Tuesday, December 09, 2008

North Canton Leaders Ignore Signs Leading To Financial Calamity

Prepared Comments Made to
December 8, 2008

On Monday, December 9, 2002, eight years ago, almost to the day of tonight’s meeting, I sat on this council. One of the items on the agenda was the 2003 budget which was titled as Ordinance No. 124-02. Prior to passage of the budget that night, I presented information to council pointing out that the city’s General Fund was going to be down twenty-five percent from the previous year in that 2003 budget while proposed expenditures for 2003 had spiked over the previous year. I also remarked on the practice of passing the city’s annual budget on an emergency as many other pieces of legislation get passed. The Repository reported my comments the next day in an article titled “N. Canton Council OKs $44 million budget.”

The observations I provided that night were quickly rebuffed by Finance Chairman Jon Snyder. Mr. Snyder countered that the city had $18.0 million in the bank and that citizens “…pay taxes for purposes of services. And that it is incumbent on the administration and the elected officials of council to provide services whether it be a fine EMS service, whether it be repair of your streets, or police department.”

Well, council did indeed spend down the reserves. The $18.0 million in reserve funds that Finance Chairman Snyder referred to that night have been spent in just five years. But not all of the millions were spent on providing services for city residents. Before the remaining weeks of 2002, were finished, I received a phone call from Council President Snyder who advised me that Arrowhead Golf Course was for sale. We all know how that story played out and continues to this day. A single expenditure for $4.2 million totally unbudgeted. I might add that the 2003 budget approved only weeks earlier did not include a line item for acquisition of property for $4.2 million, nor did it include all the other costs associated with the acquisition of Arrowhead Golf Course.

In late 2001, North Canton City Council agreed to repay the Maytag Corporation an overpayment of taxes that amounted to over $3.1 million dollars. The city made payments back to Maytag in 2001, 2002 and 2003 that amounted to nearly $1.1 million. Over the course of a year in 2005 and stretching into early 2006, the city made further payments of nearly $2.1 million dollars to Maytag, again refunding overpayment of taxes.

I suspect that the $1.5 million removed from the General Fund in 2005, for the funding of the CIC was totally unbudgeted as well.

Did the leaders of North Canton ignore all the signs that have brought the city to the precipice of financial distress that you face in your budget for 2009 and beyond?

Adding up the expenditures noted above accounts for nearly $9.0 million of the $18.0 million Finance Chairman Snyder talked about six years ago. It is obvious that one half of the $18.0 million in reserves was not spent for services as Finance Chairman stated those funds should be spent.

Have city leaders been prudent over the course of the last six years while reserves were being drained and revenues continued to decline? Where is the remaining $9.0 million of the $18.0 million that the city had in reserves?

According to information from Mayor Held’s state of the city PowerPoint presentation titled Income Tax Collections vs. General Fund Expenditures 1990-2007, North Canton General Fund Expenditures have outspent Income Tax Collections every year since 2001. How does one outspend revenue for seven straight years and not know there is a reckoning some day in the future?

Why would a community continue to outspend its income tax collections while there were repeated signals and warnings that it was about to lose its largest employer? One only had to have read the newspaper to have seen the handwriting on the wall on the fate of the Hoover Company.

A March 30, 2000, news story titled “Hoover workers ponder future” reported some Hoover Company salaried workers were worried that they might lose their jobs. The fear became reality less than three years later when Maytag moved the headquarters of The Hoover Company to Iowa and 500 salaried jobs were lost. The stories are numerous of the slow death of The Hoover Company in North Canton and yet expenditures increased.

The City of North Canton has had ample opportunity through the years to prepare for the financial calamity it is now facing and yet for some unknown reason its leaders have chosen to ignore all the warnings.

It does not take long time to blow through $18.0 million in reserves when you outspend your revenues year after year.

In an October 25, 2001, news report in the Repository, incumbent Council Member Greg Sarbach running for re-election remarked “…the most important issue in the next two years is the decreasing tax revenue because of Maytag Corp.’s restructuring of how its subsidiary, Hoover Co., pays its taxes.” On the same date in 2001, incumbent Council Member Marcia Kiesling as well as myself and another candidate for council were quoted as saying the most important issue facing North Canton “…is how council will deal with reduced tax revenue.” Council has dealt with the reduced tax revenue by accelerating expenditures and exhausting $18.0 million in reserves in the span of six years.

As this council prepares to vote tonight on the 2009 budget, I believe one could say that city leaders have come up short in taking meaningful steps to reduce expenditures and have actually compounded the financial crisis facing the city tonight.

I do have some recommendations at this late stage in the financial crisis facing the city and they are recommendations I have made to Mayor Held, but unfortunately he has failed to take action.

Mayor Held, I must dispute your rebuttal to my comments of October 27, 2008, regarding the residency status of your city administrator. You and I have only discussed the residency of your administrator on one occasion. That discussion took place about six-months into your first term as mayor, over two years ago. We have not had at least a dozen conversations regarding the residency status of your city administrator as you stated in your rebuttal remarks that evening to council.

There is one topic that I have discussed with you on many occasions, probably a dozen times, over the last three years and that is a recommendation that you look around the state of Ohio for communities that participate in a combined Fire/EMS District and then implement a plan such as that for North Canton.

After more than two years of inaction by the administration on this topic, I encourage this council to pursue this course of action. Due to the city’s deteriorating financial condition, this is a course of action that the city will be forced to pursue and implement.

Furthermore, I would investigate, as the City of Akron is doing at this time, the creation of regional policing for the City of North Canton. This is not a course of action I would suggest at this time but the city must do its homework and be prepared to act if the city’s financial condition continues to deteriorate.

Thank you,
Chuck Osborne
City of North Canton

Monday, November 24, 2008

Overdue Civic Center Rate Increase Counterproductive And Too Late

Prepared Comments Made to
November 24, 2008

For over a month Council has been discussing raising rates for the Civic Center in an attempt at reducing the Civic Center’s financial burden on the city’s projected budget deficit for 2009. Operating deficits have been the norm for the Civic Center and documented deficit spending for the Civic Center has averaged $92,943 a year over the last seven years totaling $650,604.

By comparison, the subsidy of debt service for Arrowhead Golf Course has averaged $144,338 per year for a total subsidy of $721,692 over five years. Why is this council singling out the deficit spending at the Civic Center and not the deficits at Arrowhead Golf course? Arrowhead Golf course provides no use for the city or its citizens while the Civic Center serves as the City’s official meeting house for municipal functions and has done so for decades.

Undoubtedly, the Civic Center has run a deficit for the years prior to 2001. The problem however, is the fact that the deficits were never brought to light and have been allowed to continue year after year in spite of the fact that the city has been under increasing financial pressure to reduce costs.

Council’s Chairman of Parks & Recreation is Mr. Doug Foltz, who frequently reminds council that he is a “Parks Man.” I guess my question to Councilmember Foltz is “Why have you waited until the eleventh hour to attempt to alleviate the burden the Civic Center places on the city’s budget. You have been Chairman of Parks & Recreation since 1995 and you have never brought up for discussion the fact that the Civic Center has operated with such a large deficit.

In 2002 and again in 2003, when I served on council with you, Mr. Foltz, I was a member of the Parks & Recreation committee which you chaired. Unfortunately, during that time, I never had the courtesy of any consultations with you regarding committee business, and consequently, I too was unaware of the large operating deficits of the Civic Center.

