VIENNA — Financial help is on the way for Vienna, but the community now must bear the embarrassing distinction of state oversight.

Ohio Auditor of State Keith Faber’s office announced Friday that it has placed the township in a state of fiscal emergency for “substantial deficit and treasury deficiencies.”

The report from Faber’s office states that a township is placed under fiscal emergency in any one — or a combination — of six conditions.

It states that Vienna meets the criteria for: “5) substantial deficit balances in township funds, and 6) a sizable deficiency when the township’s treasury balance is compared to the positive cash balances of the township’s funds.”

The report states that “the total unprovided portion of aggregate deficit funds, as of Dec. 31, 2023, is $1,012,919” and that “the treasury deficit exceeded one-sixth of the treasury receipts as of Dec. 31, 2023, by $627,636.”

The report states that fire services represented the largest portion of the deficit.

Fiscal Officer Corine Hardman issued a press release late Friday afternoon, addressing the auditor’s ruling.

“We understand the concerns that arise with the declaration of a fiscal emergency, and I want to reassure our community that we are committed to restoring the financial health of Vienna Township,” she said. “This declaration, while challenging, provides us with the opportunity to implement necessary changes and work toward a stable and prosperous future.”

Hardman said the township’s aim is to work closely with Faber’s office and the commission to ensure the process runs smoothly and to be transparent with the community about the township’s progress throughout.

“Our goal is to emerge from this situation stronger and more financially secure,” she said. “With the support of our community and the guidance of the Auditor of State’s office, I am confident that Vienna Township will overcome this challenge and move towards a brighter future.”

The press release from Faber’s office states that Vienna will be placed within the oversight of a financial planning and supervision commission, with Faber’s office serving as financial supervisor, to develop a plan to eliminate the fiscal emergency conditions.

The commission will approve a recovery plan to get the township out of emergency, balance the budget and avoid future deficits. The township must submit that plan within 120 days of the declaration. If rejected, the township will have 30 days to resubmit and that process is repeated until the plan is approved.

The commission will have broad authority to review all revenues and expenditures to determine if they are healthy for the township’s budget. The commission also will require the township to establish monthly levels for expenditures that are consistent with the financial plan; approve the amount and purpose for any debts, and enter into any contracts or agreements necessary for the commission to execute its duties.

Fiscal emergency is terminated, according to the auditor’s website, when:

● An effective financial accounting and reporting system is implemented, and expected completion within two years.

● All fiscal emergency conditions have been eliminated or are in the process, and no new emergency conditions have occurred.

● Financial recovery plan objectives are being met.

● The township has a five-year financial forecast that the auditor deems nonadverse.

According to Faber’s office, the length of time communities remain in fiscal emergency has ranged from two to 11 years, depending upon the circumstances.

HOW IT HAPPENED

In March, then-fiscal officer Linda McCullough said more than $1 million in township funds were spent on overtime and equipment for the fire department. She said the overtime issue had been ongoing since 2022 and that she made trustees aware of it last July but nothing was done.

She said trustees also bought other expensive equipment for the township, including a pickup truck and a tractor.

Faber’s office was investigating the “missing” $1 million, and auditor’s office records show claims were filed against McCullough.

Trustees stated that they never received bank statements from McCullough, who claimed that she had provided trustees with the documents. The fiscal officer is not legally required to share those documents with trustees, but fiscal officers of other Mahoning Valley townships say it is considered a best practice to do so.

In February, several township employees informed trustees they had not received their paychecks through direct deposit.

In a news release, trustees stated that when they contacted McCullough, she told them it was a bank error. However, when trustees called the bank, they learned the township’s account was overdrawn and that more than $1 million had been transferred from Vienna’s money market account to its checking account over the past year, leaving several hundred thousand dollars in outstanding bills.

The township also is missing more than $320,000 in ARP funds, which trustees say McCullough mismanaged.

In April, then newly-elected fiscal officer Rhonda Root — former trustee Robert Root’s aunt through marriage — who had taken over for McCullough, said she was having trouble setting a budget for the township because Faber’s office took McCullough’s computer, leaving Root without access to information vital to the budgeting process.

Root had never served as a fiscal officer so Braceville fiscal officer Tom Shay was appointed as Root’s assistant to guide her as she learned the job.

Amid the turmoil, trustee Root resigned on April 17, and police Chief Bob Ludt on April 22. On May 8, Rhonda Root followed suit, citing exhaustion from trying to work her regular job from 7 a.m. to 3:30 p.m. and then work as fiscal officer for the township every evening until at least 8 p.m.

The township laid off three police officers and the fire department, operating at a deficit, has been reduced to an all-volunteer operation, relying heavily on outside community support for emergencies.

The police department operates on two levies that generate $350,000 per year, and the fire department on three levies that generate just over $200,000 per year.

Trustee Phil Pegg said at the May meeting the township was trying to sell equipment to make up some of the budget deficit. That includes an ambulance Vienna bought, with ARP funds earmarked for the purchase and anticipating that a loan would cover the remaining cost.

Vienna got a bit of help when it received a $100,000 tax settlement from the county, and Shay said then that the township is seeking a tax anticipation loan of $250,000 to help it cover expenses. The township had at least $1.3 million in unpaid bills as of May

A NEW BEGINNING?

In June, the township hired Hardman to replace Root as fiscal officer.

Hardman said she wants to get Vienna back to a point where it has monthly income that will support the township’s basic functions, and even hopes to rehire police and fire personnel.

The township also will begin using speed cameras in August, which it hopes will support the police budget. At a community event last month, Hardman said the cameras, which will operate on Route 11 and State Route 82, could bring in $80,000 this year.

Blue Line Solutions, Ltd. a Nashville-based company, owns the equipment and will pay for all police overtime used to operate it.

Trustees said in June they are doing everything from shutting off unused cell phones in the police department, for $45 dollars per month each, to mulling the sale of 14 acres of township property behind Baker Elementary School.

Last month, Hardman said that 2021 and 2022 fiscal audits should both be completed by the end of August, which will give her and trustees a clearer picture of the township’s financial footing.

Hardman said an ongoing investigative audit could take more than a year to complete.

Faber’s press release states that Vienna is the 12th Ohio community placed in a state of fiscal emergency, including three cities, seven villages, and two townships. Faber’s office states that seven of those declarations have been in place for more than six years, including East Cleveland since October 2012.