Friends – this is an important must read from the FRONT PAGE of today’s Cincinnati Enquirer about the status of the township’s finances. It’s worse than we thought but it’s not something we can’t overcome. Thank you again for your trust & support in working to right-size Hamilton Township’s finances. – Dave
by Rachel Richardson
HAMILTON TWP. – Marr Park was to become one of the largest parks in Warren County when Hamilton Township officials unveiled plans for it in 2010.
The sprawling 149-acre park on Nunner Road was envisioned with 32 multi-use sports fields, tennis and basketball courts, shelter houses, picnic and playground areas, wetland and woodland areas, 6 miles of walking trails and a fishing lake, among other amenities.
Instead, the site – into which officials have already sunk more than $930,000 and which was supposed to open to the public in 2012 – has been abandoned, a victim of what a group of residents and some officials say is more than a decade of financial mismanagement.
The situation raises broader questions about the ability of local and state authorities to oversee finances of fast-growing areas in a timely way. It’s a cautionary tale of how missteps in adding amenities can cripple such municipalities’ promising trajectories.
“We have a roundabout to nowhere,” Trustee David Wallace said of a circular junction built in 2012 to accommodate the expected storm of traffic to the park – a useless expense since no road connects the roundabout to the site.
Marr Park was going to be a symbol of growth for Hamilton Township, whose population (23,556) increased during the last decade at a faster rate (144.6 percent) than any other community in Butler, Clermont, Hamilton and Warren counties, the 2010 Census found. Instead, the stalled project has become a symbol of waste and lax budgetary oversight, said Wallace, a 41-year-old Iraq war veteran and Ohio National Guard captain who was elected to his first term last fall.
“Trustees were under the assumption that they had the money because (township Fiscal Officer) Jackie Terwilleger said we had the money – only to find out later it wasn’t there,” said Wallace. “They made (spending) decisions without verifying. The checks and balances were not there.”
Township officials in 2010 spent more than $50,000 to draw up a plan to develop the park in phases over the next few years. Construction began in the fall of 2010 with the grading of 13 soccer fields. Officials then secured an $825,000 25-year no-interest loan through the Ohio Public Works Commission of which it spent $608,943 to construct the roundabout.
The township received its second round of bids for the road leading into the park from the roundabout and a parking lot last year when an accountant hired by the township told officials the money had run out, township Administrator Gary Boeres said. “Once we questioned if the funds were really there, the project was immediately put on hold,” he said.
Officials instead approved a 5-year, 1-mill parks levy to go on the ballot last fall, but 59 percent of voters rejected it. Boeres says the township now has “absolutely no plans” for opening the park.
The shelved project is one of a long string of setbacks for the financially beleaguered township, which has struggled with snarled finances and looming deficits for more than a decade but has finally captured the attention of state – and local – officials. Audits of the township’s finances by state-certified auditors for fiscal years 2002-2009 reveal numerous violations of state law, many of which are repeat violations.
In January, state Auditor Dave Yost announced he’s directed his office to complete the township’s audits for 2010-2013 and analyze spending to determine if the township should be placed in a financial distress status.
In June, Moody’s Investors Service withdrew its rating of the township’s $2.1 million debt due to a backlog of audits for fiscal years 2008-2009 and 2010-2011. Yost said the delay in those audits – the township’s 2008-2009 audit was released in December and its 2006-2007 audit wasn’t released until 2010 – could be due to sloppy bookkeeping.
Much of the blame falls on Terwilleger, an elected official who’s held the fiscal officer seat since she was appointed in 1980 and has run unopposed in the last three of four elections, Wallace said. “I do not believe Jackie Terwilleger has the skill set required to perform the duties that she’s been elected to do,” he said.
Terwilleger, who oversees the township’s books and provides budget information upon which trustees rely to approve expenditures, did not return The Enquirer’s repeated requests for comment. A biography listed on the township’s website shows she took two years of business classes and one year of accounting and business law courses at an unnamed college in Columbus along with additional training in various subjects.
“I hate to point fingers, but it was the fiscal officer’s responsibility to certify that the money was available to spend. We operated based on the numbers the fiscal officer gave us, and she said they were available,” said Trustee Kurt Weber, an engineer who was elected to his first term in the fall of 2009. He joined current Trustee Gene Duvelius, who did not return The Enquirer’s request for comment, and Becky Ehling, who was defeated by Wallace last fall.
Weber said he began to question what he said were “inconsistent” numbers provided by Terwilleger and pressed trustees to hire an outside accountant in the fall of 2012 to assist her. In June 2013, accountant Mark Hurst of Deerfield Township-based Hurst, Kelly & Co. notified officials the township’s bank balances showed a $2.5 million deficit.
Township building funds show $2.3 million deficit
State audits reveal the township has long carried negative cash balances in several funds from 2002-2009, the most significant of which are in the township’s building funds to cover the cost of a new township administration building that opened in 2001. In 2002, the building fund had a negative balance of $493,140. That ballooned to $1,685,724 in 2005 and $1,967,016 in 2007. Officials last week revealed the building fund is forecast to have a negative balance of $2,373,679 by year’s end.
