City water and sewer workers would become private sector workers under the proposal.
By TIM YOVICH
VINDICATOR TRUMBULL STAFF
GIRARD -- Consumers Ohio Water Co. has proposed buying the city's water distribution and sewage treatment systems for $8 million, a deal that would pull the city out of fiscal emergency.
In addition to hearing the proposal Monday, city council voted 4-to-3 to place a 0.5-percent, two-year income tax increase on the November general election ballot.
The issue would generate about $750,000 annually and increase the income tax rate from 2 percent to 2 1/2 percent.
Under the proposal to buy the sewer and water systems made public by Mayor James J. Melfi, the city would net $5.1 million from the sale.
The purchase of Girard Lakes from Consumers Ohio Water for about $2.4 million in the mid-1990s is one of the reasons the city has been under a state-imposed fiscal emergency since August 2001.
The city pays about $235,000 annually on the loan to buy the lakes. Over the life of the loan, the city will have paid $4.9 million for the property.
The city has about 5,400 residential water customers and 600 commercial customers that receive water through what Melfi described as "very old" lines.
The city buys water from Youngstown, Niles and McDonald and resells it to users in the city.
If the deal goes through, seven city water employees would become Consumers Ohio Water workers, along with nine at the sewage treatment plant.
The original sewage treatment plant was constructed in 1961 with secondary treatment added in 1987. The city will be paying $450,000 annually to pay off the construction loan over the next seven years.
Melfi said he doesn't know if $8 million is a fair price and questions what will happen to future water and sewer rates.
Consumers Ohio Water's proposal specifies the city will set the rates to 2005.
Councilwoman Kathleen O'Connell Sauline, D-2nd, who chairs council's finance committee, asked that a nationwide search be done to determine if others are interested in buying the city services.
Employees in the water and sewer department are members of the American Federation of State, County and Municipal Employees Local 3356.
Elizabeth Zagorski, Local 3356 president, said after the meeting the union will not support any sale.
"We think we're providing good services," Zagorski said, noting she doesn't want to see a city service sold.
Discussion of placing an income-tax increase before voters caused debate.
Sauline and Councilmen Renny Paolone, D-1st, and Joseph Lambert, D-at-large voted against the measure, while Councilmen Clyde Wagner, D-3rd; Charles Doran, D-4th; and Joseph Christopher, D-at-large, voted for it. Councilmen John Moliterno, D-at-large, was absent.
Council president Louis J. Adovasio broke the tie by voting for the measure.
Sauline, who introduced the legislation to place the measure on the ballot, voted against it, she explained, because the city is not being operated in a fiscally sound manner.
Paolone said he would rather see a 6-mill property tax levy on the ballot because it's more equitable. Lambert agreed with Paolone.