SALEM — The finance committee discussed the incorrect use of ARP funds designated to pay for the city’s building department for a recent property purchase in its meeting Monday.
While discussing a proposed appropriations ordinance, Councilman and Finance Committee Chairman Andrew Null questioned auditor Sal Salvino about an appropriation of $25,000 from the city’s General Fund for the “Capital Outlay Economic Development” line item to cover the city’s annual payment for the services of its third-party commercial building department Elevate Building Solutions. Null said that the $25,000 for the payment had been budgeted to be paid with federal American Rescue Plan (ARP) funds last year before the deadline to designate the use of those federal funds.
“When we did the contract with [Elevate Building Solutions] it included three annual billings, in 2023, 2024, and 2025 we were going to pay $25,000. Those were to be paid from the ARP funds and had to be earmarked by the end of 2024. When I look back to the 2024 budget, we did allocate that $50,000 once again with $25,000 to be paid out in 2024 and then the balance was to be paid out this past month,” said Null. “What you said during our conversation was that all the money in the ARP fund, whatever number that might be, is gone. There’s still supposed to be $25,000 in there and when I asked you where’s the balance of that money, you said it was allocated to help cover the costs the Red Barn purchase.”
Salvino confirmed that the remaining ARP funds, totaling $63,090, had been fully depleted by a purchase order to cover part of the $450,000 purchase of the property located between Lincoln Plaza and the Salem Memorial Building where the former Red Barn restaurant stands.
“The ARP funds are depleted; they are down to zero. Looking back to Jan. 1 of 2025 historically there was a [purchase order] that was open for that. Knowing now what I should have known then, I should have opened an order for $25,000 which would have dropped that encumbrance of $63,000 by $25,000. … but that’s what happened. That earmarked figure did go to the purchase of the Red Barn,” said Salvino.
Councilman Jake Gano asked how those funds could have been used for the purchase as they had already been stipulated for another purpose, and how ARP money could be used for the purchase at all since the resolution authorizing the purchase approved by the city council on April 24 specified that it was to be made exclusively utilizing privately donated funds. City Service Safety Director Joe Cappuzzello said that he didn’t think that could be correct as the funds for the purchase had been raised through donations from private citizens which were specifically stipulated for that purpose, but that he would confer with Mayor Cyndi Baronzzi Dickey.
“I do not think that’s correct. All the funds for the Red Barn were raised by donations, 100% of them, 100% … I don’t have it in front of me but I’m pretty sure the donations that were made came up to $450,000,” said Cappuzzello.
Salvino reiterated “that looking back” opening a purchase order for the $25,000 contract payment and designating those funds “was one of the first things [he] should have done” on Jan. 1. However, he said that he didn’t know it needed to be done and that “it was next to impossible to know.”
Gano countered that it was “very possible to know because we have legislation that states otherwise,” prompting Salvino to emphasize the complexity of the city’s daily finances.
“Jake with all due respect, I understand what you’re saying but the intricacies in the everyday, I had no idea Jan. 1,” said Salvino.
Gano reiterated that ignorance was not a good reason, and that “when you have $25,000 that shouldn’t have been spent and you’re saying, ‘well I had no idea,’ that’s fiscally irresponsible.”
“That’s your job Sal, that’s your job. ‘I had no idea’ is not a good excuse. That’s a terrible excuse,” said Gano.
Salvino said that regardless, it was the truth, and that he was being transparent about the error.
“That’s the truth, and I’m going to be transparent with you. Knowing now what I didn’t know then I should have opened a purchase order for $25,000,” said Salvino.
Councilman Jeff Stockman asked who had placed the order to use the ARP funds for the purchase, and Salvino said that the requisition had been placed by the mayor’s office. While Gano said that appropriating the funds to cover the contract expenses would now mean that taxpayers dollars from the general fund would be paying for something which residents had been told would come from federal funding; however, Null noted that the city still had a contractual obligation to make that payment to Elevate.
“We have to pay the bill to Elevate, there’s no question about it, but then how do we fix all the other stuff. We cannot withhold the money from Elevate, but we’ve got to get to the bottom of these issues and that’s what I’m having a conundrum with,” said Stockman.
The ordinance also included the appropriation of an additional $15,000 from the General Fund to the “Contractual Services Legal Services-Litigation” line item for legal expenses associated with the city’s appeal of the Columbiana County Commissioners denial of the annexation of a .7917-acre Beechwood Road property owned by Sean and Laurie Butcher. Salvino said that all $10,000 originally budgeted for the appeal had been expended, noting that the cost had risen to approximately $12,000 currently and that more money was necessary to cover the costs of the city’s appeal to Ohio’s Seventh District Court of Appeals. It also appropriates $643 within the city’s Health Fund to the “Contractual Services Heal Grant” line item which were not originally budgeted as necessary, and $100,000 to the “Contractual Services WF” line item, which is the funds from the department’s Workforce Development Grant, and allows the department to spend those funds.
The committee ultimately voted to forward the ordinance to the city council for review. In its meeting, which immediately followed the finance committee meeting, the council voted unanimously to pass the ordinance with the emergency clause, meaning it will take effect immediately rather than having a 30-day waiting period.
The committee also discussed a proposed resolution to establish a special projects fund; however, it died for lack of a motion to forward it to council.
When asked why the ARP money had been used for the purchase, rather than donated funds, Salvino said that he does not select what funds to use for a given purchase and that the person who completes the requisition form designates which funds and line items to draw the money from, how much, and for what purpose, and that his role is just to ensure that there is a sufficient balance within those funds to make the payment.
“My job is to make sure you have enough money there. That’s what my signature on the paper is for,” said Salvino.
mahart@mojonews.com
