Tough decisions await Vienna to end fiscal emergency
The Mahoning Valley is no stranger to financial struggles and crises among its local governments and school districts. Nor has it been spared the long arm of state government seizing the reins of local control over flawed finances through declarations of fiscal emergency.
The city of Niles, for example, became the very first fiscally challenged local government in Ohio to fall into the ignominious pit of fiscal emergency back in 1980. Since then, several Valley communities, including Campbell and Girard, have likewise found themselves under the stern control of a state-led fiscal oversight commission.
And among school districts in the Buckeye State, no fewer than 12 in Mahoning, Trumbull and Columbiana counties have spent months and years under the watchful eye of state overseers. In fact, the Valley has had an oversized proportion of districts bleeding red ink. According to the Ohio Auditor’s Office, 12 of the 44 fiscal emergency declarations issued statewide since passage of the law in 1978 have applied to Valley schools, including Youngstown City School District twice, Niles City Schools, Lordstown Local School District, Struthers City School District, Liberty Local School District, Jackson-Milton Local Schools and many others.
Nonetheless, all of them ended the tense and frustrating period of state control all the stronger in the short term, and most of them have come out of the emergency in robust fiscal health for the long term.
That record of success should provide some comfort to trustees, administrators and residents of Vienna Township, which became the newest community in the state to fall under the intensely watchful eyes of the state auditor’s office.
State Auditor Keith Faber declared a fiscal emergency last week for Vienna after an analysis of the township’s finances confirmed a substantial deficit and treasury deficiencies.
Of course, those overall findings and the resulting emergency should come as no surprise to anyone.
Earlier this spring, trustees learned the township’s account was overdrawn and that more than $1 million had been missing from the community’s coffers. Faber’s report stated, “The total unprovided portion of aggregate deficit funds” stands at $1,012,919.
At the center of that community’s storm was former fiscal officer Linda McCullough, who claimed the $1 million missing resulted from excessive overtime and major equipment purchases, documentation for which was never provided to trustees.
The fallout from the fiscal calamity has been swift. Just to name a few hardships, a township trustee has resigned, three police officers have been laid off, and the fire department, operating at a deficit, has been reduced to an all-volunteer operation.
Clearly, the community can ill afford a prolonged period of crisis that threatens the health and safety of its 4,000 residents. That’s why it is critical that trustees, new Fiscal Officer Corine Hardman and township administrators cooperate fully and expeditiously with the oversight commission.
Early signs show promise. Hardman issued a press release the day the declaration was issued that commits the township to work seriously and closely with Faber’s office.
“Our goal is to emerge from this situation stronger and more financially secure,” Hardman 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.”
As with other communities in the Valley that have undergone similar crises, the journey won’t be easy and community leaders no doubt will be forced to make some tough decisions and swallow some bitter medicine.
As far as the commission is concerned, everything will be on the table. For other communities, that meant a variety of initiatives painful in the short term, but gainful in the long term had to be implemented. Among some recent communities and school districts that worked their way out of fiscal emergency, Faber said it required a hodgepodge of actions.
His accounting of them found 15 local governments reduced staff or eliminated departments, 13 passed income tax levies or reduced income tax credits, 10 reduced money spent on supplies, services and utilities, 10 raised utility fees and nine changed employee benefits such as pay, vacation and health insurance to trim expenses.
The sooner the commission forms and meets the better. From its first meeting, Vienna will have a mere 120 days to come up with a viable long-term plan for recovery that will be sent to the state panel for approval.
As the process unfolds, unfounded speculative rumors on social media about the financial crisis, such as those reported at Tuesday night’s township trustees meeting, must cease. They serve only to muddy the waters toward finding a clear path to financial solvency.
Clearly there is no time to waste. That’s why community leaders might well start by contacting any of a number of nearby communities or school districts that have wiggled their way out of the embarrassing, but necessary state of fiscal emergency for guidance to proceed as productively and as rapidly as possible.