Niles jubilant in release from its state watch
NILES — Ohio Auditor Keith Faber on Monday released the city of Niles from fiscal emergency after what was described by state officials as a near-record turnaround from serious debt to financial stability in a span of four-and-a-half years.
“It’s truly amazing, the level of improvement,” said Faber, before he presented Mayor Steve Mientkiewicz with a plaque celebrating the city’s financial stability, during the afternoon announcement at Niles Senior Center on East State Street.
The Auditor’s Office placed the city in fiscal emergency in 2014 due to deficits in seven funds, including a $2.7 million deficit in the water fund and a $118,000 deficit in the sewer fund.
The city’s five-year forecast now projects positive balances going forward, including a $4.3 million balance in the water fund by 2023 — a $7 million turnaround.
In order to be released from fiscal emergency, the city had to implement an effective accounting and reporting system, correct all fiscal emergency conditions, meet objectives of a financial plan and prepare a five-year forecast that met the standards of the state auditor. The city of Niles met all conditions, according to Nita Hendryx of the state auditor’s office.
“This was a team effort for the citizens of Niles,” said Mientkiewicz.
In an effort to restore the city to financial stability, city employees took concessions, and, in 2016, voters passed a levy to increase income tax from 1.5 percent to 2 percent. The city also cut back on health care costs by switching to a different provider, which saves $2 million annually. An automated city auditor’s office, improved monthly reconciliation program and outsourced income tax collection also will save the city money going forward.
Former Mayor Thomas Scarnecchia said when he took office in 2015, there was no money to work with. “It was total negative,” he said.
The state auditor’s office worked very closely with Niles, said Faber. “We have a level of confidence that the city will not immediately fall back into fiscal emergency,” he said.
Still, with what Mientkiewicz estimates as a $65,000 loss in property taxes with the idling of the General Motors plant in Lordstown, the city has to remain adaptable. He said Niles will “make the necessary adjustments,” going forward to remain financially stable.
“Today is not the finish line, it’s the starting line,” said City Council President Barry Steffey Jr., who was part of the now-disbanded Niles Financial Planning and Supervision Commission.
Last month, the Niles School District was placed in fiscal emergency. Faber said having both a community and its school district in fiscal emergency at the same time is a relatively rare occurrence.
The school district, in addition to having a deficit, has nearly unintelligible financial records, he said.
The district is nearing the end of the 15-day window in which a financial planning commission must be appointed. Like the city, the district will have to meet requirements to be removed from fiscal emergency.