Metro-East News

City in ‘dire straits’ financially, East St. Louis officials say

East St. Louis Mayor Emeka Jackson-Hicks.
East St. Louis Mayor Emeka Jackson-Hicks. BND

Mayor Emeka Jackson-Hicks on Friday called a news conference to discuss the city’s financial condition and the $5.9 million deficit that she said has hurt the city financially.

Since Thursday, rumors have been floating throughout City Hall and beyond that city employees may be looking at payless paydays. At least 17 people have been laid off in an effort to streamline the city’s budget. Earlier, City Manager Alvin L. Parks Jr. denied that employees will be asked to work without pay, but said there probably will be more layoffs before the end of the year.

Later, during the press conference, he admitted that payless paydays were discussed during a recent staff meeting.

Jackson-Hicks said at a news conference she wanted to let the citizens know what’s going on with the city’s finances. She said she promised them transparency, accountability and implementation and each individual standing with her from the city manager to the financial staff were invited to answer questions.

She added that the budget deficit of approximately $5.9 million dollars was from a number of circumstances.

“Each one of them led to the city’s financial condition,” Jackson-Hicks said. “The continued decline in revenue, particularly Casino Queen revenue, contracts, accounting for $2.8 million owed for pension expenses, workman’s compensation claims and settlements in excess of $1.9 million.”

“Efforts to fight and pay the many grievances that have been filed, fiscal and operational deficiencies, and budgeting a $2.5 million Financial Advisory Authority loan that the city never received,” she added.

Jackson-Hicks said the $2.5 million was needed and was to be used to balance the city’s budget and “continued to operate using its cash reserves, although it never received proceeds from the FAA loan.”

Duane Stewart, a member of the city’s financial management team, said the city’s “cash flow is in pretty dire straits.” Budget Director Egzabia Bennett agreed stating that “the city is in a pretty bad situation.”

The city is facing hard decisions as it relates to essential bills and payroll. The city is putting forth efforts to collect anything owed or due to the city — including TIF loans — to make sure essential services are provided like finances and public safety.

Alvin L. Parks Jr., East St. Louis city manager

When Parks was asked several times if the people who have been sitting in the financial seats for years, handling city finances and budgets are qualified and whether he thought mismanagement was a key reason that things languished for years without being caught, he finally admitted that mismanagement of city funds along with a lack of serious internal controls has contributed to this situation.

“The city is facing hard decisions as it relates to essential bills and payroll,” Parks said. “The city is putting forth efforts to collect anything owed or due to the city — including TIF loans — to make sure essential services are provided like finances and public safety.”

The city has a treasurer, a financial management team that includes two people, a budget analyst, and a budget director.

Parks said all of them are qualified. He said the fact that the governor is holding up the city’s gaming revenue to the tune of $2.8 million and the fact that the city has paid out $1.9 million in workmen’s compensation has helped to create the bleak financial picture for the city.

Parks also said that for years the city kept budgeting a $2.5 million loan that it was supposed to get in 2010 from the Financial Advisory Authority, a former state oversight panel that was appointed to oversee the city’s spending, that it never got are contributing factors. He noted that more layoffs are coming and “we’re looking at cost-cutting measures and revenue enhancing.”

Parks said legal fees have to be reduced and at this point the city cannot spend anything. The city has 150 employs with most of them being in the police and fire departments. The city also owes the city firemen’s pension fund, totaling $2.8 million dollars. He added that the city paid $580,000 in September and is planning to pay an additional $200,000 in December.

Treasurer Charlotte Moore said when the city released its bonds in 2013, the $1.7 million was never collected. “The city had to request the money and it didn’t,” Moore said.

She noted that when she took over in April, she found a number of checks that were not being mailed out.

“I found voided checks that were not mailed.” She said the city was spending $4,500 on cell phones for city employees. Now, that is down to $2,000, Moore said. She said she didn’t think the cell phone bill should be more than $500. Moore also said there are a couple of banks that want to help the city with a loan, but until a 2013 audit is completed that won’t happen. “We have to have our house in order,” she said.

As far as payless paydays, Parks said at a staff meeting there was some discussion over payless paydays “that has become an external discussion.” contributing to the rumors.

“We’re doing everything we can to make sure everyone gets paid,” he said. That will be accomplished by identifying new sources and unconventional sources, he said.

“Going forward the only spending that will be done will be for public health and safety and public works,” Parks said.

Carolyn P. Smith: 618-239-2503