As you have said, Mr. Foltz, recreation is a cost that benefits the city in ways not easily identified on the bottom line. Unfortunately, the expense of providing recreational opportunities must be budgeted within the financial constraints of the city’s annual budget.

My point here is that many years have gone by in which reductions in operational deficits of the Civic Center could have been sought but were not addressed. The time for “trial and error” to tweak revenues and unburden the city’s budget has run out.

The proposal to increase rental rates at the Civic Center as outlined in tonight’s legislation, Ordinance 118-08, must work as the state does not allow deficit spending for cities in Ohio. Council President Revoldt has made that point clear in earlier discussions. Can the proposed rate increases wipe out the Civic Center deficits that have gone on for years? That remains to be seen.

What I can say is that bookings at the Civic Center from 2005 through 2007 are down fifteen percent over bookings from 1996 through 2004. When I spoke about Civic Center rental activity before council on October 13, 2008, I raised the prospect that ownership of the former Arrowhead Golf Course by the city and subsequent lease of the facility has seemingly resulted in a decline in bookings at the North Canton Civic Center. I still believe that to be the case.

What other reason could account for the decreased bookings at the Civic Center. The two North Canton facilities, both owned by the taxpayers, are competing with each other. And as the bookings of the Civic Center decline and the bookings of the former Arrowhead Country Club increase, the North Canton taxpayer loses. The operator of the golf course keeps profits from rentals at the clubhouse and through lost bookings to the golf course; the Civic Center continues to operate at a loss.

As for the rate increases proposed in tonight’s legislation, some of the rates have doubled. The Saturday rate for the Events Hall has gone from $600 to $1,200 for a Saturday booking.

Some might think that is a good way to increase revenue. Economics 101 would tell you differently. The relationship between the price of a product and the demand for that product is termed either elastic or inelastic. A good example of demand that is elastic is the recent spike in the price of gasoline earlier this year. Demand for gasoline dropped as the price increased.

The rate increases planned for the Civic Center may very well further depress the number of bookings at the Civic Center and thus not provide the increased revenue that is hoped for at this late hour.

The unfortunate lesson learned here is that years of wasteful expenditures cannot be remedied overnight. Council Chairmanship of a committee requires more than years of asking for funding until the money is all gone and then proposing a legislative fix that must hit a homerun the first time at bat.

Thank you,
Chuck Osborne
City of North Canton

Monday, October 27, 2008

North Canton Officials Ignore City's Charter & Voters

Prepared Comments Made to
October 27, 2008

The North Canton City Charter as well as city voters are getting the bum’s rush and the citizens of North Canton do not have to look very hard to find examples that the laws of the city only have meaning when it is convenient to the individuals in power.

Section 3.02 of the North Canton City Charter states: “The Director of Administration shall be a resident or establish residence in the municipality of North Canton within a reasonable time after appointment and shall remain a resident during tenure of office.”

Mr. Earl Wise took office as North Canton’s City Administrator in Mayor David Held’s first term as mayor. Mayor Held was sworn in for his first term as mayor on December 1, 2005. Throughout Mayor Held’s first two-year term as mayor, City Administrator Earl Wise failed to comply with the residency requirements of the North Canton City Charter.

As we all know, Mayor Held was elected for a second term as mayor in the 2007 general election and was sworn in for a second time on December 1, 2007. Mayor Held is now one year into his second two year term as mayor. City Administrator Earl Wise, in his mayoral appointed position, is also into the second year of his second term in the Held Administration and Mr. Wise continues to defy the mandate of the North Canton City Charter.

I am aware that the issue of residency requirements required by city charters in Ohio is being challenged and is now before the Ohio Supreme Court but is that a valid basis to ignore the law as it currently is written? Often laws are challenged but until they are overturned by a judicial body they are still valid laws. Mr. Wise, a licensed attorney and former Stark County prosecutor, should be well aware of that fact.

In the 2007 general election, city council sent to the voters of North Canton an opportunity to rescind the residency requirements outlined in section 3.02 of the North Canton City Charter. North Canton voters reaffirmed the residency requirements for the city administrator and rejected the proposed change by nearly two to one.

Isn’t three years a reasonable time after appointment to comply not only with the North Canton City Charter but also with the recent reaffirmation of that requirement by the voters of the city?

Do any office holders of the city recall their oath of office to support the laws of the City of North Canton? You are culpable as well for sitting idly by and saying nothing on this issue.

North Canton officials feel they can violate the city charter with impunity and ignore the wishes of the voters. Who cares what the voters decide? Apparently North Canton city officials do not care how the voters feel.

This past summer an initiative petition was circulated and signed by 880 North Canton voters to place an issue on the ballot. The proposed legislation would have allowed North Canton voters the opportunity to decide whether city tax dollars should continue to be used to fund the city’s CIC or whether these funds should be returned to city coffers to reduce projected deficits and defer cuts in city services.

The filed initiative petition needed 764 signatures for placement of the issue on the ballot. The Stark County Board of Elections (BOE) validated 847 signatures and certified that there were sufficient signatures to place the issue on the ballot.

After certification of the petition by the Stark County BOE, North Canton city officials apparently felt that the voters of North Canton did not deserve an opportunity to decide how or where their tax dollars should be spent and unilaterally elected to spend taxpayer funds to fight the taxpayer and prevented the issue from appearing on the ballot.

It appears that North Canton officials feel they can ignore and override the wishes of the voters. Who cares what the voters want? Apparently city officials do not care how the voters feel and have no desire to hear from the voters in the voting booth.

A few weeks ago, specifically at an August 25, 2008, council meeting, Mr. Glenn Saylor, a city resident spoke publicly about the legal fees incurred by the city to thwart placement of a ballot issue before the voters. The issue was an initiative, noted earlier, regarding use of taxpayer dollars to fund the city’s CIC.

During Council President Revoldt’s remarks regarding the expenditures for legal fees to fight placement of the issue on the ballot, City Finance Director, Alex Zumbar, interjected: “[we] will have for you, Mr. Saylor, a copy of the bill and he will announce it here publicly when it is available.” I can only presume that the “he” Mr. Zumbar was referring to was to Council President Revoldt.

I do not mean to speak for Mr. Saylor, but I have talked to him and Mr. Saylor has advised me that he has not heard anything, from any city official, regarding the amount of taxpayer funds that were expended for legal expenses to fight placement of the taxpayer initiative on the ballot.

Nor have I heard any announcement in this chamber, on the record, of the legal expenses incurred by the city. In the minutes of the above noted council meeting it was stated that the amount of the legal fees would be announced publicly. Council President Revoldt, I have not heard of any announcement by you or anyone else in this chamber on the promise to publicly announce the cost of the legal challenge to prevent placement of the legislation on the ballot.

It appears that North Canton city officials feel they are not accountable for expenditures of taxpayer funds that are spent unilaterally to fight the taxpayer. And, when confronted by concerned taxpayers in this forum make promises that they do not keep.

The City of North Canton is not only experiencing a financial crisis of monumental proportions, it is also experiencing a crisis of leadership by North Canton city officials.

Apparently city officials no longer feel they are accountable to the voters. They would rather just forget the charter and forget the voter.

Maybe it works for city officials but it does not work for democracy and the rule of law.

Thank you,
Chuck Osborne
City of North Canton

Monday, October 13, 2008

Financial Subsidies For Arrowhead And Civic Center Burden City

Prepared Comments Made to
October 13, 2008

At last Monday night’s Committee of the Whole, Mayor Held commented at the end of the meeting on the lone bid to lease Arrowhead Golf Course that was presented by Finance Chairman Jon Snyder. Those comments appeared in an October 8, 2008, Beacon Journal article titled “North Canton council discusses golf proposal.” In the article, “Mayor David Held said the city’s goal has always been to preserve the course as a community asset and not spend money in the process.”

