Edgerton Village Council Asks State Auditor To Be Formally Released From Fiscal Emergency

After 3 ½ years the village of Edgerton could soon be out from a state-imposed fiscal emergency.

The village’s Financial Planning and Supervision Commission approved a document asking the state to terminate the fiscal emergency at a March 9 meeting. The community will now wait for the state to approve the application.

A formal announcement will be made when State Auditor Dave Yost can come to the village and present officials with some documents.

The village fell under fiscal emergency due to a long-term debt from a sewer project from the 1970s. The village had insufficient income to cover its debts and had not exercised sound financial oversight,

The process to fiscal wholeness has been likened to a diet by Commission Chair Sharon Hanrahan. Hanrahan works with the state’s Office of Budget and Management.

“Getting out of fiscal emergency is not like winning a football game, it’s more like a diet,” Hanrahan said. “You can’t eat chocolate cake every day and maintain weight.”

The village has adopted steps it will take to remain out of fiscal emergency:
– Property tax revenue collections are based on estimated assessed valuations for the given year.

– Renewing a five-year, 2-mill property tax levy in 2015. The levy term began in 2016 and will be renewed in 2019.

– Enacting a 1.75 percent income tax with credit for taxes paid to other communities. Eighty percent of revenues will go to the general fund and 20 percent to the income tax capital projects fund.

– Securing grant and debt funding for a new fire truck in 2019. The grant will be $360,000 and the debt for $500,000.

– Securing grant and debt funding for the water tower project of $125,000 respectively for 2018 and 2019.

– Water rates will increase 2 percent in 2017, 2019 and 2021.

– Sewer rates will increase 2 percent in 2018 and 2020.

The village will have expenses that follow historical patterns:
– A 3 percent increase for salaries forecast for 2017-21
– A 5 percent increase for hospitalization benefits annually from 2017 to 2021.
– Various supplies and materials and contractual services to increase between 3 and 8 percent each year.

While the village is climbing out of a fiscal emergency, a reduction in the income tax is not likely for several years, Administrator Dawn Fitzcharles said. The streets have not been paid in 15 years and now there are two that need work, she said.

The village fire department must get on a vehicle replacement program, Fitzcharles said.

“Does that mean we are going to spend that $500,000,” Fitzcharles said. “But it’s there.”

Commission member Bob Day argued the increased income tax was for getting the village out of fiscal emergency and now that it has happened swiftly, he would like to see what the revenues would be if there were a 0.25 percent or 0.50 percent cut in the tax.

Day can understand the need for some upcoming projects like the streets, but other projects, such as a garage for the police, he finds dubious. He said he was looking at the plan from the taxpayers’ point of view.

The commission approved the Financial Recovery Plan recommended by the Village Council, Dec. 19, 2016, 6-1 with Day dissenting.

With the plan approved, Commission member Pam Fitzcharles said her experience in the private sector showed her that goals can be set for five years down the road, but if something crucial happens in the meantime, those plans can be and often are jettisoned.

“It’s just a plan,” she said.

Council member Jackie Perry said being in fiscal emergency helped the village adopt budgets and have written documents for a spending plan.

“There is a process in place,” Perry said.

Commission member Tom Flegal said the public must hold the council accountable for its fiscal responsibilities.

“This is not the end. It should be the beginning of doing things the right way,” Flegal said.

There should be an environment where people can question each other, Day said.

“Because it keeps you sharp,” Day said.

Mayor Lance Bowsher thanked the commission for their work and especially thanked Hanrahan and Belinda Miller for their work.

“We are headed in the right direction,” Bowsher said. “Perception is perception, but we know we are doing things (correctly) and we are headed in the right direction.”

The state has picked up most of the cost for oversight, Hanrahan said. The village paid $782.50 in the last fiscal year, Dawn Fitzcharles said.

The final act of the commission was to approve a resolution to formally request an end to the fiscal emergency.

Now everyone will wait for a response from the auditor.

James Pruitt may be reached at publisher@thevillagereporter.com

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