Addressing budget concerns in Lorain

Lorain Mayor Jack Bradley surprised us Wednesday during his State of the City address. After dispensing with a few pleasantries at the Palace Theatre, he dove into one of the city's most pressing problems: its budget. The surprise was that Bradley discussed the city's budget woes at all. In recent years, Bradley's State of the City addresses have tended to focus on the positive and exclude the negative. A state of the city speech should include both. Later in his address, Bradley rightly highlighted the good things that have happened in the city, including park improvement projects and a drop in violent crime. Anyway, back to the budget. City Auditor Joe Koziura, himself a former mayor of Lorain, has said that the city's fiscal health is strong enough to get through this year and limp into 2026, but after that? Things could turn sour. The city's general fund expenses are projected to run between $45 million and $46 million this year against projected revenue of around $41.7 million. The difference this year will be made up by a carryover of $6.9 million from last year. Koziura has estimated the carryover into 2026 would likely fall between $1 million and $2 million. Bradley hasn't exactly shared the same pessimistic outlook. He told us last month that auditors tend to be conservative, forecasting looming budget shortfalls that fail to materialize. He highlighted the carryover and pointed out that the city's reserve fund — also known as a rainy-day fund — was around $2 million, up from about $750,000 when he first took office in 2020. But hoping that Koziura is wrong isn't a plan, which is why it was good to hear Bradley discuss how his administration planned to tackle fears about the budget. "Nevertheless, we must develop a comprehensive plan that will use strategic initiatives to address the budget in future years," he said. "We believe by working with our auditor, our employees and City Council the budget issues can be resolved. This will mean we will need a combination of revenue enhancement and expenditure management strategies to keep our future budgets balanced." When we asked Bradley after the speech whether "expenditure management" might be a euphemism for cuts, including possibly layoffs, he said it wasn't. Rather, he said he was looking ahead to union contract negotiations and cost-saving measures he had implemented. For example, during his speech, Bradley pointed out two programs that employees can use to cut medical costs, which he said could save the city up to $1.2 million this year. He also said that the city would get roughly $1 million in increased property tax revenue. Left unsaid was that the increased property tax revenue comes from increased property taxes, the result of increased property values. Those increases haven't gone over well with many property owners, including in Lorain. Additionally, Bradley said that income taxes were rising and that the city Treasurer's Office had beefed up its efforts to collect delinquent taxes. After promising to maintain city services, Bradley turned to economic development, a topic that he hadn't spent much time on during his recent State of the City addresses. That was, as he has previously acknowledged, because there wasn't much to tell. This year, though, Bradley was enthusiastic about several upcoming projects, which he said would bring new jobs to the city. Not only is income tax revenue rising, as he noted earlier, those new jobs will bring even more income tax revenue into the city's coffers. He said that cleanup work would take place this year at the sites of the old St. Joseph Hospital and the former Stove Works property with an eye toward redevelopment. He said the city was still working to redevelop the old pellet terminal and was trying to do the same at the former National Gypsum plant. Companies such as Camaco and Skylift have plans to expand and add more jobs. Bradley also said the new Ohio Motorsports Racetrack, built in Cromwell Park, the site of an old landfill, would hold its first event in June. All of which was good news, but the project that intrigued us the most was the one that Bradley didn't provide much detail on. He said the city's investigation into the conditions of the old Republic Steel plant led to reopened conversations with the company, and the property is now being eyed for potential redevelopment. Whatever the project is, Bradley said it could bring "numerous high-paying jobs" to the city. "All I can tell is you is stay tuned," he said. When we pressed him for more information after the speech, Bradley again demurred, although he acknowledged that FirstEnergy had worked on a load study that examined how much electricity would be available at the site. It's hard to say whether all of this will be enough to shore up the city's budget in the long term, but Bradley deserves credit for explaining how he intended to deal with the city's uncertain fiscal future. As we were winding down our post-speech conversation with Bradley, we asked him what his forecast was for the city. "I think this year it's cloudy with a chance of some very, very good weather in our future," he said. Stay tuned.