Mayor Announces Declaration of Fiscal Emergency

RUTLAND—Rutland Mayor Tyler M. Eblin is announcing that Ohio Auditor of State Keith Faber has declared that a fiscal emergency exists in the Village of Rutland, effective March 29, 2022.

The declaration comes as a result of a deficit, or negative balance, in the Village General Fund, following financial woes that began in 2016 with a negative balance of just over $6,000. Due to a lack of effective fiscal oversight and spending an amount of money from the Village General Fund greater than money received, the deficit increased to $74,437 in 2017.

Ohio law requires cities and villages to annually adopt a budget that dictates the amounts of public funds that will be set aside to meet the expenses of the municipality. Amounts budgeted for public programs and services must be less than the tax revenue estimated to be received during the year for which the budget is approved. If spending is greater than the amounts budgeted, a negative balance occurs.

The Village administration has worked to reduce the deficit through improved fiscal oversight, a reduction in spending, and additional property tax levies. Improvement in the deficit’s recovery continued through 2021, wherein Village officials had reduced the deficit to just $5,456.

However, outstanding fees owed to the State Auditor’s Office totaled more than $100,000. Monthly payments toward these fees in the amount of $100 would eventually be rejected and the State Auditor’s Office would soon desire full payment or substantial monthly or quarterly that the Village couldn’t financially achieve. Following negotiations between the Village administration and the State Auditor’s Office, the Village Council accepted a write-off proposal in the amount of $54,000, with remaining fees forgiven. Without an alternative option, this amount was paid from the Village General Fund, thereby increasing its deficit to $60,168. Consequently, the Ohio Auditor of State has declared that a fiscal emergency exists in the Village of Rutland.

Moving forward, the Village Council will be required to adopt a five-year fiscal recovery plan not later than July 26, 2022, delineating the process by which the Village of Rutland will eliminate the deficit in the Village General Fund.

“Our Village has made great strides in recent years. This declaration shouldn’t stunt the fact of this progress, but further solidify that we still have a journey awaiting us,” comments Mayor Eblin. “With this declaration, we will have the full assistance, monitoring and resources from the State Auditor’s Office to steer our Village in a more financially successful direction.”

Mayor Eblin expresses that budget cuts in the Village General Fund will continue until adequate tax revenue is achieved to wholly fund expenses compensated by the Village General Fund. Those expenses include police protection, street lighting, a portion of utilities and the payroll and operating expenses, such as supplies, materials and professional services of the Village administration.

“When a public fund has a negative balance, you are essentially required to reimburse that fund with tax revenue received until that negative balance is flipped to a substantially positive balance,” comments Mayor Eblin. “The less money you allocate for expenses, the more money you will have available to set aside and allow the affected fund’s negative balance to correct itself.”

Mayor Eblin explains that police protection remains due to the current police protection levy and the support of the Village’s auxiliary police unit. Once revenue from the police protection levy is exhausted, police services will come to a halt until a new fiscal year arrives.

Street lighting will remain in place during fiscal year 2022 and the Village Fiscal Officer, Village Mayor’s Court Clerk and Village Marshal will receive reduced compensation. Some funding has been set aside for administrative supplies and materials. The Mayor and members of the Village Council have forfeited their salaries. Recently passed tax levies are allowing Village services to remain afloat, although reduced, while also allowing for extra money to be set aside to correct the general fund’s negative balance. If adhered to, the 2022 fiscal year budget of the Village of Rutland is estimated to correct the general fund deficit by $17,757.

Village officials will be meeting with representatives from the State Auditor’s Office to discuss the Village’s fiscal emergency further and to begin preparing the Village’s five-year fiscal recovery plan.

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