The lobby of the Warren County Administration Building, which was was completed in 2000 and is payed for. Warren County has no general fund debt, but being so frugal has come with a price.(Photo: Tony Jones, The Cincinnati Enquirer)
LEBANON, Ohio -- As the nation teeters on a fiscal cliff due to growing deficits, one Ohio county is sitting pretty.
County is one of nine Ohio counties with no general obligation-limited
tax debt as of Dec. 15, according to a Cincinnati Enquirer analysis of
financial data provided by the Ohio Municipal Advisory Council. The
other eight are generally more rural than Warren.
governments prefer to pay as they go and do much less in terms of the
scale of their capital projects so that they can finance a lot of
current operations," said Mark Robbins, a professor in public policy at
the University of Connecticut.
That's the approach in Warren
County, which has grown rapidly as a Cincinnati exurban area and held
down property taxes. It pays cash for big-ticket items, including $12
million for a new administration building in 2001. But there's a
downside. Its Common Pleas Courts Building, for example, has employees
working in hallways because of overcrowding and commissioners' refusal
to go into debt for a large expansion.
conservative approach - "aversion to debt," Commissioner Dave Young
calls it - dates to the late 1980s, according to former Commissioner
Mike Kilburn, who served 28 years on the board before leaving office two
Kilburn, a new commissioner in January 1983, recalls
that the county couldn't meet its payroll. So a bank advanced the county
$500,000. Kilburn said he and other commissioners asked, " 'Do we need
it? Can we afford it?' And many times the answer was no. ... We just ran
that budget like it was our own company (and) like it was our own
The county has experienced tremendous growth during this
period. Its population more than doubled from 1980 (99,276) to 2010
(212,693), making it the second fastest-growing county in the state.
Warren's approach is uncommon in Ohio, Robbins said it's not that rare
for local governments to have no general obligation debt because other
forms of financing are available. Those include leasing arrangements and
revenue-backed debt that's not general obligation.
obligation-limited tax debt is approved without a vote of the public and
is backed by the county's full faith and credit, an unconditional
pledge to pay debt. The county can raise taxes to pay for general
obligation debt and the debt is paid with any general revenue such as
court fees, or sales or property taxes.
"General obligations have
the advantage of ... offering the lowest borrowing costs for the
governments that use that form of financing," Robbins said.
Hamilton County, also growing strongly, has $753.6 million in sewer
revenue bonds and $19 million in parking revenue bonds for riverfront
garages, in addition to its $76 million general obligation debt. The
median debt for Ohio's counties is just under $7.3 million; Hamilton and
others are above this level and half (including Warren) are below it.
Warren County has $30.2 million in other types of debt for such things as road, water and sewer projects.
said his county has a philosophical approach of spending only what the
county collects in revenue. Also, he said the county has had the
foresight to plan and pay cash for big-ticket items.
that during his tenure Warren County paid cash for a new juvenile
detention/juvenile-probate courts building (1995), an expanded jail
(1996) and a new administration building (2001). What really helped was
that commissioners "had the courage to increase our sales tax from 5.5
percent to 6.5 percent," which was done in anticipation of building a
new 911 center. (Ohio's sales tax is 5.5 percent and localities can pass
an increase and keep that portion.)
The frugal governance has enabled Warren County to:
- Have the lowest county property tax rate in Southwest Ohio.
give raises to county employees. Non-union workers have received
increases of at least 2 percent every year since 2002, except in 2010.
layoffs during the current economic downturn. The one exception? The
county let go a building inspector about three years ago due to the
- Maintain a sizable reserve fund. The county is projected to have about a $20 million reserve fund next year.
a higher bond rating (i.e. credit score), which allows a county to
borrow at a lower interest rate. Of course, Warren isn't interested in
taking on debt.
But being so careful with money comes with consequences, including:
- The county has "fallen significantly behind in vehicle replacement" for the sheriff's office, according to Sheriff Larry Sims.
average daily population of the county jail in 2010 (266 inmates)
exceeded its 207-inmate capacity. Double bunking has increased capacity
to 280. The county used to send inmates to Butler County but is now
housing all of itsprisoners.
- A planned $6 million building that
will be built next year next to the Common Pleas Courts Building will
solve the space problem at the courts building for only about a decade.
- Increased costs (inflation) for capital projects as the county waits to save the money.
County Administrator Dave Gully said the county has deferred many
capital projects because of the economy. He said three years ago county
buildings "were in horrible shape" because of deferred maintenance.
Problems included roof leaks, foundation leaks and electrical and
plumbing problems. He said the county has caught up on about 50 percent
of them. He said some buildings still have major roof issues and the
remaining 50 percent will be done during the next three to five years.
The tough task ahead for Warren County is how to stay debt-free as the county continues to grow.
Mattson, associate professor of public administration and public policy
at Northern Kentucky University, said a growing county that keeps a no
general obligation-debt policy can't keep up with its infrastructure
needs. He said counties in Florida in the 1970s and '80s fell behind on
infrastructure such as widening roads, building improved water and sewer
lines and constructing fire stations.
Mattson recommended that
Warren County update its public works facilities and expand its jail. He
said the county's new building next to the common pleas courts building
should be built to meet the county's needs for about 20 years, not a
few years. Otherwise, "You're always playing catch up," he said.
But Young said he has no intention of borrowing money for daily operations and is against raising taxes.
live within our means," Young said. "The most successful thing we do in
Warren County is having the ability to be able to tell people 'no.'"
Longtime resident Van Harlingen of Turtlecreek Township said commissioners are doing a responsible job.
of these days this economy will turn around and you'll start seeing
this county blossom and I think it'll be because our commissioners have
been careful with the money," she said. "We won't be saying 'OK, we're
ready to build an arts center' and they're going 'Oh, sorry, we're in
Paul McKibben, The Cincinnati Enquirer