Ohio Auditor Dave Yost released an analysis Wednesday that sizes up the fiscal health of the state’s 247 cities and 88 counties.
Comparing the study to a doctor’s physical, he said there are significant warning signs of financial troubles ahead for many communities, including Akron, Canton and Ravenna.
“There’s not a lot of wiggle room in the fiscal health of our governments,” Yost said.
The auditor’s office measured 17 financial indicators ranging from general fund balance to debt service, and rated each one as having a positive, cautionary or critical outlook.
Akron was assigned a critical outlook for six indicators, including the ratio of general revenue to net expenses, debt service and liabilities. It also had a cautionary outlook for four items.
Any city or county with six critical outlooks — or a combination of eight critical and cautionary ratings — is considered at high risk for fiscal emergency.
Only four cities fared worse than Akron for the number of critical ratings: Canton (9), East Cleveland (7), Girard (8) and Norwood (12). Ravenna and Maple Heights each had six.
“What this report shows is that many cities in Ohio continue to struggle to recover from the Great Recession and from the state’s slashing of the local government fund and elimination of the estate tax,” Akron Mayor Dan Horrigan said in a prepared statement. “Comparable cities like Canton and Cincinnati have similar indicators.”
He noted that he put together a “Blue Ribbon Panel” to help make financial recommendations when he first took office last year.
“I have already taken several key steps forward to implementing some of the panel’s recommendations for improving our overall fiscal health, including: revamping employee health care, reforming an outdated retiree supplemental health benefit system, critically evaluating our fees and collection rates citywide, and implementing efficient, cost-cutting policies and technology across the board,” he said.
Horrigan added that additional reforms are coming.
Yost cautioned that people can’t draw conclusions from just one indicator and that the data “doesn’t mean bad management of the local government,” many of which have faced declines in revenue.
Eighty-two percent of counties and 92 percent of cities have at least one cautionary or critical indicator.
One of the biggest concerns, Yost said, is that local governments have not invested enough on capital assets and infrastructure because it’s easy to put off that spending.
“It’s a danger sign,” he said.
Cuyahoga Falls, Fairlawn, Kent and Norton received a perfect positive outlook score for all the indicators.
Akron-area counties fared well. Only Stark received a critical outlook for the ratio of general revenue versus net expenses.
The results, based on 2015 data, are available in an online searchable database at www.ohioauditor.gov/fhi. The state plans to update the list, which doesn’t examine villages or townships, twice a year.
Rick Armon can be reached at 330-996-3569 or rarmon@thebeaconjournal.com. Follow him on Twitter at @armonrickABJ .