V&M Star guides Girard budget into black

By LINDA M. LINONIS

linonis@vindy.com

GIRARD

In 2002, the city faced a deficit of $2.55 million in its general fund. It ended 2010 with $50,000 in the general fund.

Mayor James Melfi is cautiously optimistic that the city’s financial fortunes are changing for the better. But a spending spree isn’t on his agenda.

He plans to stay the course of “watching every nickel.”

Melfi said a combination of factors led to the city’s being placed in fiscal emergency. The loss of a major employer, Indalex, in 2007 put about 300 workers out of jobs and wiped out 10 percent of the total income tax for the city, he said.

The city also faced a declining tax base as some residents moved away or defaulted on paying taxes. The struggling American economy also contributed to Girard’s plight.

Now, one could say a “star” is shining on the city in the form of V&M Star, which is contributing to the uptick in the city’s finances.

Melfi said the city will get an estimated $3 million from the construction of a plant addition through income taxes on wages of construction workers. Youngstown will get $2.5 million.

The mayor cautioned that this money is a one-time thing; once construction is completed in 2012, that money ends.

In late December 2010, the city received a $58,000 check from V&M Star as its share of the plant’s 2010 income-tax withholdings. Also, Girard Muncipal Court Judge Michael Bernard transferred $300,000 from the court to the city treasury. Those both helped the city end the year in the black, but they are one-time events.

The mayor and Jerry Lambert, director of public service, said the administration and council have been proactive in cutting city expenses.

One example, Lambert said, is the city’s payment history for workers’ compensation. In 2006, it cost the city $389,458 and in 2011, it will cost $171,460. The reduction, Lambert explained, was made possible by implementing random drug tests and safety classes for city employees.

The city staff also has been downsized. Attrition has lowered the city’s payroll. “We’re probably down about 25 across the board,” Melfi said. A secretary in the mayor’s office retired last year and has not been replaced.

Another example is the recreation department, which had 10 part-time and one full-time workers in years past. Now there is one part-time worker.

Though the city is moving forward financially, the mayor said areas of concern remain. The water department is $93,000 in the red, he said, but less than two years ago, it was $694,000 in debt. Stricter collection methods for fees have improved collections, Melfi said.

The mayor also said the city is looking at buying six new police cars; the fleet has six 2009 cars and six 1996 vehicles. “The older ones need to be replaced,” he said.

The street department also is using older vehicles, some 18 years old.

Melfi said grants have helped the city. Last year, the city received $400,00 in demolition grants for derelict buildings. Removing them improves the look of the neighborhood, the mayor said. Washington and St. Rose schools also were demolished.

A new $7 million senior housing complex built by Trumbull Metropolitan Housing with U.S. Housing and Urban Development money and three $1 million neighborhood improvement grants, with no city matching funds, improved sidewalks and curbs and benefited paving projects. “These things help restore neighborhoods,” Melfi said, and make them “safe and clean” places to live. The mayor wants to develop a “rainy-day fund” as a financial cushion.

Paul Marshall, financial planning commission administrator for Ohio, oversees Girard’s fiscal-emergency status. Girard is among 24 local governments and 10 school districts in Ohio in fiscal emergency. “The city has done well in a short period of time,” Marshall said. “It’s challenging.”

Marshall said cooperation among the city administration and council has moved the city closer to its goal of exiting emergency status closer.