By Courtney L. Anderson
SHARON — The city of Sharon will get an infusion of cash this year from the Sharon Sanitary Authority.
Instead of paying the city $1.4 million in 2011 for the sewer collection lines as was agreed when the authority was formed in 2007 to take over operations of the wastewater treatment plant, authority members on Thursday agreed to pay the city $280,000 a year between now and 2013.
The first payment will be transferred to the city in August, Lucas said.
Council members Thursday voted 3-0 to accept the deal only if the money is set aside in a restricted account until council members, two of whom weren’t at the meeting, can get together with the mayor and auditors and “see where we’re at,” council member Victor Heutsche said. Council member Bob Messina and Vice President Frank Connelly were absent.
Concerns over the city’s dire financial straits at the moment and the ability of the authority to come up with a lump sum in two years led to discussions about restructuring the payment schedule, Mayor Bob Lucas said.
“For budgeting purposes I believe it makes it better for the city and it also helps the sanitary authority,” Lucas told council members.
Breaking the payments up over five years means the city will get $560,000 early and the authority can defer payment of $560,000. The money was set to be due by Dec. 31, 2011, and there is no interest involved.
Lucas said that the city won’t get the big windfall in a few years, but this way they can budget use of the funds over the five year period. And the city, which is facing a potential shortfall of revenue due to low wage tax collections, can certainly use the cash.
“It would help us now and in next year,” Lucas said, noting that it could balance this year’s budget if a deficit materializes or help pay for the salary of the new city manager the city will hire to replace him. How the money is spent will be up to council.
Earlier this week, Lucas said he wasn’t sure how much wage tax revenues were down but estimated they were at about 75 percent of what they should be at this point. He said he’d know more in the coming months.
Authority member Vincent Cardamon said he didn’t see any shortcomings in the plan.
“It’s not going to cost us anything. In four years it just might benefit us,” Cardamon said.
He called it was a “win-win” situation because the city needs the money now and the authority has it.
“The funds are there. That’s what’s important,” Cardamon said.
“I think it benefits everyone,” said authority Secretary Ed Winslow, who ran the meeting in the absence of Vice President Frank Connelly, who is ill, and after the resignation of former President Robert Beach. Authority members also named Connelly as chairman until the end of the year.
Lucas said he talked the issue over with authority financial consultant Gary Rose. Doing away with the large sum payment might help the authority avoid raising user fees down the road, Lucas said.
“We tossed around some numbers, but all I did was divide (the total owed) by five,” Lucas said.
