Campbell's fiscal crisis should be a warning to all

As the seven-member state-mandated commission begins the arduous task of developing a fiscal recovery plan for the city of Campbell, a statement from Unice Smith, chief project manager in the state auditor's office, should serve as the backdrop for the sessions:
"Fire and police are taking up 70 percent of your general fund revenue. It should be around 40 percent. We can't tell you what to do, but you can't continue the way you are. We will not let you grow the deficit."
Smith issued that poignant warning last week during a special meeting with council members. At the meeting, the enormity of Campbell's fiscal crisis was made public.
According to the state auditors, the city is $1.2 million in the red, but that figure does not include the cost of utilities. Outstanding bills and leases account for $819,000 of the shortfall, while the rest comes from overexpenditures in the general fund for salaries and benefits for employees.
But that wasn't the only bad news Mayor Jack Dill and lawmakers received.
Nita R. Hendryx, assistant chief project manager for the northeast region, revealed that the city had not paid into police and fire retirement funds or the Ohio Public Employees Retirement System for a year, which means it will be charged interest and penalties.
Devastating effect
Hendryx, who is a member of the state fiscal oversight commission, used the word "cripple" to describe the effect of the additional costs. And she also had a terse warning for the mayor and council: "If no changes are made, you're never going to get out of debt."
The other members of the commission, which was scheduled to meet for the first time this morning, are Jacqueline M. Mickler, branch manager and assistant vice president of First National Bank and Investment Services; F. Anthony Fontes, owner of Tiny Tots Child Development Center and Progressive Management Training Center; Paul Zuzik, a semi-retired certified public accountant who worked for the state auditor's office for 18 years; Mayor Dill; President of Council Robert Yankle; a representative of the director of the state office of management and budget; and a representative of the state treasurer's office.
The commission's first order of business will be to address the revenue shortfall in this year's budget. Expenditures will have to be cut because revenue projections have not been met.
Over the next 120 days, there will be a slew of proposals for dealing with Campbell's fiscal crisis, but the bottom line is one that we have harped on for years pertaining to all government entities in the Mahoning Valley: employee costs must be slashed.
When a state official points out that the police and fire departments are grabbing much more of the general fund than is normal, city officials have no alternative but to focus on that aspect of the budget.
Concessions
What can be done? Layoffs are inevitable if those costs are not reduced. Concessions, which have become common in the private sector, are still rare in government. But the city of Campbell does not have the luxury of giving the safety forces a pass. Firefighters should join the police and workers in the street and water departments in agreeing to a pay freeze. But that may not be enough. A reduction in wages and larger copayments on health insurance premiums could become necessary.
Campbell taxpayers have shown a willingness to do their part to keep the city afloat. Last year they approved a 3-mill levy so laid-off workers in the police, fire, street and park departments could be brought back. In November, they renewed the city's 2.5 percent income tax.
Even so, the state placed the city under fiscal watch.
Elected officials and public employees throughout the Valley ignore the lessons of Campbell's fiscal crisis at their communities' peril.