Editor’s note: Sean Kalin Stipe is a Libertarian candidate for an at-large position on Lorain City Council. Early voting has already begun, with election day set for November 3rd. Buckeye RINO endorses Stipe for Lorain City Council at-Large.
A quick read of the Morning Journal gives the impression that we are having some financial problems, but it’s only to the tune of $690,000. Our Mayor will quickly pass the blame to funding from the State of Ohio being cut $400,000 from last year. When the budget was presented to council in March, Lorain was in bad shape; heck, the whole country was, so a major cut in state funding should have been anticipated.
This still leaves another $290,000 that is going to the anticipated end of year budget deficit. Blame it on the streets. The have spent $209,000 more than budgeted, and the improvements to our streets shows that it was well spent (sarcasm). The question that hangs out there is who is allowing department to overspend their budget. That falls right in the lap of out chief administrator, the Mayor of Lorain. Remember that council already approved the spending levels for the year, but that doesn’t seem to matter anymore.
There has to be some good guys that are saving money this year. The parks department should truly be commended for their efforts. One the Journal’s list of who has save the most is, of course, the Mayor who is $938 under budget. “Ata boy!” But wait, how did he get the numbers to show this “savings?” These numbers, provided for this week’s council meeting shows that the Mayor’s salary for the last four months of the year are not included. That’s $14,086 per month. Now that department is over by $55,406 dollars at the end of year.
This tricky book-keeping is repeated in most departments. The expense sheets provided to the public has a lot of blacked out sections, but it appears that no one got paid in September or will be getting paid in October. Then there is a lump sum payment in November. For those on city council who actually read their packets, they must figure out how this shell game is being played.
So how do we figure out what the projected deficit of Lorain actually is. It certainly isn’t going to be just $690,000. Here is how fast that number changes:
- -$ 690,000 2009 expenses over revenue as reported
- -$1,500,000 2008 year end deficit
- -$734,000 “Shoe Boxed” bills
- -$500,000 Utility department money that was borrowed (transferred aka “advanced”) in 2008
- -$2,400,000 Debt service payment due at the end of 2009
- -$2,000,000 Borrowed from Water department
- -$2,000,000 Borrowed from Water Pollution Control department
TOTAL 2009 Year End Deficit (simplified version)
This leads to what role the Lorain City Council members that are being elected in November is actually going to be. According to state law, it’s not going to be much. In 2002, Lorain was placed on “fiscal watch” and can not be removed until the general fund deficit is eliminated. Lorain will enter “fiscal emergency” if one the following happens; default on a debt, lack of funds for payroll, “shoe boxed” bills exceed 30 days, or the year end deficit is 1/6 of yearly revenues.
Projected general fund revenue for 2009 (as of 9/24/09) is $35,658,000. That makes the danger number just under $6,000,000 and as you can see from above, we exceed that by nearly $4,000,000. There is still a debated legal opinion from ex-Law Director Provenza about the fact that we can “advance” monies from the Utilities department. The significant fee increases to our water and sewer bills earlier this year sure look like a back door tax at this point.
Should we end up in an emergency, the City of Lorain will be run by a financial planning and supervision commission. This includes the treasurer of state, the director of budget and management, the mayor, the council president and finally 3 others that come from a list of five people appointed by the mayor and council president. Those people can not have held public office in the last 5 years. The governor picks the three. All members of this commission are immune from any actions they take.
So unless a rabbit is pulled from a hat, this will be the new government of Lorain. The magic trick being shown right now is hiding this until after the November election.