Performance Audits
Interested in a
Performance Audit?
L.E.A.P. Fund
Leverage for Efficiency, Accountability and Performance (LEAP) Fund for performance audits
About This Site
Testimonials
Contact Us
Auditor of State Website
Local Government Toolkit
Tools to help communities find ways to deliver efficient, cost-effective services
Local governments seeking additional ways to deliver efficient, cost-effective services have two important tools at their disposal: shared services and streamlined processes for joining together to form a single, lower cost government. These choices are local decisions, not top-down, one-size-fits-all mandates from Columbus.
Both tools allow governments to capture economies of scale by either increasing service output for each dollar spent, or by decreasing costs for each service delivered. A staffing or capital investment that might not make economic sense for one community acting alone, for example, might make excellent sense for two communities acting together.
In the Local Government Toolkit, SkinnyOhio has compiled examples, best practices, reference documents and other resources to help anyone who would like to learn more about how Ohio communities are working together to provide the best possible service at lower cost to the citizens in Ohio's communities.
- FAQs
- Shared Services
- Mergers
- Dissolutions
- Laws to Know
- Resources
FAQs Sharing Services
FAQs Streamlined Mergers
The first process requires an initial vote by the electorate to form a commission to study a possible merger. A second vote is then required to accept or reject the commission’s decisions.
Another, more streamlined process was recently enacted in House Bill 153 of the 129th General Assembly. Under the new law, the legislative authorities of each local government may, by a two-thirds vote, put the question on the ballot for the electorate to approve. Once voters approve the merger, the legislative authorities would have 120 days to enter into a merger agreement.
The new law allows mergers between municipalities, townships to municipalities, or municipalities to townships. Townships wishing to merge with other townships must follow a different process. More information about this process may be found here.
Should voters approve the merger, the legislative authorities would have 120 days to enter into a merger agreement.
Yes, if you live in a city, village or township, you may bring a petition to require your government to merge with another city, village or township. Under the new law, the petition must have the signatures of at least 10 percent of the number of electors who voted for the governor in the last gubernatorial election. Each community seeking to merge must have the required number of signatures. See A Citizen's Guide to Petitioning Mergers.
FAQs Township Mergers
No. Mergers are decisions made by local officials and citizens in those communities. Local governments pick their own merger partners, and leaders have flexibility to decide what works best for their communities.
Township officials and citizens living in the townships proposing to merge are the ones who decide whether merger is the right option for a community.
By a two-thirds vote, boards of trustees in the townships proposing to merge may place the question before the voters in those communities. Alternatively, local residents of the townships may petition for merger by gathering enough signatures to place the question on the ballot. In both cases, the majority of electors in both townships must approve the merger.
Yes, if you live in the township, you may bring a petition to require your government to merge with another township. Under the new law, the petition must have the signatures of at least 10 percent of the number of electors who voted for the governor at the most recent general election for the office of governor in all of the townships you are seeking to merge.
At the first general election for township officials after merger, township electors will vote for three trustees, with staggered terms. Electors will also choose a township fiscal officer. See A Citizen's Guide to Petitioning Mergers.
If your township is a home rule township, you may still use the merger process outlined by state law.
Shared Services Idea Center
Information can be searched by county or by a number of partnership categories, including economic development, fleet management, public safety, technology and others. Entities are encouraged to add or update information or submit a new project not currently listed within the database.
Shared Services have been used by Ohio governments for many years to take advantage of opportunities to lower costs and enjoy economies of scale by joining together in contractual and other service arrangements. Examples include police dispatching, computer services, special education, and administration. The opportunity to provide combined, cost-effective services is limited only by imagination and determination.
Recent changes to Ohio law allow more flexibility to share services by granting universal authorization to all local governments. (RC 9.482 - Contracting Authority)
Shared Services Idea Center - Search examples to see how governments are working together to save money. Find ways to inspire your community’s efforts to partner with others to offer quality services at lower cost. The database pulls together information provided by local governments, school systems and other community organizations in Ohio, as well as data from other trusted sources, on topics ranging from dispatching, purchasing, economic development and many others.
Helpful Documents
Evaluating Shared Services
Shared Services Checklist
Prior to entering a shared services agreement, local governments should consider several issues.
