LORDSTOWN - With Lordstown's council members hearing new reports that the GM complex could extend its shutdown into March, officials are trying to figure out how to best plan for the village budget.
Councilwoman Mary Jane Wilson said during Monday's finance committee meeting the village should set aside the money now to pay the village's debts for next year. Currently, the village sets aside 20 percent of income tax collections to cover loan payments for the sewer project loan.
"That could be 20 percent of nothing," she said. "We know there will be no payments in January. Now we're hearing they could be shut down into March."
Jim Graham, president of United Auto Workers Local 1112 at the Assembly plant, said current plans call for the winter shutdown to last until the beginning of next month, but knows that could change.
"As of right now we're scheduled to go back Feb. 5," said Graham. That could change based on sales and events on the national level, he said. The first few months of the year are historically a slow period for car sales, he said, as potential buyers are worried first about paying the holiday bills and don't start making major purchases again until the end of the first quarter.
The village's finances rely heavily on income tax payments from GM and its suppliers that are based in the township, with the automotive industry supplying 75 percent of the income tax paid each year. The village received $5.6 million in income tax payments in 2008, an extraordinary amount, said deputy clerk Bill Blank. The higher collections were based on taxes paid on buyouts and major investments in the plant.
During a year when the plant has all three shifts in operation, the village expects $5 million annually to be generated. This year, however, as the nearly half of the workers at the plant have been laid off, and layoffs have been announced at supplying businesses, the village is currently estimating $3.2 million in revenue will come in 2009.
"I certainly wouldn't want to estimate it any higher," said Blank. "It may even be as low as $2.5 million."
The village has payments of $606,000 due annually for 20 years to pay for the new east side sewer system. The payments are paid up. Wilson suggested taking a portion of the $1.7 million surplus in the capital improvement projects and setting it aside for next year's debt payments. Blank said he would look to see if that is permitted under Ohio law.
Under current laws, about 40 percent of the village's income tax collections are set aside to pay down debt and fund capital improvements.
The finance committee may suggest to council they do away with this earmark system for 2009, and instead use the $1.1 million surplus for any capital improvements, at least until the village can get a clearer picture of its financial future.
"That will give the clerk the flexibility they need this year," said mayor Michael Chaffee.
The village is looking at creating healthcare savings accounts for village employees, saving tens of thousands of dollars in health care. Also, employees volunteered for a wage freeze. Capital improvements will also largely be frozen for the coming year.
Council next meets at 6 p.m. Friday in the administration building.