Monday, March 13, 2006

Taxpayers Receive Nothing for Expenditure of $6,000; Action Must Begin to Recover Illegal & Unauthorized Expenditure

Prepared Comments Made to
March 13, 2006

It is the role of this council to control the expenditures of all monies expended by the City of North Canton. The relatively simple process of applying for, accepting, and utilizing grant money is also controlled through council. This process is provided for in both the North Canton City Charter and in Ohio State law.

Through council’s control of public funds, whether the funds were received from tax receipts or through grants, the public is assured that public funds are spent wisely and fairly and that taxpayers will receive some value for their tax dollars.

In a Council of the Whole meeting on February 22, 2005, former City Administrator, Michael Miller, revealed that he had expended $6,000 three months earlier toward the purchase of approximately 24 acres of property known as the Crowder property.

The signed option agreement, dated November 22, 2004, was done without the consultation or knowledge of the North Canton City Council.

This was a direct violation of Section 3.01 (4) of the North Canton City Charter. This section states in part:

“The mayor shall sign, on behalf of the municipality, all contracts, conveyances of indebtedness and all other instruments to which the municipality is a party.”

The agreement was a six-month option to purchase 24 acres of property from Mr. David Crowder for $540,000. The $6,000 option payment was to be credited toward the final purchase price of the property. In fact, the agreement was an integral part of a purchase of property which would have required the knowledge and approval of council through legislation.

Council did not have knowledge as a public body of the option agreement nor did council have knowledge as a public body of the expenditure of the $6,000 toward the purchase of the Crowder property.

The activities of former City Administrator Michael Miller were that of a rogue city official with a plan and agenda of his own who was acting beyond his authority and separate from the final approving authority, which is this council body.

The purchase price of the property listed in the option agreement was far in excess of the $25,000 spending limit under North Canton’s city charter and Ohio state law and required approval by the Board of Control and the North Canton City Council.

Thus, for Mr. Miller to enter into the option agreement without council approval in a deal that ultimately required council approval for a $540,000 purchase price was totally irresponsible and a direct violation of the spending limit established by the North Canton City Charter Section 4.05 and Ohio Revised Code §735.05.

Why Mr. Miller waited for nearly half of the six-months of the option agreement to lapse before advising the North Canton City Council of his actions pertaining to the purchase of the Crowder property has never been explained.

On February 28, 2005, a week after former City Administrator Michael Miller revealed his actions to council regarding the option agreement and $6,000 expenditure; I presented comments to council regarding my concerns. Those comments are in the record and they detail, as Mr. Miller himself describes it, the “convoluted” deal that he, Miller, fashioned in secrecy.

Ultimately, Council refused to purchase the Crowder property after further discussions on May 16, 2005, and on June 6, 2005. On August 29, 2005, council returned the $180,000 grant that Mr. Miller had secured toward the purchase of the property from District 19 of the National Resource Assistance Council (NRAC).

The bottom line is that $6,000 of taxpayer funds were spent with the city and taxpayers getting absolutely nothing in return for the expenditure. The unmitigated loss of $6,000 of taxpayer funds is due entirely to the actions of former City Administrator Michael Miller.

I believe laws have been broken and the taxpayers of North Canton have suffered a loss that needs to be recouped.

Many times we question the validity of government expenditures but at the very least, taxpayers are left with something to show for the expenditures made by their government. But in this instance, taxpayers received absolutely nothing in return for the $6,000.

The previous council seemed to look the other way. It was an election year. No sense in rocking the boat in an election year.

I hope that this new council is as outraged as I am at the failure to follow the system of checks and balances in the expenditure of public funds.

I am asking that this council to recover the loss of $6,000 and return the money to the general fund.

Since Mr. Miller did not have the authority to sign and obligate the city to the purchase of real estate for $540,000, it could be argued that the agreement with Mr. David Crowder is not valid and that Mr. Crowder should return the $6,000.

Given that Mr. Miller exceeded his authority in fashioning a deal outside the public knowledge and approval of council, maybe Mr. Miller should reimburse the city for the loss of $6,000.

In the event that this council fails to take immediate action to recover the misspent funds, I must advise this council that I will be compelled to seek recovery of the funds through other means available to me as a taxpayer of the City of North Canton.

I ask you, please, to show the taxpayers of North Canton that this body is truly a watchdog and a conservator of city monies and also of the individuals who spend our tax dollars.

Thank you
Chuck Osborne
City of North Canton