Youngstown board cancels contract vote
YOUNGSTOWN — The board of control canceled a vote on hiring a consultant to assist with its water and wastewater issues because the contract would have violated the city’s purchasing policy.
The thwarted move has a councilwoman saying that all consulting contracts should first come to city council.
“We couldn’t do it (Thursday) because of our purchasing policy,” said Kyle Miasek, interim finance director and secretary for the three-man board that also includes Mayor Jamael Tito Brown and law director Jeff Limbian.
The board hired Michael Abouserhal, a CPA and former Ohio Lottery Commission executive director, in May for up to $25,000 — at $150 per hour as well as travel and mileage reimbursement — to prepare a long-range forecast for the water and wastewater funds, evaluate the funds and come up with recommendations on possible rate increases.
The board had a similar item on its Thursday agenda to hire Abouserhal to do a five-year forecast for the two funds including discussions with the Environmental Protection Agency regarding rate increases and loan agreements, assisting in preparing and evaluating a five-year forecast to city council, assisting in the selection of the finance director and other services deemed appropriate by the mayor. That proposal called for Abouserhal to receive $150 per hour — up to $25,000 — and travel and mileage reimbursement.
That would have put his payment for water and wastewater consulting services at an amount up to $50,000.
The city’s purchasing policy allows the board of control to spend up to $25,000 without city council approval so if the contract was approved, it would have violated the policy.
“It’s our plan to put this in front of council because it exceeds $25,000,” Miasek said. “We’re going to ask council for the authority.”
But Brown downplayed the purchasing-policy violation — saying the contract was delayed because “we need a few more things from him before we move forward. He had some clarifications in the scope of services. He’s coming next week to go over some things. We’ll also meet with council. We’ll set up a meeting in the future with council to discuss his findings.”
Miasek said: “It was the decision of the administration to pull it.”
Councilwoman Lauren McNally, D-5th and chairwoman of its finance committee, said: “It really concerned me when I first saw it on the agenda. Maybe all professional service agreements need to be approved by council. It’s not like this is the first time the mayor pushed the $25,000 limit without telling council. I have concerns about that policy.”
The wastewater fund is burning through money because the city has refused to increase sewer rates to fund federally mandated improvement projects. Without that rate increase, the state Environmental Protection Agency stopped loaning money for the projects, forcing the city to use wastewater funds to pay for that work.
Arcadis, an international firm that specializes in water and sewer analysis, recommended in October 2018 that sewer rates be increased 8 percent per year for five years, starting Jan. 1 of this year.
That rate increase would cover only about $75 million of the $160 million in improvements the city is required to make under a 2014 settlement with the federal EPA.
If the board eventually approves a deal with Abouserhal, it would be his third contract this year with the city that pays him up to $25,000.
He was hired by the board in January to do a financial projection of the city’s general fund as well as assist with the hiring of a permanent finance director. Miasek, deputy finance director, has served in that role on an interim basis since January 2018 when Brown took office.
Abouserhal’s report, finished in May, stated the city has made substantial improvements in its finances, but is projected to have a $5.65 million shortfall in 2024 in its general fund and other funds that receive money through the general fund such as police, fire and street construction.
Abouserhal was hired by the city last year for $25,000 to do a similar projection and he stated there would be a $16 million general-fund deficit in five years if the city didn’t do anything. The city made a number of cuts, including a reduction of 17 full-time employees and restructured its health insurance contract to save about $1 million annually that Abouserhal said led him to lower the shortfall.