One of Ohio's poorest cities was dealt another financial blow Wednesday when a federal judge stuck it with a $638,000 judgment in favor of a Rhode Island company that supplied the traffic cameras the cash-strapped city hoped would boost its revenue.
A Rhode Island judge handed down the default judgment against East Cleveland, the impoverished Cleveland suburb where oil baron John D. Rockefeller once summered, after the city failed to answer the now-defunct company's original lawsuit and subsequent motions or engage in settlement talks.
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"No one from the city has responded to my emails or correspondence I sent," said attorney James Atchison, who represents the receiver overseeing the Providence company's state insolvency case. "We're more than happy to resolve, settle this matter."
Atchison said in an interview Tuesday that he's aware of East Cleveland's financial straits and said the receiver would have accepted an amount lower than the judgment. And he acknowledged that he could also ask the judge to tack on interest and attorney fees that could swell the total to around $1 million.
East Cleveland has been on hard financial times for years. There are worries about a severe winter because the city might not be able to buy road salt until it pays the thousands of dollars owed from last winter. The Ohio auditor declared a fiscal emergency in October 2012 because of the city's ballooning deficit and put a state-appointed commission in charge of East Cleveland's financial affairs.
East Cleveland law director Ronald Riley said on Wednesday that the city could not afford to hire local counsel in Rhode Island as the court required, much less pay the receiver what the city owes. Riley said he sent letters to the judge asking that he be allowed to represent the city by himself but was rebuffed.
"There's no money," Riley said. "We're stuck. There's no way of settling this."
Another company, Tempe, Arizona-based American Traffic Solutions, bought out the Rhode Island company and still operates red light and speed cameras for East Cleveland. The city took an advance from American Traffic around the first of the year and won't see any payments for traffic violations from the company until November or December, said Sharon Hanrahan, an employee from the Ohio Department of Budget and Management and a member of the East Cleveland financial oversight panel.
Hanrahan said on Wednesday she was not aware of the Rhode Island case or the amount owed.
"That sounds pretty East Clevelandish," she said.
Smith reported from Providence, Rhode Island.