DALLAS -- East Cleveland Mayor Gary Norton Jr. and City Council President Thomas Wheeler have been recalled from their positions in a special election as the city plunges into insolvency.
Both officials were targeted for recall due to concerns about the city's finances and a potential annexation by Cleveland. Wheeler survived recall votes in December 2015 and June 2016, while Norton was targeted in 2015 but did not face a vote.
The recall vote Tuesday came as East Cleveland faced a service-level insolvency. The city, which has no debt, said it is struggling to meet payroll and benefit obligations because of a revenue crunch that isn't likely to ease.
The city has 21 days to certify the election, Norton said in a press conference Thursday morning. Norton, who was recalled on a vote margin of 50.9% to 49.07%, said he didn't think that the certification process would change the outcome.
Wheeler's recall is based on a slimmer margin. "Right now there is four vote difference on whether or not the councilman will be recalled or remain in office," Norton said. "Because the election was so close we will hold off until Dec. 27 to assure East Cleveland that the election results are certified and finalized."
Council Vice President Brandon King will assume the position of mayor on Dec. 27 once the recall is confirmed. Norton said East Cleveland would with have either one or two positions on the council to fill, depending on whether Wheeler's recall sticks.
In the meantime, Norton and Wheeler will remain in their positions.
"Despite the city's best efforts, East Cleveland is insolvent," Norton wrote in an April 27 letter to the tax commissioner. "Based upon financial appropriations projections for the years 2016, 2017, 2018 and 2019, the city will be unable to sustain basic fire, police, EMS [emergency services] or rubbish collection service. The city has tried to negotiate with its creditors in good faith. …It has been a somewhat impracticable effort."
The city had adopted a financial recovery plan that was signed off by a state-appointed fiscal commission. It was intended to restore the city to fiscal solvency but would have decimated its public safety forces, officials said.
Revenue collections plunged in the past few years. The Cleveland Clinic-owned Huron Hospital shut down in 2011 and has since been demolished. Losing the hospital cost East Cleveland about $10 million a year in income tax, according to the city's finance director Jack Johnson.
The city has also suffered a disproportionate loss in state funds in recent years relative to other communities in Ohio, and its population is down about a third from 2000. About 40% of East Cleveland's residents live below the poverty line.
East Cleveland was placed in a state of fiscal watch in 2012 after the city failed to provide an acceptable plan for tackling its deficit. Ohio State Auditor David Yost declared the city in fiscal emergency later that year, after officials failed to present a feasible recovery plan. A special supervision commission was formed to review and make suggestions on a recovery plan. Last year Yost's office issued a statement that municipal bankruptcy or merging with the city of Cleveland probably offered the most viable options for the city.
In August the city terms for annexation were rejected by the Cleveland City Council. "The annexation is on hold while Cleveland seeks an expert opinion with regard to what the impact would be on the city's finances and operations," wrote Frank Shafroth, director of the Center for State and Local Government Leadership at George Mason University.
Among the conditions for the merger with Cleveland, East Cleveland council members would become members of an East Cleveland Advisory Council and would continue to be elected and compensated at the same level as current East Cleveland Council Members. The East Cleveland Advisory Council members would become voting members of the East Cleveland Community Development Corporation and the five members of the advisory council would be the majority of the CDC's voting members.
East Cleveland also asked to continue operating its own municipal court and wants to maintain its red-light camera program – even though voters banned the cameras in Cleveland in 2014.
In May, East Cleveland formally petitioned State Tax Commissioner Joseph Testa to file for Chapter 9. Testa must sign off on a local government Chapter 9 filing under state law. The city has been seeking authority from the state to file for Chapter 9 for nearly a year.
"From an Ohio Department of Taxation perspective, nothing has changed," Gary Gudmundson, a spokesman for the Ohio Department of Taxation said. "We submitted a letter to the City advising them what would need to happen to pursue a bankruptcy track."