Published: Wednesday, April 18, 2007
Girard back in black May 11
The general fund should be in the black in a matter of weeks.
GIRARD Residents here can expect some uplifting news in the mail from city hall.
After fighting through the difficulties of fiscal emergency for more than six years, the city's general fund will be in the black as of May 11. Residents, earlier this week, were sent correspondence explaining the change in the city's financial picture.
Mayor James Melfi said the city's general fund has not been in the black since 1998.
The city as placed in fiscal emergency in 2001 with a general fund debt of about $2.5 million. Melfi said the state auditor's office at that time determined that the debt was due in large part to the building of the $5.3 million justice center, the purchase of the Girard Lakes at a cost of $2.5 million and $2.25 million in improvements along U.S. Route 422.
Financial turn around
According to Melfi myriad of changes in the way city government is handled, including cuts in hospitalization costs, employee costs, purchasing and new management of resources, led to the financial turn around.
"We obviously have taken measures in the last six years to turn this city around. Many different measures were taken. We had to save money and we had to do it quickly," he said. "We safeguarded the people's money very closely. We have taken this very seriously."
Melfi, who is running for re-election this year, said the list of cost-cutting measures undertaken by city officials resulted in savings of $50,000 to $75,000 monthly.
What gave the city the final bump moving it from the red to the black side of the financial coin, Melfi said, were two money-saving events that took place during 2006 a court ruling that curbed the city's spending in the Girard Municipal Court and use of the Regional Income Tax Agency for tax collection purposes.
The city engaged in a long battle with Municipal Court Judge Michael Bernard resulting in a lower funding amount for the court than initially ordered by the judge. Melfi said that court ruling will save the city about $250,000 annually going forward.
According to Melfi, the city's hiring of RITA for tax collection purposes has resulted in an increase of $400,000 annually in income tax revenue.
Melfi said he is proud that the income tax generated has increased and the city's general fund deficit has decreased without any increases in city taxes. He said the auditor, law director, council's finance chairman and the state appointed fiscal commission deserve equal credit for the financial turn around.
"Everybody played a part in the recovery of this city," he said.
Melfi has plans to keep the city out of financial crisis. He said the city could eventually be looking at a surplus in the general fund and he would like to set some of those general fund dollars aside for a rainy day.