When Fairfield was on the economic brink as General Motors closed its Fisher Body plant in the late 1980s, leaders made the right moves to put the city on the path of economic prosperity, officials said.
FISHER BODY PHOTOS: Inside GM’s Fisher Body plant in Fairfield, which closed three decades ago
In the decades after that closure, the city invested in changes and recruited a greater diversity of businesses to decrease how much it relied on any single entity. It has also saved money, which allowed it to weather the Great Recession without too much pain and gives leaders a positive feeling moving forward.
Fairfield City Councilman Tim Abbott said the city’s rainy day fund, which is 25 percent of the general fund operating expenditures, “was really the key element for us being able to ride through the recession without any reduction of our quality of life and to really our employees and our workforce.”
City Council wants to maintain the rainy day fund at 25 percent, which is around $7.5 million, Abbott said.
The city has a nominal amount of debt for a city with an estimated 42,500 population. At the beginning of fiscal year 2019, Fairfield’s debt load was just under $17.3 million. An additional $2 million debt was added for the water division’s distribution system improvements, and in April the city refinanced three bonds on much of the city’s outstanding debt. By the end of the fiscal year, nearly $1.9 million of principal debt will be paid off.
“The city’s health has maintained because of the diverse makeup of businesses throughout the city,” said Finance Director Scott Timmer. “Our diversified tax base has allowed us to sustain economic downturns better than cities who were reliant on a smaller number of industries.”
The city’s investments — mostly on Ohio 4 and Seward Road — made after Fisher Body closed helped to stabilize its revenues, said Fairfield Economic Development Director Greg Kathman.
“After the Fisher Body plant closing announcement, the city made strategic economic development investments with the goal of diversifying its economy so as to not be too dependent on any one business or specific industry type,” he said.
“The city has carefully watched its expenditures while still making strategic infrastructure investments. These investments have directly led to increased economic development success.”
City officials believe Fairfield will eventually need to borrow more money for future projects, likely for park improvements at Harbin Park and Marsh Lake, and a new potential building in 2021 at the wastewater treatment plant.
“Our bond rating has always been one of our top five goals every year, and that bond rating is the key to us obtaining low debt in times of infrastructure improvements we need to make,” he said. “We have been very fortunate that we have been able to be able to pay for projects … and where we can pay cash for the projects that we can pay for.”
The city’s Aa1 Moody’s bond rating, which is the second-highest possible credit score, helps it save money when it needs to borrow, Abbott said. The city can get to a Aaa bond rating, but some of the criteria to achieve that is out of the city’s control, Timmer said, such as the state pension liabilities. Abbott said it’s “doable” but will take time.
If the city wanted, it could pay off its debts and go debt-free — something Butler County Commission intends by 2020 — but Timmer said it “would directly impact the current Aa1 bond rating.”
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