Open, Honest Government for North Canton

Amended Lease of Arrowhead Golf Course Proposes Taxpayers Finance Unadvertised Sale of Property to Current Operators

2012-01-18T00:01:00.004-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
January 17, 2012

A little over a month ago on December 12, 2011, Finance and Property Committee Chairman and City Council President Jon Snyder held a committee meeting prior to that night’s council meeting to discuss authorizing legislation to amend the lease agreement between the City and R & S Golf Properties, Inc.

Chairman Snyder’s public explanation for amending the Arrowhead Golf Course lease was that without amending the lease, the City was precluded from selling the property if it chose to do so.

This explanation rang hollow with me as Law Director Nilges had previously notified the Lessees five-months earlier in a July 13, 2011, letter that as a result of the Lessees’ default in its Lease obligations, the City was exercising its right to terminate the Lease, effective December 31, 2011, pursuant to Article XII, Section 12.1.1 of the Lease.

With termination of the lease just a little more than a handful of days away from the December 12 council meeting, the City would have had no limitations on selling the golf course property. Thus the reason provided by Chairman Snyder for amending the Lease on the Golf Course was little more than political misdirection.

The agenda for the December 12 council meeting was amended after the published agenda items were addressed and Ordinance No. 114-11, proposing to amend the Lease, was added. The added agenda item was titled: “An ordinance authorizing the Mayor to enter into an Addendum to the Lease by and between the City of North Canton and R & S Golf Properties, Inc., an Ohio Corporation and Robert C. Purcell and David Scott DeMuesy as individuals (“Lessee”) executed on December 22, 2008, for the premises known as The Fairways fna Arrowhead Country Club, and declaring the same as to be an emergency.”

I would like to know who would like to take credit for drafting the less than two full pages of the Addendum to the Arrowhead Golf Course Lease and if council members read the amended lease before voting!

My concern is that each of the two sentences comprising paragraph 3.1.7 of the amended lease clearly violate Ohio state law and the Ohio Constitution.

The first sentence in Section 3.1.7 states, “Lessee shall have the option to purchase the Golf Course Premises for a mutually agreed upon amount not less than the appraised value of the Golf Course Premises provided Lessee exercises such option by the earlier of thirty days following any termination of the Lease pursuant to this Article III or December 31, 2014.”

I am stunned that anyone would propose to sell Arrowhead Golf Course property in this manner and codify this into law since the method of sale described in the amended lease clearly violates state law.

Ohio General Code Section 3699 specifies that the sale of real estate by a municipality must be advertised once a week for five weeks in a newspaper of general circulation within the corporation and bids secured before municipal real estate is sold.

The provisions as to advertising for bids are designed for the protection of the taxpayer. This procedure insures that the most advantageous terms possible are secured for the city, its residents, and its taxpayers.

The second sentence in Section 3.1.7 of the amended lease states, “The Parties agree to meet and discuss in good faith the possibility of the City holding a note for purchase in the event that Lessee exercises its option to purchase the Golf Course Premises.”

I am again stunned that members of this council and the Held Administration would propose the possibility that the taxpayers of North Canton finance the purchase of Arrowhead Golf Course to benefit private interests.

This is in direct violation of the Ohio Constitution, Section 8.06, which states in part, “No laws shall be passed authorizing any county, city, town or township, by vote of its citizens, or otherwise, to become a stockholder in any joint stock company, corporation, or association whatever; or to raise money for, or to loan its credit to, or in aid of, any such company, corporation, or association….”

As is typical of all voting of North Canton City Council, Ordinance No. 114-11 passed unanimously with seven votes in favor of amending the Lease that five months earlier the City of North Canton had already exercised its right to terminate following default R & S Golf Properties.

What I failed to note earlier regarding the Finance Committee meeting that preceded the vote to amend the Lease was that Councilmember at-Large Kiesling was absent for the committee meeting and heard none of the discussion and yet she voted on the legislation after arriving at the council meeting that was already in progress.

Equally noted in the vote to amend the Lease was the fact that Councilmember at-Large Cerreta voted on the legislation when Mr. Cerreta, as an abutting property owner to the Golf Course, clearly has a personal interest in the activities and use of the property. Mr. Cerreta, the prudent course of action for you would have been to abstain on the vote to amend the Lease. Furthermore, the praise heaped on you by Finance Chairman Snyder regarding your accorded prominent participation in negotiating the amended lease is equally disturbing as again you have a personal stake in the activities and use of the golf course property abutting your residence.

