City officials deal with market turmoil
Lisa Roberson | The Chronicle-Telegram
ELYRIA — Monday’s turn of events on the stock market and the continuing effects of an unstable housing market made for heavy discussion among City Council members, who tried to make sense out of three items affected by the bad economy.
Talks about buying a new pumper truck for the Fire Department, establishing a land bank and lowering the asking price on the East 12th Street city-owned house first appeared to be three separate items for the Community Development and Finance committees to handle, but soon into the talks it became obvious each was being affected by the same economic uncertainties.
City officials are floating the idea of a lease-purchase agreement for the $269,000 pumper truck instead of selling municipal notes to financial institutions — once considered to be safe investments because cities pay back the money with tax revenue. That method is now falling out of favor as market pressures brought about by sub-prime lending dry up financing sources. As a result, City Auditor Ted Pileski said he would be hard-pressed to sell a note right now that would allow the city to buy the pumper.
“The financial world is in an upheaval right now, and the traditional financing method of issuing notes to pay off debt is just not happening,” Pileski said. “Leasing may be the only option we have right now if we want to get this truck without buying it outright.”
Council voted to allow the city to pursue the best financing available, whether through a lease-purchase agreement or a note sale.
The financial concerns that hinder the truck acquisition are also why City Council is looking at cutting the price of a home that the city repaired and is trying to sell.
The city-owned home hasn’t sold because the current housing market has left neighborhoods flush with homes for sale, but with fewer buyers who qualify for loans. The four-bedroom home has an asking price of $112,000.
The idea of starting a land bank is being explored as a way for the city to purchase vacant property and dilapidated homes cheaply with the idea of holding onto the land until it can be better-used. With $2.4 million in grant money from the federal government designed to shore up neighborhoods, city officials see land banking as a best bet to rehabilitate neighborhoods hit hard by the housing crisis.
The discussion about the city-owned house and land banking will be continued at a Community Development and Finance committee meeting in late October.
Contact Lisa Roberson at 329-7121 or lroberson@chroniclet.com.
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Filed by Lisa Roberson | The Chronicle-Telegram September 30th, 2008 in Top Stories. Popularity: 1% |
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