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No action taken on financial problems

Mingo Junction looks at budget

October 24, 2012
By MARK LAW - Staff writer ( , The Herald-Star

MINGO JUNCTION -Village Council on Tuesday didn't proceed on applying to common pleas court to transfer $250,000 to balance the budget by the end of the year and also may rescind a decision to change the terms of a state bond for the water plant.

Council on Oct. 9 voted 4-1 to bring in an ordinance to ask the state auditor's office for permission to transfer $250,000 out of the community complex fund, which has a balance of $372,000. The community complex fund has received money from a portion of the village's income tax over the years.

An ordinance was ready for action Tuesday, but Councilman John Bracone said he wasn't in favor of transferring the money until it is known exactly how it will be spent.

Councilman John Brettell on Oct. 9 voted against the measure, saying the money was intended to be used for a community complex and not for "bailing us out at the end of the year."

Village Clerk John Angelica said the money is needed to cover deficits in various general fund accounts at the end of the year and to cover expenses at the beginning of next year.

Angelica said the state auditor's office first has to approve the transfer. That decision would take about two weeks. The village then would have to seek a judge's approval in common pleas court. Angelica said that process will take about two months. He also said the delay now will result in the village not being able to balance the books at the end of the year or have money for expenses at the beginning of 2013.

A couple residents at the meeting said they thought the transfer of the money from the community complex fund would cover money needed for a bond payment to the state for the water plant.

Council also at the Oct. 9 meeting approved an ordinance to apply to the Ohio Water Development Authority to extend the term of the bond for the construction of the water plant.

The village financed $7.69 million and has made 33 semi-annual payments of $294,310. The bond for the water plant was for 25 years.

OWDA has agreed to extend the life of the bond to 30 years.

The semi-annual payment now will be $271,117.

Village Administrator Charley Bowman said the recalculation resulted in a credit for almost three payments. The village will be able to skip the two payments in 2013 and make a $47,984 payment in January 2014. The regular $271,117 payment will begin in July 2014, he said.

The steel plant in the village was once the largest purchaser of water. The village received about $1.5 million in water sales in 2008. But the plant was shut down and sold by RG Steel and the village isn't collecting any water revenue from the facility.

Village officials were concerned the village wouldn't collect enough in water usage fees from residents to make the upcoming water plant bond payment.

Bracone, who was absent from the Oct. 9 meeting because of death in the family, said the village will pay an extra $1.5 million in interest payments for the additional five years on the bond. He said he would rather see the village find a way to pay the original amount and be done with the payments in nine years, instead of 14 years with the refinancing of the bond.

"I say pay the extra $23,000 and be done," he said.

The paperwork already has been sent to OWDA, and council will have to rescind the measure.

Angelica said the water fund currently has a deficit of $45,000. He said about $250,000 in water bills will be collected in the next month or so.

Angelica after the meeting said, "This town will be bankrupt by Jan. 1."

The meeting started with Mayor Ron DiCarlo saying he wanted a more organized meeting. He said residents would be given three minutes to bring a problem to council and then the matter would be referred to the appropriate council committee to be addressed. He said residents wouldn't be allowed to ask comments as the meeting progressed, as has been customary.

About 35 minutes later, five to six people were shouting at each other at one time, arguing over the issue of the community complex fund and the water plant bond.

After the meeting, Angelica had to be separated from a person at the meeting because a fistfight almost started.

DiCarlo, during the meeting, said answers to Bracone's questions will be addressed at a finance meeting at 6 p.m. on Nov. 8.

Council and DiCarlo were questioned at the beginning of the meeting about the hiring of Bowman as administrator.

DiCarlo said Bowman will be paid $30,000 a year, without any benefits. He said Bowman will be in the village three days a week and be available on a fourth day by phone. He said Bowman teaches a municipal administration class at the University of Akron.

DiCarlo said Bowman's resume includes the help he gave to various municipalities throughout the state that were experiencing financial problems. He said Bowman also will write grants.

"He has turned a lot of villages and cities around. We couldn't get anybody more qualified for $30,000 a year. The village will see in six to eight months that he will pay for himself," DiCarlo said of Bowman, who was absent from the meeting Tuesday because of a prior commitment.

Council also voted 4-2 to endorse the additional 1-mill levy for the Jefferson County Joint Vocational School for current expenses, purchasing equipment and improving buildings.

Councilman Chuck Dickey voted against the endorsement saying he can't justify endorsing any additional levy because of the state of the local economy.

Also, Fire Chief John Wright addressed a letter to the editor in the Herald-Star on Sunday concerning an ordinance approved by council on Sept. 25 concerning parking recreational vehicles and boats.

Under the approved ordinance, residents wouldn't be allowed more than two boats or RVs. The boats and RVs would not be allowed to be parked on the street. The RVs and boats have to be parked in the rear or side of the residence and no closer than 5 feet for a property line.

"I want to make it clear to the public that I am in no way in agreement with this individual in reference to his opinion on the amendment of this ordinance," Wright said. "In no way, as fire chief, or as a citizen of this village, was I ever in disagreement with council on this ordinance. I worked hand in hand with council members throughout the process of making the changes to the ordinance, and I support the new ordinance 100 percent. The changes to the ordinance were nothing more than an attempt, and I believe a successful one, at making the code fair to all parties involved, whether it be an owner of a recreational vehicle or a neighboring property owner."

Ed Treglia of Mingo Junction, the author of the letter to the editor, said the ordinance was approved at an unannounced emergency meeting, but it was done at the regularly scheduled meeting on Sept. 25.

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