Discussion grew heated Monday night as Hillsboro City Council continued to mull joining the Paint Creek Joint EMS/Fire District and Hillsboro Auditor Gary Lewis challenged Safety and Service Director Mel McKenzie over Mayor Drew Hastings’ involvement in a city demolition assistance program.
Council heard a second reading on a resolution to join the Paint Creek district after hearing public input. It is scheduled for a third reading and vote at council’s November meeting. As the meeting progressed, council President Lee Koogler struggled to maintain order while local residents voiced concern over the legislation, and again later in the meeting when Lewis grilled McKenzie over the demolition issue. The mayor did not speak.
As previously reported, council has been considering for several months whether to join the district as a member or continue utilizing its services on a contract basis.
Phil Loudin, a local resident, said he is “very concerned” about the city joining the fire district.
Loudin asked if Paint Creek had proposed a price for a renewed contract, and Koogler said the Paint Creek operating board last week gave him a written proposal that was “in the $700,000 range,” which he said is “considerably higher than what we pay now.” The city currently pays about $570,000 per year for fire coverage. Later in the meeting, Koogler said the exact proposal was $720,000. Koogler said the city’s current contract with Paint Creek ends at the conclusion of this year.
Loudin asked why the the issue couldn’t be placed on the ballot for the taxpayers to decide, and Law Director Fred Beery said under statute it is council’s duty to approve or decline a resolution on the matter, but the public can have the decision repealed through a referendum.
Loudin said many people are concerned about what’s been called a “double tax” if the city joins the district. As previously reported, if council votes to join the district, an automatic property tax will be put in place. It has been said that the levy would be 5.5 mills, but Koogler said on Monday that it would likely be closer to 5.1 mills.
The city currently pays for Paint Creek’s services on a contract basis from the General Fund, which draws revenue from an earnings tax. Koogler said when the earnings tax was first presented years ago, it was marketed as being for “safety services” for the city, but the verbiage never specified that it was for fire and EMS.
Some have said that placing a levy on property owners would effectively be a “double tax” because the city uses earnings tax revenue to pay for fire coverage. Those in favor of joining the district say the extra money could be used for improving the city’s infrastructure and paying for other projects.
Loudin said whether that amounts to a double tax or not, “the perception of a double tax is there.”
Later in the meeting, former county commissioner Gary Heaton asked council if it might use the extra money to pay off bonds on the North East Street fire house. As previously reported, Paint Creek is negotiating with the city to purchase the building. Koogler said bonds on the building have not yet matured, and until they reach maturity in 2022, the city cannot sell the building “free and clear.”
Former volunteer firefighter Greg Grant said he is in favor of joining the district, but said the city should reduce the current earnings tax and put an earnings tax increase on the ballot if more revenue is needed for projects.
During council comments, Councilman Adam Wilkin asked that a committee review an earnings tax rollback, and Koogler placed the matter in the Finance Committee.
Former commissioner Tom Horst said it “feels like Paint Creek’s trying to put the hammer on us,” and suggested that council members talk to people in their districts.
“I think you’ll get your ears opened,” he said.
In other comments from council, Brandon Leeth thanked those in attendance for their input, saying council has a “tough decision ahead of us.”
But, he said, “when everyone comes together, we can make a rational decision.”
Council member Wendy Culbreath said the same people who are opposed to the extra property tax protested at the last council meeting about a municipal trash collection service that she said would save residents money.
“I’m getting mixed signals,” she said. “It can’t be about the money.”
The comment was met with audible protest from the audience. Later in the meeting, when the public was allowed to speak again, Loudin said in his home, where one of his children is in college and the other is on their way there, “it’s all about the money.”
Council member Ann Morris said council has been discussing the Paint Creek issue for some time, and “it’s not a rash decision.” Morris said no one in Hillsboro runs their home on a budget from the 1980s — which was when the last earnings tax was put in place — and the city shouldn’t have to either. Grant later argued that Hillsboro residents’ salaries have increased since the ’80s, and with them the revenue generated by the tax.
Council member Justin Harsha said negotiation on the Paint Creek proposal is “inevitable,” and that it is “ridiculous” to go from paying $570,000 to $720,000.
Later in the meeting, McKenzie read aloud a four-page report to council regarding Hastings using the city’s demolition assistance program to tear down his two-story building on Governor Trimble Place.
According to the city’s administrative policy for funding demolition, which is dated April 2017, property owners can have their buildings demolished at the city’s expense and reimburse 100 percent or 50 percent of the cost of demolition through property tax assessments, with the reimbursement rate being decided based on a set of criteria listed in the policy. The criteria include increased property value and neighborhood property values, potential for new business or expansion and increased private-sector investment.
Controversy grew over Hastings using the program in March of this year when Lewis raised questions about whether the mayor should participate. At the time, McKenzie said Hastings would reimburse the city 100 percent. Beery said Hastings’ participation was lawful, and the building was torn down.
But in recent weeks, Highland County Auditor Bill Fawley said he received two different agreements regarding Hastings’ property tax assessments.
Fawley said the first agreement, which came to his office on a Thursday, said Hastings would reimburse the city 100 percent of the demolition cost, which was $33,100. But an agreement sent the next day said Hastings was to only pay 50 percent, or $16,550.
At the time, Fawley wondered what had changed.
On Monday, McKenzie said he had Hastings sign the first agreement stating he would pay 100 percent, but Hastings later said he believed he was eligible to pay only 50 percent.
McKenzie said after further research, he found that since the policies were adopted, three structures were demolished at the city’s expense and the owners agreed to reimburse 50 percent of the cost because all the demolitions contributed to economic development and met the policy criteria.
McKenzie said the destruction of Hastings’ building would result in a parking lot being installed, which would reduce employee street parking and make the area more attractive to businesses and customers. Based on that, McKenzie said, he approved the 50 percent assessment for Hastings and had him sign a new agreement to that effect.
McKenzie also said the demolition potentially saved the city a large amount of money because the city was liable for significant flooding in the building due to burst pipes.
“We could have been on the hook for a lot more than half the cost of a demolition had Drew wanted to push the issue,” he said.
When Koogler opened the floor for council to ask questions, Lewis began indirectly asking McKenzie questions through Koogler. Lewis asked if administrative policies supersede ordinances already on the books dealing with blighted properties, specifically one that says when the city foots the bill for demolition, the clerk of council has the duty of certifying the “total costs” of the demolition and sending them to the county auditor for assessment. Lewis also asked if McKenzie would “be willing to go to court” to defend the administrative policy.
Koogler said that was a question for the law director and that Beery could not answer.
“Consider it rhetorical,” Lewis said.
When McKenzie began to respond directly to Lewis later in the discussion, Lewis called for point of order, and Koogler asked McKenzie to direct his answers to Lewis through Koogler.
At one point, Morris said, “What’s his problem with this?” and she and Lewis began to quarrel, with Morris saying Lewis should stick to auditing tasks and Lewis saying the law should be followed correctly.
McKenzie said he thought the issue was resolved when Beery said Hastings’ participation in the program was lawful.
Lewis said it was “glaringly obvious” that city officials should follow existing ordinances rather than “go off half-cocked” and make new administrative policies.
After hearing a second reading on the Paint Creek legislation, council approved a resolution regarding an Ohio Department of Transportation resurfacing project and a resolution to accept the lowest bid for a rotary press for the wastewater treatment plant.
Reach David Wright at 937-402-2570.