Columbus – Defaults on three loans and a significant deficit fund balance prompted Auditor of State Dave Yost today to declare the City of Maple Heights in a state of fiscal emergency.

“This is a call to action for Maple Heights – their fiscal crisis demands it,” Auditor Yost said.  “Tough decisions will need to be made, and my office stands ready to provide assistance where we can.”

The Auditor of State’s office initiated a fiscal analysis of the city to determine if the financial condition of the city deteriorated further to justify declaration of fiscal emergency.  The analysis found that the city had not made its semi-annual payments on three Ohio Water Development Authority Loans in the amounts of:

• $93,240 for the Water Pollution Control Loan - Sewer Improvements
• $28,837 for the Water Pollution Control Loan - Sewer Rehabilitation
• $4,119 for the Water Pollution Control Loan - Sewer Rehabilitation Supplement

The Auditor of State’s office also determined that Maple Heights had aggregate deficit fund balances of more than $2.5 million in the general and debt service funds, which exceeded the one sixth of fund revenues by $589,889 as of December 31, 2014.

The City of Maple Heights will now come under the oversight of a financial planning and supervision commission.  Within 120 days of its first meeting, the commission must develop a plan to eliminate the fiscal emergency conditions.  The Auditor of State serves as the “financial supervisor” to the commission.  

A city 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 a debt obligation; 2) failure to make payment of all payroll; 3) an increase in the minimum levy of the city which results in the reduction in the minimum levy of another subdivision; 4) significant past due accounts payable; 5) substantial deficit balances in city funds; and 6) a sizeable deficiency when the city’s treasury balance is compared to the positive cash balances of the city’s funds.

The City of Maple Heights was placed in fiscal watch on April 10, 2014 due to significant deficits, including an aggregate deficit of $1,487,473. A review also looked at Maple Heights’ overdue accounts and found that its capital improvements fund had accounts that exceeded one-twelfth of available revenues by $43,450.  Finally, Maple Heights’ treasury deficit exceeded one-twelfth of the total amount it received by $16,281.

A full copy of this fiscal emergency declaration may be accessed online.

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The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,800 state and local government agencies.  Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.