The reality is that the City of North Canton has spent money and lots of it to subsidize the debt service on the bonds used to finance the original purchase of the property. Quite frankly, it would be refreshing if the city would come clean and tell the taxpayers of North Canton the truth regarding the revenue shortage from the lease of the golf course and the funds being removed from the general fund to subsidize the debt service.

The truth is that the city has made four bond payments of $300,000 each in four of the five years it has owned the property. The bond payments total $1,200,000. Interest expense on the bonds over the five years the city has carried the debt on the property has totaled $289,922. The bond and interest payments paid by the city over the last five years total $1,489,922. Revenue from lease payments over this same period has totaled $568,500. As a result, the city’s ownership of Arrowhead in the five years it has owned the property has required a subsidy from the city’s general fund of $921,422.

Under the lone bid to lease Arrowhead for a second time, the city will receive $150,000 annually. Under this new lease, the city will now have to pay the property taxes which are nearly $50,000 annually. Under the new lease, the city will net approximately $100,000 a year after property taxes are paid. Under the new lease, the city will receive approximately $95,500 less in annual lease payments than under the previous lease with Mr. Larizza.

In the same Beacon article noted above, Mayor Held states, “Considering the economic circumstances over the past five years, I think we have come out pretty well.” Mayor Held, I believe taxpayers of the city would beg to differ with you on that point!

The debt service for Arrowhead will continue to require financial subsidies out of the city’s general fund to the tune of at least a quarter million dollars a year for three more years. After the last bond payment for Arrowhead is paid in 2011, North Canton taxpayers can look forward to infrastructure repairs that will require yet more subsidies.

Why not acknowledge that the city is subsidizing debt service for Arrowhead?

In spite of the fact that the Repository strongly encouraged North Canton’s purchase of Arrowhead property five years ago, it would be nice if the Repository would inform its readers that North Canton tax dollars are subsidizing debt service on the purchase of Arrowhead while the city faces budget deficits.

I am sure Repository readers will forgive the Repository for urging North Canton’s purchase of Arrowhead in spite of the financial burden it has placed on the city.

The North Canton Civic Center is another financial burden requiring subsidies by taxpayers. Last year, expenses for the Civic Center outpaced revenues by $100,136. From 2001 through September of this year, North Canton taxpayers have had to subsidize operations at the Civic Center to the tune of $650,604.

The subsidies for the Civic Center for the last eight years and the subsidies for debt service at Arrowhead over the last five years combined total $1,572,026. Mayor Held, President Revoldt, Finance Chairman Snyder, I am sure you would agree these economic circumstances are not good whether the city faces budget deficits or not.

Why is council acknowledging the financial subsidies required to support the Civic Center but not acknowledging the financial subsidies required to support Arrowhead?

It was reported in council last week that only twenty-seven residents booked events at the Civic Center last year. This represents 13 percent of the total events booked for 2007.

Why are North Canton taxpayers subsidizing a facility that is used predominantly by non-residents which results in a financial loss for city residents?

A brief history of the Civic Center, framed on the wall at the Civic Center states “…this property was acquired through civic donations and presented to the city to provide the citizens of North Canton Community with a facility to socialize, conduct business and expand the arts.” This leads to the following question.

Why aren’t there discounted rates at the North Canton Civic Center for citizens of North Canton?

Can the city return the use of the Civic Center to North Canton citizens as was originally intended and still reduce the subsidies required to operate the center? I hope that can be accomplished.

These are decisions that should have been addressed years ago.

Mayor Held, I believe the city could have fared much better as you claimed in your statement if these subsidies and deficits had been managed in a timely manner.

If there had been responsible financial management in the city regarding spending, one would be able to accurately say the city has fared pretty well as you stated in your comments to the press. Unfortunately, that has not been the case for North Canton.

Thank you,
Chuck Osborne
City of North Canton

Tuesday, September 30, 2008

Council Discusses Waiver of Fees While City Faces Financial Crisis

Prepared Comments Made to
September 29, 2008

At last Monday night’s Committee of the Whole, I witnessed actions that I have never witnessed in my many years of attendance at North Canton City Council meetings. What I witnessed was an awakening of how government should function when there is honest, independent input from all participants who are truly working on behalf of the citizens of North Canton.

Last week, there was an item on the agenda to waive the water tap-on fee for residents in the city who have water well. Although this proposal was headlined under the Water, Sewer & Rubbish Committee chaired by my councilman, Jeff Davies, Councilmember Marcia Kiesling appeared to be the proponent of this initiative and she led the discussions.

Although this was a magnanimous gesture on the part of Council Member Kiesling, I am disturbed that a proposal such as this would go beyond a heartfelt expression of sympathy to those families who lose access to water in a power outage. I expect that all families who choose to remain on a well are mindful of this potential problem for themselves when electrical power is disrupted.

I know how much this public body enjoys hearing praise from admirers, especially after anyone dares question its actions but I would like to switch roles tonight and heap praise on the following individuals for providing honest discussion against the proposal to waive water tap-on fees. I know first-hand that critical comment on actions of public officials conducting the public’s business is not encouraged by this council but that is democracy at its finest.

City Engineer Jim Benekos and Superintendent of Permits & Inspection Tom Hampton certainly deserve recognition for leading the way in providing honest input on the downside of the waiver of water tap-on fees. Input on a proposed legislation such as this is sorely needed and is vital to providing checks and balances to all actions of government.

I would also like to commend the four council members who also spoke against the proposal. Council members Pat DeOrio, Doug Foltz, David Wright, and Jeff Davies also merit recognition. I applaud each of you for recognizing the pitfalls of the proposal.

The pitfalls of such a proposal are so numerous that it is hard to understand how a proposal such as this could have been placed on the agenda.

Equity and fairness first come to mind. Thousands of present day city water customers have contributed to the cost of the city water system through the collection of tap-on fees. Why would anyone want to subsidize new water users at the expense of water users who have contributed their fair share to connect to the city water system? This is patently unfair and could lead to hard feelings and possible legal challenges.

Did the supporters of this proposal forget the fact that the city is projecting a budget deficit for 2009? Council President Revoldt and Finance Committee Chairman Snyder were in support of this proposal. There was no economical basis for supporting this proposal so I must conclude that your support for Council Member Kiesling’s proposal was political in nature and that is a shame.

The legislative process depends on independent thought and deliberation from all seven members of this council, not on blind political support.

This proposal was one vote away from receiving enough support to be legislation on tonight’s agenda. Thankfully, the proposed legislation did not survive last week for a legislative vote on tonight’s agenda.

Mr. Snyder, the current fee for water tap-on fees was increased in 2006 under your Chairmanship of the Ordinance, Rules & Claims Committee. The minutes show that you supported Ordinance No. 82-06, on June 12, 2006. In the minutes of that meeting, the increase in tap-on fees passed council with unanimous support.
Mr. Snyder, in your recommendation for passage of the legislation you are quoted as saying:

“[it was an effort] to go through every revenue source that the city has and bring them in line with present-day costs…[and]…would bring in additional revenue to the Water Department as the costs of the tap and the labor to install it has increased….”

The legislation to increase the water tap-on fees in 2006 was passed on an emergency.

