MAHONING COUNTY Treasurer hopes finance program will be a draw

By BOB JACKSON
VINDICATOR COURTHOUSE REPORTER
YOUNGSTOWN -- There's been mixed reaction to an economic development incentive program unveiled last year by Mahoning County Treasurer John Reardon.
Interest has been high, but participation is low, Reardon said.
So far, only Youngstown has taken advantage of the investment incentive program, but Reardon said he's willing to wait while other communities mull it over.
"We have met with representatives all over the county, and I would say the interest level was strong across the board," Reardon said.
How it works: The program makes low-cost funds available to local governments by allowing them to make short-term loans from the treasurer rather than going through banks or investment companies.
Under Ohio law, county treasurers can buy municipal bonds issued by any city, township or village in the county. By going that route, the communities save considerable underwriting costs and interest expenses, Reardon said.
"There really are a lot of advantages to this, and we want people to take advantage of it," he said.
Youngstown saved about $40,000 by selling the county a one-year, $1.75 million note for expansion and development of Performance Industrial Park and Salt Springs Road Industrial Park, according to David Bozanich, deputy finance director.
He said the city was then able to roll that savings into development of the Ohio Works Business Park, near North Star Steel. More than 250 jobs have been created at the Ohio Works project, with at least an additional 150 expected, Bozanich said.
"It really is a win-win situation," he said. "We save a lot of money by financing through the county, and the county still makes its money."
Source of funds: Reardon said he uses money that would otherwise be invested in short-term securities, which the county already does. It is repaid at rates lower than those charged by banks but comparable to what the county would receive on its short-term investments.
Reardon said most communities would save between 2 percent and 4 percent by selling their obligations to the treasurer rather than on the open market. There is no cap on the amount a community can receive for a particular project.
Communities: "It's a nice tool to have for local government, and I think it was very creative on [Reardon's] part," said Teddy Ryan, Sebring village manager.
He said Sebring is interested in the program but hasn't found the right project to give it a try.
Campbell Mayor John Dill also likes the idea, but he said he's not clear on what type of project would qualify and what wouldn't. Dill said programs like this one are ideal for small communities that need to squeeze as much as possible out of every dollar in the budget.
"It's something that I probably should sit down with Reardon and talk about again," Dill said. "It's a fantastic idea. I'm just not clear on the guidelines."
Criteria: Reardon said the money is available only for projects that local governments prove will create or retain jobs. It is not available to private companies or individuals.
He will also provide money for infrastructure improvements to industrial parks or to help communities with matching funds for federal and state projects.
Bozanich said the city plans to tap into the program again later this year, though it hasn't settled on a specific project. It's more attractive now because interest rates at banks are starting to rise.
"From the city's perspective, we will continue looking to the program for some competitive funding," he said.
bjackson@vindy.com