Income-tax receipts fall in Niles; treasurer expects trend to go on

By Jordan Cohen

NILES — Job losses and industrial cutbacks have caused the city’s income-tax receipts to drop substantially, and Treasurer Robert Swauger said he expects the trend to continue.

“It’s lower than expected, and we could be down by 10 percent from last year,” Swauger told council Wednesday. “We were down $400,000 in 2008 from the 2007 collection, and we could be off by as much as $500,000 more by the end of this year.”

The forecast means the income tax would generate only about $5.4 million by the end of this year, substantially less than the high of $6.3 million collected in 2007.

Swauger said collections last month declined by $50,000 from April 2008. “That’s because there was a company that had paid substantial bonuses at that time,” Swauger said. “Obviously, that didn’t happen this year.”

One element associated with the down economy, however, may work in the city’s favor — lower interest rates.

Council approved issuing $2 million in notes to cover the cost of repairs for the sanitary-sewer system, and Auditor Charles Nader said the city may be able to secure interest payments of just 1 percent.

“A financial representative advised us that a city in Northeast Ohio paid only 1 percent for its notes, and I’m hopeful we can get the same rate,” Nader said.

The ordinance council approved says the bonds issued by the city would pay 5 percent interest until the principal is paid.

The auditor said the city also may cut its costs for the project by paying $200,000 of the principal and financing only $1.8 million in notes.

In one other item, council approved two oil and gas lease agreements with Everflow Eastern Partners LP, Canfield, which will pay the city nearly $2,000 in signing bonuses along with royalties, which are yet to be determined.

The company needs to use several city streets for wellhead drilling off Niles-Cortland Road and in Weathersfield Township.