Sample Heavy Equipment Utilization Template
Calculate the utilization (total engine hours) of heavy equipment to find potential savings in underutilized equipment.Examples of Shared Services Agreements
Tractor and Boom Mower (Provided by Burton Township)
Dispatching Services and Jail Facilities (Provided by Broadview Heights)
Prisoner Housing ‐ City of Broadview Heights and City of Strongsville (Provided by Broadview Heights)
Shared Use Facilities (Provided by City of Independence)
Joint Bidding (Provided by North Royalton)
Group (Police) Enforcement (Provided by University Heights and South Euclid City)
Police Service Equipment Personnel (Provided by Westlake City)
Central Fire Dispatch Center (Provided by Westlake City)
Dispatch and Communications (Provided by Painesville City)
Joint Economic Development District (Provided by Painesville City)
Safety Forces Mutual Aid (Provided by Willoughby City)
Snow and Ice Removal (Provided by Geauga County Engineer)
Public Health Services (Provided by Summit County Public Health)
Computer Support Services (Provided by Summit County Public Health)
Ambulance District (Provided by City of Oberlin)
EMS (Provided by City of Oberlin)
Fire Services (Provided by City of Oberlin)
Merger Resources
Mergers may be initiated either by a petition of the people or by the local legislative authorities with approval of the people.
Streamlined merger processes were adopted in 2011 by the General Assembly at the behest of the Auditor of State to ease the administrative burden of allowing local governments to come together to form a single, lower cost government. Under House Bill 153, townships and municipalities that voluntarily initiate a consolidation to achieve economies of scale may now do so by either legislative action or by citizen petition, subject to final voter approval. In addition, the law provides a new option, township-to-township mergers, that was not available under prior law. Mergers may be initiated either by a petition of the people or by the local legislative authorities with approval of the people.
Mergers may have many benefits, including streamlining government and making communities more business friendly by reducing jurisdictional complexity. WIth ever increasing fiscal pressure on local government, merger may be a viable option for those communities who voluntarily choose it.
Helpful Documents
Municipal / Township Mergers
Streamlined Municipal / Township Mergers Overview
For the new streamlined process, the legislative authorities of each local government wanting to merge must pass a resolution or ordinance proposing a merger by a two-thirds vote. No election of a commission to study and statement of conditions for merger is required.Draft Resolution - To Approve A Merger
This is a sample resolution for approval of a merger.
Township to Township Merger Requirements Overview
Each board of township trustees of the townships merged, by adopting a joint resolution approved by a majority of the members of each board, shall enter into a merger agreement that contains the specific terms and conditions of the merger. The townships must do this within 120 days after approval of the merger by the electors.This link above should be the document attached hereto, not the one it currently is attached to.
Sample Township Merger Agreement
The sample agreement demonstrates the requirements found in Ohio Rev. Code § 523.04. That statute provides that, at a minimum, a merger agreement should contain the terms referenced in the sample agreement below. This is not an exhaustive list of potential terms. There could be other necessary terms/conditions, depending on the particular situation of each merging township.
Township Merger Agreements - Statutory Default Terms
Should township trustees not develop a merger agreement within 120 days following the approval of a merger, statutory default rules apply.
Citizens' Resources
A Citizen's Guide to Petitioning Mergers
This informational sheet is written to guide citizens in the process for initiating a merger through a petition. (Please note, this is not an official petition. It is only a sample. Petitions must be obtained from local boards of election in the respective counties where a merger may occur.)
Dissolutions
Villages may surrender their corporate powers upon the petition to the legislative authority of the village of at least forty percent of the electors and by an affirmative vote of a majority of electors at a special election.
B. Village Clerk’s Duties Upon Majority Vote for the Surrender of Corporate Powers
The village clerk must certify the result of the election to the Ohio Secretary of State and the County Recorder, who shall record it in their respective offices. Corporate powers shall cease on that date.
C. Continuing Rights and Liabilities of the Village After Surrender of Corporate Powers (ORC §703.21)
- Once the village council has been presented with the petition for surrender, the council may not create any new liability.
- Certain rights and liabilities remain, and are not affected by the surrender of corporate powers. The village shall remain liable for accrued liabilities (prior to surrender), as well due and unpaid taxes.