Mr. Snyder, I do not understand your change of heart on this issue. If the legislation required passage on emergency two years ago while the city was more financially sound, why when the city today faces budget deficits, would you have any inclination to waive needed revenue? It makes no difference whether the tap fees are paid into the water fund or the general fund. The city still faces extreme financial difficulties.

Mr. Snyder, your attempt to salvage the proposal to waive the tap-on fees when support for it waned last week defies your position two years ago as the Chairman of the committee who supported the rate increase. Your support for the proposal also flies in the face of your present position as Chairman of the Finance Committee while the city faces budget deficits.

What would council have done with this proposal without input from two courageous city employees? Thankfully, city residents will not have to find out.

Ironically, after council discussed the feasibility of waiving potential revenue for the water fund, council discussed where to find needed savings to bridge the $654,000 projected budget deficit for 2009. Unfortunately, council spent more time last week discussing how to give away revenue than time spent discussing where to cut $650,000 from next year’s budget.

I do hope that every member of this council, the mayor, the administration, and city employees are allowed and encouraged to speak freely on issues so that decisions are made for business reasons and not political ones.

With the loss of revenues that the city has experienced and continues to experience, bad decisions can no longer be masked by excess revenues as they were in past years.

Thank you,
Chuck Osborne
City of North Canton

Monday, June 09, 2008

North Canton Proposes Corporate Welfare at Taxpayers' Expense

Prepared Comments Made to
June 9, 2008

On tonight’s agenda there is proposed legislation to appropriate $143,000 from the unappropriated balance of the North Canton CIC Escrow Fund to the North Canton CIC. It is to be voted on as Ordinance No. 61-08. The movement of these funds is an accelerated payment ahead of the payment schedule set forth three years ago in previous legislation. That legislation provided for annual payments of $100,000 to the North Canton CIC for fifteen years totaling $1.5 million dollars in taxpayer funds. These are funds that were paid in good faith by taxpayers to fund city operations.

Tonight’s proposed legislation will also put into jeopardy an initiative petition which is presently being circulated that seeks to allow voters the opportunity to choose whether to cease annual payments from the North Canton Escrow Fund and a return of the remaining balance of $1.1 million dollars to the General Fund. The City of North Canton was duly served notice of the initiative petition on May 28, 2008, when it was provided a certified copy of the proposed legislation.

Tonight’s proposed legislation is also corporate charity raised to a new high, even by North Canton standards.

At least week’s brief discussion on the benefits of bringing Myers Controlled Power Corporation to North Canton from the City of Massillon, the facts regarding employment levels and tax collections seemed to escalate each time someone spoke on the topic.

Former President Ronald Reagan followed a policy in his dealings with the Russians that many of you might remember – Trust but verify. Has anyone on this council bothered to verify the so-called facts regarding the benefits of paying $440,000 to assist in the relocation of Myers Controlled Power Corporation to North Canton?

Based on council’s discussion last week, it is clear that this body is running with what is termed in the finance world as “imperfect information.”

After providing many members of this council body with documents I have obtained from the City of Massillon, I hope to hear a more factual discussion tonight on the possible relocation of Myers Controlled Power Corporation to North Canton. And the discussion should be free of the hype and sales pitches I heard last week. This should not be a political decision that results in a sound byte or photo opportunity for politicians.

The documents show the following facts: Controlled Power Corporation relocated back to Massillon in 2000 from Canton Township to the very facility from where it began its operation in 1966. In a letter to the Mayor Massillon, dated January 18, 2000, Controlled Power Corporation asked for relocation assistance in the amount of $25,000 with the promise that Controlled Power would relocate its seventy employees to Massillon and increase employment to over 100 people by early 2001.

These are the very same 100 jobs that North Canton now proposes to pay $440,000 for. Apparently, Myers Controlled Power believes they have found the yellow brick road leading to North Canton and that the Wizard of Oz will grant them their wish.

I hope that this council and the trustees of the CIC realize how financially unsound this proposal is. It is amazing that this plan of action has even been seriously discussed publicly. If anyone does not think this proposal for corporate welfare is financially unwise then I would suggest that before further consideration of this proposal they make the same request of the Wizard of Oz that the Scarecrow made.

Along with the relocation assistance of $25,000, the City of Massillon abated personal property taxes on equipment which, I am told, amounted to approximately $21,000 per year. Given that personal property taxes for business are being phased out by the state of Ohio and end in 2008. Apparently, Myers has no financial incentive to remain in Massillon.

Controlled Power Corporation met promised employment levels for the first four years of the ten-year abatement period. In 2005, Controlled Power Corporation was purchased by Myers Power Products and employment was slashed to 58 people where it remained for two years. In an October 9, 2007, letter, Massillon’s Community Development Director advised Myers that the Tax Incentive Review Committee recommended to Massillon City Council that Myers Controlled Power be placed on probation for failing to meet the promised level of 100 jobs. Presently, Meyers remains on probation.

Statements were made at last week’s council meeting that first year income tax collection for the City of North Canton from Myers, based on current payrolls, would be around $93,000 annually. Someone else stated income tax collection would top $100,000 the first year and $139,000 in the second year. Does anyone know factually? Shouldn’t there be a minimum dollar amount of income tax collections that are guaranteed regardless of employment fluctuations? Or is this simply a promise that if not kept North Canton will simply slap their wrist and put them on probation as is the norm when companies do not keep their promises for corporate welfare?

Income tax collections in the City of Massillon, with an income tax rate of 1.8%, from Myers totaled approximately $56,000 in 2007, and lower still in the two previous years. This is a far cry from the promised $100,000 and more that has been suggested in presentations before this body. With North Canton’s lower tax rate of 1.5%, will North Canton truly collect the levels of income tax we are being told in this sales pitch to try to justify doing this deal? Does anybody know for sure?

Wasn’t the North Canton CIC supposed to operate on a revolving loan basis? How can the city’s economic development continue if the CIC does not recoup loaned funds? I remember the sales pitch three years ago when the idea of using $1.5 million of taxpayer funds to fund the CIC was discussed. We were all told that the taxpayer-funded CIC will work as a revolving loan fund allowing the CIC to be self-supporting? Giving the funds away and owning landlocked property with little or no value and owning used crane equipment installed at great expense in a private facility is not recouping funds needed to help the next business.

How is North Canton going to lure the next company to the city if you proceed with this extravagant example of corporate welfare? The next company is going to expect equal or better treatment. They will follow the yellow brick road to North Canton because they know there is a pot of gold waiting for them. And if the Wizard of Oz refuses their request, they will not care whether the City of North Canton will be a good fit for their company. For these companies, you will have poisoned the well when you refuse their request, either because you have exhausted your limited supply of funds or you realize that you are giving away the farm, and your efforts to attract more companies will be much harder.

If this proposal gets the green light, communities across the county and the state will wonder what possessed the leaders of North Canton to pay $440,000 for the guarantee of the same 100 jobs for which Massillon paid $25,000. People can only come to one of two conclusions: sheer desperation or sheer ignorance.

I urge fiscal responsibility and common sense. To give hundreds of thousands of dollars to a business and also before the year is out cut city services will result in a great deal of citizen discontent and ultimately harm to the City of North Canton.

Thank you,
Chuck Osborne
City of North Canton

Monday, April 28, 2008

North Canton's Purchase of Arrowhead Golf Course A Disastrous Financial Decision

Prepared Comments Made to
April 28, 2008

Today is the fifth anniversary of North Canton City Council’s 3rd and final vote to purchase the former Arrowhead golf course. While we generally celebrate past events that positively affect our lives, the purchase of Arrowhead is not one of them as is quite evident for many reasons.

