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Niles leaders question financial recovery plan
By Jordan Cohen
NILES
Niles City Council members can be described as anything but optimistic after adoption of the revised five-year financial recovery plan to get the city out of fiscal emergency.
That also describes the attitude of the man who will take the reins as mayor in January.
“I wasn’t happy with it – it all came as a surprise to me,” said Mayor-elect Thomas Scarnecchia, adding that he had not seen the 21-point plan before it was introduced to council Wednesday.
Scarnecchia said he had met the previous week with Mayor Ralph Infante, who developed the plan, but was never given any specifics. Infante’s term expires at the end of the month.
“My concern is that we were running out of time, and this was so last-minute,” said Barry Steffey, incoming 4th Ward councilman. “I think this is a time for leaders to lead and restore trust with the voters.”
The revision was required after voters rejected a 0.25 percent income-tax increase in November, which was critical to the earlier version of the plan being adopted. The city is submitting a 0.50 percent income-tax hike on the March ballot, which would fund safety forces only. It is projected to generate $2 million annually.
Although Scarnecchia said he has yet to see the entire plan, he expressed reservations about several of its components. Those include terminating the local dispatch center, eliminating the income-tax department and hiring the Regional Income Tax Agency to collect the taxes.
“We have a great system, and I’d hate to lose it,” he said, referring to the dispatching operations. “I’d like to keep the income-tax department and make sure it is productive.”
According to figures contained in the plan, eliminating the dispatching service would save the city $93,000 beginning in the second quarter of 2016 and $124,000 for all of 2017.
The plan lists savings of $43,000 by outsourcing tax collection to RITA, a figure disputed by city Treasurer John Swauger, who argued unsuccessfully that savings would be “minimal.”
Robert Marino, council president and a member of the Financial Planning and Supervision Commission overseeing the city’s recovery from fiscal emergency, said he believes the plan is viable contingent upon passage of the tax increase but understands why there is so little optimism.
“There are things in there that are very tough, and people’s lives are being impacted,” Marino said. “Due to the fiscal situation we’re in, there really are no alternatives. It all depends on the income tax.”
It is the last of the 21 points, however, that has the incoming administration and employees on edge. Should the tax be defeated, the plan requires layoffs in the safety forces and of other employees paid through the general fund to enable the city to balance its 2016 budget.
In November, the city was advised by its state-appointed financial supervisor, Tim Lintner, that appropriations in the 2016 budget would have to be cut by 16 percent. Lintner warned at the time that furloughs were likely, but Infante said he does not anticipate layoffs in the first half of the year.
Besides the tax hike, the plan lists other sources for increasing revenue. One is the elimination of minimum-manning clauses in the police and fire departments through collective bargaining. The plan estimates a total savings of $250,000, but bargaining has produced no settlement.
Another is income-tax receipts from construction of the Cafaro Co. headquarters at the Eastwood Mall complex. The city expects more than $157,000 additional revenue based on a $10.5 million payroll at the site. Previously, the city only collected $20,000 from construction at the site. Several members of the deficit commission have been critical of the department because of the low figure.
The commission will meet Monday to vote on the plan’s approval. Assuming a favorable vote, Scarnecchia’s incoming administration will have to work with the entire plan despite his issues with several of its points.
“I’m going to withhold judgment until I see the entire plan,” the mayor-elect said. “We have to be creative, and that’s how we’ll pull out of this.”