Galion out of Fiscal Emergency after 14 years


GALION — The City of Galion has achieved financial stability by erasing $8 million in fund deficits and addressing a $4.4 million treasury deficiency, Auditor of State Dave Yost announced today.

Those shortcomings landed the Crawford County city of 10,512 people in a state of fiscal emergency on Aug. 9, 2004, more than 14 years ago. Only two other local governments, both in Adams County, are currently experiencing fiscal emergencies of greater length.

“It’s been about 170 months since Galion set out on a strenuous path to financial recovery,” Yost said. “By finally arriving at its destination today, Galion puts an end to the fifth longest fiscal emergency in the state’s history.”

Among the steps taken to alleviate the city’s fiscal distress, officials reduced staffing levels to save about $386,000 in 2004 and $128,000 in 2006. The city recalled some of the terminated employees as more financial resources became available.

The city yielded additional savings by discontinuing its contributions to the Galion Community Improvement Corporation beginning in 2004. Prior to the change, the city had given $194,000 to the corporation each year. More savings resulted from a three-year salary freeze for city employees.

To improve the city’s revenue stream, voters approved a 0.5 percent continuing income tax levy in 2006 for police and fire operations. This 0.5 percent tax has generated more than $12.5 million in revenue. The city’s total income tax rate is 2 percent.

Other steps taken by the city include:

  • Started charging a vehicle registration tax in 2007 that has generated more than $934,000.
  • Issued $3.5 million in general obligation bonds in 2004. Repayment of the debt was secured through a pledge from the Egbert M. Freese Foundation.
  • Implemented a cable franchise fee in 2008 that has generated more than $1.2 million.
  • Joined the Regional Income Tax Agency in 2012 to enhance tax administration and collection.

“The citizens and leaders of Galion deserve credit for their resourceful response to this fiscal crisis,” Yost said. “I urge Galion’s officials to continue working toward even healthier finances with the skills and knowledge gained during this difficult journey.”

The city also had to satisfy the following requirements to be released from fiscal emergency:

  • Adopted and implemented an effective financial accounting and reporting system;
  • Corrected or eliminated all of the fiscal emergency conditions; no new conditions have occurred, and it appears that, based on the five-year forecast, the city will remain out of fiscal emergency during the forecast period,
  • Met the major objectives of the financial recovery plan; and prepared a five-year forecast in accordance with standards issued by the Auditor of State, and the opinion expressed by the Auditor of State is “nonadverse.”
Galion has erase $8 million in fund deficits; addressed a $4.4 million treasury deficiency

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