Feb
10

Ohio Auditor Report Shows that Stow is on Firm Financial Footing

Not much happened at last night’s meetings. We gave out a handful of proclamations to worthy recipients, but did not really discuss anything meaty.

Instead of giving you a rundown of those items, I will blog to you about something with more substance…

In January, the state auditor released a report on every Ohio city, identifying their strengths and weaknesses from a financial perspective. The relevant data is from 2015 and it includes assets, condition of assets, liabilities (debt), revenue from income tax, revenue from other government sources, and cash position. Click here to see the report: Final – 06C55-FHI-2015 .

I have great news to share: Generally speaking, Stow passed the tests with flying colors.

Of the 17 statistics that the auditor reviewed, Stow received high marks on 14 of them. On the other three, the auditor only issued a “caution.” But the full picture shows that Stow is also in good shape with those other 3 statistics:

  1. Change in unassigned fund balance (category 2) – If the number is falling, the auditor will issue a caution. Stow’s fund unassigned fund balance fell in 2015, but just barely. And this was after two previous years of terrific growth. It’s not a concern.
  2. Percentage of general fund revenue that exceeds general fund expenditures (category 8) – The auditor wants to see revenue from the general fund exceeding expenses by at least 5%. In 2015, Stow’s general fund revenue exceeded expenses by about 3%. But if you look only at the general fund, you do not get a full picture of the city’s finances. Instead, if you take a look at all revenue and all expenditures (on a government-wide basis), Stow has met the 5% threshold for the past four years (see category 9).
  3. Ratio of debt service expenses to total revenue (category 12) – In order to avoid a “caution,” the auditor wants this ratio to be less than 10%. In 2015, Stow’s ratio was 12%. But, as you know, there are lies, damned lies, and statistics. This is a statistic, and it does not take into account the fact that Stow has been paying down debt at a rapid rate, in order to ease the tension on its balance sheet. In fact, since I was elected in 2009, we have reduced Stow’s total debt by 40% (if you wish, compare this with the federal government’s debt during the same period). Stow is exactly where it should be, from a debt position. You can’t hold it against a city for repaying debt. That’s like saying your household budget is better off with more restaurant dinners instead of an extra mortgage payment.

It may be useful to compare Stow with its neighbors. Stow had 3 caution marks with zero “critical” problems. Meanwhile, Hudson had 3 cautions and one “critical” issue. Tallmadge had one caution and one critical. Munroe Falls had 4 cautions and 2 criticals. Tip of the cap to Cuyahoga Falls and Kent, which had zero cautions and zero criticals.

Indeed, there is a lot of good news for Stow taxpayers in the report. It’s even more noteworthy when you compare it to where Stow was positioned as recently as seven years ago. I can assure you, the picture was ugly then.

But when I was elected, we began a campaign to improve the city’s balance sheet — while keeping in tact all of the services that residents rely on. We urged the repayment of debt. We pressured non-performing assets to make a turn-around or be cut free (courthouse, Fox Den). We emphasized the importance of economic development and a business-friendly regulatory and tax environment.

The auditor’s report is proof that the plan has worked. But we must remain vigilant, because history has shown that big spenders will seek to spread their wings after fiscal conservatives have righted the ship.

Council will meet next on February 23.

Jan
13

Council begins tradition of generosity

Here are my notes from last night’s city council meeting:

New Tradition

I have made it no secret that I believe City Council is overpaid. It goes beyond mere opinion and into fact; compare our council pay with surrounding communities and you’ll see, based on our population, each Stow council member should be paid about $10,000 per year, instead of $15,000. What’s more is that the Council President receives an extra $1,000 — for a salary of $16,000.

I have raised this issue in the past, and it failed to gain traction. In fact, it caused the council to be fractured.

Last night, I proposed a solution that solves part of the problem and was not contentious. In fact, the vote was unanimous.

My idea was to start a tradition for the Council President to donate his/her extra $1,000 every year. The donation must go to a 501(c)(3) charity that supports Stow residents who are in need. This donation would be optional, but if the President declines to donate the $1,000 in a given year, then the Council would be required to consider legislation to lower the President’s salary. The President will use the donation to help publicize the worthy cause.

I donated my $1,000 from last year to Bulldog Bags, Inc., which is a Stow-based charity that provides bags of food to Stow-Munroe Falls students who are on free/reduced lunches–for them to take home during the weekend. It’s as worthy of a cause as we have in Stow, and I think we put the City’s money to good use with this donation.

Council of Governments legislation

As you are aware, the City of Stow is creating a council of governments (a “COG”) for 911 dispatch services with Cuyahoga Falls, Tallmadge and Summit County. The bylaws of the COG will be important, to ensure that Stow is not giving up too much authority, to ensure that the funding mechanism is fair, and to ensure costs are kept under control.

Last night, we voted unanimously to adopt Brian Lowdermilk’s proposal to require City Council to have final approval over the dispatch COG’s bylaws. I added an amendment to ensure that Stow’s COG representative is an elected official — so there will be some accountability to voters.

The law directors are still hammering out the COG documents. At this point, no legislation has been introduced to adopt the COG.

Meeting Notes

Press Releases