?”
Miller explained that the city must relieve all of the fiscal emergency conditions and correct any items with accounting methods that are not in compliance.
As reported in the State Auditor’s Fiscal Emergency Analysis, published Aug. 9, 2004, the city had 13 fund deficits totaling $10.9 million. Out of six possible conditions in which a local government or public school district may be placed under fiscal emergency, two conditions existed in Galion: Substantial deficit balances in city funds, and a sizeable deficiency when the city’s treasury balance was compared to the positive cash balances of the city’s funds.
Currently all fund deficits have either been eliminated or have a payment schedule to pay down any outstanding amounts.
However, there is a third criteria item that needs to be completed: City officials must demonstrate that the day-to-day operations are satisfactory.
“Folks tend to think that when they go into fiscal emergency, if you get the fund balances in the black then it gives you the criteria to get out,” Miller explained. “The competency of those that are actually dealing with financial matters has a lot more to do with getting out of fiscal emergency than having fund balances in the black.”
The recommendation for release will come from Miller when she feels the city is in a place where it can be successful.
“Basically, we do not want a repeat,” added Commission chair Sharon Hanrahan (from the Ohio Office of Budget and Management). She noted that in the past, some entities have been released from state oversight only to go right back into adverse financial positions.
Mayor Tom O’Leary pointed out that there is a subjective element to determining the city’s “readiness.” He said he has been sensing increased interest in how much longer fiscal emergency will last, particularly from the business community.
O’Leary requested that the administration work closely with state officials to identify a final list of what needs to be done, and to develop an exit plan and timeframe.
Hanrahan encouraged city administration to continue working with the State Auditor staff for the time being.
After the meeting, City Auditor Brian Treisch gave further insight into where the city is at in the process. He explained the procedural policies for financial accounting are being reviewed. All revisions will be brought to city council before the end of the year.
Treisch also said he will meet with Miller next month to review further specifics. “We have a good grasp of what needs done and I’m looking forward to the meeting,” he stated. He added that his past year as auditor has been a constant learning experience and he has a great support staff.
He did not venture a guess on when Galion will officially be out of fiscal emergency but pointed out that the original projection was 10 years. The change in the form of city government and the resulting change in operations has added some time to the process.
The auditor invites any citizen with financial questions to stop by his office at the city building or call 419-462-0645.
Note: All financial audits of the City of Galion are available at the State Auditor’s website.
Investments and rates
Also during the meeting, Council President Carl Watt asked if anything is being done in regards to investments. He referred to the suggestion made by City Treasurer Paula Durbin.
In her report for the second quarter of 2014, Durbin stated that she is putting an investment policy together, because the city’s $26,000,000 is currently earning next to nothing in interest.
“Under State statute without an investment policy we can only invest in Ohio Star and Ohio Star Plus,” Durbin stated in the report. “If we took just $10,000,000.00 and invested in Star Plus we could earn $16,666.00 per month instead of about $78.00. If we invested $20,000,000.00 we could make almost $34,000.00 a month!”
Miller said she would be meeting with Durbin and the firm Meeder Investments later that day. However, an investment policy needs put in place before the city can make any investments. There will be a presentation to the Finance Committee when a draft of the policy is completed.
In the mayor’s report, O’Leary said a consulting firm has been working on a rate study for electric, water and sewer. When recommendations for all three utilities are in this fall, city council will look at all of them. He said the goal is to set rates based more on cost of service structure.
Lastly, the commission approved a new engagement letter with the State Auditor’s office, which provides financial services to the city for as long as it is in fiscal emergency. The new letter runs through June 30, 2015 and the cost is not to exceed $35,000. In the previous contract, $33,795 was reported as the actual amount spent for these services.
The Financial Planning and Supervision Commission’s next meeting is scheduled for Oct. 30 at 9 a.m.