WELLSVILLE Auditor puts village in fiscal emergency
A financial planning and supervision commission will help bring stability to village finances.
By NANCY TULLIS
VINDICATOR SALEM BUREAU
WELLSVILLE -- With fiscal emergency declared in the village, officials must now form a financial planning and supervision commission to oversee village finances.
The village was placed on fiscal emergency status Wednesday by Ohio Auditor Jim Petro. It is the second time the village has been declared in fiscal emergency. The first time was from June 1984 to March 1989.
Tom Prendergast, auditor's office spokesman, said the village overspent several special funds by $339,123. After transferring money from the general fund to cover those deficits, a deficit of $17,928 remains.
He said the fiscal emergency status was declared based on December 2000 and April 2001 audits.
Mayor Joe LaScola said the village carried deficit balances into 2001 from the previous year in several special funds, particularly in the fire fund, about $100,000, and the cemetery fund, about $42,000.
LaScola said village residents passed levies for the cemetery and fire funds, which should cover those debts when collected. There also is about $100,000 in income taxes uncollected, he added.
Stability: Petro said the financial planning and supervision commission will help bring stability to village finances, and through an upcoming performance audit, auditors would identify more efficient ways for the village to operate.
He said the commission, as required by law, will consist of a representative of the state treasurer's office, a representative of the state office of budget and management, the mayor or a representative of the mayor's office, the council president or other council representative and three of five residents recommended to Gov. Bob Taft by the mayor and council president.
The Wellsville residents must each have at least five years of private-sector business or financial experience, he said.
Recovery plan: Petro said the commission has broad oversight power to reduce spending and stabilize village finances. The commission will approve a financial recovery plan prepared by the village within 120 days of the commission's first meeting.
LaScola said he did not foresee any problems with local officials and residents working on the commission with auditor's representatives.
"We do need some help," LaScola said. "We have this deficit, but it's not nearly as bad as the last time. We'll just go out and do what we have to do."
Once financial stability is restored, the commission will disband, Petro said. To achieve financial stability, the village must eliminate the fiscal emergency status and produce a credible five-year plan projecting financial stability, he added.