- The village shall have the right and power to (1) Settle claims, (2) Dispose of property and (3) Levy and collect taxes to pay existing obligations.
- Disposition of remaining property or money - all monies or property remaining belongs to the township or townships located wholly or partly within the village. If there is more than one township, the money and property shall be divided among the townships in proportion to the amount of territory that each township has within the village boundaries.
- Even though corporate powers may cease, village officials will still have responsibilities to wrap up operations and have a final audit.
Upon the presentation of a petition to the council for such an election, it is the duty of the council, before taking action thereon, to satisfy itself that it contains the names of the requisite number of qualified petitioners, and for that purpose it may refer the same to a committee to make the necessary examination. While such petition is under consideration and before action thereon by the council, signers thereof may withdraw their names from such petition, and if thereby the number of names is reduced below the requisite number, it is the duty of the council to refuse to order such election. Dutten v. Village of Hanover, 42 Ohio St. 215.
“Special election” is defined by ORC §3501.01(D) as “any election other than those elections defined in other divisions of this section. A special election may be held only on the first Tuesday after the first Monday in February, May, August, or November, or on the day authorized by a particular municipal or county charter for the holding of a primary election.”
- The village has a population of 150 persons or less ;
- Consists of less than two (2) square miles; and
- Meets at least two (2) conditions for surrendering corporate powers (below).
A. Conditions for Surrendering Corporate Powers (ORC §703.201(A))
(1) Fiscal emergency for at least three (3) years with little improvement;
(2) Failed to follow election laws for two (2) consecutive election cycles ;
(3) Declared unauditable in at least two (2) consecutive audits;
(4) Does not provide at least two (2) municipal government services ;
(5) Failed at least once to adopt a tax budget; or
(6) An official has been convicted of theft in office under ORC §2921.41 or a federal statute at least two (2) times in ten (10) years.
B. Auditor of State Duties (ORC §703.201(B))
(1) Within ten (10) business days of the Auditor of State issuing report to the village, the Auditor of State shall send a certified copy of the report and letter to the Attorney General requesting the Attorney General institute legal action to dissolve the village;
(2) Along with audit report, the Auditor of State must give the village notice of his intent to refer to Attorney General for dissolution.
C. Attorney General Duties (ORC §703.201(C))
Within twenty (20) days of receipt of the Auditor of State’s report and request letter, the Attorney General may file a legal action in the court of common pleas for dissolution of the village.
D. Court of Common Pleas Duties (ORC §703.201(C))
(1) Hearing within ninety (90) days of the Attorney General filing.
(2)
Notice of hearing goes to the Attorney General, Village Clerk, and the Fiscal Officer of township within village
(3) At hearing, the court shall determine if the village has a population of 150 persons or less, consists of less than two (2) square miles, and meets at least two (2) conditions for surrendering corporate powers. If the above conditions are met, the court shall dissolve the village.
E. Attorney General Duties Upon Court Order to Dissolve (ORC §703.201(C))
The Attorney General must file certified copy of order of dissolution with Secretary of State and County Recorder. Corporate powers of the village cease upon recording in County Recorder’s office.
F. Continuing Rights and Liabilities of a Village After Dissolution (ORC §703.21)
- After receipt of the Auditor of State’s report and notice of the Auditor’s intent to refer to the Attorney General for dissolution, the village council may not create any new liability.
- Certain rights and liabilities remain and are not affected by the surrender of corporate powers. The village shall remain liable for accrued liabilities (prior to surrender) and due and unpaid taxes.
- The village shall have the right and power to settle claims, dispose of property, and levy and collect taxes to pay existing obligations.
- Disposition of remaining property or money: All monies or property remaining belongs to the township or townships located wholly or partly within the village. If more than one township, the money and property shall be divided among the townships in proportion to the amount of territory that each township has within the village boundaries.
- Even though corporate powers may cease, village officials will still have responsibilities to wrap up operations and have a final audit.
ORC §703.201(D): Population of a village is the population determined at the last federal decennial census or based on population estimates certified by the Department of Development between decennial censuses.
The election system of Ohio can be demonstrated through a four-year cycle. The following applies to village elected officials: Municipal Year (2009, 2013, 2017, 2021, etc.). Most municipal officials, will be elected. Municipal Year (2011, 2015, 2019, 2023, etc.).
