Monessen continues to bleed red, mayor says
A special meeting of Monessen City Council to discuss the 2015 audit attracted a handful of citizens, one councilman, the mayor and solicitor Monday.
Solicitor Gary Matta explained that the special meeting had been needed because of state audit requirements.
“The Third Class City Code says you have to advertise your audit and discuss it at a public meeting. It was discussed at the past two public meetings, but it hadn’t been advertised,” said Matta.
With only one council member present, there was no quorum for the special meeting. The city clerk also called off sick, Mayor Louis Mavrakis said.
“We can’t call the meeting to order, but we can answer your questions,” Matta said.
In the 2015 audit prepared for the city by MaherDuessel, certified public accountants from Pittsburgh, the balance sheet shows the city to be in the red by $767,825, with $416,828 of that coming from cost overruns in the general fund, over $8,000 more in debt service than there was revenue to cover and $121,618 in operating losses at real estate owned by the city, including Eastgate 8, where the city offices and rental properties are located. Monessen has a general fund budget of $4.9 million.
“I’ve been saying since day one that this council keeps saying we finished in the black, but we’re not, we have a deficit,” Mavrakis said.
Mavrakis said he has not received the executive summary cover letter that usually accompanies such an audit. He said the company will be sending that letter in time for June’s council meeting at the latest. Matta said he has not discussed the audit with the accounting firm.
Mavrakis said he has suggested selling the city office building since he took office.
“This building has lost $300,000 since I got into office,” Mavrakis said.
The audit shows 2015 revenues from the office rentals, listed in the audit report under proprietary funds as “enterprise” and “rents and royalties,” of $146,695. An additional $49,309 is added to the proprietary funds in the category of “interfund operating transfers.” Mavrakis said he wasn’t certain what was included in that category.
Even with total revenues in the proprietary funds of $196,004, expenses in that same category of $317,622 result in a deficit at the office building.
The mayor said by his calculation the building has cost the city even more, because its portion of the city’s insurance is $24,000, which falls under a different line item in the audit.
Councilman Ron Chiaravalle said the city has long made it a practice to pay end-of-year bills with revenues from the next year, noting that approximately $270,000 in bills were outstanding at the end of 2015 that were paid with tax anticipation funds borrowed for 2016, putting the city behind already for this year.
“It was a payday loan. The next payday comes around and you get your paycheck and it’s only half of what you usually receive. It’s the same here,” Chiaravalle said. “You can’t keep telling the public you’ve done a great job if you’ve taken the money from this year and spend it to pay for what you did last year.”
Chiaravalle said the city is participating in an early intervention program to help keep it out of bankruptcy, but the state budget impasse delayed the start of review. Chiaravalle said that review should begin soon.
Chiaravalle said he asked for the budget to be reopened at his first meeting after his election, as is permitted under the city code when a new member joins the council, but the motion was voted down.
“I didn’t ask to open the budget just to make noise, I was concerned about that deficit budget,” Chiaravalle said.
“I want to thank you because you are using out-of-the-box thinking,” Capt. Sue Thwaite of the Salvation Army told Chiaravalle.
Thwaite commended the councilman for proposing the use of Private Industry Council students for summer workers in Monessen, giving the students work experience while saving the city money.
Mavrakis said Chiaravalle has proposed numerous ways to save the city money, but most have been voted down. Mavrakis said funds he has saved the city, including the salary he doesn’t take, should have gone toward public projects such as street repairs, but instead the money has gone to other payroll expenses.
“I’m going to keep on trying,” Mavrakis said. “The bottom line is, you’ve got to sell this building; stop the bleeding. I had a buyer, and nothing.”
Mavrakis said if the building were to be sold he would propose that the city move its offices into a section of the Monessen Library, a building the city already owns.
Mavrakis said the current office building needs $1.4 million just to repair the heating and cooling system.
Matta said the official audit discussion meeting will be held in conjunction with the planning meeting on May 16 at 6 p.m.