The City of Youngstown is in trouble with the state for the way it spent money on certain projects.

The city spent around $5.5 million from its water, wastewater and sanitation funds on economic development projects like the downtown hotel and university housing.

The State Auditor’s Office first contacted city administration in May with concerns that the use of their water and wastewater funds for grants and loans might not comply with Ohio law.

Now, the city might be required to pay that money back from its already struggling general fund.

If that happens, Law Director Jeff Limbian says it could put Youngstown into a fiscal emergency.

“It’s a financial disaster and it could put us into a fiscal situation where the state could take over the financing of the city and basically run the city. We do not wanna get to that point,” he said.

Limbian says they’ll have to gather all the documents that called for the funding over the last several years and try to justify them to the state.

He also says the city is in discussions with the auditor’s office about a forgiveness plan with a promise that the city won’t use these funds like this again.