Girard reaping the benefits of good management, V&M Star
For a decade, Girard’s city gov- ernment has had to bear a very heavy burden: A fiscal oversight commission controlling its finances as a result of the declaration of fiscal emergency by the state.
Every spending decision requires the approval of the commission. It hasn’t been easy for Mayor James Melfi, his department heads and city council, Major cuts in spending have been imposed, especially with regard to the payroll. About 80 percent of the city’s operating budget goes towards employee salaries and benefits. Wage freezes, elimination of jobs through attrition and not filling vacancies have helped erase more than $2 million in red ink.
But the closing in 2008 of one of Girard’s largest employers, Indalex, which operated an aluminum extrusion plant, knocked the city back on its financial heels. The company provided $225,000 in tax revenue and shelled out $250,000 in water and sewer payments.
Just when it seemed that the progress Girard has made over the years to get its budget balanced was all for naught, along came Vallourec, the French parent of V&M Star of Youngstown, with the announcement that it will spend $650 million on a state-of-the-art steel pipe-making plant on a site adjacent to its existing facility. Given the enormity of the project, land in Youngstown and Girard, along Route 422, was carved out. Thus, Girard stands to benefit financially.
The city ended 2010 with a surplus of $50,000, which Mayor Melfi says is not an invitation for government to go on a spending spree. In late December, the city received $58,000 from V&M Star as its share of the existing plant’s income tax withholdings, and $300,000 from Girard Municipal Court Judge Michael Bernard. The money was in a special court fund.
Despite these positive developments, the mayor intends to stay the course of “watching every nickle.” But, there is a sense of optimism that after all these years of budgetary trials and tribulations, better days are ahead for Girard.
The construction of V&M’s new plant will result in $3 million in revenue from the income taxes paid by the 400 or so workers. The city of Youngstown will receive $2.5 million.
When the plant is fully operational, it will have 350 employees earning an average salary of $50,000. Girard will share in the income tax paid by them.
Good public policy
By any measure, the agreement between the two cities on revenue sharing not only paved the way for V&M to secure the land it needed for its plant, but it’s good public policy.
Indeed, there is now talk that Vallourec intends to spend another $350 million on expansion. If that happens, the cities of Girard and Youngstown will reap additional benefits.
Girard has also been aggressive in pursuing state and federal grants, and for a small city hit hard by the national recession has done quite well.
It secured $400,000 to demolish derelict buildings, and $3 million in neighborhood improvement grants that facilitated the construction of a $7 million senior housing complex built by Trumbull Metropolitan Housing. TMH got funding from the U.S. Department of Housing and Urban Development.
It has been a long haul for the city of Girard, but things are looking up.