EP councilman: No money in, no money out
EAST PALESTINE – If money isn’t going back into the electric trust fund, money shouldn’t be taken out, Village Councilman Alan Cohen said Monday.
Cohen made the statement before council gave a second reading to legislation that would suspend payback to the fund another two years.
He said a clause should be included in the ordinance stating no money would be taken from the fund during the two-year suspension.
He compared the matter to taking out a loan on a home.
“If you borrow from a bank for a mortgage and don’t make any payments, you are not going to be able to take out a loan. As long as we are deferring payment to that account we should not be making any withdrawals from that account,” he said.
The village has taken money from the fund over several years to cover expenses in the water, sewer, street and general funds. The borrowing was approved by past councils on the stipulation any money taken would be paid back.
Payback was suspended in the early 2000s when the village didn’t have enough money to make the payments, and seated councils have approved the suspensions over the last decade.
The suspensions were typically for five years, and council was presented with legislation in January to suspend payments another five years. The matter was tabled until recently, when Councilman and Finance Committee member Jim Tyger suggested a two-year suspension instead.
The legislation was amended and given a first reading at the Sept. 23 meeting.
The electric trust fund was created from the $3.08 million sale of the light plant to Ohio Edison in 1974 and is now down to roughly $30,000.
Finance Director Traci Thompson provided council members last month with a list of withdrawals, or “borrowing” from the fund, dating to 1996.
The most recent withdrawal was $32,000 in 2011 to pay a loan on the street sweeper purchased in 1997 for $152,646. The village still owes $10,667 on the loan.
No money was borrowed from the fund between 2006 and 2011, according to the list, although money was borrowed each year between 1996 and 2006, with the exception of 1998, when no money was borrowed.
The village owes $1.97 million back to the fund at this point.
Cohen said his suggestion gives the village a “reason” to start paying the fund back.
Councilman Don Elzer disagreed with the suggestion, and argued he views the electric trust as a “rainy day fund” and doesn’t want to see the village put restrictions on it.
“This idea that we have this fund to put money into and have restrictions on how we take it out is crazy to me,” he said.
Cohen responded he understood that argument but the restriction would only apply during years the payback is suspended.
Elzer then asked, “What is the goal, that we get back to where we have $3 million in this account?”
To which Cohen said yes, and Elzer countered the $3 million could be used for the village in other ways.
Although he opposed the suggestion, Elzer did not oppose Cohen’s motion to include the clause and the motion passed with all in favor.
The amended legislation to suspend payback two years with no money withdrawn during that time will be put before council at the next meeting for a third reading and a vote.
Council also approved a first reading of legislation amending the legislation setting new park and pool rates for next season. The prior legislation erroneously featured the current rates.