Water fund deficit impedes emergence from fiscal emergency

By John W. Goodwin Jr.

A forecast shows the city in the black for the next five years.

GIRARD — The city may be on track to emerge from state-imposed fiscal emergency, but one city fund will need its negative balance cleared before that can happen.

In order to emerge from fiscal emergency, the city must bring its various accounts into the black and have a plan showing the city operating in the black going forward.

Nita Hendryx, member of the state fiscal commission overseeing city finances, said the water fund is currently the biggest impediment to emerging from fiscal emergency. The fund is currently more than $600,000 in the red.

Paul Marshall, president of the fiscal commission, said he would not entertain a request for the city to be removed from fiscal emergency until the water fund is addressed.

“If we can get the water fund down to a reasonable level, that is our best chance” to escape fiscal emergency, Marshall added.

A five-year forecast provided by Hendryx shows the city’s general fund operating in the black over the next five years. The forecast includes about $200,000 in additional income tax revenue with the building of the new school and $48,000 annually from gas wells built in the city.

The forecast takes into account the $300,000 in income tax lost with the closing of Indalex in January, leaving 300 employees without work. The company manufactured windows and doors for the construction market.

Mayor James Melfi, however, points out that about 60 workers are still operating in the facility for now and paying taxes. He said there also is a new shredding facility coming to the city that will employ between 20 and 40 people.

The forecast shows the city ending each year from 2008 to 2012 with balances of $64,000, $494,000, $785,000, $407,0000 and $12,000, respectively. The 2011 and 2012 figures are contingent upon renewal of emergency services levies.

Marshall inquired about an upswing in miscellaneous spending in 2008.

Auditor Sam Zirafi said the jump from $327,000 in 2007 to $684,000 this year can be explained by a list of one-time expenses such as the city’s $85,000 share to purchase the old North Avenue School for construction of the senior center, about $33,000 in easements along U.S. Route 422 and undetermined legal fees.

jgoodwin@vindy.com