YOUNGSTOWN — Mayor Jamael Tito Brown said he expects a court to ultimately decide if the state auditor is correct that Youngstown improperly used approximately $4.5 million from its water, wastewater and environmental sanitation funds for business development.

An Aug. 29 state audit of the city’s 2017 finances stated the money for economic development by private companies shouldn’t have come from those three restricted funds and instead should have come from the city’s general or business development funds.

The auditor issued a finding for adjustment requiring the city to have the general or business development funds reimburse $3,170,620: $1,696,003 to the water fund, $1,324,617 to the wastewater fund and $150,000 to the environmental sanitation fund.

The amount — to be repaid over 15 years — was reduced because of a $2,042,042 loan given to the downtown DoubleTree by Hilton hotel with $750,000 of it forgiven if it’s paid back by December.

“I believe the auditor took a narrow view of the ’17 audit compared to the other audits. I want to make sure, under my administration, if there are pieces not in compliance, we’ll change them. But we felt the ’17 audit was too narrow. Why didn’t the auditor’s office raise this issue before,” Brown said.

Brown is referring to the city using nearly $10 million from the three funds for economic development since 2010.

Auditor Keith Faber has said his office learned about the issue in March 2018 when the city settled a class-action lawsuit that questioned the legality of using money from those restricted funds for economic development. He said he has no plans to go back to prior closed audits.

Faber said his office could send the issue to the attorney general’s office, but is first waiting for the completion of the city’s 2018 audit, which he expects to be finished by the end of this year or in early 2020. The city spent about $1 million in 2018 from the water, wastewater and environmental sanitation funds for economic-development projects.

It has since stopped the practice.

“I need a court to tell me who’s right or wrong. If the state auditor would pursue any further actions, we’d ask a court of jurisdiction or a court of law to weigh in on it. They won’t pursue anything until after the ’18 audit. But we expect a court to make a decision,” Brown said.

The auditor’s office first alerted Brown in a May 4, 2018, letter that the funds had been inappropriately allocated.

The repayment of $3,170,620 over 15 years is about $211,375 annually, which Faber said wouldn’t put the city into fiscal emergency.

“Ratepayers expect that the fees they pay for services will be used for their intended and legal purpose,” Faber said Aug. 29, when the audit was made public. “In this case, the city has violated that expectation. My office has tried to balance our concerns regarding this misuse of money with the city’s financial condition and were met with a lack of willingness to address these findings.”