The amended Arrowhead Lease benefited no one but R & S Golf Properties. North Canton forgave R & S Golf Properties for property tax payments to the City owed by the Lessee in the amount of $16,089. Not addressed in the amended lease is whether the required annual $80,000 in capital improvement obligation has been met over the last three years and if the Lessee would or could continue meeting its infrastructure obligation in the future.

What are the odds that the current Lessee can exercise the option to purchase the golf course property if they are unable to pay the property taxes? Finance Chairman Snyder would have the public believe that is a possibility. If that is the case, advertise the property for sale and let all interested buyers submit a bid for the golf course property as the law requires.

The amended lease is flawed, taxpayers are fed political misdirection, and North Canton taxpayers continue to pick up the tab on this debacle.

At this time I ask that the amended Arrowhead Lease be voided and be replaced with
a new lease that does not violate the Ohio Constitution and Ohio State Law. If the Administration and this Council fail to correct the shortcomings of Ordinance No. 114-11, the violations in the amended lease can be resolved by the courts if that is the course the City desires to take.

Thank you,
Chuck Osborne
City of North Canton

Public Health Order against North Canton Distressful & Costly to Taxpayers

2011-12-13T00:26:00.004-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
December 12, 2011

For the second time in the last ten years, the City of North Canton finds itself facing a governmental order to clean up a dump site where, for years, the city was open dumping solid waste in violation of state law. North Canton taxpayers will certainly be getting a lump of coal in their stocking this Christmas as the cleanup will require the expenditure of city funds and needlessly place added stress on the city’s budget.

In 2002, North Canton was mandated to clean up its own Dressler well field as a result of dumping practices that dated back to the 1980s. That cleanup cost taxpayers approximately $500,000.

Mayor Held, you were the City Administrator at that time and as administrator you oversaw the cleanup for the city. One would think that after overseeing the expenditure of approximately one half million dollars of public funds to abate illegal dumping practices that that experience would make an indelible impression and that thereafter you would make an extra effort to ensure the proper disposal of city waste material.

Apparently, no lessons were learned as open dumping of solid waste continued during and after the cleanup of the Dressler well field site. This appears to be the case as in a December 10, 2009, Repository report titled, “Cleaning up a mess in North Canton” it is stated “…City administrators say the two dump sites has been used for more than five years, while one former employee indicates the site has been used since the 1990s.”

The discovery of the illegal dumping of street sweepings began with a complaint from the Ohio EPA to the Stark County Health Department on October 6,2009. The original complaint cited two dump sites, one on a farm on South Arlington and a second site north of Portage Avenue on Freedom Avenue known as the Mathie property.

I have been told by city officials that the dump site on South Arlington has been cleaned up and that it was done in-house with city employees and city equipment. Mysteriously, no one in the city can provide to me information as to when and at what cost?

I would like to see documentation as to the man hours expended, the equipment used, and the cost to dispose of the solid waste at a licensed disposal facility.

I would also like to know why City Council has not asked for any accounting of the cost of cleanup of the South Arlington site.

The Mathie dump site is adjacent to North Canton’s water treatment plant as well as to a city well field. It also lies within the Zimber Ditch flood zone.

Two years have passed since state and county regulatory agencies have weighed in on the violations of state law regarding the illegal disposal of solid waste by the City. The Mathie property dump site was also identified as a wetland.

Fortunately for North Canton, the property was deemed not to be a “regulated” wetland as dumping apparently began before creation of the Clean Water Act in 1972. This ruling by the Army Corp of Engineers spares North Canton the cost of wetlands mitigation.

Consequently, North Canton will only be required to remove the street sweepings that were open dumped on the Mathie property. This is detailed in a November 16, 2011, “Public Health Order” from the Stark County Health Commissioner William Franks to City Administrator Michael Grimes requiring the City of North Canton to remove solid waste that was dumped in violation of state law.

The cost of the cleanup is on everyone’s mind but as of last Friday, Administrator Grimes would not provide any estimate to me of the cost.

In a November 25, 2009, interview published in the Stark County Political Report (SCPR) titled, “Clean Up of Street Sweeper Backfill Could Cost $100,000 Plus How Much in EPA Fines?” Mayor Held tells the Report that “…the cost of remediating could be $100,000….”

Mayor Held, I would like to know if your estimate of the cost of a cleanup that you gave to the SCPR two years ago is accurate.

