It will take Girard five to six years to straighten out its financial problems, the city auditor estimates.
By TIM YOVICH
VINDICATOR TRUMBULL STAFF
GIRARD -- The debt-ridden city must reduce spending by more than $1 million annually to dig itself out of the red, the city auditor says.
Auditor Sam Zirafi reported Monday that the city must cut spending from $9.7 million annually to $8.4 million to erase negative fund balances and generate cash.
Zirafi released his analysis of city finances to city council's finance committee.
Councilman Joseph Lambert, D-at-large, was the only lawmaker to attend the meeting. Two other finance committee members, Councilman Reynald Paolone, D-1st, and Councilman John Moliterno, D-at-large, were absent.
The analysis does not include the municipal court operations. The court and city administration have been at odds over the cost of the justice center, which houses the court, and how much the court should pay for it.
Estimate: Estimates indicate the city will end the year $1 million in the red. It costs $1.44 million annually to repay loans for capital improvements.
The city borrowed $4 million to build the justice center and $2.25 million for underground utilities when U.S. Route 422 is widened.
"We need to sit down and see how we should approach this," Zirafi urged.
Last week, the auditor sent a letter to Mayor James Melfi, strongly recommending the mayor reduce spending in funds he controls by more than $500,000 by year's end.
Melfi, who attended Monday's meeting, outlined how he has saved the city $1 million in the 16 months he has held office.
Melfi said he will have a long-term financial plan for the city in about a month after the state auditor's office concludes a special audit of the city's finances.
Recommendation: Zirafi called for no major capital improvements for the next five or six years -- the time it will take to return to sound financial footing.
City Treasurer John Martin said the city can't look at a one-year solution, noting income tax payments are down $38,000 compared with this time a year ago.
Lambert asked if there is any way the city can increase its revenue, such as through commercial development.
Melfi explained that downtown stores don't generate much revenue and any hope the city can buy, develop and manage commercial properties is probably beyond the near future because of the city's large debt.
Frank Rich, city director of safety and human resources, explained the city might be able to increase income by addressing the "extreme" loss of water in the city-owned distribution system.