Just how close is Boardman to fiscal watch? State to review

By Denise Dick

The township administrator doesn’t believe the financial situation is dire yet, but one ‘hiccup’ could change that.

BOARDMAN — A financial analysis by the state auditor’s office will determine if the township, flush with cash just a few years ago, is at the brink of fiscal watch.

Jason Loree, township administrator, received a letter this week from the auditor’s office in response to his March 26 letter to the office’s Local Government Service branch requesting the analysis.

“We sent a letter to them saying that we would be willing to conduct a fiscal watch analysis for them,” said Emily Frazee, a spokeswoman for the Ohio Auditor’s office.

The analysis will be conducted on the township’s financial condition as of Dec. 31, 2008, and may include an examination of the township’s financial forecast for the year ending Dec. 31, 2009, the letter from the state says.

“It says that if we qualify for fiscal watch, they’ll provide technical services for free,” Loree said.

Loree doesn’t think the money situation has yet reached fiscal watch status, but it’s not beyond the realm of possibilities.

“I don’t believe we are, but I think we could get there pretty quick if we have a little hiccup,” Loree said.

Possible hiccups include a necessary, but unexpected equipment purchase, unanticipated retirements or a lawsuit, he said.

Any of those possibilities could cause a cash flow problem.

Fiscal watch is declared if a community meets at least one of four criteria, according to the auditor’s Web site:

U A significant number of accounts are past due.

U Total deficit funds, less the total of any balances in the general fund and in any special fund that may be transferred to meet such deficits, exceeds one-twelfth of the total general fund budget for that year and the receipts to those deficit funds during that year.

U Money and marketable investments, less outstanding checks, less total positive fund balances of general fund and special funds, exceed one-twelfth of the total amount received during the preceding fiscal year; or based on an examination of a financial forecast approved by the legislative authority.

U The auditor of state certifies that the general fund deficit at the end of the current fiscal year will exceed one-twelfth of the general fund revenue from the preceding fiscal year.

If the township is beyond the point of fiscal watch, the auditor’s office will place the township in fiscal emergency, the auditor’s letter says.

The auditor’s office has requested additional financial information, and the review is expected to begin shortly after its receipt.

“A fiscal watch analysis can take anywhere from two weeks to six weeks,” Frazee said.

The township, in its letter to the state, cited the lagging economy, high foreclosure rates and reduction in personal property tax as reasons it needed help to determine its financial status.

It’s not unique to Boardman. Other communities are facing the same problem of decreasing revenues, the administrator said.

“We want everyone in the township — the labor unions, everyone — to have a clear picture” of the financial situation,” he said. “There’s a little bit of a credibility issue going on.”

If the auditor’s office cites a problem that’s expected to cause problems next year, everyone will be aware of it.

“They’ll see that we’re not just making this up,” Loree said.

The auditor’s office would make recommendations but it’s likely to be pretty boilerplate stuff.

“Reduce costs,” Loree said. “That means payroll costs or operating costs, and I don’t think we can reduce our operating costs any more.”

denise_dick@vindy.com