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Warren development agency funding eyed; budget might be delayed

WARREN — City Council’s finance committee last week unanimously recommended not supplementing the Community Development department’s budget with general fund or enterprise fund money.

Now council members have to decide whether they want to delay passing the 2017 city budget because the supplemental funding is included. The city must pass its annual budget by Dec. 31.

If the majority of council follows the finance committee’s recommendation, the 2017 budget proposal will have to be amended or its passage will have to be rejected.

Councilman Eddie Colbert, D-at large, finance committee chairman, has been one of the council members leading the effort not to provide supplemental income of  $233,748 per year through the billing of the city’s enterprise departments or through the city’s general fund.

He and other council members questioned the legality of using enterprise fund money for a non-enterprise department after a transfer to Community Development was made earlier this year. The city is still waiting a legal opinion from the state auditor’s office.

“If we pass this budget and sometime next year it is determined this finance method is not legal, we may be required to repay the money provided in 2016 using this method and any money used in 2017,” Colbert said.

CD Director Michael Keys has told administration and council members that if he does not receive the supplemental income, he will have to lay off up to three of his five employees. That means the department will not have the personnel required to oversee the more than 20 nonprofit programs that receive up to $125,000 in Community Development Block Grant funds to operate.

Colbert argues it does not make sense to provide a supplement of $233,748 per year for administrative costs for the non-profits when only $125,000 is being provided to the agencies.

Councilwoman Helen Rucker, D-at large, and Councilwoman Cheryl Saffold, D-6th Ward, each have expressed support for passing the 2017 budget proposal with CD’s  supplemental funding intact.

“I have spoken to the administration about expanding the services of CD to  do economic development and create an economic development department,” Rucker said. “They seem interested in exploring that idea.”

“We don’t want to risk losing the funds we already are receiving from the federal government through CD,” she said. “There are other cities that are using their CD departments in creative ways.”

Rucker said the services provided by the non-profits are vital to different segments of the community.

The councilwoman also said the CD department also has been  involved with a variety of programs in the city, including the development of Kinsman House, the attraction of Auto ParkIt, brownfield planning, as well as the implementation of demolitions through the Moving Ohio Forward program, the Golden Triangle project and fair housing.

The supplemental funding issue came to light in the spring when the administration announced the plan to provide income to the CD department to help it balance its budget through the end of the year by having it bill the city’s four enterprise departments for the services it supplies them. The enterprise departments are water, waste water, storm water and sanitation.

CD’s funding primarily comes from Community Development Block Grant allocations from the U.S. Department of Housing and Urban Development and its partnership with Trumbull County to handle HOME allocations, also from HUD.

Keys said administrative funding from these two  grants provides about $150,000 a year. Last spring, Keys said he needed approximately $170,000 in additional funds to provide enough money to pay his staff through the end of 2016.

Councilman John Brown, D-3rd Ward, said council should seriously consider the recommendation of the finance committee when deciding to either support or not support the current budget proposal.

“I do believe the department should be able to stand on its own,” Brown said. “We have never gotten an answer on whether the supplemental financing method used this year is legal. I don’t understand why it has taken this long to get an answer.”

Brown suggests that the CD money currently being used for the non-profits could be redirected for infrastructure improvements in low-to-moderate income areas of the city.

rsmith@tribtoday.com

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