Hillsboro City Council will meet at 7 p.m. next Monday to hear a second reading on a resolution to join the Paint Creek Joint EMS/Fire District, and hear from Safety and Service Director Mel McKenzie, who said Tuesday he will give council a detailed report on Hillsboro Mayor Drew Hastings’ participation in a city demolition assistance program.
As previously reported, council voted 4-3 in favor of the Paint Creek legislation last week following an executive session, but the motion did not carry because it was attempted as an emergency measure and did not receive six favorable votes.
Councilwoman Ann Morris made a motion to suspend the three-reading rule and vote on the legislation as an emergency, and when roll was called, council members Morris, Claudia Klein, Brandon Leeth and Wendy Culbreath voted yes. Council members Mary Stanforth, Justin Harsha and Adam Wilkin voted no.
Council President Lee Koogler said since emergency legislation must receive six yes votes to pass, the resolution failed. Morris requested a special meeting for further discussion before 2019 budget talks begin.
While the motion failed as an emergency, it still counted as a first reading of the resolution, and a second reading will be held at the special meeting Monday. The meeting will be held in the municipal courtroom at the Highland County Justice Center.
If the city joins the district, it would have a seat on the Paint Creek operating board, and a 5.5-mill property tax would be imposed to pay for membership, as is the case for townships that have joined the district. It has been said the increase in property tax would amount to about $170 per year for each $100,000 of valuation.
Some local residents have complained that the levy would effectively be a “double tax,” because a portion of tax revenue is used to pay for the Paint Creek contract out of the city’s general fund. Those in favor of joining say the general fund savings could be used to pay for infrastructure projects and other needs.
The city’s current contract with Paint Creek expires at the end of the year, according to Koogler.
Koogler, who called the special meeting, said council will hear public comment if anyone speaks up.
McKenzie and Hastings both said they will be in attendance at the meeting, and plan to continue attending meetings in the future. As previously reported, Hastings and McKenzie said in September that they would not attend council meetings until Koogler and council Clerk Heather Collins began communicating better with the administration.
McKenzie said those issues have been resolved, and Hastings said while he still has interpersonal problems with Koogler, he is ready to attend meetings again.
Koogler said he is “happy they’re choosing to attend the meetings.”
“I would agree there’s been no resolution between Drew and I, but I am effectively communicating with the safety and service director, as I thought I was previously,” he said.
Hastings will likely become the center of attention when discussion shifts to the demolition of one of his buildings earlier this year and the rate at which he will reimburse the city for the cost through property tax assessments.
As previously reported, the program allows property owners to have their buildings torn down at the city’s expense, then reimburse the city for the cost through five years of assessments on their property taxes.
In March of this year, McKenzie said Hastings would reimburse the city 100 percent, but that number apparently changed between then and May, when Hastings signed a new agreement stating he would reimburse the city 50 percent of the demolition cost — leading Highland County Auditor Bill Fawley, whose office processes property tax assessments, to wonder what changed.
Fawley said when he received a packet last Thursday from Administrative Assistant Heather Borreson detailing the assessments for two demolitions — Hastings’ building and another building owned by Robert Schurman — an attached agreement for the Hastings property said “The City of Hillsboro will assess fifty-percent (100 %) of the total cost of the demolition.” The “fifty” was scratched out and replaced with “one-hundred” next to what appears to be the initials “D.H.”
An attached spreadsheet showed the assessment being a total of $33,100.
But Fawley said he received a second email on Friday from Borreson saying Hastings’ assessment amount was actually $16,550, with a different agreement attached saying Hastings was to pay 50 percent of the demolition cost.
Fawley said Tuesday he has asked Hillsboro Law Director Fred Beery for a written law or agreement that outlines the city’s demolition rules. Beery said he had not yet received such a request Tuesday morning, but that he will render an opinion as soon as he does.
The discrepancy also piqued the interest of state auditors, according to Hillsboro Auditor Gary Lewis, who raised questions earlier this year about Hastings’ involvement in the demolition program.
Lewis told The Times-Gazette that a state audit of the City of Hillsboro has been extended an additional month so auditors can “look into” the issue.
“That’s what they told me,” Lewis said. “They wanted to go over that a little bit more.”
Lewis said he had “nothing to do with that.”
Fawley said he just wants to make sure he has all the correct information before proceeding with the property tax assessment.
“We were always told the city would have nothing invested except they would be fronting the money, that it would be 100 percent paid back by the owner,” Fawley said. “So what has happened that changed this from 100 percent to 50 percent?”
McKenzie declined to answer that question in an interview later in the afternoon, saying he will give a full explanation of the matter at the upcoming council meeting.
McKenzie said the first agreement was signed when Hastings applied to participate in the program early in the spring, and the second was signed in May.
McKenzie’s only further comment was that the 50-percent assessment on Hastings’ property “goes along with our administrative policy on demo and blighted property,” and that he wants “all the facts out at one time” at next week’s meeting.
McKenzie gave The Times-Gazette a copy of the city’s Administrative Policy for Funding Demolition, a document dated April 2017, which says property owners can sign agreements with the city to have 100 percent or 50 percent of the demolition cost assessed to the property tax.
The policy says the mayor, safety and service director and code enforcement officer review a set of criteria to determine the extent of the city’s financial assistance for the demolition in question. According to the policy, the criteria to be considered for commercial properties are: increased property value, increased neighborhood property values, potential for new business or expansion of existing business or increased private-sector investment.
Hastings said he has never been involved in that determination and that he had no say in his assessment rate.
When asked about the differences between the first agreement and the second, Hastings said, “I don’t think I scratched that out, I don’t think that was me.”
When Hastings was told the revision to the first agreement shows what appears to be the initials “D.H.” next to it, Hastings said, “Yeah, I kind of remember initialing that.”
“But,” he said, “I have always thought that my share was going to be 50 percent.”
When asked why he never clarified after McKenzie told The Times-Gazette and city officials that Hastings would reimburse the city 100 percent, the mayor said, “I personally thought, ‘Well, I don’t think that’s the way this is ultimately going to turn out’… I just didn’t really think about it much anymore.”
Hastings said the demolition controversy was part of “an ongoing, continuous effort” by Lewis to damage his integrity.
“Why is it that everything that has come up about Mayor Hastings since I took office almost six and a half years ago… seems to emanate from the auditor’s standpoint? There’s a reason for that,” Hastings said. “I think anyone with half a brain will realize that Mr. Lewis has a fixation on me.”
Lewis said that comment was “pretty laughable.”
“I’m like any auditor. I just call balls and strikes,” he said. “Anything I’ve had differences with him on derive from his conduct, not mine… And then he turns around and blames me for his problems.”
Reach David Wright at 937-402-2570.