City of Niles could save $4.4 Million Annually

Thursday, September 11, 2014

Columbus – The city of Niles (Trumbull County) could realize a variety of potential savings and efficiencies, according to a performance audit released today by Auditor of State Dave Yost.

“City officials requested this performance audit to help guide financial decisions,” Auditor Yost said. “I commend the city for moving ahead with recommendations, even before the release of our final report.”

Auditors reviewed a ten year period (2003-2012) to assess how costs of city operations have affected fund balances. The water fund reached a deficit of $1.7 million in 2012 and the electric fund saw a 35.4% decrease in net assets.

Water Recommendation

Compared to a similar water department in the city of Painesville, Niles spends $0.77 more per cubic foot of water. The city could negotiate reducing bulk water prices by $0.77 per cubic foot with its supplier, the Mahoning Valley Sanitary District, or explore cheaper water purchasing options and save approximately $1,583,900 per year.

Electric Recommendation

Niles lost 14% of its electricity in 2012 at a cost of $2.7 million. Reducing its electricity loss to an industry accepted rate of 9% could save the city $982,000 annually. The city has moved toward implementing a recommendation to invest $300,000 into technology solutions that will help track electricity and other city functions.

Other Cost-Saving Recommendations

Revenues from the city’s wastewater department cover 76 percent of its expenses, whereas peer average revenues cover 106 percent of expenses. A permanent rate increase of $0.39 per cubic foot would generate the $795,500 needed to cover the city’s wastewater expenses. The city recently increased sewer rates by 15 percent for the next four years.

The city currently spends more than its peers on its Collective Bargaining Agreements and health insurance. Negotiating to bring these costs in line with its peers could save the city a total of $1,584,400 per year. The city could also save $26,600 per year on life insurance costs by acquiring peer average rates through competitive bidding. 

The audit also found higher overtime costs than peers in the Niles police and fire departments. Contract negotiations could help bring overtime costs near benchmark levels, saving $213,000 annually.

Contracting the city’s dispatch and health department services to Trumbull County would save $189,500 annually. Additionally, $138,000 could be saved annually by contracting the city’s income tax function to an external organization.

Finally, reducing one maintenance position would save $31,600 annually and increase efficiency.

A full copy of this performance audit is available online.



The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,800 state and local government agencies.  Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.


Carrie Bartunek
Press Secretary