The purchase of Arrowhead golf course was not a course of action I supported as a member of city council five years ago and my opposition to the purchase for $4.2 million is well documented in minutes of three sessions of city council held on April 14th, 21st, and 28th of 2003.

Five years ago, legislation to purchase Arrowhead was fast-tracked through council with three readings on three successive Mondays. Can you imagine expediting the expenditure of $4.2 million dollars that was not anticipated in the city’s budget for fiscal year 2003? Council expedited the three readings over a two week period by holding a special council meeting that was not discussed or agreed to by council in its first reading of the Arrowhead legislation. The notice of the intervening special council meeting was announced the Thursday before a Friday in which city hall was to be closed for a three-day weekend. Do you think there were forces working behind the scenes to manipulate this legislative process?

I did not stand alone in my opposition to spending $4.2 million for the purchase of Arrowhead. In the minutes of the first reading to purchase Arrowhead on April 14, 2003, Finance Director Julie Herr stated:

“…I’m not overly excited to spend 4 million dollars on something that we’re not going to see a return [on] ... With the current economic situations and the fact that next year we’re going to have to budget for at least a 2 million dollar payment for [the] Hoover Company – because of the settlement agreement, that’s something that we’re going to have to address in the budget next year. And with paying back 4 million dollars, that debt service is just money that’s going to come off the top of capital projects. So that means less money to do different projects within the city….this is going to have a financial impact down the road. I just want to make everyone aware that there is going to be a financial impact for the city for the next year and years to come.”

Finance Director Herr’s comments were quite prophetic even though the city ultimately only financed one half of the purchase price. The city paid half of the purchase price in cash from city’s reserves. That $2.1 million in cash would come in very handy at the present time.

For the entire term of the Arrowhead lease, lease payments to the city have been far short of debt service and it is robbing the city of needed funds just as the city’s finance director warned. Even with debt service requirements for Arrowhead that are one half what was anticipated, debt service has still greatly exceeded lease revenue.

In 2004, the first year of the lease, Arrowhead debt service was $326,177 while lease revenue, including a $50,000 infrastructure payment, totaled $145,000, a shortfall of $181,177.

In 2006, Arrowhead debt service was $358,338 while lease revenue, including a $50,000 infrastructure payment totaled $159,500, a shortfall of $198,838.

In 2007, Arrowhead debt service was $389,002 while lease revenue including a $50,000 infrastructure payment totaled $159,500, a shortfall of $229,502.

For 2008, the finance director anticipates debt service of $362,825 while lease revenue totals $159,500, a shortfall of $203,325. There was no shortfall in 2005 because the city did not make a principal payment on the outstanding bonds that year.

Over the five years of the Arrowhead lease, debt service on the bonds to finance merely half the purchase price of Arrowhead has exceeded revenues from the lease by $721,422.

If one were to add the lost interest on the $2.1 million cash that was removed from the general fund, called opportunity cost, there is an additional loss to the city of $334,476.

The cumulative burden on the city for Arrowhead over the past five years of the lease totals $1,055,898.

There is a reason why debt service exceeds revenue from the lease at Arrowhead golf course and it boils down to the fact that the current lease calls for lease payments far below market lease rates. According to respected life-long operators of upscale public golf facilities, a fair market lease rate for Arrowhead golf course is ten percent of the valuation of the property. The purchase of Arrowhead golf course for $4.2 million would require a fair market lease rate of $420,000 per year. I tried to make that point in comments to council on January 29, 2007, and my message fell on deaf ears.

After this year’s $300,000 principal payment on the Arrowhead bonds, the city will still owe $900,000 on the debt. Can the city continue to subsidize The Fairways golf course under the current lease rate and payment schedule? This will result in a continued burden on the city in excess of a half a million dollars over a three-year period.

Five years ago, professional operators of golf courses advised me that facilities such as Arrowhead golf course were valued at two and one half times their gross revenues. In spite of being refused the financial records for Arrowhead, I was able to conclude from collecting financial records from Good Park in Akron, the Legends in Massillon and other golf courses that Arrowhead generated around one million dollars in annual revenue, thus a fair market value for the purchase of the property would have been approximately $2.5 million dollars. Bob-O-Link golf course, nearly identical in size, had recently sold for development for $2.45 million.

Unfortunately, the huge overpayment paid by the city for the Arrowhead property has come home to roost and the situation has continued to deteriorate.

In spite of lease rates that are substantially below market rates for an asset that cost the taxpayers of North Canton $4.2 million, Mr. Kevin Larizza, the lessee of the golf course, renamed The Fairways of North Canton, advised the city in a letter received November 2, 2007, that he wants to cut his losses and terminate his lease with the City of North Canton effective November 1, 2007. Mr. Larizza states that the golfing industry across Ohio and across the state has seen a decline over the past few years.

In the minutes of the April 21, 2003, meeting, the second reading to purchase the golf course property, I read into the record from the April, 2003 PGA Magazine, titled Wake Up Call, excerpts from the article that reported the golf industry was in a decline and that this translated to a “loss of revenue across the board – green fees, lesson and caddy fees, golf cart revenue, ball equipment and merchandise sales, food and beverage, hotel rooms at golf destinations, etc.” This independent information from the golf industry also fell on deaf ears.

In a November 2, 2007, Mr. Larizza’s new management team, Golf Pro Scott DeMuesy and Course Manager Rob Purcell, describe in a letter to the city that The Fairways was “in dire need of a strong management Team…” when they met with Mr. Larizza early last year to discuss a management agreement.

In a subsequent letter, dated November 9, 2007, DeMuesy and Purcell advise city council that “…Mr. Larizza has essentially ceased financial support of the entire operation, leaving the business in a day to day turmoil.”

In the same letter is a list of items that DeMuesy and Purcell feel need to be addressed, presumably in the very near future. The list includes a need for golf course equipment, a repair of the clubhouse roof, a need to replace the clubhouse carpet for safety reasons, a need to lease new golf carts and fertilizer & chemicals to improve the appearance of the golf course marked with a disease called Dollar Spot.

A tally of these needed expenditures approaches $400,000. There was no mention of what it might cost to repave the parking lot or replace the sprinkler system which was a problem before the city took over the property, or the many other infrastructure improvements that may need attention.

Can the City of North Canton continue to fund a facility such as this and continue to drain city coffers that have already run dry? Should the City fund a facility that is such a huge drain on very limited resources?

At the present time, not only is the city leasing a facility far below market rates that continues to drain away funds needed for basic city services, the city is also now financing the operations of The Fairways. The lessee of The Fairways, Mr. Kevin Larizza, who is operating the golf course for commercial gain, has failed to render to the city, per the lease, his January 1, 2008, lease payment of $110,000.

North Canton’s purchase of the Arrowhead golf course was a disastrous financial decision that has burdened the city from the beginning and has accelerated the city’s financial decline. It cannot be blamed on the loss of the Hoover Company.

The City of North Canton must relieve itself of the financial burden as continued ownership is beyond the budget of city taxpayers.

Five years ago, I urged that the city simply purchase the development rights to the property to prevent unwanted development. That course of action was not followed. Today, continued ownership of the golf course by a city with projected budget shortfalls for as far into the future as anyone dares to look is not prudent and is patently unfair to taxpayers who rightly expect services for their tax dollars, not subsidies for a golf course.

