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Niles: Commission orders revised recovery plan
By Jordan Cohen
NILES
After listening to state-auditor reports of continuing deficit spending and a projection of only $27,000 in the general fund by the end of 2017, the Financial Planning and Supervision Commission decided it had heard enough.
The commission unanimously voted to order the Scarnecchia administration to submit an amended financial-recovery plan by Dec. 19. Niles has been in fiscal emergency for two years and is required by law to follow the plan, which must be approved by the commission.
Mayor Thomas Scarnecchia, who is a commission member, joined the rest of the panel by voting in favor.
“We need to see expenditure reduction – period,” said Quentin Potter, commission chairman who appeared frustrated over the administration’s inability to curb deficit spending.
The panel has demanded a plan to reduce every department deficit and a maintenance plan for the 89-year-old city hall. The 2017 budget contains no allocations for the building’s improvements, and Potter is concerned more money may be needed.
City hall is just one of several financial problems plaguing the city. The Wellness Center, long a drain on the general fund, faces a $200,000 deficit by the end of this year and needs another $40,000 to finish the year.
Tim Lintner, one of two state-appointed fiscal supervisors, said if the money is allocated, the red ink will worsen.
“We expect a cash balance at the end of this year of [$59,000], but if the $40,000 is spent, we would only have $19,000 left,” Lintner said. “That will probably put us in deficit by the end of 2017.
At last week’s council meeting, Scarnecchia said he is working on a plan to cut the center’s mounting expenses and will make it public before the Nov. 2 council meeting.
The auditors’ statistics project $12 million in citywide funds, but that figure has no impact on the sinking general fund.
Fiscal Supervisor Nita Hendryx said the water-fund losses will continue in 2017 even though its deficit was reduced by more than $1 million this year. Hendryx said she has seen no plans to cut spending in that department.
“The appropriations are as much as the revenue coming in [and] something’s got to give,” she said. “We are not progressing at all.”
“The water fund is what put this city in fiscal emergency to begin with, and there’s no movement,” Lintner said.
Auditor Giovanne Merlo told the commission next year’s budget does not contain funds for installation of the city’s electronic water meters, which have remained in boxes for several years.
“That was foolish,” said commission member and council President Robert Marino. “We’ll have 5,000 water meters sitting around.”
Service charges paid to Huntington Bank and other banks also add to the pressure on city finances. Lintner said the city is “on pace to spend [more than] $167,000 this year,” a figure that Potter called “extraordinary given the expense.”
Treasurer Janet Rizer-Jones said she expects negotiations with the banks to reduce those charges, but was unable to say by how much.