Some lawmakers said there should have been more discussion on how profits will be spent.
By AMANDA C. DAVIS
VINDICATOR TRUMBULL STAFF
WARREN -- The city has begun the process of selling nearly 40,000 shares of Anthem stock to reduce its short-term debt.
Treasurer John Taylor has said he'd initiate the stock sale as soon as city council gave the go-ahead, which it did Tuesday by a vote of 9-1.
"[Council members] made the only decision they could make," Taylor said, explaining the market is volatile and "We don't want to try and time it."
Officials say the stock will go up for sale Thursday. Anthem Insurance decided to become a publicly traded company recently and awarded shares of stock to Warren and other governments that were policyholders and paying into the system for years.
The legislation passed as an emergency during a special meeting. Councilman Doc Pugh, D-at large, cast the sole dissenting vote.
Against legislation: He opposed the legislation, saying a clause designating how the money will be spent should have been left out because council didn't have enough time to discuss it.
The legislation was proposed by the administration and supported by council's finance committee.
The ordinance authorizes auditor David Griffing to pay off more than $2 million of the city's short-term debt and put the rest in a hospitalization fund.
The money will be used to pay off debt from capital projects last year, the city's downtown parking deck, and a loan for improvements at Avalon South Golf Course.
City officials have said the interest rate on the loans is about 4 percent, which means that had they been paid off last week, the city would've saved $246 a day.
Paying off the short-term debt will free up about $600,000 annually for five years, money that can be used for city projects or whatever council deems necessary, city officials say.
Council introduced the legislation last week but did not have enough votes to pass it as an emergency.
Favored ordinance: Councilwoman Susan Hartman, D-7th, voted in favor of the ordinance even though she adamantly opposed the clause spelling out how money would be spent. A "no" vote by Hartman wouldn't have changed the outcome.
She said she felt the ordinance needed to pass so the city could sell the stock.
Councilman Dan Polivka, D-at large, said there was no reason to delay the sale, adding, "I think this is a great shot in the arm for the city."
Pugh and Hartman were upset the legislation didn't have a financial impact statement, which council requires with all ordinances dealing with the appropriation of money.
Councilman John Homlitas, D-3rd, said paying off the city's debt should be considered a financial impact statement.
Hartman said she thinks the money should not be spent on debt because unexpected costs might arise, such as $200,000 the city would have to pay if some safety forces win a lawsuit pending before the city.
Judge W. Wyatt McKay of Trumbull County Common Pleas Court upheld a ruling last year of the Warren Civil Service Commission that says the city erred in 1999 by incorrectly notifying 17 firefighters and two other employees of impending layoffs.
Lt. Jeff Younkins, president of Warren Firefighters Local 204, has said that if the city loses on appeal, it will have to award three months of back pay for each of the 19 employees, which could cost up to $200,000.
Angelo said that possible expense is a nonissue because the city intends to win the case.