I urge that the city sell the golf course property but withhold the development rights to the property. The city will have paid much more for those development rights than it would have five years ago, but at least it will come away with something to show taxpayers that the purchase was not entirely in vain.

Thank you,
Chuck Osborne
City of North Canton

Thursday, March 27, 2008

Short Sighted Thinking Thwarts North Canton City Council's Progress

Prepared Comments Made to
March 24, 2008

Given that this new city council has completed its first one-hundred days in office, today being day one-hundred fifteen, and in keeping to this council’s interests in performance audits, I thought I would provide an audit of what I have observed of this body. My audit of council’s performance comes free of charge.

My first observation of this council is that despite efforts to ensure that there is a free flow of public discussion on the issues, in recent council meetings this has not occurred. On March 10, 2008, North Canton Mayor David Held was abruptly cut off when the council meeting was gaveled closed by the council president. The rules of parliamentary procedure were not even followed as there was not a motion and a second to close the meeting. Failure to allow the mayor to speak two weeks ago was followed by a denial to allow public comments at last week’s council meeting.

I hope the two occasions cited above are an oversight and are not a predictor of future actions by this council to limit discussion on public business before this body.

Although my first comments were less than glowing, I would like to offer some positive comments for Mr. Revoldt’s actions as a leader of this body. President Revoldt, I believe your efforts to lead this council to passage of legislation on a number of issues was sound in judgment, well thought out and certainly in the best interest of the city. I would like to commend you on the following legislative efforts:

Your first proposal was that the city extend the deadline for compliance with nonconforming signs by businesses. Unfortunately, your recommendation came after Community and Economic Development Chairman Kiesling had already embraced discussions to simply remove the entire section of the zoning code regarding compliance with nonconforming signs.

Extending the deadline should have been every politician’s knee-jerk reaction. The issue is resolved and the politician is off the hot seat. This city paid a Cleveland firm over fifty thousand dollars to draft the zoning regulations and many of the members on this council voted to codify that zoning in 2003. The issue of nonconforming signs needs to be addressed. Most communities that are current in their zoning regulations deal with this issue in a more responsible manner than simply sticking their heads in the sand and stripping the language from their zoning code.

I would like to add that having the Community Economic Development Committee handling zoning issues is inherently a conflict of interest. Issues with regard to zoning and issues of economic development have diametrically opposing goals.

This council can offer relief to business owners at this time by simply leaving the legislation on the books as it is and extending the deadline for compliance. I urge you to embrace President Revoldt’s recommendation and do just that.

President Revoldt, I commend you and support your recommendation that council implement legislation dealing with nepotism. It is inconceivable how anyone on this council can argue in support of maintaining a practice that is so detrimental to good government. There is no way to hide or contain the problems that arise from hiring practices that permit nepotism.

Nepotism instantaneously creates problems of perception for the public and the city. President Revoldt framed this issue very eloquently and succinctly. It is a problem of management.

Hiring relatives creates a minefield of problems. Whenever any decision is made by a manager responsible for a relative in an organization, the first thought that comes to mind, consciously or unconsciously, is that the employee is related to the mayor, a city council person, the city administrator, or a department head. It is human nature. And due to the nature of that kinship there will be a natural tendency to treat that employee as family. And even if there is no bias, there is no way to convince someone that there is no preferential treatment. It will exist if someone feels slighted or if one’s relative is not hired or simply if it is believed by citizens. Nepotism undermines good government and good management practices.

Why should anyone apply for a position in North Canton when it is common knowledge that relatives are favored over non-relatives?

On a Web site from Santa Clara University’s Markkula Center for Applied Ethics, there is the following: “…because favoritism is often covert (few elected officials are foolish enough to show open partiality to friends, and family), this practice undercuts the transparency that should be part of governmental hiring and contracting processes.” The Web site is titled Favoritism, Cronyism, and Nepotism.

Clearly, the council members who spoke last week in opposition to legislation regarding nepotism are not acting on behalf of their constituents or in the best interests of the city. And the most vocal critic of the nepotism legislation was Council member Foltz who argued that the ownership of the Hoover Company, a private corporation, by multiple family members was a good example in support of nepotism.

I do not think that argument has any connection to the issue at hand. Ownership of a private corporation by related family members has no relation to hiring and management practices of city government that is responsible to the public.

Lastly, I would like to commend Council member DeOrio for his research in disproving the existence of a council policy for construction of sidewalks. Council member Foltz has argued against the construction of city sidewalks for many years citing the existence of council policy to support his position. Even if such policy did exist, that does not mean successive city councils are bound by it for eternity.

There is nothing more important for bringing citizens together than sidewalks. Sidewalks provide a path to your neighbor’s house. Sidewalks take children to school. Sidewalks allow citizens to exercise and explore their city. Sidewalks can also allow citizens a path to their city parks.

Last week, Mr. Foltz argued against the construction of a sidewalk that would allow citizens’ access to Price Park without having to walk down Glenwood Street and across a narrow bridge that carries traffic in to the city from Belden Village and The Strip. What is the rationale for supporting the spending of thousands of city funds for construction of park trails and upwards of $150,000 for a bridge on park trails in the middle of the woods and not supporting spending of city funds for sidewalks? There really is no logic just as there is no council policy against enhancing the quality of life in this city with funding for city sidewalks.

In spite of the position taken by Mr. Foltz against the construction of sidewalks, I do hope this council realizes that it only takes four votes to move legislation through council. Legislation before this council does not require a unanimous vote. Your membership on this council requires putting the citizens first and not your fellow council members.

I realize that this council seldom listens to my comments but I do hope you follow the recommendations of your council president for dealing with the deadline for nonconforming signs, the need for nepotism legislation, and the construction of sidewalks on the south entrance to Price Park.

Thank you,
Chuck Osborne
City of North Canton

North Canton CIC In Violation Of Its Plan And The Ohio Constitution

Prepared Comments Made to
July 9, 2007 & February 25, 2008

In the spring of 2005, this council body authorized the removal of $1,500,000 from the city’s income tax fund and deposited the funds into an escrow fund from which annual payments of $100,000 are being paid to the North Canton Community Improvement Corporation (CIC). As of June 15, 2007, the account balance controlled by the North Canton CIC totaled $300,000. Payments by the city to the North Canton CIC will continue annually with the last payment being paid out on June 15, 2019.

Week after week I, as well as others, sit in the audience and hear council discuss how to deal with declining revenues and funding shortfalls for needed infrastructure improvements and yet the funds set aside for the CIC are left untouched.

I have addressed this issue on several occasions before this body and yet each of you on council chooses to allow these taxpayer funds to be used for purposes other than for support of city services as intended.

My message to you tonight is to provide notice that; one, the North Canton CIC is operating in violation of its own Agreement and Plan and; two, the financial support that is being provided to the owner of Abbott’s Bridal Shop violates Section 6, Article VIII of the Ohio Constitution.

I have addressed these issues in a letter to the Ohio Attorney General with a request that any and all financial transactions of the North Canton CIC be frozen until such time as these violations are investigated.

The North Canton CIC is in violation of its own Agreement and Plan because it is currently using funding sources never anticipated when the CIC was set up twenty-seven years ago.

The present CIC Agreement and Plan was drawn up in 1980 by the Cleveland Law Firm of Squire, Sanders & Dempsey and was crafted in anticipation of the issuance of Industrial Development Bonds (IDB). St. Luke’s took advantage of this bond financing on two occasions. The use of industrial bonds imposed no expense to North Canton or to the taxpayers and was a valuable economic development tool for the city. Sadly, city leaders have abandoned the use of bond financing as a tool for economic development in favor of using taxpayer funds. This was a costly move for taxpayers and the city.