Hurst said the township, with a $15 million to $20 million overall budget, has been able to meet its financial obligations by taking money from other funds to cover funds with deficits – a violation of state law for which it’s received multiple citations in state audits.
Weber said he doesn’t remember seeing the township’s 2006-2007 audit, which the state auditor’s office released three weeks after he took office, but he wishes he had “dug deeper” into the township’s finances.
He blames errors by Terwilleger for the township’s persistent deficit in its building funds, to which money was to be transferred from the township’s general fund. Those transfers occurred and the bills were paid, but Terwilleger didn’t subtract the payments from the general fund balance, he said.
In addition to the building funds deficit, the township’s roads and bridges fund is forecast to have a negative balance of $323,267 in 2014.
When asked how the township plans to fulfill its financial obligations given its projected deficits, Weber said, “I don’t know.”
Wallace said the township must now spend tens of thousands of dollars to fix “the fiscal officer’s failures.”
• Trustees last year approved the creation of a new financial coordinator position at an annual salary of $45,000 to manage the fiscal office’s day-to-day activities.
• A portion of the township’s human resource manager’s duties – and her $50,000 annual salary – are now spent managing payroll and payroll deductions, a task formerly performed by the fiscal officer.
• The township has paid two accountants more than $46,000 since September 2012 to correct accounting mistakes and better manage its finances. It has also switched to the Ohio Uniform Accounting Network (UAN) software developed by the state auditor’s office, which Yost said is designed to force municipalities to operate within Ohio budgetary law and will resolve some of the township’s noncompliance issues.
Terwilleger is now acting in a “review capacity,” said Boeres, but accusations of misconduct continued into last month.
• In an email from Boeres to trustees dated Feb. 11, Boeres accuses Terwilleger of either “purposefully delaying getting the UAN system ready” or possessing “a lack of knowledge about the UAN system.”
• A retired police officer notified the township Feb. 13 he didn’t receive scheduled retirement and insurance benefits in January and February. Officials say Terwilleger failed to respond to a Jan. 4 request from the Ohio Public Employees Retirement System for information to activate the benefits.
• Township trustees unanimously voted Feb. 19 to refer Terwilleger to the Warren County Prosecutor’s Office for a criminal investigation on charges she allegedly backdated a series of checks – totaling about $134,000 – in January and issued them without trustees’ approval, as required under Ohio law. Officials also asked the township’s law director, Warren Ritchie, to investigate whether other accusations of unauthorized spending by Terwilleger violate the Ohio Revised Code.
• At the Feb. 19 meeting, Wallace confronted Terwilleger about $4,631 in late fees incurred by the township to OPERS after he said Terwilleger failed to make timely payments for much of the past two years. Terwilleger personally reimbursed the township the full amount on Feb. 26, saying the penalties were “my fault.” Documents obtained by The Enquirer on Wednesday show the township has incurred more than $25,000 in late fees to OPERS in the past 10 years.
Officials say their options are limited when it comes to Terwilleger: As an elected official, whose term expires March 31, 2016, she answers to voters, not trustees.
Trustees hope to organize workshops in March or April at which the township’s department heads will work with accountants and community members to resolve the issues, Weber said. But that isn’t “something that could reverse a negative $2.5 million fund balance in one fell swoop.”
About the audit violations
State audits conducted of Hamilton Township’s finances from fiscal 2002-2009 reveal a total of 25 violations of state law, many of which are repeat violations.
Violations for most years cite inaccurate transaction records that required significant corrections by consultants, such as transactions listed in the wrong account or funds incorrectly recorded as investments or expenditures.
Other repeat violations say the township budgeted to spend more money in funds than it anticipated collecting, spent more money from funds than trustees approved and spent money without obtaining a required purchase order for those expenses.
The township received repeated violations for a failure to deposit cash receipts in a timely manner. In one case, consultants had to adjust township records for 2005 to account for more than $250,000 of receipts that were not deposited “for an extended period” and instead were recorded as 2006 receipts. Ohio law requires public money to be deposited within three business days of its receipt.
All audits for those years list funds with negative cash balances, mostly in the township’s EMS and building funds. In 2005, the township had a combined negative $1.9 million in its EMS and two building funds. That number rose in 2009 to a $2.2 million deficit in just its building funds.
Ohio Auditor Dave Yost said that, while state audits may reveal violations of state law, his office is a reporting agency and doesn’t take enforcement action against municipalities with violations.
“The goal of my office isn’t to penalize people, it’s to get it right,” he said. “Our goal is to get the books in order, get the processes working right.”
However, if certain budget violations prevail, the auditor can place municipalities in one of three fiscal distress statuses depending on the severity of the financial situation. The most severe of these statuses is a fiscal emergency, in which a municipality’s finances are taken over by the state Financial Planning and Supervision Commission until the municipality can meet certain conditions to terminate the status.
Click here to see this article on Cincinnati.com.
Previous Enquirer articles: