GIRARD Mayor: Agency to forgive part of sewer loan

The city is still facing a general fund deficit of $1.66 million.
By TIM YOVICH
VINDICATOR TRUMBULL STAFF
GIRARD -- A state agency is expected to forgive $450,000 of a $13 million loan used to upgrade the city sewer treatment plant, Mayor James J. Melfi said Thursday.
"It looks very good," Melfi said of a favorable decision by the Ohio Water Development Authority's Emergency Relief Program.
The mayor explained that the loan will be forgiven for one year because of the severe damage it sustained to the plant during flooding July 21 and 27.
The Federal Emergency Management Agency (FEMA) has estimated the damage at $1.5 million, not only to the plant, but clogged creeks and culverts that are part of the system.
About the loan
Melfi explained that the city received the OWDA loan in 1988 to construct a secondary sewage treatment plant. The city makes two $225,000 payments per year on the loan.
When the city was placed under state-imposed fiscal emergency in August 2001, the city sewer fund was in the red. It's now in the black, Melfi said.
Despite the anticipated OWDA windfall, the city still faces a $1.66 million general fund deficit by the end of the year. The $450,000 cannot be transferred to the general fund, the mayor said.
Melfi said he has been working with the OWDA to assure the city is following the proper procedure for the agency to forgive a portion of the loan that will be paid off in 2007.
'A total loss'
"It was a total loss," Melfi said of the South State Street plant that was forced to shut down as a result of the flooding. "All you could see was the roof."
The mayor said the plant lost its pumps, motors, computers, vacuum truck to clean sewer lines, lawn mower and paperwork, including maps of the system.
Because Trumbull County has been declared a federal disaster area as a result of the storms, FEMA will pay 90.5 percent of the $1.5 million to make repairs.
Melfi will be meeting with FEMA representatives next week to discuss the damage.
He expressed concern about what occurs if the actual damage exceeds the $1.5 million estimate and who's responsible to pay for it.
yovich@vindy.com