Friday, July 22, 2016
By Jordan Cohen
NILES
Treasurer Janet Rizer-Jones said Thursday the city is being victimized by “exorbitant fees” by the bank handling millions of dollars in utility payments made by residents and businesses.
Tim Lintner, one of two state-appointed financial supervisors, identified the institution as Huntington Bank, and said he agrees with the treasurer’s description.
“I haven’t seen bank fees this high just for using your own money,” Lintner told the Financial Planning and Supervision Commission. The commission reviews Niles’ expenditures and revenue while the city remains in fiscal emergency.
Lintner said Huntington, one of two banks used by the city, “imposed the bulk of the charges.” The city also uses PNC Bank.
“Last year, the fees were $73,135, but this year, we’re on pace to pay [more than] $131,000,” Lintner told the commission. “For whatever reason, their fees have astronomically increased.”
Banks impose fees for credit payments of utility bills. City Auditor Giovanne Merlo said the fees vary with methods of payment such as credit cards, reward cards and merchant services.
“They told us they increased the fees because of the use of different payment methods,” Merlo said after the commission meeting. However Merlo and Rizer-Jones also revealed to the surprise of commission members that Huntington is paying little or no interest for the money that it holds before distribution to the city. Rizer-Jones, who has been treasurer only for a few months, said she is trying to find out how long Huntington has been holding city funds virtually interest-free.
According to the fiscal supervisors’ financial report, the city has earned less than $7,000 in interest thus far this year despite the millions that pass through the financial institutions.
“That’s why we’re looking at other banks,” Merlo said.
The commission meeting occurred after business hours, and the bank could not be reached Thursday to respond.
As was the case at Wednesday’s council meeting, Mayor Thomas Scarnecchia came under fire for his proposal to eliminate the minimum manning provision for the safety forces to help reduce overtime. When the mayor said it would be “the chiefs’ discretion” to staff below current levels, three commission members were unimpressed.
“If we’re not going below, we’re not going to save money,” said Mary Ann Coates, who is a certified public accountant, while John Davis said the proposal “has no teeth.”
“I can’t in good conscience support this,” said council President Robert Marino who also serves on the commission. “I can’t imagine why we’d even consider this.”
The legislation was given a first reading only by council, which does not meet again until mid-August.
There was, however, some good news on the state of city finances. Improved tax collections due to changes in state laws have significantly boosted the city’s general fund. Lintner said he expects the fund to be balanced by the end of the year.
Quentin Potter, commission chairman, said he is encouraged by the latest financial news, but warned the panel that it must determine whether the city’s financial approaches are “sustainable” over the long run.
“We have a ways to go,” Potter said. “We have to see how revenues and expenditures play out.”