A November 23, 2009, Repository report titled, “North Canton council won’t discuss dumping probe” stated, “City officials said they didn’t know that dumping street sweepings at the site would be a violation.”

Mayor Held, having formerly overseen the cleanup of a previous dump site here in North Canton as City Administrator as well as having held the position of Director of the Joint Solid Waste District for Stark, Tuscarawas and Wayne Counties since July of 2004, I am flabbergasted as to your professed ignorance regarding the disposal of solid waste.

In the November 23, 2009, minutes of City Council, former Council President Daryl Revoldt states, “…in addition to funding remediation, this council may consider other appropriate actions it deems necessary to satisfactorily resolve this matter and assure that a similar situation does not reoccur.”

I would like to know if this council is prepared to finally speak up publicly on what will obviously be a wasteful expenditure of taxpayer funds to comply with the Health Department’s “Public Health Order.”

Is this council prepared to speak to the failure of leadership by Mayor Held on this matter?

What line items on the budget will go unfunded to find the dollars needed to accomplish the remediation of the dump site?

Among the reasons the Stark County Health Department cites for its decision to issue a “Public Health Order” against the City are:

1) Street sweepings are defined as solid waste in O. R. C. and O. A. C.
2) North Canton City personnel attended training regarding street sweepings,
and should have been aware that sweepings needed to be disposed of in a
licensed solid waste facility.
3) The City of North Canton had previously been ordered to clean up street
sweepings that were open dumped in the late 1990s.
4) The waste is in the proximity of one of North Canton’s municipal water
supply wells.

The repeated failure by city officials to comply with state laws regarding the disposal of city wastes and the concomitant financial costs that the taxpayers of North Canton are forced to bear are an embarrassment to the community and distressful to residents. Furthermore, it raises deep concern about the caliber of leadership in North Canton.

Given that the Health Department’s “Public Health Order” against the City is nearly a month old, and the fact that citizens deserve to know the financial impact that the remediation will entail, and in the interest of transparency and accountability I ask that the full details regarding this issue be made available to the public without further delay.

Thank you,
Chuck Osborne

North Canton Mayor’s Appointment of Permits Superintendent Is a Plan of Deception

2011-11-28T22:50:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
November 28, 2011

Since mid-November I have followed Mayor Held’s quest to staff an assistant administrator position at City Hall and I am concerned that City Council is either complacent in letting the Mayor staff that position or is blind to the Mayor’s plan of deception to accomplish that end.

Two months ago, on September 19, this council failed to act on the Mayor’s request for an assistant administrator, and yet without a doubt, Mayor Held is working his way to getting that request fulfilled with what I believe to be a plan of deception.

Mayor Held, your statements in the press over the last two months are contradictory and call into question the course of events transpiring behind the walls of City Hall.

In a Repository report on September 19, 2011, titled “North Canton considers assistant administrator post” you stated you will keep Eric Bowles tasked with the added duties of permits and inspection, saying “With Bowles doing double-duty, the city has saved money by not paying a salary for the permits and inspections job.”

Two months later, the Repository in a November 14, 2011, report titled, “North Canton hires permits superintendent” you state that the city has hired a new superintendent of permits after spending several months with the development director doubling up on duties.

In that report Mayor, you say, “Eric Bowles … once again will be able to focus on bringing new business to the city now that Bill Bartos has been named superintendent of permits. You, Mayor, are quoted as saying, “We can’t go with one person managing both departments.”

A week later at the Council of the Whole meeting of November 21, under questioning by Councilmember Foltz, Mayor Held stated that Eric Bowles would continue in Permits and Development with the new title of Director of Permits & Development.

Which is it Mayor Held? Either Mr. Bowles can handle both the Department of Development and the Department of Permits & Inspection or he cannot?

If Eric Bowles is going to continue to head up both departments, what was the reason for the appointment of Bill Bartos to be Permits Superintendent two weeks ago?

Clearly, Mayor Held, the appointment of Bill Bartos to the position of Superintendent of Permits has been nothing but a ruse. It is obvious to me that you have intended from the beginning to hire an assistant administrator so that you will have a replacement for City Administrator Grimes when Mr. Grimes steps down early next year. I might add that you have acknowledged to me in speculation that Mr. Grimes would serve as City Administrator for only 12 to 18 months from the time of his appointment in March 2011.

