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SALEM -- City council discussed financial assistance options in a special meeting.
The meeting, held Oct. 10, saw discussion of an ordinance authorizing City Service Safety Director Joe Cappuzzello to prepare and submit an application for and accept financial assistance from the Ohio Public Works Commission's State Capital Improvement Program and to execute contracts as necessary for the construction of the North Union Avenue and East Ninth Street pavement repair projects. Council discussed at length whether the city should only apply for the grant assistance it pursues each year or should also pursue a potential zero interest loan to help fund the city's annual street paving projects for 2024.
Councilman Andrew Null said that he was concerned about taking the loan in addition to the grant on top of the city's existing debts and questioned why such a loan was potentially necessary for the project. Null also questioned if the city could apply for just the grant funding.
"My concern about the loan is it's a great interest rate obviously, but it still has to be paid back," said Null.
Cappuzzello said that the loan would be to off-set the extreme costs to repair North Union Avenue, which he said was "one of, if not the worst, roads in town," and that residents have been asking him about the issue since he began serving as safety/service director. Cappuzzello said that the costs of repairing North Union were "prohibitively expensive" and that the estimate the city had received for asphalt work from Third Street to Tenth Street alone last year was over $1 million.
Cappuzzello also said that East Ninth was in similar condition, estimating the cost to do both would be approximately $1.4 million, and that while the city didn't have to apply for the loan, if the city pursued grant funding alone, they likely would be unable to work on any other streets for the year.
Councilman Steve Faber questioned what the city's current debt balance was, and Cappuzzello said that the city currently still owned $1 million on the existing street loan, but that $500,000 was currently budgeted for 2024 to pay that down, and that "in theory," the same would be done in 2025 to pay off the remaining balance, before the current levy ends in 2025.
Faber said that was only accounting for the street department's debt and did not account for the rest of the city's debts, including the loan taken to purchase the property located at the corner of South Lincoln and East State that will be the site of the ongoing Lincoln Plaza project.
"We have more debt than just streets; we have $450,000 on the corner that we're paying interest on, I assume, right now with no payment to the principle, and I believe we're paying something on the Pershing Street extension. We're talking about North Union and East Ninth, and it seems like we're forgetting, and maybe I'm wrong, that we have other debt besides that," said Faber.
Cappuzzello said that to his knowledge the city had never applied for the loan, and that he had never been aware of the potential before, and the zero percent interest rate had caught his attention as a potential source of funding. Cappuzzello also said that it was his belief that once the current loan was paid off those funds would be used to begin paying off the loan for Lincoln Plaza.
Council ultimately decided to pursue only the grant funding, and following discussion of if the ordinance would need to be altered, it was ultimately decided to alter the grant language to say "financial grant assistance" in place of "financial assistance," and the modified ordinance was unanimously approved.
City council will meet next at 7 p.m. Nov. 8 as the council's regular meeting on Nov. 7 was re-scheduled as council chambers are used as a polling location.