The use of taxpayer monies to fund a CIC under the present Agreement and Plan is not adequate and actually puts the city in violation of state statute as Chapter 1724.10 (A) requires that a CIC prepare a viable plan that is approved by council.

In an OAG opinion, 67-056, the Ohio Attorney General states: “…that a political subdivision may not appropriate monies derived from tax action to provide for the maintenance or operating expenses of a community improvement corporation.”

The state statute regarding Community Improvement Corporations, (Section 1724.10 (A)) has a similar statement. “Any such debt shall be solely that of the corporation and shall not be secured by the pledge of any moneys received or to be received from any political subdivision.”

Taxpayer monies have been pledged from the City of North Canton and continue to be received by the North Canton CIC. These taxpayer funds were paid to the city to maintain city services and now have been diverted for a purpose other than which they were to be used.

Additionally, the Agreement and Plan of the North Canton CIC is being violated in other ways.

First, there is nothing in the Agreement and Plan of the North Canton CIC that allows for the promotion of retail development. The Preamble of the “Agreement and Plan” states:

“The Corporation and Municipality desire to incorporate the terms and provisions of the Plan into this Agreement so that this Agreement embody and constitute the plan of industrial, commercial, distribution and research development…”(emphasis added).

Providing added parking to benefit a private retail business does not meet any of the requirements delineated in the CIC Agreement and Plan.

Second, the Agreement and Plan clearly states that taxpayer funds are not to be provided to the CIC.

In Article III, paragraph (2), the CIC Agreement and Plan states:

“The municipality shall not be required to make any financial contributions to the Corporation and nothing in this Agreement and Plan shall be construed as permitting the Corporation to obligate the Municipality except as expressly set forth in this Agreement and Plan” (emphasis added).

In Article III, paragraph (3) the CIC Agreement and Plan continues with:

“All costs of the Corporation shall be paid solely from the funds of the Corporation and the Municipality need not contribute any moneys to the Corporation to meets its costs. In no event shall any moneys raised by taxation be obligated or pledged for the payment of any bonds or other obligations issued or guarantees made pursuant to this Agreement and Plan” (emphasis added).

In Article II, paragraph 5(b), the CIC Agreement and Plan has similar language:

“[The Corporation may] …acquire sites…for lease or sale by the Corporation, provided that any such debt shall be solely that of the Corporation and shall not be secured by the pledge of any moneys received or to be received from the Municipality, State of Ohio, or any political subdivision thereof” (emphasis added).

The requirements of Article II, paragraph 5(c) were ignored by the trustees of the North Canton CIC when approving the application for financial assistance from the owner of Abbott’s Bridal Shop. This section of the North Canton CIC says:

“[The Corporation may] make loans to any person, firm partnership, corporation …and may establish and regulate the terms and conditions with respect to any such loans; provided the Corporation shall not approve any application for loan unless and until the person applying for said loan shows that he has applied for the loan through ordinary banking or commercial channels and that the loan has been refused by at least one bank or other financial institution” (emphasis added).

The trustees of the North Canton CIC never required the owner of Abbot’s Bridal Shop to pursue financial assistance through ordinary banking or commercial channels before seeking financial assistance from the North Canton CIC.

The specifics with regard to violation of the Ohio Constitution arise as well from the North Canton CIC’s decision to provide financial assistance to the owner of Abbott’s Bridal Shop. In the court case of C.I.V.I.C. v. City of Warren, the Ohio Supreme Court ruled that municipalities taking action “to raise money for” and “loan its credit to, or in aid of” private corporations violates Section 6, Article VIII of the Ohio Constitution. The North Canton CIC is an agency of the city and by extension this is what is taking place between the North Canton CIC and the owner of Abbott’s Bridal Shop.

In a OAG opinion, 71-044; the Ohio Attorney General states that a “municipality may not make an outright, unrestricted gift of funds to a nongovernmental organization, regardless of whether or not such organization may be generally engaged in performing a beneficial, public purpose.”

There are grave concerns with regard to the present operation and funding of the North Canton CIC. The Corporation must get its house in order before it can serve the City of North Canton. A twenty-seven year old document crafted for industrial bond financing of economic development projects clearly will not work, legally or otherwise if you are using other sources of funding for the North Canton CIC.

Using public monies to benefit private interests in violation of The Ohio Constitution and state law should raise a concern to North Canton elected officials.

This is not a legacy any of you wishes to leave behind given the financial difficulties North Canton is facing today.

Thank you,
Chuck Osborne
City of North Canton

Monday, February 11, 2008

Wasted Expenditures Continue In North Canton Despite Budget Woes

Prepared Comments Made to
February 11, 2008

On tonight’s agenda, as in the past, there is legislation authorizing expenditure of taxpayer funds that continue to drain city coffers while providing little if any benefit to the city and its citizens. As the council and the administration have continued to grapple with an uncertain future for the city, I believe it is timely to think about expenditures and the mentality that have contributed to the city’s financial distress.

I would like to start with some of the legislation that is on the agenda for tonight. Ordinance No. 12-08, authorizing payment to David Crowder brings to mind an option to purchase 24 acres of wetland from Mr. Crowder in November of 2004, for which former City Administrator, Michael Miller, paid Mr. Crowder $6,300.

I have a letter from the Director of the Ohio Public Works Commission, Mr. W. Laurence Bicking, in which he notes that several of the terms of the option agreement “raised questions with respect to the science supporting the necessity for constructing ponds on the site as would the lease back provisions. These concerns would have been raised with the City and most likely referred back to the District 19 Natural Resources Assistance Council for their consideration.”

In effect, the six-month purchase option was not acceptable to the State of Ohio and was of no use to the city. In addition to the $6,300 that was paid to Mr. Crowder for the six-month purchase option, former Administrator Miller also expended an additional $4, 550 for an appraisal and survey of the property. All of these expenditures were made without the knowledge or approval of council. Two members of that council have confirmed to me that council was not aware of former Administrator Miller’s expenditures to acquire the property.

When I hear the name Crowder I can only think of the expenditure of a minimum of $10, 850 for which taxpayers received absolutely nothing in return and Mr. Crowder receiving $6,300 for a purchase option with terms that were wholly unacceptable to the State of Ohio and thus not worth the price of the paper they were printed on. And now Mr. Crowder is coming to the city for an additional payment of $2,965 of taxpayer funds.

Ordinance No. 14-08 is legislation authorizing expenditure of $18,000 to a former city employee who was terminated from his employment with the city. It is not unusual for an employee to be terminated for cause, whether they are employed in the public or private sector. If this employee’s employment history had been properly documented over time there would be no reason for a financial settlement upon this release from employment. Wholly unacceptable employee conduct should not be rewarded with a nice big check as the employee is released from his employment. The employment of this individual came about under Mayor Tom Rice.

The mention of former Mayor Tom Rice brings to mind the removal hearings in 2004 and the sudden suspension of those hearings because elected officials put politics ahead of their duty to the citizens and suspended the hearings. For that lack of intestinal fortitude, the citizens of North Canton were asked three years later in 2007 to compensate former Mayor Rice and his attorney to the tune of $31,000.

