The Heart of the Money Problem

06 Feb

We need to set something straight concerning the $2.5 million deficit in Maple Heights. There has been a lot of complaining and blame-shifting in our City. Whether it is the County Executive, the State Auditor, the Governor, bad landlords, property devaluations, or even Representative John Barnes; we seem to be intent on blaming our woes on someone else. But, as long as we keep pointing the finger, we will be unable to solve the real issues.

There may be problems that are outside our control – but the problem lies within.

The Real Problem

The problem in Maple Heights is the same problem that the Auditor of State found in East Cleveland, which is currently in fiscal emergency. In his December 19 press release, Auditor Yost said, “The city’s lack of fiscal management is both unsustainable and irresponsible.” While it may be a hard pill to swallow, we look a lot like East Cleveland.

How can I say that? Let us look at some of the symptoms.

The Symptoms

Here is what the Auditor’s Office found in East Cleveland:

The audits show that as of December 31, 2011, the city had 10 funds with deficit balances…East Cleveland officials also appropriated more money that what was estimated to be available. …To make matters worse…the city spent more than what was appropriated in numerous accounts.

The first symptom is deficit balances. At the close of 2013, Maple Heights city officials managed to send three more funds into the red. That bought us to more than seven funds in the red with a cumulative negative balance exceeding $2 million. East Cleveland may be further down the road but we are on the same track.

The second symptom is even worse: we appropriated (budgeted) more than we expected make in revenue. In 2013, we expected to receive $627,000 in each of the police and fire funds. Nevertheless, in the City Expense Report, we budgeted $768,949 for Police Services and $809,870 for Fire Services. Just like East Cleveland, we somehow budgeted more than we knew we would receive.

The third symptom is most troubling: we spent more than we budgeted. What good is a budget if you blow right past it?

Back to the same two funds. We closed last year having overspent the budgeted amounts in both funds – police by $45,000 and fire by $38,000. This, plus the over-appropriation listed above, brought the final over-expenditures in these two funds to more than $200,000 each. And this is just the tip of the iceberg.

There may be problems outside, but the problem – financial irresponsibility – is within.

What is the Solution?

Some would have us believe that the place to start is giving the City more money, a.k.a. raising taxes. But why put more gas in a leaking gas tank? No, the place to start is patching the holes.

However, some would tell us we do not have time for that because the proverbial sky is falling. But this aversion to sound planning and strategy is what has placed us in this mess. As we used to say in the Marine Corps, “Failing to plan is planning to fail.” We are here because we have not had the foresight or courage to plan for the future.

Conclusion

No, new taxes will not address the heart of our money problem. We will still be a leaky tank with merely a larger funnel feeding it, letting our money run all over the ground. The sky is not falling, but we are on a slippery slope. Just like East Cleveland, Maple Heights is on a path that is “unsustainable and irresponsible.” If we want to truly move forward, we need to fix the real problem: our financial irresponsibility.

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  1. Maple Heights in Fiscal Emergency – This is What We Need | Bill Brownlee - August 13, 2015

    […] an article from February of last year, I showed that the City was guilty of the same financial irresponsibility committed in East […]

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