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City leaders await mineral rights exploration at Red Gate Farm
By ROBERT CONNELLY
CANFIELD
City officials are awaiting the results of a mineral-rights exploration that could lead to new well drilling at Red Gate Farm.
That exploration was discussed recently by city attorney Mark Fortunato as city budget talks continue.
City manager Joe Warino further explained that there are three wells now on the farm that are shallow, but new wells would be 3 miles deep.
“We didn’t know if we could extend those [active] lines” to any new well sites, Warino explained. Fortunato has not said when those exploration results will be released.
The city purchased Red Gate Farm in 2003 for $2.3 million. It sits at state Route 62 and Leffingwell Road and a $1 million downpayment was made at the purchase time. That was followed by a $1.3 million, three-year construction loan at a rate of 2.78-percent interest. That was re- financed in 2006, followed by two $150,000 principal payments in 2009 and 2011.
The city then refinanced the loan in 2011 for an eight-year, $1.3 million mortgage loan at an interest rate of 3.65 percent. That has been followed by annual payments of about $162,000, including both interest and principal.
Police Chief Chuck Colucci said in all, the city has paid $1,697,617.49 toward Red Gate since the 2003 purchase. The balance of the debt Monday was $602,382.51.
City officials are considering a loan restructuring to lower the annual payment $10,000 and lower the interest rate 0.73 percentage points.
“We have the lowest interest rates I’ve seen in my lifetime,” Warino noted.
A new $1.1 million loan, with a little more than $600,000 still owed for Red Gate combined with a $500,000 police expansion, is what could be voted on March 25 at the next city council meeting.
This issue is separate from an increase to the income tax, which would have to go on a ballot for Canfield residents, city officials made clear Monday. Warino said the city has lost $110,000 in state money from the local government fund, as well as $400,000 from a decline in local estate taxes.
That makes for a drop of about $500,000 in city revenue.
City leaders 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.
“I don’t know that we have that many businesses that are making $1 million, $1.5 million. ... [They] have to have tremendous traffic in the store to even approach $1 million in profit,” said Mayor Bernie Kosar Sr.
If those pass, Warino said, “Probably within the next three years, we’d be in a deficit.”