ORC §703.201(A)(4): Services typically provided by a municipal government include police or fire protection, garbage collection, water or sewer service, emergency medical services, road maintenance, or similar services. “Services” does not include any administrative service or legislative action.
Under ORC §703.21, after receipt of the audit report and notice mentioned in §703.201, the legislative authority of the village shall not create any new liability until the decision of the court of common pleas under division (C) of §703.201 of is declared. If the Auditor of State notifies the village that the Attorney General may file a legal action under §703.201 of the Revised Code, but the Attorney General does not file such an action, the village shall not create any new liability for thirty days after receipt of the Auditor of State’s notice.
In summary, no power exists for the voluntary surrender by a city of its corporate powers. However, under Ohio Revised Code §703.08, a city may reduce its status from that of city to village. The relevant statutes for this reduction include:
- ORC §703.08: A city, from which territory has been detached since the last federal census, may surrender its corporate rights as such city and be reduced to a village in the manner provided by §§703.09 to 703.19, inclusive, of the Revised Code.
- ORC §703.09: A petition, requesting that the city, from which territory has been detached, surrender its corporate rights and be reduced to a village, signed by at least one hundred citizens of the city, shall be presented to the legislative authority setting forth that by reason of the detachment of territory the population of the city has been reduced to less than five thousand, and that a majority of the citizens thereof desire to surrender its corporate rights, and requesting that it be reduced to a village. Such petition shall also contain a prayer that the legislative authority authorizes the taking of a census in the city for the purpose of ascertaining its population.
• The municipal corporation or township has a population of less than five thousand as of the most recent federal decennial census;
• The municipal corporation or township has been under a fiscal emergency for at least four consecutive years; and
• Implementation of the financial plan of the municipal corporation or township required under this chapter cannot reasonably be expected to correct and eliminate all fiscal emergency conditions within five years.
B. Duties of the Court of Common Pleas and Receiver (ORC §118.31(B)): If the court finds that all of the required conditions apply to the municipal corporation or township, the court shall appoint a receiver. The receiver, under court supervision, shall work with executive and legislative officers of the municipal corporation or township to wind up the affairs of and dissolve the municipal corporation in accordance with §703.21 of the Revised Code or the township in accordance with the process in §503.02 and §§503.17 to 503.21 of the Revised Code.
Shared Services – Laws Which You Should Review
RC 9.482 - Contracting Authority
Universal authority for local governments to share services.
RC 307.15 - Contracts for Shared Services
Authority for counties to contract with other governments to share services.
RC 715.02 - Public Improvement Contracts
Authority for two or more political subdivisions to contract for joint constuction or management of a public improvement.
RC 5705.38 - Legal Level of Control
School districts and subdivisions have differing dates for passing an appropriation measure; any entity sharing services with a school district should consult with legal counsel.
RC 5705.41 - Restrictions on Appropriations and Certificate of the Fiscal Officer
Entities should consider the blanket and super blanket certificate authority, “Then and Now Certificate” and when it would be applicable.
RC 5705.42 - Appropriation of Anticipated Proceeds
Grants or loans are deemed appropriated and usually must be spent only for the purpose of the loan or grant, also when receiving a grant or loan, payment may go directly to the vendor.
RC 5705.10 - Distribution of Revenue Derived from Tax Levies
Certain revenue must go directly into certain funds.
RC 5705.36 - Certificate of Available Resources
School districts and other entities have differing reporting periods, and the shared services entity must report any remaining fund balance so other entities can certify any amount available.
RC 5705.09 - Establishment of Funds
Each entity must establish funds listed.
RC 5705.14 -.16 Transfer of Funds
Transfer of funds between entities in shared services.
RC 5705.12 - Permission to Establish Special Funds
Must get permission to establish special funds with approval by AOS (excluding funds established by 5705.09).
RC 5705.121 - Municipality and Township Special Funds
Townships may establish cemetery funds and municipalities may establish cemetery, urban development tax increment equivalent, and sanitary police pension funds.
RC 5705.43 - Improvement Paid by Special Assessment
Entities that share services paid for by special assessment must comply with applicable requirements regarding contracts and authorizing ordinances and resolutions.
