Girard makes financial strides

The city's deficit is now under $1 million.
By JOHN W. GOODWIN JR.
VINDICATOR TRUMBULL STAFF
GIRARD -- The city is still fighting through the murky waters of fiscal emergency status, but officials say spending reductions and an increase in tax collections via a collection agency are making the financial future a little clearer.
The state placed the city in fiscal emergency in 2001 with a general fund deficit of about $2.4 million. The most recent figures, Mayor James Melfi said, show the deficit has been reduced to about $890,000.
Melfi recently told members of a state fiscal emergency commission that Girard could be out of fiscal emergency by 2011, but he said if the deficit continues to shrink at the rate seen in the past few years, the city could emerge from fiscal emergency "much sooner."
Cuts made
Melfi said the deficit reduction is largely due to across-the-board cuts the city has made. Girard has reduced its overall staffing, including personnel cuts in the police department, which is down 12 employees from 2001.
Funding to the park department went from an annual $225,000 before fiscal emergency to an annual $45,000 budget now, with one part-time employee and volunteers.
"We made these decisions to try and cut costs, but we realized from the onset that you can only cut so much. We still have to provide basic services to the community," the mayor said.
Melfi said city officials realized there would have to be a revenue increase combined with the spending reduction to bring the city out of deficit.
Tax agency
That is where the Regional Income Tax Agency comes into the picture. Melfi said the agency is directly responsible for an increase in tax revenue this year.
The RITA provides income tax collection services for 115 municipalities and cities in the state. It charges 2.75 percent of the city's total tax collection for its services. Girard joined the organization in 2005.
Before joining RITA, the city handled its own income tax collection with two full-time employees. One of those employees retired and the second was moved to a different department in the city.
Melfi said the city is saving $60,000 annually in wages and benefits by eliminating the city income tax collection department and using RITA. He added the agency also has increased income tax collections by $250,000 in the first eight months it has been on the job.
"RITA, we felt, was one of those areas where we could reduce operational cost and improve collections," Melfi said. "It has truly proven to be a great benefit to this community in a short time."
Experienced collectors
Gary Chips of RITA said the agency is able to increase tax collection amounts by drawing on 30 years of tax experience with programs that have been proved successful.
He also said the agency uses programs and technology a financially strapped community could not afford to put in place.
Melfi said the city is benefiting from the agency's experience and he is happy with the increase in collections. He would not speculate as to a date before 2011 when the city would emerge from fiscal emergency.
Melfi and city officials are banking, in part, on the passage of an income tax for police services in November to keep the city on the path to financial stability. Should the tax fail, Melfi has said, more cuts may be necessary.
jgoodwin@vindy.com