Choices, judgments and $2.5 million

University Heights has uncovered nearly $2.5 million dollars in financial "irregularities" starting in 2008. This is not the final total. The city may still face additional charges until all payment agreements are finalized. These irregularities, mismanagement and negligence amount to more than $240 for each registered voter in University Heights.

A full-time finance director manages our tax money—about $25 million dollars. Our former director, Arman Ochoa, appointed in 2000, gave notice in 2008 that he was leaving to accept a position with the Northeast Ohio Regional Sewer District (NEORSD). Council chose to reappoint him to manage our tax money at night and on weekends.

Council minutes of Dec. 1, 2008 records "Councilman Sims reported that the proposal was studied by all members of council. Sims noted that his consolation in moving toward a part-time finance director is based solely on the fact that Mr. Ochoa has done a good job for the city and because of his familiarity with the city." Council voted on that night to reappoint Ochoa as a moonlighter at an annual salary of $50,000.

Councilmen Bullock, Consolo, Murphy, Sims, and Vice Mayor Goldberg voted for the reappointment, saying "The city will save approximately $55,493 for the term of the appointment"

Many are now questioning council’s judgment. Why did council think a person putting in at least 40-60 hours a week, performing a demanding new job elsewhere, would have the energy, alertness and dedication to work an additional 32.5 hours each week to manage our tax monies?

According to public records, we paid him for working 130 hours a month. Do the math. The day job is 60 hours a week. The nights and weekends job with us is 32.5 hour a week. That adds up to a work schedule of 92.5 hours a week. Did Council really think he could work 13.2 hours a day, 7 days a week, 365 days a year?

Then, surprisingly—at least to council—"financial irregularities" cropped up in June 2009. It was discovered that Ochoa made "irregular" payroll advances to himself, amounting to $69,795 in 2008, when he was still the full-time director.

Following his termination at the end of June 2009, council appointed yet another moonlighting finance director. This time, the appointment was made with the full knowledge of existing irregularities in the city’s finances.

Some recall that council may have been preoccupied that summer. A few had reelection campaigns to focus on, and most were involved supporting proposals to change the city charter, which were on November’s ballot. Should they have been more concerned with the city’s finances?

Jenny Esarey began as full-time finance director in March 2010. As she reviewed the books, Esarey uncovered more irregularities. Workers compensation premiums were not paid on time. That cost the city nearly $100,000 a year, every year, for lost discounts. She discovered a missed $2,000,000 TIF payment for the second half of 2008. That led to the discovery of the nonpayment of $420,000 in rollback monies to the TIF trustee. [TIF—Tax Increment Financing—is an economic incentive program established by the Ohio Legislature to enhance economic development and create jobs.]

On the heels of each new revelation by Mayor Susan Infeld, council’s reactions ranged from stunned, frozen silence to righteous indignation, demanding, "Why weren’t we informed?"

Is council being disingenuous? Or, as some people ask, are the five councilmen who voted for the moonlighters adopting a strategy of "the best defense is a good offense?"

Mayor Infeld succeeded in persuading the Bureau of Workers Compensation to reinstate the city’s discount, saving University Heights nearly $100,000 each year. But the city still faces a balance of $1,500,000—for the city’s TIF payment, $420,000 to the TIF trustee, and the payroll irregularities of the previous finance director. These are considerable amounts for a city that has prided itself on its sound fiscal management.

Mayor Infeld is working hard to find ways to balance the books. Will we have to pay more taxes to get the same services or will we pay the same taxes to get less?

The 2011 budget process is underway. Although University Heights is surviving the current economic crisis better than some neighboring cities, Mayor Infeld will need this council’s total cooperation on the 2011 budget in order to restore the city’s finances. UH voters need councilmen to honor the promises they made and the pledge they took to serve the community.

Anita Kazarian is a marketing professional, founder of Noah’s Landing, LLC, and a longtime resident of University Heights. Contact her at anitakazarian@gmail.com.

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Volume 4, Issue 1, Posted 12:22 PM, 12.17.2010