GALION — After more than a decade, the City of Galion no longer is in a state of fiscal emergency.

Auditor of State Dave Yost released a report Thursday stating Galion’s release from the fiscal emergency category after “erasing $8 million in fund deficits and addressing a $4.4 million treasury deficiency.”

Galion Mayor Tom O’Leary said he is more than pleased to have the city back in control of its operations.

“It certainly is time for the city to be back on our own and on our own course to be making our own financial decision,” O’Leary said.

Yost reported Galion was in a state of fiscal emergency for 14 years, the fifth-longest fiscal emergency in state history. Only two cities, both in Adams County, currently are experiencing emergencies of greater length, according to Yost’s release.

Galion was placed in fiscal emergency status Aug. 9, 2004, after it was found that former Galion Finance Director William Bauer had embezzled at least $87,000, according to an article from 2005 by The Associated Press.

Bauer pleaded guilty to five counts of embezzlement, according to the article.

O’Leary said there were many more individuals who should share the blame of Galion being placed in emergency status, as other administrators should have seen what was happening.

The situation eventually helped Galion drop its charter and elect O’leary as mayor in 2013.

Because of being placed in the emergency status, city officials reduced staffing to save $386,000 in 2004 and $128,000 in 2006. Some employees were returned to work once funds became available, according to the state’s report.

Also, in response to the emergency, voters approved a 0.5 percent continuing income tax levy for police and fire operations. The levy generated more than $12.5 million for the city as the city’s income tax rate was raised to two percent.

O’Leary said in the mid-2000’s there was discussion about disbanding the Galion Police Department and contract with the Crawford County Sheriff’s Office and to have the Galion Fire Department regroup to a volunteer department status.

“A lot of thanks needs to be expressed to the residents and taxpayers for being patient on something that lasted a long time,” O’Leary said. “There was no real negativity over how long this issue took and then the voters’ willingness to increase the income tax on two separate occasions to support our fire and police, the residents and taxpayers are the unsung heroes in this.”

According to the Auditor of State Office report, 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 in a press release. “I urge Galion’s officials to continue working toward even healthier finances with the skills and knowledge gained during this difficult journey.”

O’Leary said credit also must be given to city council and auditor offices and both the local and state level.

The city also had to satisfy the following requirements to be released from fiscal emergency, according to the auditor’s report:

  • 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.”

O’Leary said it is the goal of the city’s current administration to continue to be in a fiscally conservative mindset, which he said will bode well for the city’s future.

“Overall, this is just a good day for the city and Galionites,” O’Leary said.

A complete copy of the report may be found here.