The City of Hillsboro cannot use proceeds from the estate of the late Jean Head to retire the debt on the new fire station – at least not at this time.
Hillsboro Probate and Juvenile Judge Kevin Greer issued a ruling Wednesday denying the city’s request to use more than $800,000 from the estate of the former Hillsboro florist to help pay the bond indebtedness that exists for the fire station. Greer had indicated during a previous hearing that he was leaning against granting the city’s request.
But Greer’s decision leaves the door open for the city to eventually make use of the funds. “At such time the potential sale/lease of the firehouse to Paint Creek is resolved, the issues to be decided as outlined in this action will have much more clarity,” the judge wrote. “There are simply too many unanswered questions at this time for the Court to make an informed and reasoned decision on the various issues presented by the parties to this action.”
Among those questions, as outlined by Greer, are, “Is the end game of the City to pay off the firehouse with funds from the sale or lease to Paint Creek and then use the trust dollars transferred to the City as a result of this action for another purpose? Would that not be an attempt to circumvent the intentions and directives of Jean A. Head?”
A hearing on May 3 included testimony from Hillsboro Safety and Service Director Mel McKenzie, and arguments from attorneys representing the city, the Paint Creek Joint EMS/Fire District and the Clinton County Foundation, where the funds from Head’s estate are being held in escrow.
Head left the money in her will to the Clinton County Foundation “to be held in trust for the purpose of building capital improvements for the Hillsboro Fire Department and Emergency Medical Services,” specifically “for the erection of a new building for the fire department and EMS squad for Hillsboro.”
Head died in 2015 at age 91. Her will was signed in January 2008, just a month after the city purchased the old Washington school property to build a new fire station. The will was also written before city council voted to disband Hillsboro Fire & Rescue in 2013 and contracted for fire and EMS services with the Paint Creek Joint EMS/Fire District beginning in 2014.
Even though Head lived to see those events transpire, she never updated her will, but the executor of her estate said that was because health issues precluded her from doing so.
The fire district is now operating out of the new fire station under a lease agreement while negotiations drag on for a possible purchase of the facility by Paint Creek. The city argued that the money left by Head should be released to the city to be applied against the bond used to finance the new fire station on North East Street.
In Wednesday’s decision, Greer noted that a memorandum filed with the court after the May 3 hearing expresses the opinion of City Auditor Gary Lewis that 69.97 percent of the city’s bond indebtedness is attributable to the fire station, with the rest attributable to the remodeled police station. “However, the bond debt service schedule attached to the May 9th memorandum of the City states 62.5% of the debt service is attributable to the fire station. It is noted the Court has been provided three different percentages by the City,” including an estimate from McKenzie that the percent of debt for the fire station is 60 percent.
The judge noted that the competing opinions made it impossible to establish what percent of the annual bond payment should be attributed to the fire station alone.
Greer writes that “of greater concern” is a letter from Dinsmore and Shohl, the city’s bond counsel, which states that “if the fire station is leased by the City of Hillsboro to Paint Creek the rental value of the fire station could either be subtracted from the annual amount paid by the City for Fire and EMS Services or placed in a bond retirement fund for payment on the bond debt service for the 2010 and 2016 bonds. If the City elects to sell the fire station for an amount sufficient to pay off the bonds on said building the City will not be permitted to pay the 2010 bond off until June 1, 2020 and the 2016 bond December 1, 2022. Either way, lease or sell, it appears sufficient public funds will be available to make the annual payment on both bonds until redeemed as well as the principal balance when the same can be paid in full.”
Noting it is the “duty and obligation of this Court to ensure disposition of that property be carried out according to the directions of Jean A Head,” Greer adds that Head gave executor G. Michael Brown full discretion “to utilize the Trust funds in accordance with the instructions as provided. “ The discretion given Brown “must be considered in any future use of the Trust funds,” Greer wrote.
Reach Gary Abernathy at 937-393-3456 or follow on Twitter @AbernathyGary.