November 26, 2014

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Audit finds Lorain officials illegally moved funds

LORAIN — An audit released Tuesday by the Ohio Auditor’s Office said Lorain officials made two illegal budget transfers totaling $100,000 last year.

The transfer process was approved by City Council members in 2009. However, the audit said the transfers during the 2012 fiscal year from the Water Fund and Water Pollutions Control Fund to the Economic Development Fund violated Ohio law. It said approval from a Lorain County Common Pleas Court judge or from the Ohio Department of Taxation wasn’t sought.

The audit recommends returning the money to the funds. “We recommend Council and management carefully review and adhere to the (law),” said the audit signed by state Auditor Dave Yost.

Lorain Auditor Ron Mantini said he has consulted with Law Director Pat Riley and Lorain plans to seek approval for the transfers from a Common Pleas Court judge and state Tax Commissioner Joseph Testa. Mantini said no legal opinion was sought when Council approved the transfer process.

“It was something we felt we could do based on what other cities have done,” said Mantini, adding that the city of Hamilton has a similar process. “We certainly do plan on appealing it because we don’t want to have to pay that $100,000 back.”

The Economic Development Fund has a $150,000 annual budget, which includes $50,000 from the general fund, Mantini said. The fund provides money for business loans, tax incentives and marketing to attract businesses to Lorain and expand existing ones.

Mantini said the idea behind the transfers is that expanding businesses increases sewer and water bill payments.

Mantini said money from the fund to market Lorain to businesses included spending between $3,000 and $4,000 to send Rey Carrion, then acting director of building, housing and planning, to attend a trade show in Las Vegas in June or July.

“You make contacts by doing that,” Mantini said.

Contact Evan Goodenow at 329-7129 or egoodenow@chroniclet.com.


  • Rear_View

    Las Vegas contacts eh… “winner, winner chicken dinner!!!”

  • Fedupintheburbs

    Las Vegas trip on illegally transferred water and sewer funds? Risky gamble on the City of Lorain’s part…….

  • Ex_Subscriber

    Wonder no more why your water and sewer bills keep going up and up. They’re using that money as a cash cow to fund their other boondoggles. So, let’s have an answer to this: if you spent between $3k and $4k to send Mr. Carrion to Vegas, where’d the other $96k to $97k go? To paying off the bad business loans Economic Development has made over the years – like to Kalo’s Floor Coverings or Ghoulardi’s? Inquiring water users want to know.

  • SoLoJimbo

    Mantini is notorious for doing illegal transfers from water and sewer money. Don’t forget the illegal land purchase in Amherst without any approval? Hopefully the state auditors are looking into that also. Or all the transfers to keep the general fund out of the red?

  • stillsleepyeyes

    Lets not forget the people that are transferred there for retirement……………cash cow and how……………….how’s that water tasting now………………………

  • oldruss

    I have always maintained that water funds and sewer funds were supposed to only be used for operations and maintenance of the water and sewer systems, and that using money from either dedicated fund for other purposes was illegal. City Council’s approval of a transfer ordinance cannot make that which is illegal into something that is not illegal. The money paid into the water and sewer funds by the utility rate payers should not be available for use by the city carte blanche. And to now retroactively seek approval of this illegal transfer by going to a common pleas court judge, after the fact, should not make what the city did illegally now suddenly legal.

    • stillsleepyeyes

      They have been doing this for years ……………….its how they balance there budget……….every year…………

    • Conservator440

      It would not be Lorain without the corruption. If you always do what you always did, you always get what you always got…………..

  • Phil Blank

    Nothing new or different here, just make them pay it back, PLUS INTEREST!!

  • Phil Blank

    At least they used the county bus to get to the Horseshoe!

  • GreatRedeemer

    Contacts in Vegas. Was Jimmy Dimora there ?

  • Bonnie Pickett

    We can see by the increase in new businesses in Lorain that $3 to $4 thousand of the taxpayer’s money was put to good use. If taxes are spent for attracting new businesses, taxpayers should be able to see a return on their money. In light of how little money the city of Lorain has to spend, wasn’t something available on the internet to teach them how to attract new business? I’ll bet that the city official stayed at Motel 6 and ate Happy Meals to save us money. (comment was just a little sarcastic)

  • MrRespect

    Guess who was just appointed the head of Lorain’s Department of Housing and Planning !……………………Yep! Rey Carrion! Looks like many more trips to Vegas will be on the agenda!