Youngstown law director says potential $5 million debt would be - News weather sports for Youngstown-Warren Ohio

Youngstown law director says potential $5 million debt would be 'a disaster'

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An economic bombshell was dropped at a Youngstown City Council meeting on Wednesday night.

Law Director Jeff Limbian said the cities general fund may be on the hook for a reimbursement of more than $5 million.

"It would be a disaster," said Limbian.

The reimbursement is a directive from the state auditor after the city used water, wastewater, and sanitation funds for economic development.

"We are really in the early phases of understanding the depth and breadth of the problem," said Limbian. "We have grave concerns that the problem is real."

In a letter from the state auditors office to Finance Director, Kyle Miasek, the state said it is looking into seven grants or loans the city paid out in 2017.

Those projects include the Doubletree Hotel, Youngstown Business Incubator, Fireline, YMCA, Noble Creature Cask House, and Mitchell Joseph, whose company is building the chill can plant.

"The administration has been very concerned about the recklessness of prior administrations and the expansive way the statutes have been interpreted to allow the use of water funds. We have been concerned about that from the outset. We sought some advice from outside council to see if we were working in the right direction. It turns out this was validation that in fact we were right and prior administrations were wrong to expend these monies from the water funds," said Limbian.

The letter said if the city cannot provide additional support to explain the allowable purpose of the funds coming from water and sanitation, it would require the city to make reimbursements from the general fund. For 2017, that amount was around $4.5 million. They are also looking at activity in 2018 for $1 million. 

"There is always the possibility if we don't have some forgiveness that we could be talking about a fiscal emergency," said Limbian.

Youngstown Mayor Tito Brown is heading to Columbus on Thursday and says he plans to speak to the state auditor to discuss possible solutions to the crisis.

"I want to talk about how under my administration, these types of things won't be normal," said Brown. "That we won't necessarily have those things happen under my administration, but I need to have some relief for the City of Youngstown because we can't afford that."

Brown said he's hopeful the state will work with him on a plan that won't put the city in fiscal emergency.

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