The city of Galion is still in fiscal emergency but the five-year financial forecast for the city is positive.
Belinda Miller, chief project manager of the Northwest region of the state auditor’s Local Government Services Division and Galion’s city fiscal supervisor, said there will be a satisfactory carry-over in 2020.
“The fund balance is decreasing during the forecast period but there will still be a satisfactory carryover in 2020,” said Miller during the quarterly financial planning and fiscal supervisory committee meeting on Wednesday at the city municipal building.
While there are no changes for the water fund rates or the sewer fund within the five-year forecast, there is a predicted change to electric rates.
“There is a rate increase in 2018 for forecast purposes,” Miller said.
Mayor Tom O’Leary said the electric rates are a point of contention within the community.
“There were long-term purchase agreements made by previous administrations which is why a large part of our power is coming from a coal-burning plant but our debt issues have even more to do with an investment in green power that council invested into at about the same time they invested in coal-burning power,” O’Leary said.
O’Leary said the city is still paying for indiscretions of the past.
“Inexplicably, there was a depletion of the electric fund by 2004,” O’Leary said.
Miller explained that the city had to secure a loan at a 5.5 percent interest rate to stay above water at that time.
“The city is locked in at that rate and the loan cannot be refinanced,” Miller said.
O’Leary compared the debt to being forced to pay off a car that has been totaled.
“Debt service is a pretty large chunk of our operating costs,” O’Leary said.
The next meeting of the committee will be held at 9 a.m. on April 27.