Ford City Officials Still Negotiating with EDA
Ford City Borough Mayor Marc Mantini chastised Borough Council members Monday evening in his final remarks for not responding to an offer from the Economic Development Administration in regards to the $581,000 defaulted grant. However, council members said the issue could have legal implications and will be discussed publicly when everything is sorted out.
by Jonathan Weaver
Income tax returns are due to the federal government by the end of the day, but it also may be Ford City Borough’s last day to take advantage of an opportunity to settle a financial debt.
At the end of August, a Ford City ad-hoc action committee submitted eight proposals to the federal Economic Development Administration (EDA) to satisfy a $581,000 defaulted grant on the former PPG property, and the Kittanning Paper has learned officials have taken those under advisement.
In documents obtained yesterday, EDA Regional Director Willie Taylor offered Ford City Borough Council President Kathy Bartuccio a lower payment due to the Borough’s economic hardship.
“Based upon the original grant award of $581,000, and taking into consideration the number of years that the Borough of Ford City maintained compliance with the grant award, EDA will agree to accept the sum of ($116,200) sufficient and adequate consideration to extinguish the grant obligation,” Taylor wrote in the October letter.
If Ford City Borough Council makes the first of three annual payments of less than $39,000 by the end of the day, a full release from the terms and conditions of the initial grant award would be applicable, Taylor wrote in the October letter.
Payments would have been made during the next three years – all due on Tax Day.
However, by March, that agreement was not reached with Taylor, according to communication from EDA Philadelphia Region Interim Director Paul Matyskiela to Senator Toomey in March.
“EDA extended every opportunity to the Borough to resolve their obligation in a fashion that is fair to it and to the American taxpayers. However…they failed to act to accept EDA’s offer to accept a reduced sum…,” Mayskiela wrote in a letter.
The matter will be directed to the federal Treasury Department for collection.
Mayor Marc Mantini was upset at the end of Monday’s council meeting that elected council members did not respond to the proposal.
“Somebody dropped the ball here!” Mayor Mantini said.
Several council members – including Council President Bartuccio, Vice-President Miklos and Councilman Josh Abernathy – denied seeing the initial proposal when it was received.
“This has been a matter of negotiations with legal implications,” Miklos said Monday.
However, Abernathy pointed out that the three council members and all others currently elected did not make the decision to default on the grant award. He said negotiations are ongoing and will be discussed in the future.
“It is something that is being worked on. When we finally get to the bottom of it, it will go out to the public and everyone will be made aware,” Abernathy said. “We were under the impression that we were able to work with them to come up with the best outcome for the Borough.
If we’re going to pay money, I want to spend money that’s going to go into the community.”
A local resident Monday night argued that the deal should have been taken unless specific details needed to be negotiated.
The ad-hoc committee, made up of Borough Council Members Vickie Schaub and Gene Banks, Planning Commission Member Tyson Klukan and Parks and Recreation Member Stacy Klukan, submitted the eight proposals after weeks of discussion – including approaching several regional and national companies about leasing or selling portions of the vacant 40-acre brown field property, capitalizing on the local tourism industry through new business or being willing to sell or lease 300 acres of natural gas rights to EQT, valued at a one-time rate of $150,000.
Now-Borough Manager Eden Ratliff oversaw the ad-hoc committee’s several meetings during the summer before the proposals were due at the end of August, and said in March that the defaulted grant repayment is one of the largest hurdles the community has to overcome.
“I’m confident (the proposals) could rectify the issue in the mind of Ford City Borough. We have to come to an agreement with the EDA.”
In September 2000, the grant was utilized to rehabilitate the former PPG foundry along 2nd Avenue by the Greater Ford City Community Development Corporation and leased to Caracal manufacturing, but, bankruptcies by both the CDC and Caracal and Borough Council allowed for the building to be repossessed by F&M Bank.
It is now home to OEM Shades and BelleFlex Technologies after about $10 million in federal and state grant funding was invested into the revitalization of that building.
The bank foreclosed on the aforementioned property in December 2010 and was acquired by F&M Bank.
