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Long-term analysis shows Youngstown’s finances are improving, but much more work is needed
Financial consultant says fiscal emergency is ‘a concern’
YOUNGSTOWN
An analysis of Youngstown shows the city has made substantial improvements in getting its finances in better shape, but it still has a long way to go to be on solid footing.
A 38-page report, obtained by The Vindicator through a public-records request, projects that the city will have a $5.65 million shortfall in 2024 in its general fund and other funds that receive their money through the general fund such as police, fire and street construction.
It shows a projected 2020 deficit of $1.11 million, a deficit of $2.38 million in 2021, $3.71 million in 2022, and $4.69 in 2023.
The report was prepared by Michael Abouserhal, a financial consultant hired by the city who did a similar projection last year. He is a CPA and former Ohio Lottery Commission executive director.
Fiscal emergency is “a concern,” he said. “It’s always there.”
The good news, Abouserhal said, is while he’s projecting a $5.65 million shortfall in five years, the report he did last year had a $16 million projected deficit in five years.
“The city should be complimented for making tough decisions, but they are still facing financial challenges,” Abouserhal told The Vindicator. “There is a need to get going on revenue.”
The projected deficit doesn’t include the state auditor wanting the city to pay about $4.5 million from its general fund to reimburse water, wastewater and sanitation funds for economic-development projects from those latter three in 2017. The city is still negotiating with the auditor’s office over a repayment plan. The city will also have to resolve about $1 million it provided from those three funds for projects last year.
The city hired Abouserhal last year and this year – for $25,000 each time – to evaluate the city’s finances and do long-term budget forecasting. The city recently hired him for up to another $25,000 to help with the water, wastewater and sanitation funds issue.
In his latest report, Abouserhal cited reasons for reducing the projected financial shortfall having to do with major cost savings last year. The major ones were a reduction of 17 full-time employees from the prior year and the restructuring of the health insurance contract, which save about $1 million each annually.
Abouserhal listed several recommendations in the report to increase revenue and reduce costs, which he said includes proposals from department heads.
Among the revenue suggestions – some of which are the same as what he recommended last year – include:
Engage foundations, banks and private partnerships to focus on economic development, revenue attraction and improving overall operations in the city.
Look at the amount of money charged for licenses and permits as well as evaluate fees that are waived.
Be aggressive in finding a company to lease the former AT&T facility on Salt Springs Road and sell the South High Fieldhouse on Erie Street. The city has unsuccessfully attempted to sell the fieldhouse over the years.
Have the fire department charge for various services including inspections and responding to car accidents, fuel spills and hazardous material spills.
Increase the fees for birth and death certificates from $23 to $25 to raise about $52,000 to $55,000 annually.
Have the clerk of courts hire a collection agency that specializes in parking ticket collections to address the issue of more than $1 million in unpaid tickets. The clerk of courts has asked city council to allow the police department to put tire boots and/or windshield barnacles on at least the top 120 worst repeat offenders.
Perform a review of the current court costs and fines.
Expand the traffic camera speeding enforcement program if it’s warranted for public safety.
Work with Youngstown State University to create sponsorships and naming rights program for the city.
Among the ways to decrease expenditures – some are the same as last year’s recommendations – are:
Continue to focus on attrition. If there was a reduction of 18 full-time employees, the savings would be about $1 million, he said. He also urged the city to specifically look at the clerk of courts/municipal courts. Last year, he recommended the elimination of up to 30 employees from there. This year, he said he didn’t give a specific number.
Implement mandatory furlough days, reduce pension pickup for existing employees with a corresponding reduction in salary for employees who don’t receive pension pickups, eliminate pension pickup for newly-hired employees, forego salary increases negotiated for 2020, increase the employees’ contribution to health insurance premiums from 10 percent to 20 percent. All are subject to negotiations, which Abouserhal said is “easy for a financial consultant to recommend, but very difficult to implement for a city because of collective bargaining.”
Reduce discretionary overtime payments.
Re-evaluate if health services or other city services could be provided by Mahoning County.
Reduce the operations of the Henry Stambaugh Golf Course to April to October, a reduction of about two months, and consider selling it.
Evaluate possible alternatives for external consulting services for the engineering department.
Evaluate the city’s policy for taking city vehicles home.
Review security needs for 20 Federal Place.