Palestine could leave electric trust in the dark
EAST PALESTINE – Money borrowed over the years from the village’s electric trust fund may never be paid back.
Council members discussed the matter last week before a first reading of legislation that would suspend payback to the fund another five years.
The fund was created following the $3.08 million sale of the light plant on the west end of town in 1974. Until the sale to Ohio Edison, the village had operated its own electricity generating facility. Although the plant was phased out, the building remained under the ownership of the village until sold to Bradley L. Strawser in 2002.
Strawser developed the site for the manufacture of lids and gaskets for plastic and metal containers. The industry later left the area, however, and the building is now owned by Councilman Don Elzer.
Of the $3.08 million given to the village, Finance Director Traci Thompson said only $30,806 remains since money has been borrowed from the fund.
Over the years seated council members approved legislation to borrow money from the trust fund with the intent it would be paid back, but with not enough money available, the payback was continually pushed aside through legislation that allowed suspending the payments.
Money taken from the fund has gone to the water, sewer, street and general fund, Thompson said.
The only money going back into the fund at this point is revenue from the sale of lots at Leslie Run Estates and payback for the purchase of a street sweeper years ago, she added.
The sweeper cost $150,000 and the village put $10,000 back into the trust fund last year. Additional $10,000 payments were already planned for this year and 2014 but may not happen if the legislation to suspend payments goes through.
The legislation is for 2013 through 2017 and is the third before council since 2002.
Council approved in 2002 suspending payback for 2003 through 2007, and again in 2008, for payback through 2012.
Thompson said there is no money available in the village’s other funds to pay back the trust fund at this point.
Councilman Fran Figley said he’s aware the money isn’t available but argued payback shouldn’t be done away with completely.
But Elzer didn’t agree.
“We are saying we can’t pay it back, so why not forget about it?” he said.
Councilman Alan Cohen also questioned why payback is necessary since the village was borrowing from itself in the first place.
He noted that while the village is required, according to the prior ordinances passed, to pay the money back, putting money into the fund by using other funds when little money is available is “like robbing Peter to pay Paul.”
Elzer asked if the payback could be done away with completely through new legislation since it’s clear there isn’t money available for that, which prompted a brief discussion regarding whether the village would be paying off a debt by putting the money back.
Thompson said the trust fund is showing an outstanding debt since all ordinances passed stated the money would be paid back.
Village Solicitor Shirley Smith said she would look into whether legislation could be written that would absolve the village from any payback and have that information available at the next meeting.
Council approved a motion to read the legislation by title only, and a second reading is required before a vote can be taken.
Figley said he would not be approving the legislation and argued the fund should be viewed as a savings account.
“What’s wrong with putting some money back?” he said.
Village Manager Pete Monteleone said he and Thompson have discussed putting money aside in the future for contingencies.
“Our plan is to start having some savings. We are hoping we are able to operate, give everybody everything they need and then have some contingencies. In my opinion, if we were to make any sort of large payments of ourselves to pay back into the fund, I agree it would be like robbing Peter,” he said.