Hamilton Twp. climbs out of decades in the red

Posted at 6:00 AM, Oct 01, 2015

HAMILTON TWP. -- It's only been a year since Ohio declared a fiscal emergency -- the worst designation possible -- in Hamilton Township. But now, the township is expected to emerge from state oversight and take back control of its own checkbook.

State Auditor Dave Yost will join township officials and a state-appointed oversight committee to announce the township's regain of financial independence at a special meeting set for 10 a.m. Thursday at the Hamilton Township Administration building, 7780 S.R. 48.

"This will give us some autonomy so that we can begin working independently again," said Dave Wallace, a first-term trustee who began pushing for fiscal reform when he took office in January 2014. "It's great news, but the fact is, we shouldn’t have been here in the first place."

Hamilton Township had been awash in red ink for more than a decade before capturing the attention of state officials last year.

Yost placed the community of about 24,000 residents in fiscal emergency in April 2014 after state-certified audits of the township's books revealed numerous violations of state law dating back to 2002.

Among the most egregious violations found by the audits were deficits of $2.5 million in the township's road and bridge and new administration building funds and a $1 million-plus treasury deficit.

Yost appointed a state oversight committee to take over the township's checkbook until officials could develop a plan to eliminate the deficits and a five-year plan for spending.

Wallace said the deficits were never the result of the township not having enough money, but rather due to hundreds of accounting errors made through the years by Jackie Terwilleger, who had served as the township's publicly elected fiscal officer since 1980, coupled with poor oversight by township trustees.

Terwilleger retired in March 2014 amidst allegations she had mismanaged the township's finances. Trustees appointed one of the township's most vocal critics, Ray Warrick, to serve out the remainder of her term through March 31, 2016.

Officials say the process of climbing out of fiscal emergency required the administration to make some tough — and long overdue — decisions on spending.

"It forced us to do something that’s never been done in decades, which is to scrub all the expenses going out, renegotiate some of those contracts and we actually lowered taxes in the process," Wallace said.

Warrick, the township's current fiscal officer, said while Hamilton Township has spent more than $100,000 in the past two years by hiring consultants and accountants to help unsnarl its finances, the additional scrutiny and belt-tightening has led to savings of more than $150,000 a year.

Those savings allowed the township to shore up its cash reserves to use for capital expenditures and emergency expenses and adopt a more balanced budget, he said.

"No one now can budget a department to spend more money than the amount of tax dollars certified to come in that year," Warrick said. "That may seem like a simple thing, but it's not even looked at that way in most government entities. It's that kind of thinking that will sink the ship." 

The process of financial rebuilding has also meant changes in the way township officials conduct business. Financial reports, budgets and expenses are now posted on the township's website in what officials say is a renewed embrace of transparency.

"We were one of the first to put our checkbook online," Warrick said. "We’ve gone beyond in that we’re putting all kinds of reports out there that the public can go to the website and search in real time."

Residents have not welcomed all of the changes. In scrutinizing its finances, officials found that the township's fire department was overfunded and sought to overturn a $1 million fire levy passed in 2006.

Despite opposition from fire department supporters, trustees in July passed a resolution by a vote of 2-1 to instruct the Warren County auditor to no longer collect the levy. The move saves taxpayers $34 a year per every $100,000 in property valuations, Warrick said.

This summer, township trustees also mulled over a cost-saving plan to privatize the township's fire department, but the proposal was quickly abandoned after two public meetings saw standing-room-only crowds fiercely opposed to the idea.

The township continues to struggle in how it will fund its road and bridge budget, which was forecasted to have a negative balance of $323,267 in 2014.

Warrick said this spring, trustees dissolved a tax increment financing district for capital road improvements in the area of state routes 22/3 and 48. The dissolution freed up $2 million to go into the township's general fund where it can be used for road maintenance, he said.

That bought the township some "breathing room," said Warrick, allowing it to spend about $600,000 a year for the next three years on road improvements. Beyond that, voters may be asked to approve a roads levy, officials say.

Warrick said while the fiscal emergency status represented a black mark for the township, the process has allowed it to emerge a better and more efficient steward of taxpayer dollars.

"When you look back over time at all the mistakes that were made in not knowing where money was or spending on things without proper scrutiny, there was plenty of waste and abuse," he said. "The good news is, under the new operating conditions, we were able to save money in other ways."