GIRARD Officials study mayor's financial plan

Several things have to happen for the plan to work, city officials say.
By JOHN W. GOODWIN JR.
VINDICATOR TRUMBULL STAFF
GIRARD -- The city's plan for financial recovery this year hinges on three primary aspects of the mayor's recovery plan -- stability in court finances, savings in health care and a plan allowing the city to get an advance on state allocations, said members of city council's finance committee.
Mayor James Melfi, members of the committee and Auditor Sam Zirafi spent several hours going over a plan introduced by the mayor that he says would take the city out of fiscal emergency by year's end.
The committee would like more information on some aspects of the plan, including getting an advance on various state funds paid to the city each year.
The city, Melfi said, gets about $250,000 from the state annually. It will ask the state to give it one half of that annual amount for each of the next six years in one lump sum this year. In return for that advance, the state would withhold half of the city's annual allotment for the next eight years.
Melfi and Zirafi noted that one good aspect of borrowing the money is that even if the state's annual allocation to the city is decreased in the future, the city would already have the money and not be obligated to repay the difference between the two amounts.
Quotable
"The major advantage to this, other than eliminating the stigma of fiscal emergency, is that if we take this advance, the money we take will never be cut," said Melfi.
Some members of the committee are not impressed with the potential move. Councilman Dan Moadus said the city would be losing a total of about $1 million over the eight years on the advance of about $730,000.
Moadus also said that if all aspects of the plan do not work, the city would still be in fiscal emergency, lose half of its allotment for eight years and still have to pay for the use of the Fiscal Oversight Commission. The city, beginning this year, must contribute to the salaries of commission members. Zirafi said that cost could run between $20,000 and $40,000 annually.
"I don't support [getting the advance] period. That just doesn't make sense to me," Moadus said.
Health care
Another major aspect of the plan, committee members said, is cutting health care costs. Melfi said health care costs will be a major part of contract negotiations with city employees this year. The city, he said, will see where savings can be found.
City employees took a freeze in wages three years ago. Melfi said the current plan does include pay raises for city employees.
Committee members also agree that the Girard Municipal Court cannot demand more money from the city than it is appropriated this year in order for the plan to work.
In 2005, the court ordered the city to issue an additional $250,000 above its initial appropriation to cover court expenses. The city paid the money, but challenged the order in court and is waiting on a decision.
Other aspects of the recovery plan include transferring $135,000 in interest from the Lakes/Dam Fund to the general fund this year and then $5,000 per year thereafter; renewing of the fire levy passed in 2004; applying inheritance tax to the general fund; and selling timber off city property in 2009, which would generate an estimated $50,000 that year.
Melfi also said the city should begin to see revenue generated in 2006 from five to seven gas wells drilled within the city limits as another part of the recovery plan. Initially he said the wells would generate $125,000 for each of the next three years and $50,000 annually beyond that, but that amount may be reduced because of a late start in the drilling process.
jgoodwin@vindy.com