Commissioner: Niles fiscal situation ‘unusual’

Housing inspector Jeff Crowley, Law Director J. Terrence Dull, Councilman Barry Steffey and Mayor Tom Scarnecchia discuss the city's finances Wednesday in City Council Chambers.

NILES — Over the past eight years, any time the city of Niles raised more revenue, it increased its spending and drained more than $13 million in cash reserves, and nothing the city has done so far has been enough to overcome the losses, state-appointed fiscal supervisors said Wednesday.

The only thing left to do is cut spending because there is no more new revenue source coming, fiscal supervisor Tim Lintner said.

“You are not on track. That has to change,” said Commissioner Quentin Potter. “There is increased spending across the board.”

But, as the data from 2007 to 2015 shows, the city has operated for nearly a decade spending more than it made.

The city’s fiscal commission reviewed what could happen if the administration, under Mayor Tom Scarnecchia’s lead, fails to produce amendments to what will be the city’s fourth fiscal recovery plan by the Dec. 2 deadline.

If the plan is too weak to overcome the general fund’s nearly non-existent cash reserves, Council President Robert Marino said it would be appropriate for the fiscal supervisory commission — of which he and Scarnecchia are members — to order a 15 percent spending cut across the board, in every department.

Potter said if Scarnecchia brings a plan to the table, even if it isn’t quite up to par, he would be willing to let him work on it a bit longer, if there was evidence of a good faith effort. A spending cut is a “big hammer” to drop, Potter said, and it isn’t the only drastic measure the commission could take if it feels the administration isn’t willing to do what it takes to right the ship.

However, Potter said, he has faith that City Council and the administration are working diligently.

Scarnecchia promised he is looking at cuts everywhere, and also said layoffs are not part of his plans.

The commission also requested the administration start providing it with a breakdown of overtime costs — which have soared in 2016 — to ensure overtime is only being used in cases of emergencies.

Safety Service Director Jim DePasquale promised all the overtime could be justified. The water department saw $80,300 more overtime charged than in 2015 — a 110 percent increase — because it only has one shift but has had 65 more waterline breaks this year than last, he said. The light department — which saw a 90 percent increase of $82,800 in 2016 overtime — has had more outages than usual and several after- hours business line connections to attend to this year, DePasquale said.

Overtime and other unpredicted expenses keep popping up, Scarnecchia said, making it hard to get ahead with fiscal recovery plans the city has passed before.

The city just learned it has to pay the Trumbull County Combined Health District $30,000; all of the work to repair city hall, except the new roof, has to be funded and appropriated; bank fees are on pace to cost more than $100,000 more this year over last; and for some reason businesses aren’t withholding as much income tax as the department predicted.

Potter said the city’s failure to get control of its finances after living under fiscal emergency for more than a year is “unusual.”

“This needs to be taken seriously. This is unusual for a city to be in fiscal emergency. It is unusual for a city to be in fiscal emergency and not making progress after almost two years of work. Usually in the course of these commissions you start to see improvement, improvement that can be counted on. Stability starts to increase, you see the signs that we’re headed in the right direction,” Potter said. “That hasn’t happened yet. There isn’t any improvement.”

Council would need to approve the amendments to the fiscal plan Dec. 7 in order for the commission to accept it at its next meeting, 4 p.m. Dec. 21.