General fund balance declining

PERRY TWP. — Township trustees said they need to come up with a plan to address a more than 77 percent decline in general fund cash over the past four years that’s expected to grow to 84 percent this year.

“We need to have a better financial plan and better management of our funds,” Trustee Jim Armeni said.

The revelation concerning the general fund bottom line came during a report given at Monday’s meeting by two representatives of the Local Government Services office within the Ohio Auditor’s Office, who provided a one-page analysis of the general fund cash balance which showed a continuous decline since 2014.

According to the report, the ending balance totaled $368,821 in 2014, then dropped to $248,589 in 2015, $203,097 in 2016, $156,356 in 2017 and then $83,226 in 2018. Overall, that was a decline of 77.43 percent. Based on the 2019 budget in place for the general fund, the ending balance for this year will drop to $58,469, bringing the total reduction in balance down by 84.15 percent.

“This is a little alarming,” LGS Chief Project Manager Nita Hendryx said.

Plain and simple, the expenditures in the general fund have been outpacing the revenue, leading to the cash balance dwindling.

“You have to start living within your means,” LGS Project Manager Timothy Lintner said.

Armeni asked if they had looked at the various levies the township relies upon to pay for police, fire and the various tax sources for road and bridge money.

“I think they might be out of balance, there’s none for general operations,” Armeni said, adding he didn’t know if they needed to let one go and then put a levy on for the general expenses or not.

Hendryx commented that the general fund is their gold. It can help out when other funds are down, but nothing can help the general fund. She said “you have to protect it like it’s your own.”

“There’s no question when we look at this we have to take some measures,” Trustee Don Rudibaugh said.

What those measures are at this point appear unknown. When asked what’s next, Lintner and Hendryx explained that the township could request a financial analysis, one that would go into more detail. When asked the same question, Armeni said “we need a plan and I’m not quite sure how to go forward.”

Fiscal Officer Susan Johnston said the general fund covers the salaries, benefits and retirement for the trustees and fiscal officer, health insurance, property insurance, office supplies, fidelity bond premium and utilities for the administration building on North Ellsworth Avenue.

“The biggest drain on the general fund has been supplementing the police department,” Johnston said, although she said it’s been less in recent years.

Trustee Chair Cliff Mix said he would hate to have to put another tax issue onto the residents. A recent large expense that came out of the general fund last year was more than $42,000 for the storage of a stolen backhoe at a towing facility.

Rudibaugh said it’s just as Lintner explained during his report, either find a way to increase revenue or cut expenses.

Armeni had arranged for LGS to take a look at some of the numbers and come to the meeting, thinking it would be a good idea. He commented that he said a year ago that the township had to change the way it does business.

During their report, the LGS personnel reviewed what should be happening, with Lintner noting the reconciliations should be done on a monthly basis and provided to trustees on a monthly basis so they know how much money is in the bank. For entities who end up in fiscal distress, the reconciliations are often one of the issues.

Hendryx said the trustees should be getting financial reports each month that should match the bank statements so they know what’s coming in and what’s going out in each fund.

In talking about Perry Township in particular, a graph illustrating the decline in the general fund balance appears like a slide, starting higher at the top and going down.

The township will be having a public hearing for the 2020 tax budget at 6:30 p.m. July 29, followed bya special meeting to take action on the tax budget, which must be submitted to the Columbiana County auditor’s office.