Last week, more than one week after Bill Bartos began his new job as Superintendent of the Permits & Inspection Department, I learned in a phone conversation that the newly appointed permits superintendent had never met some of his staff. Given that newspaper accounts had reported that Mr. Bartos had been on the job over a week as the Superintendent of Permits, one would expect that Mr. Bartos would be fully engaged and involved with all the staff in his department.

Is Mr. Bartos actually working and heading up the permits Department or is he employed elsewhere?

The fact of the matter is that Development Director Bowles revealed to me that the newly appointed permits superintendent was not working in the permits department but in fact has been assisting City Administrator Grimes at City Hall.

Mayor Held, I would like to know the purpose in announcing the appointment of Bill Bartos to be the new head of the Permits & Inspection Department when you apparently never actually intended for Mr. Bartos to fill that position. I would also like to know if you find this kind of deception serves the citizenry of North Canton.

From City Council, I would like to know if you are privy to these orchestrations by Mayor Held and if you are a partner in this less than forthright plan?

Doesn’t North Canton have in place a search process written into the city’s personnel procedures that outlines the proper way in which high-level leadership positions are to be filled in the city?

It seems to be public knowledge that the city’s new permits superintendent was hired on the recommendation of a neighbor of Mayor Held. I would not call this an acceptable hiring process for North Canton’s next City Administrator.

Mayor Held, there is no manner of transparency and accountability in cronyism and that is what your recent closed-door appointment of a permits superintendent can be called.

Cronyism should not be the accepted method to finding qualified individuals to fill high-level leadership positions in the City of North Canton.

On tonight’s agenda is proposed legislation, titled Ordinance 103-11, to establish the classifications and rates of compensation for the positions of Director of Administrative Services and Director of Permits and Development.

I might interject here that the Director of Administrative Services was a position that was created for a former City Administrator in the present administration who was removed from office and then allowed to collect a salary for the remaining six months of 2010 before his employment with the City ended due to budget cuts.

North Canton’s financial situation has continued to deteriorate and there is certainly no room to fund newly created job classifications. With salary and benefits, the requested new job classification of Director of Administrative Services will increase personnel costs for North Canton taxpayers by nearly $92,000.00.

For the record, I would like to add that the press has published incorrect information regarding the salary of the recently filled position of Permits Superintendent. The salary for that position is $67,582.32 per year. This is considerably more than the $60,000 reported to the public by the press.

I would ask that this council not ratify Ordinance 103-11. To do so would reward Mayor Held for his efforts to bypass commonsense personnel policies in the recruitment, screening, and hiring of high-level city employees. Passage would also reward Mayor Held for trampling any notion of transparency and accountability in North Canton City government and make this council a partner in the Mayor’s plan of deception.

I ask that this council not let North Canton’s reputation be discredited by the statements and actions of the Held Administration that are intended to mislead the citizens of North Canton. Checks and balances in North Canton City Government are certainly needed to stop the plans of deception now being perpetrated on us!

Thank you,
Chuck Osborne
City of North Canton

North Canton’s Health Insurance Benefits to Part-time Elected Officials Are Overly Generous

2011-09-26T21:54:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
September 26, 2011

It is no secret that the City of North Canton is struggling financially to maintain city services with reduced revenues. What I suspect is not widely known by residents is what compensation is provided to part-time North Canton elected officials while they serve in office.

North Canton’s Mayor receives a salary of $15,000 annually, the President of Council $5,700, and Councilmembers $4,800. North Canton’s part-time elected officials also are allowed full family health insurance benefits. The premiums and administration costs total $14,952.48 and with the employee’s payment of an 8.1 % co-pay, the cost to taxpayers for these health benefits come to $13,916.88 annually per official.

Part-time elected officials can choose to have individual health insurance coverage and the premiums and administrative costs total $5,777.76 and with the employee copay, the cost to taxpayers for these health benefits come to $5,380.08 annually.

It is my understanding one council member continues to keep his health insurance with his employer and one council member has chosen individual health insurance coverage. The remaining six part-time elected officials have chosen full family health insurance benefits provided by the city.

The annual difference in costs between family benefits versus individual benefits is $8,536.80 per part-time elected official and when multiplied times eight, full family health insurance coverage, if chosen, to seven part-time city council members and a part-time mayor amounts to added costs to taxpayers of $68,294.40 annually.

