NILES, Ohio (WKBN) – A state-appointed financial adviser overseeing the city of Niles’ budget process urged the city not to bring any laid off employees back until its financial issues are resolved.
The City of Niles has been under fiscal emergency, and the Niles Financial Planning and Supervision Commission has been working with leaders to get a handle on a looming $1.5 million deficit, projected by the end of this year. On Thursday, the commission approved new Mayor Tom Scarnecchia’s fiscal recovery plan, which should result in a $22,000 surplus by the end of 2016.
Voters also approved a 0.5 income tax increase on Tuesday, which will give leaders about $2 million to work with next year. But Tim Litner, the state-appointed financial supervisor, said he didn’t know how much money the income tax increase would bring in this year. That money will begin being collected in July.
“We’re hopeful that starting on Monday, we can get a good idea,” he said.
For this reason, Litner urged the leaders to address the city’s other financial issues — including having no capital improvement budget — before bringing the police officers and firefighters back.
Commission member John Davis asked if money could be borrowed so that those employees could return to work immediately, especially since the safety forces were instrumental in getting the levy passed.
“I think that someway, if we can, we need to reward that effort by getting them back,” he said.
Linter said borrowing money would be up to the city and commission, but he said adjustments would needed to be made to the budget so the city’s financial issues do not return.
“Nothing has been done to adjust the way it spends money, outside of laying off people, so if you bring everybody back and you don’t fix the problem — which is the way the money is spent — that $2 million will be gone,” he said.
Nita Hendryx, of the State Auditor’s Office, suggested fixes like reducing retirement incentives, severance payments, vacation sell backs and sick leave bonuses. She also said requiring employees to contribute to health insurance and capping the amount the city pays for pensions at 10 percent would help alleviate the money issues.
“Other cities employees pick up part of the pension. In Niles that doesn’t happen,” she said.