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"Pay Your Parking Ticket, Subsidize Job Creation"
"By Dan O'BrienYOUNGSTOWN, Ohio -- City officials are looking to revenue from parking tickets, traffic violations and court fees to expand a loan program designed to entice new businesses to the city and assist existing companies looking to expand.Legislation is being prepared that calls for the city to use non-tax revenue -- that is, money raised by such means as parking receipts, court fees and traffic violations -- as a funding source for the float loan program, said David Bozanich, city finance director, at last night's meeting of council's finance committee."This is a great incentive to bring new jobs to the city," Bozanich advised.Youngtown's Community Development Agency allocates about $5.5 million each year in Community Development Block Grant funds to the float loan program, Bozanich said. While he said the loan initiatives are successful, he also noted the program is underfunded and there are more companies that could benefit. With the additional revenue, the amount of available cash would expand to about $10 million or $11 million.Under the float loan program, the city lends money at no interest to companies either relocating to or expanding in Youngstown, provided they also create a specific number of new jobs, Bozanich said. Every loan is backed by an irrevocable letter of credit from a bank, so if the debtor defaults, the bank would repay to the city the balance of the loan. Normally, companies participating in the loan program have between one year and 18 months to repay the loan. Most recently, the city approved a $2 million float loan for Wendelin House LLC of Ambridge, Pa., a steel service center set to occupy the former Allegheny Steel building on Andrews Avenue downtown. Wendelin House has pledged to relocate 20 jobs to the city and add another 30 over t three years. On average, the jobs pay $36,000 a year plus benefits, the company said.The city lends about $5 million a year to companies through the float loan program, Bozanich said.He explained although the city doesn't earn any interest income from these loans, the long-term impact is income tax revenue generated from job creation. "We can do a loan for a $1 million project, forego the $10,000 in interest it would have made and instead create 20 jobs at $30,000 a year," Bozanich said. Money raised through non-tax revenue is placed in a short-term account, earning about 1% interest a year. That money is used for various operational expenses, he continued. But making the money available for the float loan program won't adversely affect these operations, since the money is guaranteed to be repaid to the city within 18 months. "I think we'd be the only city in the country to do this on a city wide basis," the finance director said. "It makes us more competitive."Last night City Council approved a 10-year, 75% tax abatement on personal property for Tremont Cultural Center and moved another incentive package for Lyden Oil Co. to a second reading. Lyden is seeking a 10-year, 75% abatement on personal property taxes to assist an expansion to the former Safety Clean property located on Meridian Road. The project is expected to create three new jobs.Also, council approved a liquor application for a new night spot proposed for downtown, Skeeter's Jazz Club. The club is expected to open in the former Blast Furnace tavern, located next to the Plaza Cafe on Federal Street.Contact Dan O'Brien at [email protected]"