In 2002 when North Canton was contemplating a pay increase for elected officials, I researched salary and benefits of elected officials in nearby municipalities. At that time, four of the five municipalities contacted did not provide health insurance benefits to part-time elected officials. Those municipalities were Alliance, Canal Fulton, Louisville, and Massillon. Besides North Canton, only the City of Canton provided health insurance coverage for part-time officials. This has not changed.

When compared to the paid health insurance benefits provided by other area municipalities, North Canton’s health insurance benefits to part-time elected officials are overly generous.

I would urge this council to quickly pass legislation limiting health insurance to individual coverage and end family health insurance benefits to part-time elected officials.

This legislation would have to be enacted before the end of the present term of this council and would become effective with the incoming new council on December 1, 2011. If this council fails to act to restrict health insurance before the end of this council term, the city will lose out on a savings of nearly $140,000 over the next two years as Ohio law will not allow changes to compensation of elected officials in the term in which they are serving.

In the private sector, health insurance coverage is generally only available to individuals who work full-time. Is it fair and right that part-time elected officials in North Canton receive health insurance coverage beyond what their constituents struggle to provide for themselves in the private sector?

Is it fair and right that part-time elected officials not lead by example when the City asks its employees for concessions in union contracts?

Savings above and beyond those stated above could be realized if council members were allowed individual health insurance benefits from the city only if they had no health benefits through their spouse or their full-time employment. I suspect that some council members currently have secondary coverage or more through their spouse or their full-time employment.

In a February 12, 2008, Repository article titled, “N. Canton workers not receptive to wage freeze,” former Council President Daryl Revoldt remarks, “We are wrestling with a series of deficit issues for 2009, [Hoover once provided] ample and nearly predictable revenue, [but that has ended].”

The same article reported that council’s plan to deal with budget issues at that time were a wage freeze for city employees. My question to this council is why not lead by example and reduce the overly generous benefits it receives as part-time elected officials and show city employees that it will share in the pain that it is asking city employees to suffer?

The acknowledgment of the fiscal constraints facing North Canton by former Council President Revoldt occurred two and one half years ago and yet no one at city hall has focused on obvious savings that could be realized that were right before your eyes.

The last paragraph of the article reports, “Council also voted to spend $64,500 for a performance audit by the Ohio Auditor’s office. The move is supposed to help the city find ways to be more financially efficient.”

On January 6, 2009, the completed Performance Report was released to city officials. Recommendation 2.15 of the Performance Audit states: “The City should attempt to renegotiate provisions within its employee bargaining agreements that exceed peers or industry standards. These provisions are costly to the City, and successful renegotiations could result in significant savings.”

Shouldn’t this recommendation also apply to part-time elected officials?

I spoke to one councilmember regarding my planned remarks on this subject and he remarked that interest in serving on city council would decline if those particular benefits were curtailed.

To that I offer two examples in rebuttal. The first example is the North Canton Board of Education. Board of Education members receive a stipend of $125 per meeting they attend. There are NO other benefits. Has anyone ever seen a lack of candidates running for a seat on the Board of Education in North Canton? There is no personal gain to be had in serving and that has not diminished interest in serving on that board.

The second example is the part-time city council members of Hudson, Ohio. Hudson City Council members serve with a total compensation of $10.00 per month and NO other benefits. The Mayor of the City of Hudson receives $275.00 per month and NO other benefits.

This is true “Public Service” and after all, isn’t that what this is all about?

In summary, health insurance benefits for part-time city officials are not paid by an overwhelming majority of area communities. North Canton is struggling financially and fiscal prospects continue to be dim.

These savings can come without paying for another audit or a study at taxpayer expense. If each of you is serving for the right reasons and places the well-being of the community above your own self-interests, I ask that you implement these actions without delay to bring savings to the city you have sworn to serve.

Thank you,
Chuck Osborne

Arrowhead Golf Course Purchase & Ownership Continue to Be a Fiscal Disaster for North Canton

2011-09-12T21:59:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
September 12, 2011

The purchase of Arrowhead Golf Course in 2003 for $4.2 million and the subsequent eight years of ownership of the property continue to be a fiscal disaster for the City of North Canton.

North Canton City officials do not want the public to know the current status of the property and have taken extraordinary measures to cover up the current fiscal crisis with the Arrowhead property, now known as The Fairways.

Three weeks ago, before the close of a Council of the Whole meeting on August 22, Law Director Hans Nilges asked that councilmembers review a memo he had sent privately to council members.

I have inquired for several weeks as to the contents of the memo only to be told that the Law Director has stated the communication is protected by attorney-client privilege. Since becoming the City’s Law Director, Mr. Nilges has used this claim of privilege rather frequently to block access to public records requests.

