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Mayor: Monessen $8M in hole

| Tuesday, Jan. 21, 2014, 12:01 a.m.
Brian F. Henry | Tribune-Review
Lou Mavrakis, mayor of Monessen, sits for a portrait in his office on Wednesday, January 8, 2014.

Monessen's mayor said the city is saddled with at least $8 million in long-term debt, yet council last month committed nearly $400,000 in state funds to build an amphitheater that he said may never be used.

Mayor Lou Mavrakis said he won't know the amount the city owes until an audit of 2013 records is completed, and that accounting is not scheduled to begin until later this month.

Councilman Josh Retos, finance director, said Monessen is able to pay its bills or meet its payroll, but the debt requires $400,000 to be earmarked annually to meet liabilities. That's a huge burden on a city with a $4 million budget, he said.

“Every year, you start out $400,000 in debt before you even incur any new debt,” Retos said. “We live day to day. I can't predict what's going to happen in the next four years.”

The city undertook a $5 million bond issue in 2010, then borrowed $2.5 million. This year, officials borrowed $500,000 to see the city through the first several months of 2014.

Monessen, a third-class city, faces the same problems as other small cities across Pennsylvania — declining population and tax revenue. The city's population has dwindled to 7,600, dropping 12 percent from 2000-10, according to Census figures. Its per capita income is $21,000 and median household income is $30,000, compared to a state average of $50,000.

Mavrakis blamed his predecessor, Mary Jo Smith, and former city manager, John Harhai for “foolish spending.”

During Smith's tenure, the city borrowed $5 million in 2010 to make improvements, including lights and concession stands in city parks. At least $1 million earmarked to demolish dilapidated and abandoned housing was never spent, Retos said. Instead, Smith wanted the money to be spent on lighting for the parks and library renovations.

Neither Smith nor Harhai responded to repeated telephone calls and emails seeking comment.

Retos said he favors using the funds for other projects, such as paving more streets and demolishing more dilapidated buildings.

Upgrading the library was “a good idea, but we went severely over budget and actually had to take out a second bond issue,” he said. The city borrowed $2.5 million to finish the work because of cost overruns.

“We were getting change orders on change orders,” he added.

Mavrakis said the amphitheater could wind up a white elephant that the city can't afford. Council voted to spend a $250,000 grant from the Department of Conservation and Natural Resources as matching funds for $250,000 from Community Development Block Grants from the past two years.

“I'm not for the amphitheater,” Mavrakis said. “That money could be spent in other areas. They knew they were leaving office, and they did it anyway.”

Mavrakis said the city's population is small, and he doubts an amphitheater would draw crowds from elsewhere unless officials can obtain money to pay bands and market the facility.

“Someone forgot to tell them Guy Lombardo is dead,” he said.

He said the former administration left no plans about how the venue would be used or how concerts would be booked.

“They just buried me in more red ink,” he said.

Richard Gazarik is a staff writer for Trib Total Media. He can be reached at 724-830-6292 or rgazarik@tribweb.com.

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