facebooktwitterRSS
- Advertisement -
  • Most Commentedmost commented up
  • Most Emailedmost emailed up
  • Popularmost popular up
- Advertisement -
 

« News Home

DOWNTOWN YOUNGSTOWN Many factors contribute to stall in renovations



Published: Mon, July 2, 2001 @ 12:00 a.m.



Everybody supports new or remodeled buildings, but the money just isn't there, Mayor McKelvey said.

By ROGER G. SMITH

CITY HALL REPORTER

YOUNGSTOWN -- For all the recent talk about borrowing millions of dollars for downtown projects, there is one developing and inescapable factor: City finances are slipping.

Income tax receipts started softening in November. The slide hasn't stopped in 2001. Unless the trend not only subsides, but reverses, the city could face a projected deficit and budget cuts the second half of the year.

That means borrowing is becoming a backburner issue, despite plans firming up for renovated appeals court space, a new municipal court and downtown demolition.

"It reflects very fragile financial times," said Mayor George M. Mc-Kelvey. "All our decisions are tempered by that backdrop."

As of late last week, income tax collections were about $800,000 less than at the same time last year.

Income tax receipts flow unpredictably, so that number could be higher or lower. The city won't know the final status of finances until later this month, after analyzing numbers from the first six months, said Finance Director Barbara Burtner.

Not looking good: Nonetheless, the large figure indicates tough times have come and are getting tougher.

Burtner budgeted for a 1 percent income tax increase in 2001, leaving an estimated $800,000 surplus. Funding of housing demolition has since trimmed that figure to about $400,000. Her budgeting was a conservative estimate considering the city saw several percentage point increases in the past couple of years.

Recent events, however, are conspiring against growth, and even stability.

UTartan Textile closed, eliminating 250 jobs.

UNortheast Ohio Correctional Center had 450 workers but has laid off about half and is preparing to close.

UMerrill Lynch left downtown for the suburbs, taking 41 high-paying jobs.

UHundreds of Forum Health nurses are on picket lines, taking away the substantial income taxes they usually pay.

Indications are that collections will drop a percentage point or two for the year, Burtner said. The $400,000 surplus could turn into a $400,000 deficit without budget cuts.

McKelvey and Burtner will review 2001 first-half numbers and consult with city council's finance committee. A freeze on all discretionary spending and not replacing city hall workers who quit or retire are most likely to avoid a deficit, he said.

Then there's borrowing.

Lacking a surplus makes borrowing more difficult, Burtner said. Lenders like to see surplus money to make sure the loans are repaid.

More importantly, a depleted general fund leaves no way for the city to pay back a bond on projects that don't have enough revenue to cover costs, McKelvey said.

He points to a new municipal court.

Borrowing to renovate the Kress building downtown or erecting a new court would leave a big gap, according to McKelvey's calculations.

The city's general fund would have to make up a shortfall of $346,000 to $654,000 annually between court revenues and loan repayments. It doesn't appear the court could raise its fees high enough to cover that gap, either, he said.

Everybody supports new or renovated buildings, but the money just isn't there, McKelvey said. Renovating court space with about $132,000 in annual court revenue may be the only option, he said.

Since demolishing downtown buildings won't generate revenue, borrowing doesn't appear to be a possibility, McKelvey said.

Renovating the city hall annex for the 7th District Court of Appeals Court seems more palatable. That proposed project contains revenues that are close to what it will cost to pay back a loan, he said.

rgsmith@vindy.com




Comments

Use the comment form below to begin a discussion about this content.


News
Opinion
Entertainment
Sports
Marketplace
Classifieds
Records
Discussions
Community
Help
Forms
Neighbors

HomeTerms of UsePrivacy StatementAdvertiseStaff DirectoryHelp
© 2014 Vindy.com. All rights reserved. A service of The Vindicator.
107 Vindicator Square. Youngstown, OH 44503

Phone Main: 330.747.1471 • Interactive Advertising: 330.740.2955 • Classified Advertising: 330.746.6565
Sponsored Links: Vindy Wheels | Vindy Jobs | Vindy Homes