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Akron’s finances are city’s biggest challenge, mayor’s task force says

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The single largest challenge facing Akron is its finances, says a blue ribbon task force appointed by Mayor Dan Horrigan.

Akron’s finances are hurt in part by relying on income tax revenue that has not recovered from the 2007-2009 Great Recession, high city debt — about $1.2 billion — and contractual obligations to city employees, the 15-member advisory group said in its report.

The 58-page report will be required reading for the entire Horrigan administration, the mayor said Monday at a downtown news conference at Greystone Hall. The mayor received a copy of the task force report at the noon event and said he was going to start reading it over lunch.

“It’s a marathon, not a sprint. This is a long-term plan to move the city forward,” Horrigan said. The mayor said his administration will determine priorities and how to implement them after it reviews the report.

Horrigan encouraged Akron residents to read the report and make suggestions to the city government.

“I’m not here to protect the status quo,” Horrigan said.

Struggling Chapel Hill Mall, which has lost Macy’s, one of its three anchor stores, and other significant retailers, is an issue for Akron and cities it borders, Horrigan said.

“I think we all need to kind of work together to either repurpose or rethink what is in that entire area,” he said. “We can’t stand in front of retail trends, or whatever they may be, but we have to be prepared at some particular point to be able to take those actions. So, it’s more of the thought process and how we approach it, as opposed to just doing things we’ve always done.”

The task force report will be a blueprint on how to deal with Chapel Hill and other issues, Horrigan said.

The report suggests the city assess Chapel Hill and shuttered Rolling Acres Mall for possible repurposing.

While the task force report did not address Huntington Bancshare’s planned deal announced last week to buy Akron-based FirstMerit Corp. for $3.4 billion, Horrigan spoke briefly about the pending purchase while taking questions.

Akron wants Huntington to grow, too, Horrigan said. “We’ll continue to work with both companies to help them expand and grow in Akron. That’s our main priority.”

‘Fundamentally sound’

The task force report said while the city’s financial situation is manageable, “there is little margin for error, great initiatives or even unforeseen circumstances, including emergencies and disasters. In our analysis, the threats to Akron are largely external. The city is fundamentally sound.”

The report has about 100 suggestions in it, said Tim Ochsenhirt, task force chairman and retired president of law firm Roetzel & Andress. The task force did hear from Akron residents as it gathered information, he said.

“We [Akron] have weathered a lot of storms and we have done it well,” he said. “We’ve made investments during the process and I think the state of our government is good.”

Besides taking a hit on income tax revenue, the state and federal governments cut back funding to Akron and other cities, he said, while demands upon city services remained high.

The report includes recommendations and potential solutions.

Other issues the city needs to address include building the combined sewer overflow, improving city government functions and enhancing education and economic development.

Sell or lease assets

The task force said the city needs to look at whether to continue subsidizing such things as Akron Fulton International Airport and two golf courses.

The city can look cautiously at selling off or leasing assets such as water and sewer systems, parking decks, golf courses and the airport “with returns earmarked for future capital needs,” the task force said.

“We also think we should give a look to monetizing some of our assets,” Ochsenhirt said. “We have a tremendous amount of assets. And I don’t mean to sell our future by this but I think we can monetize the items we have.”

Afterward, Ochsenhirt said that being on the task force was an education for him and other members for good and for bad.

“I think a lot of the financing things were news, the assets were news,” he said. “The finances, to peel back a few leaves of the onion, was educational for me.”

Ochsenhirt also said he learned that millennial generation members have good ideas for Akron.

And while Akron is not broke, the city’s borrowing power is now very limited, Ochsenhirt said. “They pay their bills. Their bond rating is very high as cities go. … The problem is, we’re limited in the future to some respects of trying to invest.”

Christine Mayer, president of the GAR Foundation, said being on the task force taught her how Akron is more complex than she realized. She said she learned what it means to weigh different city issues such as revenue streams and how the long-term implications of debt financing can limit what levers government can pull.

“This was a quick, high-level look. This was trying to take a snapshot and be as objective as possible about the conditions we see,” she said. “This was not looking in the rear-view mirror or sort of micro-managing the past in any way. It was just trying to understand exactly where we are now and offering some common sense suggestions about moving forward. The complexity for sure was eye opening.”

Horrigan appointed the task force shortly after being elected mayor last November.

Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ. His stories can be found at www.ohio.com/writers/jim-mackinnon.


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