City of Twinsburg - Historical Financial Analysis Reports Updated

Citizen Auditors of Ohio has released the 2019 Historical Analysis Reports for the City of Twinsburg. These reports offer an indepth analysis of the Governmental Funds (Combined reports of General, Special Revenue, Debt Service, and Capital Improvement Funds) which represent the overall financial performance of governmental operations as reported on the last ten years of audited financial reports available from the Ohio State Auditor website. This specific report can be viewed at the Active Citizens of Twinsburg (ACT) website link: https://activecitizensoftwinsb... or at the Citizen Auditors of Ohio website link: https://citizenauditorohio.com...

The 2019 indepth report of the General Fund (major governmental operating fund) for Twinsburg represents over 90% of the total of all Governmental Funds. The analysis in its entirety can viewed at this ACT link: https://activecitizensoftwinsb...

Citizen Auditor, Sengstock stated that the General Fund's Net Fund Change reported a positive $800,144; however, the deficit spending continuing since 2015 is unabated since Twinsburg leadership has reduced the average spending on Capital Outlay (roads, storms sewers, public safety equipment, public service equipment, public buildings, etc) by approximately $2.4 million in 2019. Sengstock, further stated the audited report for 2019 had reported $2.2 million more spent on expenditures than revenues received for the Gleneagles' Golf Course Fund; clearly indicating a major change in spending priorities from public infrastructure and safety/service equipment in favor of a non-essential recreational program (Gleneagles' Golf Couse Clubhouse).

Mr. Sengstock has repeatedly referred to the borrowing of $7.125 million dollars in long-term debt to construct a full service restaurant, bar, banquet facility, and golf clubhouse as a 'financial boondoogle' that will potentially drain Twinsburg's General Fund of $25 million dollars over the next 25 years. Sengstock, a retired finance director and citizen auditor has estimated that including the payoff the principal and interest on the debt and recurring property taxes (due because of privatizing a portion of the operations), and other maintenance costs for the new Gleneagles' Golf Course Clubhouse, the annual drain on the General Fund will be $1,000,000 to $1,100,000 million just for the Clubhouse; add in the annual average of $311,100 for general golf course operations, that totals $1.3 - $1.4 million annually for these recreation programs. The long-term financial impact of such fiscal mismanagement is further evidenced by the voters passage of Issue 24 at the general election in 2020 (an initiative petition drive led by resident, Sue Clark and others) which reduced City Charter - Section 6.01 to 2.0 mills from 7.0 mills the amount of unvoted property taxes Twinsburg's City Council can levy without a vote of the people.

Mr. Sengstock, also released the 2019 updated financial analysis of the Gleneagles' Golf Course Fund as reported on the audited financial report filed with the Ohio State Auditor's Office. This report contains considerable information and many indepth graph's that has been updated annually since 2017, when the new unvoted Gleneagles' Clubhouse project began. That report is available at the following ACT link: https://activecitizensoftwinsb...

There is also a historical analysis of the Twinsburg Fitness Center available which was prepared from the audited financial reports available at the Ohio State Auditors website. This report is available at the following ACT link: https://activecitizensoftwinsb...

Mr. Sengstock stated that the Fitness Center like the Gleneagles' Golf Course are enterprise funds; meaning the City operates these recreational facilities on a non-profit basis but like a business operation and with the full knowledge that both operations require annual transfers from the General Fund to cover the operating losses: the actual annual average General Fund transfers for the Golf Course Fund since 2010 is $674,713 and transfers from other funds of $418,681 for an annual total of $1,093,394; the annual average General Fund transfers for the Fitness Center for the same time period has been $311,611. Mr. Sengstock, did note that many communities recreational programs require General Fund support, however, he noted that Twinsburg's subsidy of the Gleneagles' Golf Course Clubhouse are substantial leaning strongly towards excessive.

Mr. Sengstock estimates that the General Fund; over the next 25 years; will be required to transfer at least $1.4 million to these recreational programs just to keep them afloat. The City of Twinsburg has collected an average of $22 million in income taxes annually since 2010-2019; therefore it is factually feasible to assume the Golf Course and Fitness Center programs will be taking 6.4% off the top of Twinsburg's major revenue source (of the General Fund) to subsidize these operations: 5% for the Golf Course and 1.4% for Fitness Center. These should be interesting figures for Twinsburg taxpayers, given the current Mayor and Council's recent attempts to levy unvoted property taxes in 2021; which was stopped by a citizen's initiative petition that was successfully passed by voter in 2020. It appears the Mayor and Council are now determining how many property tax mills to place on the ballot in 2021 ballot (along with the Twinsburg Schools 5 mill renewal recently announced) for voter(s) consideration.

Given the current economic conditions and political conflicts (see previous articles on this issue) in Twinsburg; the Mayor and Council have some tough self-created financial decisions facing them in 2021. The Mayor and Council also insist the property tax increases are needed for police and fire pensions but many taxpayers believe the real reason for the increases are not related to the pensions or economic issues but the self-inflicted 'financial boondoggle' created with the new unvoted Golf Clubhouse. Mr. Sengstock has continually reminded the Mayor and Council that the 'financial boondoggle' they self-imposed on Twinsburg taxpayers could have been avoided had they sought out voter consideration in 2016; rather than committing to borrow $7.125 million without a secure or voted gauranteed funding source; as was the precedent done when Twinsburg purchased Liberty Park.

Twinsburg voters will ultimately be called upon to bail out the fiscal misteps of their Mayor and Council. Is it possible the voters will look to change city hall leadership in Twinsburg? Only time will tell. As Thomas Jefferson said 'We elect the government we deserve'!

Loren Sengstock, Citizen Auditor

www.citizenauditorohio.com