Boardman’s financial crisis will confront new trustees

The refusal by former Boardman Township trustees Kathy Miller and Robyn Gallitto to sign a letter relating to the state auditor’s analysis of government’s financial condition prompts two key questions: Were Miller and Gallitto being intransigent because they lost their re-election bids in the November general election? Or, were they being responsible stewards of the public treasury by refusing to accept the financial forecast submitted by the township’s fiscal officer, William Leicht?

At first blush, their refusal to sign would appear to be sour grapes. Miller, who served as a trustee for eight years, and Gallitto, who was on the board for a four-year term, did not expect to be rejected by the voters. To be sure, the township’s fiscal crisis was a major issue, but the incumbents had reason to believe residents would acknowledge the impact the national and global economic recessions were having on governments at all levels.

We did, which is why we endorsed Miller and Gallitto for re-election. Neither of the candidates who won in November, Thomas Costello nor Brad Calhoun, campaigned on a platform attacking the incumbents for mismanaging the township’s finances. In fact, the main issue in the election was the perception of disunity among the three trustees, Miller, Gallitto and Larry Moliterno.

Thus, we do not buy the sour grapes explanation for what occurred recently with the state auditor’s analysis of Boardman’s finances. Instead, we believe the two now former trustees were just not willing to take at face value the financial information the township’s fiscal officer provided to state auditors.

Fiscal watch

Early in 2009, trustees asked the state for an analysis to determine if Boardman met the conditions for fiscal watch. The status is triggered when expenditures outpace revenues. Watch is a precursor to a declaration of fiscal emergency, which would result in a state commission being appointed to oversee the township’s finances.

But because Miller and Gallitto refused to sign the letter from the state auditor’s office, the agency was unable to certify the deficit in the general fund and determine the existence of a fiscal watch.

“We rely upon the accuracy and completeness of the financial forecast as part of the information that allows us to do our analysis,” said Steve Faulkner, a spokesman for the state auditor’s office.

Moliterno did sign the letter, contending that state auditors completed their review of the township’s books and had access to all information and databases pertaining to the finances. He said he talked to Leicht and state officials before making his decision.

But, Miller, for one, indicated that what the state was after was a confirmation of the veracity of Leicht’s information. She said she could not offer such confirmation because she was not involved in the compilation of the data.

“As a trustee, I could not vouch for the information and thus could not certify by letter that the information submitted to the state auditor was complete and accurate,” Miller said.

Indeed, the tension between the fiscal officer and the trustees is not a new phenomenon. Last October, there was a Vindicator story that said trustees were frustrated over the difficulty in getting information from Leicht.

Here’s what Moliterno had to say about the budget numbers:

“The sooner we come up with numbers that we are comfortable with and can agree on, the sooner we can start working together to solve our problems.”

Then-trustee Gallitto hit the nail on the head with her statement, “Everyone is very frustrated.”

Now, it falls to Costello and Calhoun to figure out whether the financial projections prepared by Leicht are credible. Moliterno obviously has confidence in what the fiscal officer has submitted to the state, but what about his new colleagues?

At least Costello is familiar with the township’s budget, having served for six years as a trustee before being defeated in 2005. But Calhoun, a Boardman school teacher who ran unsuccessfully for trustee in 2007, is a roookie.

How long a learning curve will he need? It’s not at all clear.

Clock’s ticking

What is clear is that the trustees in Boardman do not have the luxury of time in dealing with the township’s finances. A financial forecast developed by the state auditor’s office for 2010 looked at the years 2006, 2007, 2008 and 2009. What it found was that from a $5.26 million year-end balance four years ago, the township ended 2008 with $873,000, and seemed headed for a negative balance last year.

However, in November, the township found out that it would receive a one-time payment of $566,000 as a result of voters in May approving an electric-aggregation proposal, and $220,000 in inheritance tax. That unanticipated revenue erased the deficit and allowed for some capital improvement projects.

This year, however, the budget will be dripping red ink unless revenues increase or cuts in appropriations are made.

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