Youngstown spending practices annoy state auditor
YOUNGSTOWN — Keith Faber said during his year as state auditor he hasn’t “seen anything quite like” Youngstown’s misuse of more than $4.4 million in water, sewer and environmental sanitation funds.
Faber said the city used those funds “as their general-fund ATM.”
He said the city improperly spent $4,415,332 from its water, wastewater and environmental sanitation funds in 2017 and 2018 that should have been paid by the general fund. With the findings for adjustment, the general fund would be in deficit.
But Mayor Jamael Tito Brown said Tuesday the city won’t reimburse the money from the general fund — as instructed by the auditor — unless compelled by a court ruling.
“I need a court of jurisdiction to tell me what I have to do,” he said. “The courts would have to tell me to pay that back.”
When told of Brown’s comments, Faber said: “That’s a shortsighted approach on his part.”
The Ohio Attorney General’s office could go after the city to make the repayment to the general fund, Faber said.
Also, the audit brings up so many concerns that Faber said, “Certainly it’s a potential for them to have issues with creditors.”
A state audit of the city’s 2018 finances, released Tuesday, details $1.2 million improperly spent by the city from its water and wastewater funds. It requires the general fund to reimburse the city for that money.
This is on top of the $3.1 million an audit of the city’s 2017 finances states must be reimbursed to the water, wastewater and environmental sanitation funds by the general fund. That report was done Aug. 29 — four months before the 2018 audit came out.
Brown said the auditor took “a narrow view of the law” as the city had used money from the three funds for economic-development projects for several years without an issue.
Brown said he has phased out the practice, used by previous administrations, and will use water and sewer money “for those purposes only.”
But he also defended the policy saying, “No one can disagree they wanted to help these entities.”
Other misuses of the water and sewer funds, according to the audit, were $28,758 to buy an SUV for Brown, $2,120 charged for Ohio Municipal League dues and $45,379 for software support and maintenance. After the issue was pointed out by the auditor’s office, the city used general-fund money to repay the water and sewer funds for the SUV and the municipal league dues, Faber said. Also, the city provided supporting documentation or made general-fund repayments for all but $19,176 of the software expenses, he said.
“If I was a water or sewer customer, I wouldn’t want the city using money for the mayor’s new SUV or the irrigation system or other purposes,” Faber said.
Of the $1.2 million the audit contends the city improperly spent, the largest amount is $524,629 for an irrigation system at the city-owned Henry Stambaugh Golf Course that was paid using water funds. The audit states the money should have come from the parks and recreation fund, which gets its money from the general fund.
“They had talked about if it improves water usage (the water fund) should be used,” Brown said. “We were using so much water at the golf course” because of leaks in the previous system.
The 2018 audit also raised a concern with how the police department paid some officers who worked out-of-rank. The auditor checked 40 cases of payments and found in every instance that the rate paid to the officers for out-of-rank pay was too much. There were also issues with accumulated time — additional time off instead of being paid — for officers.
While the auditor’s office isn’t requiring officers to pay the money back, Faber said it is “continuing its investigation” into the matter. “We have concerns,” he said.
Said Brown of the police payment issue: “We’re having the finance department and the law department look at it. We want the two departments to look at the process and give me their findings.”
The audit ordered the city’s general fund to reimburse $4.4 million to the three funds: $2.6 million to water; $1.6 million to sewer; and $150,000 to environmental sanitation for 2017 and 2018.
During discussions before the 2017 report was released, the auditor’s office offered to allow the city to repay the money owed by the general fund over a 15-year period. The city rejected the offer. The auditor’s office didn’t talk about a repayment plan with the city for the 2018 findings because of the refusal related to the 2017 report.
The 2018 audit also repeated issues in previous audits.
One was about how the city allocates a portion of the costs of various departments to the water, wastewater and environmental sanitation funds. Since 2004, the city uses about 70 percent of the cost of operating computer services, board of control, law department excluding prosecutors, finance department, mayor’s office, civil service and city council from those three funds. Also, about 50 percent of the cost of operating the public works department is charged to those funds.
Faber said those percentages are not supported by documentation.
“If city council is spending 70 percent of its time on sewer and water, they haven’t been able to show support for that,” he said. “The question is: how do you arrive at that allocation. Are you telling me the mayor is spending 70 percent of his time on sewer and water? I would find that incredible.”