ETHICS ISSUES, BOARD FEUDS, FEW RESULTS DAMAGE DEVELOPMENT AGENCYPublished: 6/15/14 @ 12:00
By Ed Runyan
Among the most important events in the recent history of the Western Reserve Port Authority was the Mahoning Valley’s collective decision in 2008 to create its economic-development division.
The Youngstown-Warren Regional Airport, the reason the port authority was created 22 years ago, has long been a topic of debate. Some people have called the airport a financial “black hole” because of the government subsidies that have been provided to keep it in business.
But the addition of economic development gave critics another target, and it may have set in motion forces that have led to the port authority’s current turmoil — including discussion of throwing out the current board of directors and starting over.
Jim Pirko, one actively involved longtime port authority volunteer, says the addition of economic development caused conflict because “change always brings conflict.”
U.S. Rep. Tim Ryan of Howland, D-13th, first proposed adding an economic development office in early 2008, then persuaded officials in Trumbull and Mahoning counties to contribute money to start it.
Rose Ann DeLeon, formerly of the Cuyahoga County Port Authority, was hired in 2009 as executive director for economic development at a salary of $155,000 per year after a national search.
Soon afterward, one of the four members of the port authority’s board appointed by Mahoning County commissioners, retired businessman Andres Visnapuu, complained that everything about DeLeon’s first budget was “excessive” and needed to have “performance-based targets” so the board didn’t “blindly” spend nearly $300,000 for her office in 2010.
Other controversy brewed in 2010, this time regarding board-member ethics after another Mahoning County appointee, Don Hanni III, raised questions about Trumbull County appointees Scott Lewis and John Masternick and two real-estate deals tied to port-authority matters, some of them involving DeLeon’s office.
After Masternick resigned, he called out Mahoning commissioners for appointing Hanni and Visnapuu, saying both men did little but criticize.
Mahoning Commissioner Anthony Traficanti defended Hanni and Visnapuu, saying he asked them to be “watchdogs” because of the amount of county hotel/motel bed-tax money going to the authority.
The Mahoning commissioners voted 2-1 in August 2012 to raise that county’s hotel and motel bed tax from 3 percent to 5 percent, effective Oct. 1 of that year, despite a chorus of protest from the local lodging industry, which said the move would cause the industry to lose business to areas with lower tax rates.
Voting in favor of the increase were Commissioner Carol Rimedio-Righetti and then-Commissioner John A. McNally. Traficanti dissented.
Rimedio-Righetti said she supported the tax increase because she believed the WRPA needed the money.
Mahoning commissioners also changed their distribution formula from one third to the county convention and visitors bureau and two thirds to the port authority to 30 percent to CVB and 70 percent to the authority.
DeLeon’s tenure has been marked by a lack of concrete results and personal hardship because of the death of her husband and a battle with cancer.
Her base salary was reduced at the end of her three-year contract, and bonus potentials were added to her next contract tied to performance. She was removed as executive director in March 2014 after going on medical leave a second time.
Then-chairman Atty. James Floyd said the lead economic-development position (DeLeon was then assisted by Sarah Lown) would remain vacant for at least several months.
Hanni has made no secret of his dislike for several of his fellow board members, especially Floyd, who became chairman at the beginning of 2014 after longtime board member Scott Lynn vacated the chairmanship at the end of 2013.
The conflict between Hanni and Floyd boiled over at two meetings in April — both of which were attended by some of the Mahoning commissioners.
Traficanti attended an April committee meeting at the airport during which Hanni first voiced his concern that Floyd had possibly violated state law and authority bylaws by obtaining a blank port authority check, having two other authority members sign it, then filling it out for $25,000 as earnest money for purchase of a building for the Mahoning commissioners to use for a new dog shelter.
Hanni, Floyd and another board member, accounting executive Rick Schiraldi, debated the matter at length. At the end of the meeting, Traficanti thanked both sides for their efforts.
But the next week, Commissioner David Ditzler attended the regular board meeting. Debate about the dog shelter resumed, but this time, others entered the verbal fray, with Hanni mixing it up with Lown and Dan Mamula of the Mahoning Valley River Corridor Initiative, which is the authority’s brownfield-remediation partner.
Ditzler spoke at the end of the meeting, saying the “personal attacks” taking place on the board were standing in the way of the authority doing its work effectively.
Schiraldi resigned after the meeting, Lynn soon thereafter, Floyd after that. That led Ditzler to contact Trumbull County commissioners to have a meeting about dissolving the board. Traficanti had little to say about the matter.
At last week’s port authority meeting, with only five of eight members present and new board member Ron Klingle serving as acting chairman, the body plowed through a long list of items. Hanni commented he hoped the meeting would show officials that board members could work together.
Pirko, a Warren-area commercial real-estate agent, has attended most of the board meetings over the past couple of years and was president in 2013 of YNG Air Partners, a group that has tried to help airport officials attract daily air service. He said he thinks Mahoning and Trumbull county commissioners should fill the vacant positions on the board.
“The structure is sound,” Pirko said of the port authority. “I’d be more concerned about a board that has no disagreements.”
Pirko encouraged officials in 2007 to expand the port authority’s economic-development potential and earlier worked for the marketing company Rubenstein Associates, doing research that he says contributed to the successful launch of Allegiant Airlines as a leisure airline serving the airport.
He says the important thing now is for the board vacancies to be filled with people with a business background and to get assistance from the Youngstown/Warren Regional Chamber to identify Valley residents who would make good board members.
The area can’t wait the amount of time necessary to dissolve the board and replace the five current members, Pirko said. “It could take months to years,” and during that time, economic opportunities will be missed, Pirko said.
Calls to Lynn and another former port authority member, Richard Musick, for this story were not returned.
The start of the economic-development office at the port authority has been rocky, Pirko said, but that’s to be expected. “It was a major change,” he said.
Christopher Burnham, executive director of the Summit County Port Authority, who partnered with the WRPA on economic-development initiatives before DeLeon came on board, was asked recently whether there is a way for a port authority to eliminate the kind of ethics questions that have dogged the WRPA in recent years.
He said the keys are how the appointments are made and how potential conflicts are handled.
“We’re very careful,” he said in an email. “If it’s a real clear conflict [rarely], the member must not be present during discussion and vote. If there could be a conflict [firm or company maybe part of a deal in some way], the member can’t participate in discussion and must abstain from voting,” he said.
“Its fairly simple and straightforward. The recorder is on and the minutes reflect what occurs. That’s it.”
Contributor: Peter H. Milliken, staff writer.