In Highland Heights, the mayor is pretty much given free rein in choosing city administrators. In fact, the city Charter and ordinances do not impose any specific licensing or credentialing requirements for several positions, including the Finance Director, the Service Director, the Acting Building Commissioner or the Recreation Director.
Similarly, the city does not have an anti-nepotism policy, which bars related individuals from being appointed to city administrative positions. The reason businesses have such policies is because of the inherent conflicts of interest and conflicts of loyalty that can arise when related individuals work for the same employer.
The nepotism issue was an unspoken elephant in the room during last night’s Legislative & Finance Committee meeting.
At that meeting, Finance Director Tony Ianiro was faced with the difficult task of explaining the significant deficit-spending engaged in by his brother, Dave Ianiro, the city’s Recreation Director, this year.
As I have previously reported, the recreation department is the only city department that has its own exclusive source of funding (it receives 1 mil of the property taxes paid by residents each year). It also keeps, as revenue, the fees paid for pool passes, swim lessons, and other city recreation programs. According to a recent financial report, the rec dept. took in $ 615,000 in revenue this year, but it had $ 733, 513 in expenditures (including about $ 20,000 in carryover encumbrances from 2008).
Prior to this year, no city Recreation Director had ever submitted a budget that anticipated deficit-spending by the city’s rec. dept. Recreation Director Dave Ianiro broke that record; he submitted the city's first deficit-spending rec dept budget in 2009.
Similarly, the city does not have an anti-nepotism policy, which bars related individuals from being appointed to city administrative positions. The reason businesses have such policies is because of the inherent conflicts of interest and conflicts of loyalty that can arise when related individuals work for the same employer.
The nepotism issue was an unspoken elephant in the room during last night’s Legislative & Finance Committee meeting.
At that meeting, Finance Director Tony Ianiro was faced with the difficult task of explaining the significant deficit-spending engaged in by his brother, Dave Ianiro, the city’s Recreation Director, this year.
As I have previously reported, the recreation department is the only city department that has its own exclusive source of funding (it receives 1 mil of the property taxes paid by residents each year). It also keeps, as revenue, the fees paid for pool passes, swim lessons, and other city recreation programs. According to a recent financial report, the rec dept. took in $ 615,000 in revenue this year, but it had $ 733, 513 in expenditures (including about $ 20,000 in carryover encumbrances from 2008).
Prior to this year, no city Recreation Director had ever submitted a budget that anticipated deficit-spending by the city’s rec. dept. Recreation Director Dave Ianiro broke that record; he submitted the city's first deficit-spending rec dept budget in 2009.
At the Legislative & Finance Committee meeting, Finance Director Tony Ianiro had to explain why he was asking council to allow him to adjust the rec dept’s budget, to reflect additional deficit-spending (beyond the budgeted amount) by his brother, Recreation Director Dave Ianiro.
The Finance Director sounded quite defensive at times during the meeting, and he certainly tried to put a good face on things on his brother’s behalf (the baseball program was “wildly successful” he declared, even though the 2009 revenue projections for that program were not met).
At the same time, while wearing his Finance Director hat, Tony Ianiro acknowledged that council had good grounds to be concerned over the rec dept’s financial performance this year.
The Finance Director sounded quite defensive at times during the meeting, and he certainly tried to put a good face on things on his brother’s behalf (the baseball program was “wildly successful” he declared, even though the 2009 revenue projections for that program were not met).
At the same time, while wearing his Finance Director hat, Tony Ianiro acknowledged that council had good grounds to be concerned over the rec dept’s financial performance this year.
Meanwhile, the person at issue, Recreation Director Dave Ianiro, was nowhere to be seen. As occurred during the budgeting process last spring, Recreation Director Dave Ianiro appeared content to let his brother, Finance Director Tony Ianiro, do the talking for him.
Here are some highlights from the meeting:
1. Finance Director Tony Ianiro emphasized that although the rec dept overspent its revenue by over $ 98,000 this year, general funds were not used to cover the deficit. Instead, the deficit-spending was covered by drawing down the rec dept’s (emergency) reserve fund.
That was a big hit to the reserve fund. As currently projected (and if it is lucky), the rec dept may end the year with $ 146,00 in its emergency reserve fund rather than the $244,000 it would have had if no deficit spending had occurred. Another year of similar deficit-spending will deplete the reserve fund—a fund that is needed to cover things like emergency pool repairs (the rec. dept is already on notice already that the pool may need potentially expensive repairs in 2010 to address an ongoing leak that recaulking and repainting failed to fix this year).
Unless the rec. dept. changes its way of operating, the reserve fund (built up over many years by prior Recreation Directors) will be depleted by 2011---which will leave taxpayers (through the general fund) picking up the tab for current Recreation Director Dave Ianiro’s deficit-spending.
So while the rec dept may have dodged a bullet this year, by dipping into its reserve fund, it won’t be able to do that much longer.
