Nation: Cleveland: Facing Collapse?

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The treasury is as bare as the school board president's bottom

The mayor was vacationing at a secret hideaway last week, recuperating from an ulcer attack. The president of the school board was fined $115 in court for flashing his bare bottom from a car window. The city council president and five other councilmen have been indicted on charges of accepting kickbacks from carnival operators. The city faces bankruptcy and can only pay its policemen for another week.

The city is Cleveland, home of a famed symphony orchestra, a first-rate art museum and 25 major corporate headquarters, a number surpassed among cities only by Chicago and New York. Most Clevelanders thought they had escaped becoming a national joke last year when they voted out Mayor Ralph Perk. He once set his hair ablaze with a welding torch while showing his affinity for the workingman during a campaign appearance at a local steel mill.

As Perk's successor, voters chose Dennis Kucinich, 32. He appointed as department heads a group of young Turks who sometimes seemed better suited for an Our Gang movie than for governing a city of 623,000 people. The Kucinich administration quickly shook up the city's business and political establishment—so badly that a recall campaign came within 236 votes of ousting him from office last Aug. 13. Now almost everything seems to be going wrong in Cleveland.

Last week the city council met in emergency session to find a way out of the city's most pressing problem: a shortage of money. According to some estimates, Cleveland is running a $16.5 million deficit and may have to default on $15 million in short-term notes that come due next month. One way out, says Finance Director Joseph Tegreene, 25, is to float a $50 million bond issue in December. But the city's credit rating is as low as New York City's was during its 1975 financial crisis.

Cleveland must also find a way to pay a $13 million debt owed to the Cleveland Electricity Illuminating Co. The privately owned utility sells power to the public Municipal Light Co., which resells it to 46,000 customers. Last spring C.E.I, got federal marshals to begin tagging pieces of city property for sale at auction to satisfy the bill. The private utility has offered to buy out Muny Light, but Kucinich has refused, arguing that it provides a competitive check that curbs rate hikes by C.E.I.

The fiscal crunch led the mayor last May to borrow almost $18 million from the water department's capital-improvement fund to pay other departments' operating expenses. But now the water system has decayed dramatically: pipes are badly corroded and a filtration plant is in danger of closing down for lack of maintenance. Two weeks ago a local court ordered the water department into receivership while a regional authority prepared to take over its operation.

After two days of debate last week, the best the city council could do was appropriate funds to pay policemen's salaries through Nov. 13 and fire fighters' salaries through Dec. 3. Said Council Majority Leader Basil Russo: "I hate to say it, but I think the city will be under the control of a receiver by the end of the year."