PPG Ford City Works employed as many as 4,000 workers at its peak before closing in 1992.
During the first ad-hoc committee meeting in July, committee members listened to community resident concerns and suggestions in regards to the grant repayment, as well as hearing background on the matter from elected members directly involved at the time.
By bob, April 15, 2015 @ 8:46 AM
I have read this article 3 times and think maybe I have a reading comprehension problem. It clearly states “EDA Regional Director Willie Taylor offered Ford City Council President Kathy Bartuccio a lower payment” and further on in the article states that “several council members including council President Bartuccio denied seeing the initial proposal when it was received.” O.K. Which is it? What kind of games are you trying to play with the feds? Should the people of Ford City start a Ramen Noodle diet to start saving up for the increased tax bill that will be coming to cover the whole amount of 581K? And a big shout-out to Councilman Josh Abernathy: Put your big boy pants on. I’m pretty sure the EDA could give a rat’s behind who was on council at the time they voted to default on the property. It is your responsibility and that of your fellow Council Members do what you were elected to do: fix the problem.
By mad-2010, April 15, 2015 @ 11:23 AM
Amen, Bob… You said it, “O.K. Which is it?”
By Patzu, April 15, 2015 @ 12:52 PM
You are probably 100% right on the content of your post, bob.
But, you are really delusional to think we should just forget the people who put us in this position by arrogantly defaulting on the loan.
The intent should definitely be to resolve the issues facing the borough today, BUT we should NEVER forget the cast of characters who got the town into this predicament. The breed of that council was based on arrogance, non-disclosure and questionable ethical issues that jeopardized the well-being of this town. One played the tunes on his pipe and the rats followed along in unison.
Let us move on and resolve this horrible debt issue, but NEVER who got us here and how we got here.
By fc2010, April 15, 2015 @ 3:24 PM
So the Feds give FC an option, reduce $580,000 to $116,200. In a logical world that 80% reduction by the Feds is very generous and a no brainer to take the offer. If asked to pay over three years that’s $38,700 roughly, I am sure with financial skills and critical thinking you could easily reconfigure some of your millage in the borough or just flat out pay the $116,200. As the mayor stated, “someone dropped the ball” it looks like more than a ball was dropped and accountability should now be thrown into the mix. The citizens should really question the integrity and logical thinking of council. Enough sitting around and waiting for a major manufacturer to save your town. Act in a professional way and aggressively try to attract new business. PR issues like this won’t help FC one bit, but discourage. Also, as an elected official you are to find and present solutions not just ignore problems.
By newvoice, April 16, 2015 @ 9:24 AM
facts people should know.
1. The FC Borough never defaulted on any loan.
2. The CDC refused to pay the full payments to the bank.
3.The Bank the called the entire note of 1.2 million dollars and demanded payment in full..
4.There was about a million dollar the CDC had borrowed fron a couple different banks.
5. FC borough could not borrow enough money to cover the notes.(Banks would not approve any loans on property).
6.The EDA gave up ther lein on the building allowing the bank to foreclose.
7.Council did what it could to save the building but couldn’t cover debt without tenants.
End of story…….
Now ther is a taxes property creating good paying jobs….something ford city did not do for 15 years….
By bob, April 16, 2015 @ 8:51 PM
@Patzu,
I am not delusional. Which group of people do you refer to that put us into this position? The council members 15 yrs ago who made the borough liable for financial mistakes made by the CDC? Or do you refer to the council of 5 yrs ago who voted to default following the CDCs bankruptcy? Or do you refer to the people who were on the CDC? Maybe you blame only one of these groups I mentioned, I feel they all deserve blame. And rest assured, I won’t forget the cast of characters. My point is we need to fix this, assigning
blame is getting us nowhere on the problem we have at present.
By savvynewshound, April 17, 2015 @ 8:11 AM
Kathy and Jerry have had ample opportunity to rectify the situation. I understand mistakes were made in the past. However, this council knew what they were getting into when they ran for office. Bottom line, terrible decisions and even more terrible leadership.