SHARON

The city of Sharon is planning on saving $128,000 by refinancing a bond issue but council members are still concerned about controlling the city's debt.

Council has been discussing refinancing a bond issue and borrowing more money for several months but the volatile stock market kept them from taking any action.

Michael Gasparich, city finance director, said in addition to refinancing the bond the city will also borrow an additional $2 million for capital improvement projects such as replacing the parking deck at the Shenango Valley Community Library at a cost of about $700,000.

Along with the refinancing and borrowing, Gasparich said the city will delay their $225,000 bond payment for 2002 until May 2003.

Gasparich told council members Thursday he talked with financiers from Mellon Bank and Parker Hunter, both Pittsburgh, and they can lock in a good interest rate if they act on it today.

Councilman Raymond Fabian said he knows $2 million is an "enormous amount" of money for the city but, "I think it's the only viable or feasible solution at this time . . . Unfortunately you have to bite the bullet to do it."

"I'm the one that proposed this idea," Councilman Lou Rotunno said. He said now he's uncomfortable because he doesn't trust the money will be spent on capital improvement projects and not transferred to the general fund.

Rotunno referred to money that was supposed to be cut from the budget when council eliminated several positions at the beginning of the year. When council reinstated the positions, Gasparich told council the money was still in the budget in case they did reinstate the positions.

"How can we trust you to do what you're supposed to do with $2 million," Rotunno asked.

Mayor David O. Ryan said he will make sure the money is used only for what council wants it spent on. "I will guarantee you . . . any money earmarked for any certain project will go for that," he said.

Rotunno said he's also worried because the city is already $239,000 in debt this year. He said he doesn't want Gasparich to ask for another tax increase for 2003 after the 3.5 mill increase taxpayers faced this year.

"If we had gotten the 5 mills I asked for we wouldn't be in this problem," Gasparich said.

Though Rotunno had concerns the city's bills are not being paid, Gasparich said they are.

"At some point in time we have to face the financial crisis. Whether you know it or not I'm trying to help you," Rotunno told Gasparich.

Gasparich asked council to give the go ahead to act on the borrowing. Council will have a special meeting at 4 p.m. Wednesday to give final approval to the transaction.