Private citizens learn the scope of Niles' fiscal emergency

December 7, 2016 at 12:08a.m.

NILES

The newly formed audit committee consisting of five city residents heard it all Tuesday night about the issues behind Niles’ fiscal emergency of two years – and the difficulty of getting out of it.

The five have been asked to provide input as the city tries to end the run of red ink.

Several seemed to be surprised by what they heard, particularly when Tim Lintner, state-appointed fiscal supervisor, explained the previous administration’s failure to cut expenses even when revenue was down.

“When revenue went up, expenses did the same,” Lintner said.

“Your faces speak volumes,” said council President Robert Marino as he watched the group’s reaction to Lintner’s comments.

Committee members represent the Niles Board of Education, business, a civic organization, the clergy and the community in general.

“It’s a lot to absorb, but I’m glad it’s out there,” said Sheri Smith, the community representative.

For most of the meeting, the fiscal supervisors explained in graphic detail how the city’s general fund dropped from $13.8 million at the end of 2007 to just $148,000 by 2015, a loss of 99 percent of its value because spending was uncontrolled. City Auditor Giovanne Merlo described how the city has no capital asset management in place because there have never been comprehensive records of every city asset and its value.

“It would cost from $200,000 to $500,000 to have that study done,” Merlo said, indicating that the city in its current financial condition cannot afford to pay for it.

“Hopefully we’ll get this done in the next few years,” Merlo told the committee, adding that without the comprehensive analysis of capital assets, “[it] may keep us in fiscal emergency unless we get that in place.”

Merlo said most of the previous problems have been rectified, but when he and Lintner described how the city failed to make timely deposits of finances and relied on written ledgers before software finally was installed, the information appeared to be too much for the board of education’s Becky DePanicis.

“Some of this is blowing my mind,” said DePanicis, who has an accounting background. “I can’t imagine the city being that far behind.”

The committee has been asked to participate in pre-audit and post-audit conferences with the private firm that financially audits the city.