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Mill Shutdown Will Cost Village

August 22, 2012
By MARK LAW Staff Writer , The Intelligencer / Wheeling News-Register

The village of Mingo Junction's coffers are taking a hard hit from the shutdown, bankruptcy and sale of the Mingo Junction RG Steel plant, with income tax collections down two-thirds of what was collected four years ago and revenue from the sale of water cut in half.

The village auditor's office said $3.053 million was collected in 2008 from the 2 percent income tax. The village this year is anticipating only collecting $857,000. The steel plant was once the largest purchaser of water.

The village received $1.584 million in water sales in 2008. The village is expecting to collect only $750,000 this year and that is with a water rate increase imposed in March.

Village Clerk John Angelica earlier this month told council members there may have to be cuts in the village's general fund by the end of the year to balance the budget.

"It is pretty sad for us," Angelica said. "The mill accounted for 85 percent of the budget at one time."

Up to 1,300 village residents were employed at RG Steel and its predecessors, Angelica said.

"It is just part of the economy in the area. Now the coal industry will suffer. It is happening all over. The bankruptcy rate in all communities is on the rise. The people of Mingo are resilient. We'll do whatever we have to do," Angelica said.

The village's general fund has been cut in half over the past several years with the downturn in the mill. The village's general fund this year totals $1.27 million.

Village officials are expecting revenues totaling only $900,000 this year. The village carried over $300,000 from last year into this year's budget.

Angelica said it may not be until October for the village's financial picture to be clear and if budget cuts will have to occur.

Council may have to consider transferring money from the community complex fund, a move that may be unpopular with councilmembers and village residents. There is $450,000 in the fund, which has been built up over the years from income tax collections.

The village was able to recently hire an additional police officer thanks to a $125,000 Community Oriented Policing Services grant from the U.S. Justice Department. The grant will pay 75 percent of the cost of the patrolman's wages for three years. The village will have to pay all the wages for a fourth year under the grant agreement.

Police Chief Steve Maguschak has questioned council if there will be cuts in the police department and the grant is now in jeopardy.

Village Council approved a water rate increase in March that includes a $51 a quarter service charge that will generate enough money to pay the village's loan for the water plant this year.

Water rates were increased from $6.31 per 1,000 gallons to $8.31 per 1,000 gallons, and customers outside the village were paying $6.97 per 1,000 gallons of water. The rate will now be $8.97 per 1,000 gallons.

Residents have been complaining to council about the increase since it was imposed. The village is still receiving real estate taxes on the steel mill. The village collected $205,046 in 2008, but the amount has decreased to an estimated $190,464 this year.

The future use of the mill is still up in the air.

The Mingo Junction plant was sold at bankruptcy court auction to Frontier Industrial, which plans to raze some parts of the plant. Frontier, however, plans to work around Mingo's major assets - the caster, 80-inch hot strip mill and the electric arc furnace - to possibly find an operator, according to officials at the United Steelworkers of America Local 1190.

The village, like other communities throughout the state, is feeling the impact of cuts made in state local government funding. The state cut the local funds as a way to balance the state budget. The village received $237,147 in 2008, but this year's estimate has been cut to $147,372.

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