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Posted on: January 18, 2018

City of Alliance Placed in Fiscal Caution by State

NEWS RELEASE

FOR IMMEDIATE RELEASE
January 18, 2018

CONTACT

The Office of Mayor Andreani, Mayor of Alliance

Phone: (330) 821-3110

Email: mayorPallianceoh.gov

Mayor Alan Andreani, Auditor Kevin Knowles, and President of Council Art Garnes each received word this morning that the City of Alliance was placed in Fiscal Caution by State Auditor Dave Yost. Fiscal Caution is the lowest state of fiscal distress; the more serious conditions are Fiscal Watch and Fiscal Emergency.

It was Andreani who requested that State Auditor Yost's office review the city's finances that led to the fiscal caution declaration. The designation is the first of three tiers of fiscal crisis that the state can declare. Fiscal caution is the lightest, with fiscal emergency the most severe.

The Auditor's review found that Alliance has not been able to maintain a one month balance in the General Fund each year for 2015 and 2016. The State Auditor also cites low year-end balances in other funds for those years. The city is given 60 days to formulate a fiscal-recovery plan. If one is not submitted in time, "the auditor shall declare that a financial watch condition exists," said a release from State Auditor Yost's office.

"The city's fiscal well is starting to run dry," Auditor Yost said. "Without immediate action, I'm concerned the city's financial condition will decline even further in the years ahead."

Alliance City Council President Art Games said "state and county cuts in funds to local municipalities as well as the elimination of the estate tax has led to this Declaration. Additionally, the idling of a major manufacturer interrupted an additional important revenue stream."

The city has been working to restructure both the work force and the negotiated agreements with the city's 13 bargaining units over the last four years to avoid the Fiscal Caution designation.


The General Fund is the primary fund causing the placement in Fiscal Caution. Carryover balances in other funds were also scrutinized and are part the Auditor's Declaration. The General Fund represents approximately 12 million dollars out of a total City Budget of 52 million dollars. The money in each of the other funds can't be transferred to the General Fund by law to pay for General Fund expenses. The General Fund expenditures include the Police Department, Fire Department, Engineering, Park Department, and Administration Department as well as portions of the Health Department.

Andreani stated "our efforts of restructuring and cost cutting for the last five years have been able to stave off the Fiscal Caution designation over that time period. The State Auditor's staff has been extremely helpful in guiding us to delay what turned out to be inevitable. Our employees also have had to endure considerable change in contracts and the labor force, but in the end we couldn't make up the 1.2 million dollar shortfall each year since state funds have been decreased, nor could an aggressive economic development program have enough impact fast enough".

"I am confident the combined efforts of the Administration, City Council, the State Auditor, employees and the citizens of Alliance will be able to meet this challenge and emerge with a stronger Alliance."


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