Here are some highlights from the meeting:
1. Finance Director Tony Ianiro emphasized that although the rec dept overspent its revenue by over $ 98,000 this year, general funds were not used to cover the deficit. Instead, the deficit-spending was covered by drawing down the rec dept’s (emergency) reserve fund.
That was a big hit to the reserve fund. As currently projected (and if it is lucky), the rec dept may end the year with $ 146,00 in its emergency reserve fund rather than the $244,000 it would have had if no deficit spending had occurred. Another year of similar deficit-spending will deplete the reserve fund—a fund that is needed to cover things like emergency pool repairs (the rec. dept is already on notice already that the pool may need potentially expensive repairs in 2010 to address an ongoing leak that recaulking and repainting failed to fix this year).
Unless the rec. dept. changes its way of operating, the reserve fund (built up over many years by prior Recreation Directors) will be depleted by 2011---which will leave taxpayers (through the general fund) picking up the tab for current Recreation Director Dave Ianiro’s deficit-spending.
So while the rec dept may have dodged a bullet this year, by dipping into its reserve fund, it won’t be able to do that much longer.
2. Finance Director Tony Ianiro reported that the city’s---and the rec. dept’s---property tax revenues are likely to decrease by 8 % next year, due to the downward property reappraisals adopted by the county auditor’s office this year.
Conservatively, that could mean at least a $ 28,000 drop in revenue for the rec dept. next year--- a new additional financial reality that the rec. dept. will have to face when coming up with its 2010 budget.
3. Finance Director Tony Ianiro highlighted a couple of the major contributors to the rec dept’s deficit-spending. These are by no means comprehensive.
Conservatively, that could mean at least a $ 28,000 drop in revenue for the rec dept. next year--- a new additional financial reality that the rec. dept. will have to face when coming up with its 2010 budget.
3. Finance Director Tony Ianiro highlighted a couple of the major contributors to the rec dept’s deficit-spending. These are by no means comprehensive.
-- The 8 week summer camp program operated at a $ 27,500 loss. This program has been a significant money-loser for the rec. dept. over the last several years, but the rec. dept has not taken any steps to address those financial losses. Instead, Recreation Director Dave Ianiro (along with Councilman Ted Anderson and the Park & Rec Committee) have asked the city to spend $ 300,000 in taxpayer money to renovate the old pool house for use by the money-losing camp program.
- -Recreation Director Dave Ianiro hired 15 additional pool employees (beyond the 2008 staffing level)---costing $ 28,689.55 --even though the Recreation Director had not included money in his budget for those additional hires (and even though the cold weather last summer significantly cut down on pool attendance). That piece of information came as a real shock to council members.
Councilman Leo Lombardo asked at the Committee of the Whole meeting, “How could the Recreation Director hire more employees when he was blowing his budget by 20 % ?”. He and other council members wanted to know who was aware of the extra hiring and/or who authorized it.
Mayor Coleman (who appointed Recreation Director Dave Ianiro and is his boss) did not directly answer Councilman Lombardo's question. Instead he stated that, “the hiring of employees is directly related to the number of participants in programs.” ---a statement that makes sense in the abstract, but not in reality.
In fact, they don’t station more lifeguards around the pool just because 20 more kids are swimming (the lifeguard chairs are fixed in place around the pool, which determines the number of guards on duty during each shift). Plus, the revenue figures don’t show a significant increase in pool-related participation for 2009.
Since Recreation Director Dave Ianiro did not attend the Committee of the Whole meeting either, the circumstances surrounding his decision to hire those 15 additional, unbudgeted-for pool employees remains a mystery.
--Finance Director Tony Ianiro mentioned, without explanation, that the rec. dept. spent $ 4,820 more in umpire fees than the budgeted amount. The city spent more than $ 16,000 on umpires for the 2009 baseball program.
What were Council members’ comments about Recreation Director Dave Ianiro’s financial performance this year?
- “The rec dept went 18 % over its (already deficit-spending) budget.”
- “The rec. dept. is out of control. All of the (city’s) other departments did a good job of staying within their budgets. This is out of sight."
- “Park & Rec went $ 98,000 over their budget. It stood out like mad.”
- “We have to look at tighter controls.”
- “The rec. dept. met its revenue projections. A decrease in revenue does not explain their deficit spending.”
- “We have got to have some accountability here.”
I say "amen" to that.
The person tasked with straightening out this financial mess is, of course, Mayor Coleman because:
- The Recreation Director is the mayor’s appointee.
- Recreation Director Dave Ianiro rep reports to Mayor Coleman (and not council) .
- Mayor Coleman is ultimately responsible for the rec dept's portion of the budget because he submits it as part of his own budget for the city.
- Mayor Coleman prides himself on being a financial guy, and he's been in office for 6 years, so he should be able to mentor the Recreation Director and the rec. dept through this financial challenge.
Mayor Coleman was very quiet during council's discussion of the recreation department's deficit-spending and financial situation. Let's hope he was paying close attention and taking good notes.
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