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Loan restructuring, income tax increase on the table for Canfield city
By ROBERT CONNELLY
CANFIELD
For the second-consecutive year, Canfield city is considering restructuring a loan to pay for a police department expansion. The other option could be putting a city income-tax increase on the ballot.
Last May 7, city council rejected by a 3-2 vote a loan restructuring for the debt at Red Gate Farm. City manager Joe Warino revealed during budget talks last week, however, that the interest rate had fallen further than last year’s option — 3.07 percent — to 2.92 percent.
Red Gate Farm sits at U.S. Route 62 and Leffingwell Road and was purchased for $2.3 million by city officials in 2003. There are 290 acres on the farm, which has six buildings and a gas line. The debt for the farm was refinanced in 2009 and, at that time, the interest rate was lowered from 6 percent to 3.65 percent.
That same year, the city began paying off the principal.
The new loan restructuring would extend the loan four more years — the current one is set to expire in 2018 and would total $1.1 million for the farm and the police department expansion. In total, it would be a new eight-year loan worth $1.1 million at an interest rate of 2.92 percent with an annual payment of about $152,000 a year. That payment is $10,000 a year less and at a lower interest rate.
The city’s information-technologies department is in a closet with $500,000 worth of equipment crammed in on top of officers being added over the years. There are space issues with longer periods of storage for evidence.
“I’ve watched our IT staff appear to play the game ‘Twister’ when they’re working their way through that room,” said Chuck Colucci, Canfield police chief.
Warino revealed that there is now about an inch gap at the top of the women’s locker room at the police department, “which means the room is failing at some point and will separate from the structure.”
If city leaders don’t want to restructure the debt, the thought was brought up about raising the personal income tax on city residents. Councilman Steve Rogers raised the idea a year ago, and city officials have discussed the possibility of a 0.25 percent income tax increase. The current rate is 1 percent.
“If you want to continue the department as we know it and have the service that’s provided, then somebody’s got to pay for that,” said John Morvay, city councilman. “Personally, I’m willing to pay for that. I want the best,”
He also sits on the Cardinal Joint Fire District board of directors, which approved an operating levy for a proposed third firehouse. He said voters passed that because of the quality of service provided and wanting it to continue.
Mayor Bernie Kosar Sr. said an increase of 0.25 percent in the income tax would bring in about $700,000 annually for the city. Both options will be discussed at the next budget meeting, March 18.
Warino noted two proposals by Gov. John Kasich: One is to eliminate income tax on businesses under $1 million, and the other is that a resident working outside the city would not have to pay an income tax.
“If we lose that income, we might as well close the doors. We’ve got to find a way to fill that void,” Warino said.