The memo was clearly designed to circumvent Ohio’s Open Records Laws. I have not seen the memo but after an 11-day wait for the City to comply with my recent records requests and confirmation from sources, I have learned, substantively, the contents of the memo: North Canton is ending the current lease of The Fairways with R & S Golf Properties, Inc., the operators and current Lessee of the former Arrowhead Golf Course.

In a July 13, 2011, letter from the City to R & S Golf Properties, Inc., Law Director Nilges states, “pursuant to Article XII, Section 12.1.1 of the Lease, the City is exercising its right to terminate the Lease, effective, December 31, 2011.”

Revelations in a June 3, 2011, letter from the City to the Lessee indicate that property taxes for The Fairways have not been completely paid by the Lessee as required for the three-year term of the lease and that there are concerns as to whether the required $80,000 per year capital-improvement obligation of the Lessee has been met during the lease.

A records search has also uncovered an appraisal of the golf course dated August 26, 2011. The appraisal of commercial property of this scope is not done overnight, so I can only presume that along with the termination of the lease in mid-July, someone ordered an immediate appraisal of The Fairways that cost taxpayers $3,800.

The 2011appraisal of The Fairways concludes that the property is valued at $1.9 million. This is less than half the original purchase price. Yes, the down economy has had an impact on this current valuation but it does not explain away the entire 55% loss in valuation. The $2.3 million loss off the purchase price for Arrowhead can only be attributed to gross overpayment for the golf course.

Eight years ago, after council voted to proceed with the purchase, I undertook efforts to allow the citizens of North Canton to vote on the expenditure of their tax dollars for the purchase of Arrowhead. I was halfway to getting the signatures for a referendum when the editorial board of the Repository decided to undermine the constitutionally protected right to referendum a legislative action by running an editorial urging residents not to sign the petition.

Do you think the editorial board at the Repository would like to share in the financial burden that they urged on the citizens of North Canton when they intervened to urge citizens not to sign the referendum? Not likely.

Over the last few weeks, there have been rumors that a prospective buyer was in the wings to purchase the golf course. At last week’s Council of the Whole, Councilmember Mark Cerreta stated that the golf course was not being sold. If that is the case, why was there a rush to order an appraisal of the golf course property?

The financial impact of the golf course on North Canton finances cannot be unloaded with a quick sale as the City has made a poor decision regarding the golf course property. In recent months City Council, for a fee of $14,417, chose to convert a $700,000 short-term note on the property to long-term debt, obligating the City to pay bond interest of nearly $200,000 whether the property is sold or not.

Page 10 of the Preliminary Official Statement (POS) for the bond dated March 2, 2011, states, “The Series 2011B Bonds are not subject to optional redemption prior to their stated maturity [December 2020].”

What is truly sad regarding the bond financing is the fact that there were funds available to pay off the Arrowhead notes in the CIC escrow fund that could have been used.

If the city is anxious to unload the golf course, why did this council issue long-term bonds on the property?

I would like to know, in total, how much city money has been spent on Arrowhead? I have made requests to city officials for a list of expenses incurred while owning the golf course but apparently no one knows or seems to even care.

I would not be surprised to learn that over and above the $2.3 million devaluation of Arrowhead, the City has incurred an additional $1.0 million in expenses over the eight years it has owned the property for debt service not covered by lease revenue, annual note issuance fees, appraisal and environmental fees, a 2005 storm study, and the list goes on.

In my hands, I hold a copy of the PGA MAGAZINE provided to me in 2003 by a highly respected and long-time owner and operator of golf courses in Ohio and Florida. It contains Part 1of a two-part report entitled “Wake-Up Call.”

The twelve-page report details the problems facing the world of golf and course owners. Golf play was on the decline and the report details that fact. One paragraph from the report states:

Core and avid golfers playing fewer rounds translates to a loss of revenue across the board – green fees; lesson and caddie fees; golf-car revenue; ball, equipment and merchandise sales; food and beverage; hotel rooms at golf destinations, etc. The estimated annual loss to the golf industry is about $2.77 billion per year. Yes, billion.

I read excerpts of this twelve-page report into the record 8 years ago to no avail. What has been particularly disappointing is to hear city officials continuing to defend the Arrowhead purchase.

The chickens have come home to roost and you are now getting your Wake-up Call. It is sad that your decisions have come at such great expense to the taxpayers of North Canton.

