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State auditor to Niles mayor: You are not complying with the law
By Jordan Cohen
NILES
State Auditor Dave Yost has warned Mayor Thomas Scarnecchia that he is failing to comply with state law by refusing to implement several items in the city’s financial recovery plan.
At the same time, the city’s state-appointed financial supervisors say Niles, in fiscal emergency since October 2014, faces a $1.5 million general fund deficit this year that must be eliminated.
Yost’s warning was contained in a letter that was read aloud during Wednesday’s Financial Planning and Supervision Commission meeting by Jim Armeni, an auditor liaison.
Armeni had publicly criticized Scarnecchia’s delay during last week’s city council meeting.
The mayor, who is a member of the commission, said he is working on an amended plan, but has ruled out complying with elimination of the income tax department and police dispatchers, and ending minimum manning in the safety forces.
“There are some items I don’t agree with,” the mayor said.
The state auditor’s letter is not sympathetic.
“Until the current plan is changed and the changes approved, you are bound by state law,” Yost wrote.
Commission Chairman Quentin Potter told Scarnecchia he must have council approval of an amended plan by the commission’s next meeting Feb. 18.
“You may be taking something off the table before it has been fully considered,” Potter warned.
Financial Supervisor Tim Lintner told the commission that unlike 2015 when dormant funds were transferred to keep the general fund afloat, no such option exists this year. The result is likely to mean more layoffs and more challenges for Scarnecchia.
“The carryovers have been used up,” Lintner said. “This will require deep and significant cuts by this administration to make up the difference.”
Under state law, the plan must balance the budget for five years to get out from under fiscal emergency.
On Tuesday, Scarnecchia ordered the layoffs of 12 employees, six in the safety forces, that he estimated will save nearly $600,000. Fire Chief Dave Danielson said that the cutbacks along with vacations this spring would leave the department with a total of only eight firefighters to cover the city’s two stations.
The chief said he could be forced to close the station on state Route 46 because of safety concerns.
The minimum manning issue for the fire and police departments is “in conflict with the collective bargaining agreements,” said Robert Marino, council president and commission member.
“We need to steer clear of collective bargaining issues,” Marino said.
Scarnecchia revealed that he hopes to allocate money from the enterprise funds for the water, light and sewer departments to pay for dispatchers. The law prohibits the transfer of enterprise funds into the general fund, but the mayor told The Vindicator that dispatchers frequently process calls for all three departments, which he believes would justify the transfer.
Lisa Smathers, the city’s income tax director, backed the mayor for refusing to eliminate her department and outsource collections to the Regional Income Tax Agency.
“The savings ... will quickly disappear when RITA takes their 3-plus percent of all new monies that come into the city,” Smathers said.
Scarnecchia promised to have his revisions approved by the next commission meeting, but Potter warned that time is running out.
“Fiscal emergency gets worse when you’re not acting to improve things,” the chairman said.
“The city’s history of spending more than it brings in has to end.”