Council rejects performance audit idea

DAVE MOSIER/independent editor

Van Wert City Council’s Finance Committee again discussed having a performance audit conducted of city operations, but City Auditor Martha Balyeat, who has been pushing the idea, essentially doomed the project by her own words.

Finance Committee Chair Joi Mergy held a meeting prior to Council’s regular meeting Monday to discuss the need for a performance audit and the administration’s three-year financial plan.

In the past, both Balyeat and Mergy have supported the idea that a performance audit conducted by a team from the Ohio Auditor of State’s Office might improve efficiency in city government.

Early in Monday’s committee meeting, Balyeat questioned some numbers in Mayor Farmer’s three-year plan, providing figures to back up her contention that a 3-percent increase in health care costs and a similar increase in income tax revenues may be too low (for the health insurance costs) or too high (income tax revenues).

The city auditor said income tax revenue increases are critical to the city’s operation, since those revenues are likely the only ones that would increase in the next three years. Decreases or flat revenue amounts are seen in every other current city revenue area, Balyeat stressed.

While complimenting city department heads for their efforts in managing expenses, the auditor said that revenues were the main problem in keeping the city budget in the black.

“We don’t have an expenditure problem … we have a revenue problem,” Balyeat told Council members, while noting that the city has shifted expenses in the past to other revenue areas in order to balance the budget.

“We’re out of places to shift,” Balyeat said, adding that she feels making the city more efficient could help with future budget problems.

City Fire Chief Jim Steele disagreed with the need for a performance audit, noting that he has done some research on those audits, and found they do little to provide helpful data on safety services, such as police and fire departments. Those two departments make up the bulk of General Fund spending, which would be the focus area of a performance audit.

“I think we’re wasting our money,” the chief said, adding that he sees dwindling funding from the state as one of the chief reasons the city’s revenues are falling.

The fire chief noted that a state performance audit would only deal with expenses and not really measure performance — especially in police and fire departments.

In a related item to the performance audit discussion, City Law Director John Hatcher provided a legal opinion on when the .22 percent safety income tax can be used for pay for operating expenses in the police and fire departments.

Use of that money has allowed the city to retain most of its employees and to continue to provide services to local residents.

Hatcher explained that the language of the ballot issue passed by city voters in 2010, which allows the use of up to two-thirds of .22 percent safety capital tax revenues to pay for salaries and other operating expenses in the police and fire departments, is pretty much unequivocal. The law director said the language states that, if minimum staffing levels in either department are threatened by an economic downturn, the .22 percent tax money “shall” be used to maintain minimum staffing levels.

Hatcher also said, though, that use of the safety capital tax money is not meant to be a permanent condition, since the language calls for a review each year to ensure that funding from the safety capital improvement tax is needed to maintain minimal levels.

Balyeat said during the earlier discussion on the merits of a performance audit that, as it now stands, city government would have a hard time making ends meet if .22 percent tax money was not used to fund police and fire operations.

The city auditor had demonstrated then that, without that money, the city would likely operate in the red by 2015.

Council President Gary Corcoran put the coup de grace on the performance audit idea when he said that he agrees that expenses are the primary focus of such audits and that what Van Wert needed was not expense cutting so much as more revenues — something Balyeat already stated earlier.

Noting that the answer to the city’s revenue problems was jobs, Corcoran advised that, if Council wanted to get the most “bang for the buck” out of $40,000 to $60,000 — the amount a performance audit would likely cost — it should spend the money on job creation efforts.

“If you want to spend $40,000 to $60,000, spend it there,” he told Council.

While admitting that there appeared to be little support for a performance audit among City Council members, Mergy did note that efforts should continue to find more efficient and effective ways to operate city government.

Economic development was also the subject early in the evening when Van Wert Economic Development Director Cindy Leis and economic development office staffer Darlene Myers provided an overview of their office’s operations.

Leis noted that she had four goals for the office:

Assist existing local business, which is important because studies show that 80 percent of new jobs are created by existing businesses.

Support efforts to get the Job Ready Site industrial site completed by 2014 and to increase efforts to market it and other local development areas.

Promote the “Welcome Home” branding for Van Wert County, as well as other local and state business initiatives.

Take a leadership role in workforce development.

During what she said was essentially a review of development efforts during the first quarter of 2013, Leis said it was important for local development officials to work with the 17-county Regional Growth Partnership based in Toledo, which includes Van Wert County, and with state development officials to market the JRS megasite. She said she has also contacted officials in Fayette County, which has the only other industrial megasite in Ohio, about ways to promote both sites.

At the present time, Leis said she is also trying to gather accurate workforce data for the county, as well as local workers’ job skills, since that information can help her market the area to businesses looking for specific job skills in its workers.

Myers also provided an overview of the city-county Revolving Loan Fund program and its benefits for local development. Myers noted that 37 business projects have been funded, with 76 percent of those companies still doing business locally. She added that the city could not collect funds due on only four of the 37 projects. Since 1992, the loan fund has provided $2.6 million in loans, with an average of 15 jobs per project created through the program.

Also on Monday, Safety-Service Director Jay Fleming reported that the city brush pick-up program would begin May 6, while noting that tree removal efforts began on Monday using funds received from the Federal Emergency Management Agency to reimburse the city for employee overtime related to the derecho windstorm last summer.

Council also approved on third and final reading, a resolution allowing Fleming to seek bids and award contracts for the construction of a new concession stand at Smiley Park. The facility would replace the concession stand destroyed by an arson fire.