Village Of Valleyview

Fiscal Watch Fact Sheet

Dec 23, 2003

The Auditor of State provides a fact sheet about Fiscal Watch and Fiscal Emergency on the State Website. Below is the address to the website page with the fact sheet.

http://www.auditor.state.oh.us/fiscal_watch_emergency/local_government_fact_sheet.htm

Below is the section of the fact sheet that covers Fiscal Watch.

LOCAL GOVERNMENT FACT SHEET FISCAL EMERGENCY/FISCAL WATCH LAW

History

The original municipal fiscal emergency law was enacted in 1979 as a response to a financial crisis in the city of Cleveland. Since that time, financial planning and supervision commissions have aided 32 Ohio local governments declared in fiscal emergency. Today only ten remain under stewardship.

In 1996 fiscal emergency protection was extended to counties and townships through a law (House Bill 462). HB 462 modified the fiscal emergency statute to create the "fiscal watch" status to provide early warning to faltering entities whose finances are approaching emergency status. Entities now enter fiscal watch when essentially a deficit is in existence in the General Fund or other funds and such deficit exceeds one-twelfth of total General Revenue Funds - the previous marker for fiscal emergency. Nine municipalities have been declared in fiscal watch, and only three have later entered emergency.

Any One Factor Needed for the Auditor
of State to Declare Fiscal Watch

?•All accounts that were due and payable from the General Fund for more than 30 days, less the year-end balance of the General Fund, exceeded one-twelfth of the general budget for the year.

?•All accounts that were due and payable from all funds for more than 30 days, less the year- end balance in these funds, exceeds one-twelfth of the available revenue for the preceding fiscal year from these funds.

?•Total deficit funds, less the total of any balances in the General Fund and in any special fund that may be transferred to meet such deficits, exceeds one-twelfth of the total General Fund budget for that year and the receipts to those deficit funds during that year (other than transfers from the General Fund).

?•Money and marketable investments, less outstanding checks, less total positive fund balances of general fund and special funds, exceeds one-twelfth of the total amount received during the preceding fiscal year.

?•Based on an examination of a financial forecast approved by the legislative authority, the auditor of state certifies that the general fund deficit at the end of the current fiscal year will exceed one-twelfth of the general fund revenue from the preceding fiscal year.

To determine if an entity qualifies for fiscal watch or emergency, the Auditor of State would conduct an initial review of entity finances. This analysis would commence upon the written request of the entity or at the initiation of the Auditor of State. If an entity is under "fiscal watch" the Auditor of State may provide technical and support services to the entity. Costs for this support would be borne by the state.