Auditor report warns of financial stress in New Philadelphia

A new report from State Auditor Keith Faber warns that the city might experience financial stress in the next two to three years, and city Treasurer Michelle Campbell says the city must make cuts now.

“The cuts have to be made,” she told the city council Monday. “If we don’t make the cuts, the auditor of state will be in here cutting things we don’t want cut.”

She added, “I really hope that somebody can come up with a solution and quick, because we are running out of time. We’re not going to have a city at the end of the year if there’s no money left. We have to figure out a way to make the cuts where it’s needed.”

The report found eight financial indicators that had a critical or cautionary outlook.

In March, council approved a $42.9 million operating budget for 2026, using around $2.9 million in carryover funds from 2025 to balance it. Councilman Steve Rippeth, chairman of council’s Finance Committee, has said that New Philadelphia’s tax revenue is not down for 2026, but it is not growing at the rate that expenses are.

Councilman Kris Kreinbihl has suggested that New Philadelphia merge its health department with the Tuscarawas County Health Department as a way to save money.

“The question before us is not whether our city health department has done good work — it has — but whether maintaining a stand‑alone department remains the most responsible and sustainable option for New Philadelphia moving forward,” he wrote in an email to other council members and the administration April 23.

“Like many local governments, we are operating under increasing financial pressure, and our residents expect us to closely examine costs and reduce duplication wherever possible. Across Ohio and throughout the country, municipalities are consolidating services not because those services are failing, but because doing so can reduce overhead while maintaining effective service delivery. I believe this warrants the same frank evaluation here.”

A proposed contract with the county health department has been circulated among city leaders. The proposed agreement would take effect Jan. 1, 2027. The city would make three payments of $100,000, for a total of $300,000 during 2027 for the county department’s services. That amount would increase to $360,000 by 2034.

In response to this proposal, the New Philadelphia City Health Board passed a resolution earlier Monday, noting that the board has not participated in any formal discussions or negotiations regarding such a merger.

“The Board of Health determines that the draft contract proposing merger with the Tuscarawas County Health Department is premature and does not reflect the required legal and procedural steps, including formal negotiations between governing bodies and legal counsel,” the resolution said.

The resolution goes on to say that “a thorough and transparent evaluation process” is essential to ensure that any decision is in the best interests of the residents of New Philadelphia.

Health Commissioner Nichole Bache attended Monday’s council meeting, pointing out that in 2025 the health department saved the city $83,798.50, including more than $67,000 through employee health and wellness visits performed by her department. An outside agency would have charged a minimum of $350 per employee for those visits.

“The question before you is whether a proposed merger is truly in the best interests of the city and its residents and whether it is being approached in a way that is responsible, lawful and fully informed,” Bache said.

She said a merger would require a formal feasibility study to determine if it would be mutually beneficial to both parties. “Without that analysis, there is no reliable way to evaluate financial impact, service levels or long-term sustainability. Moving forward without that foundation would be premature and risky.”

Bache noted that city residents do not currently pay for the county health department’s levy.

Kreinbihl apologized for jumping the gun on the proposal. “Unfortunately my enthusiasm outpaced the formal process and I need to apologize to Nichole and her staff, the mayor and council for that.” Campbell credited Kreinbihl for coming with an idea to fix the city's financial situation. Council will meet in the coming weeks to discuss the future of the health department.

In other city financial news, Auditor Heather Denham reported that income tax collections for the first quarter of this year are down $20,000 compared to the first quarter of 2025.

Law Director Marvin Fete used his time to urge residents to support a 1.5% income tax that New Philadelphia City Schools has on the May 5 ballot to build two new buildings on state Route 39 east of the city. He noted that two of New Philadelphia’s current school buildings date back to before World War I.

“Your income tax base is moving or not coming here, and they’re leaving because of the quality of the school buildings we have here,” Fete said. “New Philadelphia is the only school district in the entire county not to take advantage of state money to build new schools here, and that’s a problem because eventually what we’re going to be left with is an elderly population that is not receiving income and not taxable for income tax, and that’s our lifeblood.”

Mayor Joel Day reported that a new restroom and pavilion will open soon at the Southside Community Park soccer fields. Construction was completed last week.