RC Chapter 2744
Laws governing sovereign immunity.
Mergers - Laws You Should Know
RC §§ 523.01 – 523.07 - Township Mergers (with other townships)
The territory of one or more townships may be merged with that of a contiguous township to create a new township, in the manner provided under this chapter. The new township shall have all of, and only, the rights, powers, and responsibilities afforded by law to townships.
RC §§ 709.43 – 709.48 – Municipal and Township Mergers (with other municipalities or townships)
”Merger” means the annexation, one to another, of existing municipal corporations or of the unincorporated area of a township with one or more municipal corporations, or the merger of one or more municipal corporations with the unincorporated area of a township.
Other Laws that May Impact Mergers:
Resources to help provide a better services at lower cost.
AOS Website
SkinnyOhio.org
SkinnyOhio provides local governments the collaborative tools to promote lean mean fiscal machines at all levels of Ohio’s government. SkinnyOhio.org is your online resource to find the best practices of local government here in Ohio and nationally.
Performance Audit Results
The AOS has performed hundreds of performance audits on local governments to provide cost savings suggestions to help governments find a better way to conduct their business. Every type of local government can find budget solutions through a performance audit.
Shared Services Idea Center
The Shared Services Idea Center is a collaborative way to help local governments find common ground to enhance their services and cut costs by working together. The Shared Services Idea Center provides the most innovative cost saving measures from energy reduction to fuel sharing depots to give governments the guidance on enhancing services.
Ohio
Local Government Innovation Fund
The Local Government Innovation Fund was established to provide financial assistance to Ohio political subdivisions for planning and implementing projects to create more efficient and effective service delivery. Through this program, the Ohio Department of Development seeks to promote efficiency, collaboration, coproduction, and shared services among local governments, providing up to $100,000 in grants or loans for feasibility studies and demonstration projects, and up to $500,000 for multi-entity projects.
DAS Cooperative Purchasing Program
The Cooperative Purchasing Program offers Ohio counties, townships, municipalities, school districts, public libraries, regional park districts and other political subdivisions the benefits and cost savings of buying goods and services through state contracts.
Ohio Smart Schools
Ohio Smart Schools is a collaborative, nonpartisan initiative of Ohio Education Matters that has been seeking ideas and approaches that will allow Ohio to achieve innovative education reforms. This is a link to a report prepared by Ohio Smart Schools, which includes best practices for greater efficiencies.
EfficientGovNow
The Fund for Our Economic Future, which was launched by EfficientGovNow to bring greater attention to and engage the public on the issue of government collaboration and efficiency, reward efficient government and celebrate the public officials who are collaborating to increase the economic competitiveness of Northeast Ohio. The Fund for Our Economic Future is a collaboration of more than 100 foundations, organizations and philanthropists from across Northeast Ohio that strengthens the region’s economic competitiveness through grantmaking, public engagement and research.
Redesigning Ohio
The Ohio Chamber of Commerce and Ohio’s Metropolitan Chambers of Commerce undertook a year long study to move Ohio into the 21st century. Redesigning Ohio covers pressing topics such as shared services, health care costs, budgeting, and many cost saving solutions to bring greater stability to Ohio.
National
New Jersey
SHARE (Sharing Available Resources Efficiently) Grant Program provides financial assistance to help local officials take advantage of the benefits of sharing services. This handbook provides the following examples of shared municipal services: police, animal shelter, IT services, recreational and educational programming, library and technology lab facility. There are also examples of shared school district services such as the following: public works maintenance, IT, vehicle maintenance, recreational field and facilities, computer and technology labs, library and reference collections, and gasoline and vehicle fueling services.
New Jersey also conducted a bipartisan report title “Government Consolidation and Shared Services” to find new ways to move the state’s reliance off of sky rocketing property tax increases.
New York
The State of New York provides shared services tools to assist local governments. Similar to the Shared Services Idea Center, provided by Ohio Auditor of State Dave Yost, these cost savings ideas will help all levels of government from the school house to the courthouse.
Private Firms
Deloitte, based in England, conducted an extensive study of governmental shared services. “Local government needs to make a step change in the way services are delivered in order to provide greater value to citizens.” This guide provides steps to be considered when researching and enacting shared services.