Columbus – Deficit fund balances prompted Auditor of State Dave Yost today to place the Village of Edgerton (Williams County) in a state of fiscal emergency.

“There is no can to kick down the road,” Auditor Yost said.  “Now is the time for the village to make the tough choices required to bring financial stability.”

Edgerton Mayor Lance Bowsher requested a fiscal analysis be performed by the Auditor of State’s office to determine if the village’s condition justified the declaration of fiscal emergency.  The Auditor of State’s Local Government Services Section conducted the analysis and determined that the Village of Edgerton is in a state of fiscal emergency due to deficit fund balances totaling $110,452 and $134,364 as of December 31, 2012 and August 31, 2013, respectively.

The village will now come under the oversight of a Financial Planning and Supervision Commission.  The commission is responsible for approving a financial recovery plan that details solutions for eliminating the fiscal emergency condition, ensures a balanced budget, avoids future deficits and markets long-term obligations. The plan must be submitted to the commission by the mayor within 120 days of its first meeting.  The Auditor of State’s office takes an advisory role to the commission and may provide accounting training and assistance.

A village is placed in fiscal emergency if any one of the six conditions described in Section 118.03 of the Ohio Revised Code exists. The six conditions are: 1) default on any debt obligation; 2) failure to make payment of all payroll; 3) an increase in the minimum levy of the village which results in the reduction in the minimum levy of another subdivision; 4) significant past due accounts payable; 5) substantial deficit balances in village funds; and 6) a sizeable deficiency when the village’s treasury balance is compared to the positive cash balances of the village’s funds.