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Niles mayor: No bids to lease wellness center
By Jordan Cohen
NILES
On a day in which fiscal supervisors had good news for the city’s Financial Planning and Supervision Commission after more than two years in fiscal emergency, Mayor Thomas Scarnecchia had to deliver some bad news.
“No bids have been received [to lease] the Wellness Center,” the mayor told the commission Thursday. “We’re working on a Plan B.”
Thursday was the deadline for bid submission. Bids were to have been opened today.
Leasing the Wellness Center has been an important component of the mayor’s amended Financial Recovery Plan the commission approved last year.
The center has lost nearly $1 million in eight years largely due to debt service, said Atty. Douglas Newman, a former city law director hired by city council to draft the lease.
The mayor said in 2016, the center’s operations earned a $63,000 profit, but loan payments turned the black ink red.
“The note expires in 2031,” said city Auditor Giovanne Merlo. “We have 15 more years.”
“We were doomed to failure because we have not had a revenue model,” said John Davis, a commission member.
The city had hoped to lease the center for $240,000 a year, which would cover the loan cost. In December, Carmen Vivolo, city parks and recreation director, reported he had conversations with two potential bidders who he said “didn’t bat an eye” about the lease cost.
Had there been any takers, a projected $160,000 would have been eliminated from the general fund. The deficit in 2016 was $152,000.
“[That money] is not in the 2017 budget,” said Quentin Potter, commission chairman. “We’ll need to see a replacement.”
In one possible Plan B scenario reported by The Vindicator last December, SCOPE Senior Services could operate its Niles sports and fitness programs in the Wellness Center, eliminating the need for the city to contract with companies for part-time workers.
“If we’re just assisting them by being there and helping with manpower issues, then we wouldn’t be taking on any financial responsibility,” Mike Wilson, SCOPE director, told the newspaper at the time.
Overtime and vacation sell-backs continue to be costly. Statistics from Merlo and Tim Lintner, one of the fiscal supervisors, show the city spent nearly $900,000 on the those two items in 2016, an increase of $200,000 from 2015.
Nearly half that figure comes from the general fund, which needs to stay in the black over the long haul to get the city out of fiscal emergency.
“If I were giving a report card, overtime and sell-back would get a D minus,” Davis said. “We have to get this under control.”
Despite those problems, the fiscal supervisors had good news for the commission. The water fund, the only one still in deficit, cut its losses by $820,000 in 2016.
“The water fund will be positive by the end of the year,” Lintner said, attributing deficit reduction to the city’s water-rate increase. Lintner presented a more positive financial outlook compared with the city’s situation when the state placed it in fiscal emergency in October 2014.
“For the first time since 2007, there were no funds that exceeded appropriations,” he said. “We did it.”
The commission’s next meeting is March 22.