October 2, 2025

East Cleveland Faces Financial Crisis Amid Receivership Proposal

News Summary

East Cleveland is in a financial crisis as Mayor Lateek Shabazz opposes Ohio Auditor Keith Faber’s receivership proposal. The mayor claims a history of fiscal collapse and intends to challenge the auditor’s actions, highlighting issues of oversight and accountability. With mounting deficits and a declining population, the city’s financial stability hangs in the balance as the legal battle unfolds.

East Cleveland is facing a significant financial crisis as Mayor Lateek Shabazz formally opposes Ohio Auditor Keith Faber’s proposal to place the city under financial receivership. The mayor has argued that the city has endured a “13 years of state-enabled fiscal collapse” and intends to challenge the receivership in court. This legal battle highlights the contentious relationship between local leadership and state oversight during a prolonged financial struggle.

Shabazz’s opposition includes a detailed 10-page letter sent to Auditor Faber, which has also been shared with Ohio Attorney General Dave Yost. In this correspondence, the mayor accused the auditor of a “systematic dereliction of statutory duties.” He specifically pointed out the critical role of convicted ex-Mayor Brandon King along with the auditor’s office in enabling the criminal conduct that resulted in “millions of dollars in theft, fraud, and misappropriation of public funds.” This claim raises serious questions about the extent of oversight and accountability within the city’s financial management.

As part of his plan, Auditor Faber intends to ask AG Yost to appoint a receiver to manage East Cleveland’s troubled finances. This request follows the recent enactment of a state law allowing the attorney general to seek receivership for communities that cannot resolve long-standing fiscal emergencies. According to Faber, East Cleveland has been in a state of fiscal emergency for most of the last 40 years and has made little progress in addressing its financial issues. The current fiscal emergency is noted to be the longest in Ohio history, exceeding the previous record of a 17-year fiscal emergency that persisted from 1988 to 2006.

East Cleveland is grappling with significant financial difficulties. As of July, the city was running deficits in ten of its budgeted funds and was unable to meet various financial obligations, including lawsuit settlements. Faber’s announcement of the receivership filing coincided with a press conference, indicating the urgency of the situation. The mayor has criticized the auditor’s office for failing to provide the necessary oversight that could have averted the current crisis.

If the court grants Faber’s request, the Ohio Court of Claims would appoint a receiver to manage the city’s finances. This appointed receiver would have the authority to implement cost-cutting measures and enforce financial rehabilitation plans. Such interventions are designed to restore fiscal stability to the struggling city; however, Faber has warned that if receivership is enacted, it might eventually lead to East Cleveland declaring bankruptcy, drawing parallels to Detroit’s financial crisis and recovery.

East Cleveland’s financial woes are compounded by a declining population, which has decreased from nearly 35,000 residents in 1990 to approximately 13,000 today. This demographic shift poses additional challenges for the city’s economic viability and recovery efforts. The process for appointing a receiver could take a month or longer, pending the attorney general’s approval and additional judicial actions.

The outcomes of this conflict between the mayor and the auditor’s office will be closely watched as East Cleveland struggles to navigate its complex financial landscape. The city’s future, along with its residents, remains uncertain as these legal and administrative processes unfold.

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Author: STAFF HERE CLEVELAND WRITER

CLEVELAND STAFF WRITER The CLEVELAND STAFF WRITER represents the seasoned team at HERECleveland.com, your premier source for actionable local news and information in Cleveland, Cuyahoga County, and beyond, delivering "news you can use" with in-depth coverage of product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news impacting the region—backed by years of expert reporting and robust community input, including local press releases and business updates, while providing top reporting on high-profile events like the Rock and Roll Hall of Fame inductions, Cleveland International Film Festival, and holiday parades, alongside key organizations such as the Cleveland Clinic, Cleveland Orchestra, and Great Lakes Science Center, plus leading businesses in manufacturing and healthcare like Sherwin-Williams and University Hospitals, and as part of the broader HERE network including HEREDayton.com, offering comprehensive, credible insights into Ohio's vibrant landscape. HERE Cleveland HERE Dayton

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