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  • Summer Issue 2011

      • SPOTLIGHT:
         Local Government Toolkit
        A New Way of Doing Business for Ohio.

      • The Ohio Performance Team:
        OPTimizing Performance in Ohio Government

        SIDEBAR:
        What is Six Sigma?

      • L.E.A.P Fund
        Making Performance Audits
        Affordable for Local Governments
        The First Six Recipients

      • Download pdf
        Best Practices Summer 2011

SPOTLIGHT:

Local Government Toolkit
A New Way of Doing Business for Ohio

By Kevin Holtsberry – Public Affairs Staff Writer

Ohio’s struggling economy has meant financial distress and hard choices for many local governments. In reality, there simply is not enough funding at the state or local level to keep doing business the same way it has always been done.

Ohio’s struggling economy has meant financial distress and hard choices for many local governments. In reality, there simply is not enough funding at the state or local level to keep doing business the same way it has always been done.

Recognizing this, Auditor of State Dave Yost introduced a set of proposals to the state operating budget to provide local governments with new tools that offer greater flexibility in addressing their financial challenges. The proposals, known collectively as the Local Government Stabilization Toolkit, were included in the biennial operating budget (House Bill 153) passed by the General Assembly last month and signed by the Governor.

The new law streamlines and simplifies the process for townships, municipalities and villages who may want to voluntarily merge. It also strengthens Ohio’s fiscal warning and repair process to allow earlier intervention and assistance when local governments are in fiscal distress.

“Ohio is facing what may be its most challenging fiscal environment in a generation,” said Auditor Yost. “State and local governments need to find ways to provide skinnier, smarter government for the people they serve. The inclusion of the toolkit in the budget is an important first step.”

Voluntary Mergers

Prior to the changes proposed in House Bill 153, laws governing the process for merging local governments were too complex and cumbersome; in some cases, mergers were not even allowed.

The toolkit removes existing barriers and streamlines the process to help local governments ready to build stronger, better communities.

The legislation allows two or more neighboring townships to voluntarily join forces. Previously, townships seeking to merge had to give up the township form of government and partner with a village or city. Citizens were often unhappy about having to give up their township identity.

The new process is voluntary and initiated at the local level. Most importantly, township leaders can pick their own partners, including other townships, and have the flexibility to decide what works best for their community. Trustees can place the question of whether to merge on the ballot, or the process can be initiated by the people.

Provisions also were added that streamline the merger process for townships to merge with municipalities and villages or cities to merge into townships.

Fiscal Distress –
Earlier Intervention

Understanding that financial problems are hard to fix the longer they go undetected, the new law creates a “fiscal caution” designation for local governments in fiscal distress to allow for earlier detection and to offer assistance to those entities that need it. Guidelines for making this determination will be developed by the staff in the Auditor’s Local Government Services Section.

The bill also streamlines the process for overseeing governments in “fiscal watch” and “fiscal emergency,” and requires specific actions and timelines to insure local governments are taking the necessary steps toward financial recovery.

Prior to the enactment of these provisions, it was possible for a fiscal crisis to linger with little or no progress and no real consequences for failing to take action.

Financial Oversight & Planning Commissions

In current law, most local governments in fiscal emergency are required to form a financial oversight and planning commission comprised of state and local leaders.

The purpose of the commission is to create a financial recovery plan and implement the necessary steps to return the entity to good fiscal health.

For local governments with populations of less than 1000, however, the Auditor of State will now serve as the sole financial supervisor. Under this new provision, local leaders drive the process by developing their own financial recovery plan, but state auditors will be available to assist the local community on a day-to-day basis.