Has Niles finally found a way out of fiscal crisis?

A week from today, the statutorily mandated Financial Planning and Supervision Commission is scheduled to vote on the latest bid to end the city of Niles’ fiscal emergency – but danger lurks.

If the commission concludes that city government’s plan does not provide a legitimate balanced operating budget for each of the next five years, it could impose a 15 percent across-the-board cut in spending.

Every city department that’s supported by the general fund would be affected by such a move.

Layoffs would be inevitable.

Given that this is the seventh attempt by the mayor and city council to persuade Ohio Auditor David Yost to lift the yoke of state-declared fiscal emergency, it may be time for some bitter medicine.

As we’ve noted on several occasions since Niles’ finances were placed in the hands of the financial planning commission in 2014, Yost has been clear about his expectations.

‘[You can’t] go on making decisions based on not wanting someone to lose a job,” he said after Mayor Thomas Scarnecchia publicly pledged not to lay off city workers.

Scarnecchia said he intended to eliminate positions through attrition, to which Yost quipped, “I expect political leaders to serve their constituents and not their cronies in city hall. This is not a labor versus management problem; it’s a political problem.”

Thus the question: Does the recovery plan developed by the mayor and approved Monday by city council pass the sniff test?

The six previous blueprints submitted by Scarnecchia and his predecessor, Ralph Infante, fell short, which means the latest plan will be put under the microscope.

Approval not only depends on the opinion of commission members, but on the analysis of state-appointed fiscal supervisors, who are responsible for monitoring revenues and expenditures.

Supervisors’ complaints

In April, the supervisors complained to the commission that some department heads and officeholders were not complying with requests to provide timely financial information.

Reacting to the complaints, commission Chairman Quentin Potter said he and his colleagues could seek a court order requiring compliance by any official ignoring such requests.

The main sticking point in Niles’ recovery effort has been the payroll, since most of the money in the general fund is spent on employees’ wages and benefits.

When the commission rejected the sixth version in April, a major concern was the absence of detailed information, including costs, on the upgrading of the city’s 14 municipal buildings. Panel members also sought a cost estimate for hiring an outside contractor to install more than 6,000 computerized water meters the city bought some time ago.

The Scarnecchia plan approved Monday by council on a 5-2 vote contains 58 provisions, including one that would result in the city borrowing money to make improvements to the municipal buildings.

There is also a proposal to increase the Niles’ license plate fee by $10 to pay for road repairs and other improvements.

The hiring of the Regional Income Taxing Agency to take over the city’s tax collections triggered the no votes on the overall plan from council members Frank Pezzano and Linda Marchese.

City Service Director Ed Stredney told 21 WFMJ-TV, The Vindicator’s broadcast partner, he can understand why the union representing income-tax department employees would be upset. But he noted the city is projecting $40,000 in savings a year.

“Looking at the process they use, they’re much more efficient, they’re much more cost effective,” Stredney said of RITA. “They’re matching to the state and federal databases for all the businesses and taxpayers that file or would have to file in Niles, and we can’t do that now. We can’t match to the state database, we can’t match to the federal database. So switching and going to RITA and getting more for our dollar, I think is the fiscally responsible thing to do here.”

Neither the mayor nor city council can force the state to give Niles a clean bill of health. Officials must prove their recovery plan will ensure a stable future for at least the next five years.