LORAIN, Ohio — The Lorain auditor warns the city’s current spending is unsustainable. The word of caution comes as Lorain City Council members review the final budget proposal for 2025.
City auditor Joseph Koziura told News 5 Monday the city is simply spending more than it’s making annually. 2024 ended with a $9.8 million cash balance. That money was down from $13 million at the end of 2023 and has been slowly dwindling in recent years.
“I told the mayor he’s going to have to sharpen his pencil,” Koziura told News 5 over the phone Monday.
He said people are the city’s single largest expenditure. In 2024, Lorain’s payroll records show $42.6 million in personnel costs. It’s a significant increase from the $36 million spent on employee payroll the previous year.
A list of city salaries provided by the auditor shows the highest-paid employees, including the command staff for both the police and fire departments. Police Chief Jim McCann made more than $235,000 in gross wages, while the Fire Chief made more than $220,000.
A viewer letter to News 5 called the personnel spending “inflated” and recommended the city cut costs with attrition, a hiring freeze or addressing overtime pay.
“Inflated personnel costs necessarily preclude adequate spending on street maintenance, infrastructure, recreational activities, community revitalization, police and fire protection, etc,” the letter said.
Mayor Jack Bradley explained the large payroll is partially due to overtime and a retroactive pay increase from contract negotiations. He also said the city has had to prioritize better pay to attract and retain staff and stay competitive with other cities.
“We are an industrial base. We were used to having workers that were paid decently,” Bradley said.
He said the city’s $2.2 million year-end budget shortfall was a positive sign, especially compared to the $8 million shortfall originally projected for 2024.
“I don’t think anybody should hit the panic button, but I do think we should keep an eye on it, monitor it very closely,” the mayor said.
He told News 5 that in addition to trimming expenses in many departments, the city made more money than expected in 2024. It was projected to bring in about $39 million, but actual revenue was closer to $42.3 million.
The auditor said new revenue, through new jobs and investment, would help balance the budget longer term.
The mayor pointed out current investments, like a new Go-Kart track and the expansion of a construction equipment supply company, as a positive indication of things to come.
“I talk with developers, almost on a weekly basis, who want to come to Lorain and open new businesses,” said Bradley.
Both Bradley and Koziura said the loss of pandemic relief funds has been difficult to navigate as the city reels from an economic hit dealt by the pandemic. Both also worry efforts to cut costs at the federal level could mean fewer federal grants for the city.
Koziura said Lorain should still have a positive cash balance at the end of 2025 and 2026, but he is less certain the current spending patterns can be sustained beyond then.
Bradley said he was optimistic the current model is sustainable.
Lorain City Council could vote on the 2025 budget on Feb. 17, but members have until April 1 to approve the annual budget.
