Monday, March 7, 2011




Is Canton's finance director (Karen Alger) leaving "a financial death spiral" (quote from Canton City Council President Allen Schulman) only to get into a worse financial mess in North Canton?

Probably not, but the financial "red flags" are out there that indicate that maybe North Canton is in more of a financial roil than city officials are owning up to.

Sources tell the SCPR that Canton Finance Director Karen Alger is to be appointed (likely at tonight's Committee of the Whole meeting) North Canton's finance director to replace Alex Zumber who left the post in the fall of 2010 to run successfully for Stark County treasurer.  She will earn between $67,509 and $86,970.

North Canton officials' say that the city is is good financial shape, but there are reasons to disbelieve officialdom.

The reasons?
  • a possibility that North Canton will have to bear the entire amount of the rehab of the former Hoover factory complex on North Main Street because of alleged irregularities in the city's application for a $5 million "Jobs Ready Site" (JRS) grant. 
  • pending cuts from the state of Ohio in the city's share of revenue (beginning in 2013) from Ohio's estate tax (which is being eliminated).  
  • pending cuts in North Canton's share of Local Government Funds from the state of Ohio which should kick in with the onset of the state's fiscal year in July of this year.
Over the weekend Mayor Held told The Report that the city is making adjustments in the structure of its administration to retain North Canton's financial vitality.

Held said that Economic Development Director Eric Bowles will be taking over as manager of the city's building permits and inspections, zoning and community planning administration at a savings of about $75,000 to the city in personnel costs.  Moreover, he pointed out that over the last several years North Canton has reduced its managerial-esque workforce from 9 to 5 people.

A North Canton resident and city government critic tells the SCPR that there is no way Bowles can absorb the additional duties over the long haul.

Readers will recall that at the end of 2010 North Canton did not fund former Chief Administrator "EJ" Wise's position and merged his functions with the city engineering leadership work to make James Benekos the manager of both .  That merger was disassembled when former Chief of Police Michael J. Grimes was recently named as the head of North Canton administration.  Interesting enough, in making the transition Grimes was paid about $82,000 in unused vacation and sick leave benefit.

So the Wise to Benekos to Grimes move appears to have more about easing Wise out in a politically palatable way to his sponsor and benefactor (Mayor Held) than about any efficiencies.

Is the North Canton citizen correct?  Will it become apparent over time to city government leaders that Bowles cannot function effectively with the added responsibilities?

On Saturday, the Akron Beacon Journal reported that North Canton has been given about 30 more days to come up with documentation that it met all the requirements of qualifying for the JRS grant.  North Canton claims that the project has brought about 600 jobs to the city.  One has to wonder whether or not the figure they are bandying about is a "net" figure?  The Report keeps hearing accounts that indicate that a number of occupants of the JRS project have not produced jobs as promised and in some instances are no longer at the former Hoover facility.

North Canton officials need to do a full and public accounting of the "real" numbers that JRS has produced to date in "net" figure sense, that is to say: total jobs produced less the jobs that did exist at one time, but no longer exist.

One of the ways that local governments earn the disdain and discredit of citizens is how they play with the numbers.  They hold press conferences to announce economic development projects and the projected "new" jobs, and will periodically update when the projected jobs materialize to some degree, but all of sudden they (government officials) lose their voice when projected jobs do not materialize or decline in number.

North Canton certainly is in better financial shape that Canton and Massillon.    The city is probably on a par with Alliance.  However, these comparisons do not indicate that all is well with North Canton's financial picture as the city's budget gets projected out beyond a year of so.

Held pointed out to The Report that not that long ago North Canton was paving/repairing streets at about $4 million clip annually and is now down to about $1 million.

Also, North Canton is going more and more to a "tiered" system of compensation.  For those employees who have existing employment, they will remain where they are.  However, new employees are being brought in at a large reduction.  For example, a current employee may earn $17 per hours; a new employee is brought in at a $10/12 tier.

While the new efficiencies can be gussied up to look like North Canton has its financial house in order, one has to wonder.

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