Youngstown’s budget crisis demands aggressive action

The June 30 deadline for Youngstown Mayor Jamael Tito Brown and union leaders to decide on concessions city employees must make to eliminate a projected budget deficit of $16 million has come and gone. No substantive progress has been reported.

The next deadline is Aug. 30, when Mayor Brown should implement layoffs within the departments financed by the General Fund. The focus would be on the city fire department and the municipal court system.

However, if the past month and a half are any indication, inaction will again be the order of the day.

And, city government will continue to resemble a rudderless ship speeding toward a huge iceberg.

The June 30 and Aug. 30 deadlines aren’t the figment of an editorialist’s imagination. Michael Abouserhal, a certified public accountant hired by Mayor Brown to assess Youngstown’s financial health, set the deadlines in his hard-hitting, no-holds-barred report that was made public in May.

Abouserhal, who retired a year ago as vice president of finance and business services at Cuyahoga Community College and previously worked as chief financial officer for Cleveland Public Power and assistant director of finance and controller for the city of Cleveland, painted a bleak picture of Youngstown’s finances.

The bottom line: City government will face a $16 million General Fund deficit by 2023 if drastic action is not taken to cut spending.

Thus, Abouserhal recommended an immediate meeting between the administration and union leaders with the end of June as the deadline for a decision.

The focus, he said, should be on long-term fringe benefits and concessions, specifically on health insurance premium contributions, wage changes and pension reductions.

If nothing came of those discussions, Abouserhal recommended that the city decide by Aug. 30 on layoffs. Each General Fund department would be evaluated for possible staff reductions, again with a focus on the fire department and court operations.

Job cuts

In his report, the financial consultant said between 20 and 30 employees could be cut in the fire department and the clerk of courts/municipal courts, respectively.

He conceded that the wide-ranging spending reductions he proposed are “very difficult to implement and are subject to negotiations.”

The uphill battle in dealing with the city’s budgetary crisis can be seen in the ongoing controversy surrounding Fire Chief Barry Finley’s decision to close the city’s fire stations on a rotating basis. The closures are necessitated by the fact that just six months into the year, the department has spent more than $81,000 in overtime out of the $108,000 budgeted this year.

If that rate of spending continues, Chief Finley believes the overtime account will be dry by the middle of this month. He said his department needs between $60,000 to $65,000 to cover overtime for the rest of the year.

The spending is prompted by a workforce shortage. Nine of the 127 firefighters are not on the job because they sustained work-related injuries. Overtime is, therefore, necessary to maintain a regular work schedule.

But as the mayor, fire chief and members of city council attempt to find a solution to the department’s financial challenges, we are reminded of a warning Abouserhal, the financial analyst, issued when he publicly discussed his report:

“If decisions are not made, the city could end up in fiscal emergency. You need to focus on the deficit as soon as possible.”

There are only two ways government can erase red ink in the budget: increase revenue; decrease spending.

There are cities in Ohio and around the country where jobs are so plentiful that the public treasuries are bursting at the seams with tax dollars.

Unfortunately, that isn’t Youngstown’s story. The city is undergoing major changes, but not in the right direction.

That’s why the independent analysis of Youngstown government’s General Fund, which is fed mostly by the city’s 2.75 percent income tax and business-profit tax, paints such a bleak picture.

Fortunately, Abouserhal has provided city government with a roadmap for achieving a balanced budget.