The expenditure of $40,000 late in 2004 under the former Rice Administration for a sign at the airport was another waste of taxpayer dollars. The $40,000 includes rental space at the airport for a term of sixty months at $300 per month. I expect that if the world has ever heard of a Hoover vacuum cleaner, that they also have heard of North Canton.

Ordinance No. 10-08 authorizing the expenditure of $64,500 for a performance audit raises concerns of wasteful spending. How is it that department heads with decades of experience are not utilizing city resources to the utmost even after budget cutbacks that have been ongoing for several years?

I would expect that the most obvious areas for increasing efficiency have already been arrived at long ago but that there is no elected official who will step forward and initiate the needed action. We have seen at the county level discussions to centralize radio dispatch of safety forces. We have all discussed combining safety forces in some fashion to increase efficiency. Why is it that you must spend $64,500 to tell you what you already know?

How long will it take you to recoup the $64,500 spent for the performance audit? Are there savings to be had that will allow the city to continue much as it has in the past or will you be spending much needed funds to simply find out that this is the end of the line for life as we have known it to be in North Canton?

The expenditures noted above total $167,315. These wasted dollars add up quickly. That would have more than covered the $150,000 Mayor Held requested last week for engineering and design for North Main Street which would have allowed the city to apply for construction grants.

Increased labor negotiation costs are another waste of city funds that have occurred. For many years, a local labor attorney would charge the city $10-13,000 for negotiating city labor contracts every three years. In 2003, former Mayor Rice hired a labor attorney from Cleveland that cost the city $55,000.

While the city has returned to using a local labor attorney, the word is apparently is out in the legal community that the City of North Canton will pay big-city hourly rates for a labor attorney. In 2006 North Canton City Council authorized up to $30,000 for labor negotiations expenses. A savings of $25,000 over fees paid in 2003 but now double over the traditional fees charged up to and including the year 2000.

Had North Canton continued to use a local attorney for labor negotiations, the city would more than likely have saved in excess of $55,000 in fees for labor negotiations in 2003 and 2006.

The wasted expenditures of city funds noted above are just a short tally of small-time expenditures that I can recall. There is a major waste of city funds totaling $5.7 million dollars that would soften the financial stress for the city had those funds not been expended.

The first is the removal of $1.5 million dollars to fund the North Canton CIC in 2005. That expenditure was not budgeted by the city in its annual budget. At least $123,700 of those former city funds have been spent for the financial benefit of private business interests with no obligation for repayment to the CIC.

The expenditure of $4.2 million dollars for purchase of the former Arrowhead Golf Course in 2003 is another example of a major expenditure that was unbudgeted in the city’s annual budget. This expenditure by far has brought North Canton to its day of financial reckoning sooner rather than later. North Canton can soon match a recent Repository news story titled: Legends is costing Massillon big bucks.” Only the headlines will read: “The Fairways is costing North Canton big bucks.”

These expenditures have not benefited the taxpayer and that is, unfortunately, the bottom line.

Thank you,
Chuck Osborne
City of North Canton

Wednesday, January 30, 2008

Public Speaks at North Canton Council Meetings Encouraged Citizen Participation For 46 Years

Prepared Comments Made to
January 28, 2008

For forty-six years, North Canton residents have had the opportunity to address their elected leaders, publicly, on the record, at city council meetings. All of that changed with the last term of council. Very early in their term in February of 2006, council discussed implementing a time limit for visitors’ comments. That effort was stopped in its tracks after the Repository weighed in with an editorial on February 15, 2006, titled, “Messy, tedious – that’s democracy.”
The editorial suggested a simple test for men and women who have been elected to public office: “Before proposing something that will affect the people who put you in office, take your idea for a mental test drive. Imagine you’re back on the campaign trail, knocking on doors. Tell the people who answer the door what you’re thinking. Maybe frame your idea as a campaign promise.
“Imagine, for example, telling Ms. North Canton Voter: ‘Vote for me and I promise I won’t let you or your neighbors speak to City Council for more than five minutes.’”
That editorial seemed to discourage any efforts to limit public speaks for the remainder of 2006 but in 2007, council resurrected the idea and placed a time limit on public speaks at council meetings with the passage of Ordinance No. 15-07.
At last week’s council meeting I listened to the new City Council President Daryl Revoldt proposes a modification to the Recognition of Visitors portion of council meetings. When asked for his input, former Council President Doug Foltz defended the legislation that had been enacted under his leadership in the previous council term.
Mr. Foltz stated that he was pleased with the present legislation restricting public speaks of citizens who speak at North Canton council meetings. Mr. Foltz further noted that similar restrictions are imposed in other communities.
The City of North Canton has allowed unrestricted public speaks on any issue that is important to its citizens since its incorporation as a city in 1961. That is over 46 years, nearly a half a century. That is an excellent legacy to our democracy. Why did that end?
Former Council President Foltz detailed the requirements imposed in other communities on public speaks as his reason for imposing the new restrictions in North Canton. Who cares what is standard practice for public speaks in Louisville, Canton, Canal Fulton, or Massillon?
When we were children we have all at one time or another used the argument with our parents that so and so is doing this or that to which our parents would reply, “If the neighbors jumped off a bridge, would you jump off a bridge too?”
Many years ago, communities in the south would require African Americans to ride in the back of buses and they segregated the use of public restrooms and water fountains for “whites” only. Thankfully, cities throughout America did not adopt these practices just because they were the law in another community.
We all live in a community that reflects our beliefs and choose a government that respects us as citizens. The City of North Canton has its own government and its own laws for a reason. What is acceptable in one community is not necessarily acceptable in another community.
This council should be happy that the few citizens who do attend council meetings are interested in their city government; otherwise, you would be playing before an empty house. Maybe that is what some council members would prefer. I hope that is not the case.
Former Council President Foltz also stated that he was prompted to propose the limit on public speaks at the suggestion of one constituent. To sum up former President Foltz’s reasons for last year’s legislation restricting public speaks, other communities were doing it and one constituent suggested the idea.
These are not very strong reasons for implementing legislation that restrains the democratic process for citizens in our community. The system was not broken. The citizens of North Canton enjoyed speaking at council meetings for 46 years.
There is ample authority in Robert’s Rules of Order under which council conducts its meetings to give the council president authority to control the meeting.
President Revoldt, I do appreciate your efforts to soften the restrictions on public speaks and I fully realize that, with you as council president, in effect, there will be little or no restrictions to public speaks.
On the other hand, I believe that you would have the votes to repeal Ordinance No. 15-07 if the members of this council would vote with their hearts and minds instead of following the crowd. The time-honored practice of voting as a fellow council member votes on issues and legislation is not how the system is supposed to work.
The citizens of North Canton do vote for seven council members every two years for a reason. It is quite unnerving to watch council after council, year after year, pass every piece of legislation that comes before it with a unanimous vote.
Either there are some unexplained phenomena that possess every council body or cloning of humans was discovered long ago in North Canton and no one has alerted the scientific community.
The amendment to Ordinance No. 15-07 that you are proposing for passage tonight, in effect, waters down the restrictions previously imposed on public speaks, thus making that ordinance rather useless and worthy of repeal.
Furthermore, between you President Revoldt and former Council President Jon Snyder, there are 10 years of tenure as President of the North Canton City Council. Thankfully, neither of you used legislation in your terms as president of this council to limit or hinder public debate on issues that come before this council body. Ordinance No. 15-07 was politically motivated and I ask that you dispose of that legislation rather than make this new council become a part of the legacy of the previous council.

Thank you,
Chuck Osborne
City of North Canton