Cash-strapped townships trying to cope with less

Keeping Marion Township roads safe has been a priority for Bob Unrast for 20 years.

But he and the other 41 trustees across the county are facing a task more daunting than plowing snow in a blizzard. They must continue the duties they were elected to fulfill while township revenues dwindle.

"We've got to keep making more cuts," he said.

One of his concerns is Marion Township Park on St. Johns Road. The bustling site for athletics and other community events is maintained and financially supported by the township.

"We may have to close it up, you never know," Unrast said.

Loss of revenue

Thirteen of 14 townships in Mercer County expect expenses to exceed revenue this year. Five reported expenses over revenue in 2011. So far, the difference is covered by funds carried over from previous years.

"It's bare bones ... we'll have about $10,000 more in expenditures than receipts this year," fiscal officer Ed Sites of Center Township said.

Dublin Township is projecting nearly $126,000 more in expenses than revenue this year but fortunately has more than $440,000 in carryover funds, fiscal officer Robert Maurer said.

One of the factors fueling the financial crunch is a 25 percent loss in local government funds this year and again in 2013. The cuts this year range from $2,399 to $16,500 for the 14 townships. Their total allotment dropped from $341,020 in 2011 to $239,030 in 2012.

Also devastating to townships who reap big bucks from farmland settlements is the phase-out of Ohio estate taxes by January 2013. Center Township received $200,000 the last three years in estate taxes.

Blackcreek Township fiscal officer Guy Brigner Jr. said the loss will have a huge impact.

"In our township, there is a lot of older people who own a lot of ground," he said.

Other disappearing revenues include the tangible personal property tax paid by businesses and the kilowatt-hour tax paid by utility companies.

The biggest revenue sources for most townships are gasoline taxes (about $80,000 annually) and various tax levies. Each will net more this year in real estate tax revenues due to an overall 6 percent increase in property values. The townships' share of the additional $2.55 million was not yet available.

Unavoidable expenses

The townships' largest expenses are linked to road maintenance, such as for fuel and equipment. This year's mild winter is helping keep costs down.

Many trustees said they are decreasing or eliminating roadway paving in favor of a cheaper "chip and seal" method. It currently costs about $80,000 to pave one mile of road, they noted.

Each township also pays an annual stipend - based on total property valuations - to support the county health department. The payments range from $4,111 to $20,519. This obligation would be removed if taxpayers in March approve a countywide tax levy to help fund the health department.

Generating income

Townships have few options to create new revenues.

"They've lost so many sources of revenue and have little recourse," county auditor Randy Grapner said.

Trustees can implement, without voter approval, a maximum $5 motor vehicle license tax. Five local townships already have it in place. Another option is tax levies, which require voter approval. However, most generate "dedicated" funds that only can be used for specific purposes such as fire or EMS service.

"That's why we can be rich in cash and poor in cash at the same time," Maurer said.

In November, Marion Township trustees attempted to pass a five-year, 1-mill levy for operating expenses. Despite 80 percent of township levies in Ohio passing last fall, Marion's did not.

"I think Marion Township is the bellwether for others in the area," said county prosecutor Andy Hinders, legal adviser for the townships. "If they failed, they all will."

Tom Lochtefeld, fiscal officer for Gibson Township, said a new funding source would be nice but agreed the timing is bad.

"We're not considering other revenue sources because we don't want to burden taxpayers," he said.

Limited options available

New legislation now allows the 1,308 townships in Ohio to merge and share services, if voters approve. Legislators also are discussing the elimination of township governments with the burden shifted to counties.

Longtime county commissioner Jerry Laffin said merging townships might be a possibility but eliminating them would place a heavy burden on the county engineer's office, which likely would pick up many of the duties. He questioned who would be responsible for what and how the funding stream would flow.

The elimination of townships also would require a complete change in government operations; townships operate under Ohio Revised Code, he said.

Gov. John Kasich this week announced that townships may get some financial relief from the development of the state's oil and gas industry and casino proceeds. No details were revealed.

State mandates

Char McCann, a resident and taxpayer of Jefferson Township, was outraged in November when trustees opted to turn off four emergency alert sirens as a means to save money. She and others felt there were better options such as less road paving and more contributions by trustees toward their health insurance.

"Their salaries and benefits are 30 percent of the budget," she said, adding the jobs are part time. "They need to start looking at sacrificing themselves instead of the public."

Trustee and fiscal officer salaries are set by the state, based on township budget amounts, and made public in the Ohio Revised Code. The last increase was in 2008.

The officers are entitled, by law, to health insurance if they want it. The amount paid by each township or its officers is set by each township's three trustees.

A few townships provide full insurance policies with all out-of-pocket expenses and deductibles paid by the township. Most townships pay up to a set maximum toward insurance costs.

Jefferson Township last year paid more than $84,000 in health insurance expenses. The township funds a health reimbursement account to pick up deductibles that the trustees and the fiscal officer would otherwise have to pay.

Center is the only township that doesn't provide a health insurance plan for its officers.

"We opt not to take it ... it's a gentlemen's agreement," fiscal officer Ed Sites said. "We don't think we deserve it. Our paycheck is big enough."

The majority of township officers describe their current funding status as "stable," but they fear what the future holds. As the state continues to shift its tax burden to the local level, times will get tougher, Hinders said.

"It's like an assault on local governments," he said, adding public input is important. "People need to become aware of what's going on."

Ohio Auditor David Yost recently stated at a recent Associated Press legislative session that he expects more than 30 percent of local government entities this year to struggle financially.

"We'll see more local governments in fiscal distress," he said. "There certainly will be additional entities, not just cities, but townships and maybe a county or two."

Duties of township officers:
Trustees

Each township has three trustees who are elected to four-year terms. Duties include:

• Maintain roadways and signs. The work includes snow/ice removal and mowing side ditches and intersections. Some townships award contracts for the work.

• Cemetery care.

• Maintain the township house and equipment.

• Field calls from township residents.

• Oversee the township zoning board and zoning board of appeals.

• Ensure adequate fire and EMS service.

• Attend monthly meetings.

Fiscal officers

A fiscal officer/clerk serves each township for a four-year term. Duties include:

• Responsible for all financial transactions and records, including a state audit every two years.

• Prepare monthly bank statements and year-end reports to state.

• Attend meetings and record minutes and all resolutions.

• Prepare annual budget to county budget commission; give estimated resources to the auditor.

• Keep records of zoning permit issues.

• Attend required conferences and training sessions.

Trustee and fiscal officer salaries are set by the state auditor's office based on the budget of each township.

Each township decides what type of health insurance policy or reimbursement, if any, to offer its officers. Locally, most reimburse for premiums, out-of-pocket expenses and/or deductibles up to a maximum amount for privately-obtained policies.

- Shelley Grieshop