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Friday, June 5, 2009


Posted By on Fri, Jun 5, 2009 at 10:00 AM

Amid the legislation-dumping that regularly occurs before every summer, Sharon Dumas, Cleveland Mayor Frank Jackson’s robotically unfazed finance director, slipped in casually to council’s finance committee meeting on Monday and coolly ran through the new reality: The shit is really about to hit the fan.

Next year’s projected deficit is $63 million — $10 million more than the hole Old Silver had to fill last year. Yeah, he’s got nearly $20 million from the sale of Public Hall for the new county convention center, and nearly $10 million still sits in a rainy-day fund. But that still leaves a long row to hoe.

Council members looked like they were wondering how they could buy the Benz with Yugo money now.
Ward 9 councilman Kevin Conwell began ticking off his concerns. “I’m almost finished,” he joked at one point. “You’ve said that five times, Kevin,” replied council president Marty Sweeney, ever protective of hurting the administration’s feelings. Sweeney rolled his eyes and squeezed Conwell’s shoulder. What’s all this number-crunching stuff in the finance committee anyway?

“Just with hospitalization, dental and Worker’s Comp together — that’s $100 million,” said Conwell, marveling to Dumas. “That’s not even talking about paying for salaries.”

Yep, said Dumas. But hey: “We held our rating in the last bond buy,” she noted. And: “Both the state and county have negative outlooks — not us.”

She means this year. Next year, it looks like the city will join them.

In all, general-fund revenues are expected to fall $19.5 million (look at every economic indicator — or out most windows — to figure out why), and expenditures are going up nearly 3 percent, some $14.6 million. Blame most of the cost woes on the usual suspects — increases in medical costs, salaries, Worker’s Comp premiums, gas and electricity. This hole’s not getting any shallower. What’s Daddy Frank to do now?
Old Silver’s been praised all up and down the power ladder for somehow managing to balance the city’s books without any layoffs or dramatic service cuts. But all of that is just been Chapter One of Jackson’s mayoral story. This summer, Jackson’s going to unleash a trained budget butcher on the books, looking for the next round of reductions.

Ward 11 Councilman Mike Polensek was on the job when the city went into default in 1978. That was bad, he says, but this really sucks.

Polensek praises Jackson for his money management and endorses him for mayor this time around, but thinks he should be forthright with citizens about the drastic cuts that now loom. He says Dumas is acting “very restrained” for what her numbers foretell. Still, we predict that Jackson and Co. will wait until much later this year to make clear the depth of the hole — after that second term is locked up tight.

“I can tell you that I’ve never been confronted with that large a deficit,” said Polensek on Tuesday, “and with the continuation of the meltdown of the local economy, next year is going to separate the wheat from the chaff. You don’t have to have a master’s in finance to figure out where we’re headed.”
Layoffs? Quite possibly, said Polensek. Tax and fee increases? Don’t think so. Four more wards disappearing due to population loss? Likely. Much more to do with much less? Absolutely.

“If you ever talk about council people needing to apply themselves and committing themselves to analyzing the budget and understanding the budget, this is when you’ve gotta do it,” he said. “You see all these new members walking around now with these shocked looks on their faces, and I just tell ’em, ‘Welcome to the big city.’” — Dan Harkins

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