Treasurer develops economic program for Valley
Reardon said communities can save money and the county will still collect interest on its investments.
By BOB JACKSON
VINDICATOR COURTHOUSE REPORTER
YOUNGSTOWN -- Mahoning County Treasurer John Reardon has developed an investment program he hopes will lead to economic development for the region.
Reardon said he'll make low-cost funds available to local governments by allowing them to make short-term loans from the county rather than going through banks or investment companies.
Ohio law allows the treasurer to buy municipal obligations issued by any subdivision located within the county, he said. By borrowing from the county, subdivisions will save considerable underwriting costs and interest expenses, Reardon said.
He'll do it with money that would otherwise be invested in short-term securities, which the county already does.
"It's time to invest in this community and I think we can help, Reardon said. "We can save these communities some pretty significant dollars, and we're willing to do it. That's the whole point."
Creating jobs: The money is only available for projects that municipalities prove will either create or retain jobs. It is not available to private companies.
The cities, villages and townships that borrow money will repay it at an interest rate comparable to what the county would get on its short-term investments through STAR Ohio, which is the state treasurer's mutual fund.
Currently that rate is about 2.41 percent, which should be attractive for the local communities.
Most subdivisions will save 2 percent to 4 percent by selling their obligations to the treasurer rather than on the open market, which translates to large savings for the community over the life of the note, Reardon said.
"At the same time, the county's interest income will not suffer, so this is a win-win program," he said.
There is no cap on the amount a community can receive for a particular project.
Requests: Reardon said his staff will analyze all requests to determine the specific economic benefit to the community.
"We want to know how many jobs can be created or maintained," he said. "The better the jobs, the more we are willing to invest."
Reardon said he will also providing money for infrastructure improvements to industrial parks or to help communities with matching funds for federal and state projects.
First project: The treasurer said he's already got one project in the hopper. He's been working with Youngstown officials on a plan to buy a one-year, $1.75 million note for expansion and development of Performance Industrial Park and Salt Springs Road Industrial Park.
The city would pay back the money at 3 percent interest, he said.
"This is a perfect example of the new program at work," Reardon said. "On the open market, this note would cost the city 5 percent or more."
Reardon said he'll recommend approval of the project when the county's investment advisory commission meets next week.
He'll also meet next week with officials from Struthers, Campbell and Sebring, and plans to meet with other local officials soon and pitch the program to them.
"Our message is simple. We want communities to be creative and use us as a resource, especially while the [interest] rates are low," he said.