Madison Township will have to show it can live within its means if it wants to get out from under a nine-year-old fiscal caution designation from the state auditor’s office. That could mean a tax levy to keep the township general fund out of the red and provide spending options in a number of areas.
The recommendations were made by Nita Hendryx, chief projects manager for the auditor’s office, after she presented a three-year financial forecast to the township trustees during a virtual special meeting Friday afternoon. Hendryx put together the forecast with the help of township fiscal officer Leanna Rhodes after suggesting that Madison could have the fiscal caution designation lifted if it puts together a new recovery plan that avoids deficit spending.
“You want to show Columbus that Madison Township is making a concerted effort to get out of caution and for us to get out of your hair,” Hendryx said. “Step one is to figure out how we’re going to right that ship in the general fund.”
Finances in the black for next 3 years
Township finances remain in the black for the entire three-year forecast, which includes this year through the end of 2023. However, cash balances drop at the end of each year for the general fund and all road funds and are just $14,000 higher in the fire funds by the end of 2023.
Hendryx noted that the fire funds are in good shape because voters have passed several new levies and called the projected $376,520 figure at the end of 2023 for all the road funds a “nice” balance even though it is down 39% from 2020. The general fund balance had the largest drop of 70% — from $121,710 at the end of 2020 to $35,500 projected at the end of 2023.
Hendryx pointed out that the township has had revenue cuts over the years in areas such as local government funding from the state that have reduced the general fund and has to recoup and make up for those revenue losses. She suggested that an operating levy would be a solution for the general fund. A one-half mill issue would generate around $83,000 to cover the projected deficit spending.
The general fund can pay for anything — salaries, benefits — anything you want to do, the general fund can pay for, but your street funds can only pay for streets and your fire funds can only pay for fire,” Hendryx said. “If you want to have more flexibility, obviously your general fund needs some help.”
Levy possible for road department
Trustee Cathy Swank reported at the board’s July 6 meeting that she is working on a possible levy to pay to replace aging road department equipment.
Hendryx gave trustees until Sept. 10 to develop and submit a new recovery plan to show how the deficit spending is going to be eliminated, including a new three-year forecast based on those ideas and a capital spending forecast that shows what equipment the township plans to buy and how it plans to pay for it. “That will give you 60 days to get your heads together, figure out what the savings would be, where revenue would come from, give you some time to vote on these things and incorporate it into a new recovery plan,” she said.
Trustees chairman Jim Houser said the board probably will hold several meetings to put the new recovery plan together.
Trustees are holding a special meeting on Monday, July 12,at 4 p.m. to discuss the 2021 road paving program. The lone bid of $185,200 for the12 roads on this year’s list was about $35,000 more than the township has left in its road levy paving fund after paying for this summer’s chip and seal program.
Trustees held a second meeting early Friday evening to pass the 2022 tax revenue budget that must be submitted to the county auditor later this month. The document calls for $5,048,611 in revenue as certified by the Richland County budget commission, $211,259 in estimated general fund spending and $4,834,960 in all other funds.