GIRARD - With the construction phase of the V&M Star expansion coming to a close, Mayor Jim Melfi confirmed Thursday that city officials would be seeking a state audit to accurately account for total monies owed to Girard from Youngstown, in accordance with revenue sharing agreements.
Melfi stressed that the audit would have been requested regardless of the circumstances.
"We have a very unique agreement with Youngstown with the V&M expansion," Melfi said. "Our shared revenue agreement is with Youngstown and, since the property was annexed by Youngstown, all income taxes go to them. So, as a result, we have to depend on Youngstown sending Girard our share.
"It's not about us not having trust. We just need to verify that the citizens of Girard are getting everything they are owed. One can only be completely assured with a state audit," he said.
According to Melfi, V&M estimated $5.5 million in tax revenue would be accrued at the end of the construction phase. The agreement calls for Girard to receive 55 percent of income tax revenue and Youngstown to take the remaining 45 percent. So far, Melfi said Girard has received approximately $1.3 million, when closer to $3 million was expected.
"The number that kept popping up during our negotiations was $5.5 million," Melfi said. "That would mean, under the agreement, we would get $3 million and Youngstown would take the other $2.5 million. Since the construction phase is now coming to an end and we only have $1.3 million so far, that is a little eye-opening."
Melfi said he plans to send a written formal audit request to Ohio State Auditor David Yost in the coming weeks.
"We've been in contact with them and some overtures have been made to the auditor," Melfi said. "We aren't anticipating any problems in getting the audit done."
In the past, city officials for Girard and Youngstown have disputed stipulations in the V&M Star expansion agreement.
According to Melfi, Youngstown failed to pay more than $39,000 in permit fees for the project in March of 2011.
"We agreed that Girard would receive 50 percent of any permit fees," he said. "We found out over a year ago permit fees were paid to Youngstown by V&M and we were not notified."
Then in August of 2011, an attorney for the Regional Income Tax Agency filed lawsuits on behalf of the city of Girard for more than $158,000 in back taxes, interest and penalties.
Melfi said the audit has nothing to do with past issues, but is something which has to be done to ensure fairness in the deal.
"I want to repeat that this isn't a trust issue," Melfi said. "We have no reason to believe Youngstown is withholding revenue from us and Youngstown's Mayor (Charles) Sammarone has been very forthcoming with us. There is just a lot at stake with such a large project. The city of Girard has sacrificed the most, because the project is taking place on former city property.
"We have to be sure and (the audit) is something we will continue to do each and every year," he said.
Attempts to contact Sammarone were unsuccessful.