Thank you,
Chuck Osborne
City of North Canton

Does the City of North Canton Manage City Property & Personnel Effectively?

2011-08-29T22:34:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
August 29, 2011

I have observed over some time now the business of city government and I am prompted to ask the question: Does the City of North Canton manage city property & personnel effectively?

A few days before Christmas of 2010, a family on Pittsburgh Avenue suffered an estimated $250,000 in damages as a result of a fire. What caught my attention was the fact that firefighters were unable to use two nearby city fire hydrants. According to a Repository story dated December 20, 2010, fire crews tried to connect to a hydrant on the corner of Portage and Pittsburgh. That hydrant failed and when crews hooked to a second hydrant further north on Pittsburgh, that hydrant worked but broke within a few minutes.

Now, we are just seven months later and we have city residents dealing with sewer backups. In a Beacon Journal story dated, August 25, 2011, Mayor Held states, “the city will work on possibly clogged sanitary sewer lines.”

Problems with infrastructure are happening all too frequently. Is North Canton being effectively managed? Factoring in the repeated storm water flooding in the city that we are all too well aware of and one would certainly wonder what is going on with management of the city’s infrastructure.

Not as critical as the infrastructure failures noted above, but important just the same, is what I perceive to be a misuse of city personnel. Anyone who has ever attended a State of the City speech has surely noticed the abundance of city personnel who turn out. Many of these events have taken place during the workday. Clearly, city personnel cannot be doing their jobs if they are attending these political events.

How many city employees were ushered over to the Suarez event, less than two weeks ago, on August 18, 2011, while on the clock? We all know this has gone on but is this an effective way to manage city personnel?

My motivation for asking whether North Canton is effectively managed came to me on Tuesday, August 16, 2011. It was on that day, at approximately 1:15 p.m. that I saw four city employees in a city vehicle, waiting at the traffic light at the intersection of Dressler Road & Belden Village St., ostensibly coming back from lunch.

When I noted to one of the passengers in the car several days later that I had observed him in Belden Village in a city car around lunch time a few days earlier, he told me that the driver of the city car was looking at city water lines. Why would four city employees need to be riding around Belden Village looking at water lines at lunch time? Do you think the three passengers enjoyed spending their lunch hour looking at city water lines?

I have learned that only the city’s Fire Chief has a vehicle available to him to use on a permanent basis. I have consulted the North Canton Personnel Handbook and it states, “City Vehicles are to be used for City business.” Is the city’s vehicle use policy enforced?

Is there a policy regarding the misuse of city employees? Apparently, there should be one.

The instances above do not make me feel that North Canton is managing city property & personnel effectively. Given the city’s ongoing precarious financial situation, one would think we could do better.

Thank you,
Chuck Osborne
City of North Canton

92% of North Canton City Ordinances Adopted As Emergency Legislation

2011-07-11T23:09:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
July 11, 2011

In the year 2010, 92% of all municipal ordinances adopted by North Canton City Council were passed as emergency legislation. I suspect most North Canton residents would be dismayed to know that “municipal emergencies” are a common occurrence at City Hall.

The adoption of municipal ordinances as “emergencies” is not a new phenomenon by North Canton City Council. As a former councilmember, I questioned the need to repeatedly adopt legislation using “emergency” measures. This practice, I believe has increased and does not serve the citizens of the community.

For residents who are unfamiliar with the legislative process, the North Canton City Charter states that “…every ordinance shall be fully and distinctly read at three (3) different, regular council meetings unless Council votes to suspend this rule.” Without a suspension of this rule, the normal legislative process spans six weeks. After the third reading and passage by city council, the ordinance is then available for the signature of the Mayor. The ordinance becomes law 30 days after passage on council with or without the signature of the mayor.

The City’s Charter requires the affirmative vote of at least six (6) members of Council to suspend the rule requiring thee readings and allows adoption of the ordinance with just one reading.

The suspension of the rule requiring three readings is generally coupled with passage of an ordinance on an emergency which allows the ordinance to become effective immediately upon approval and signature of the Mayor.

Emergency passage of ordinances also requires the affirmative vote of at least six (6) members of Council and is considered an action that, “…is necessary for the immediate preservation of public peace, health or safety….”

North Canton City Council adopted a total of 105 municipal ordinances in 2010. Ninety-six of those ordinances were adopted as emergencies necessary for the immediate preservation of public peace, health or safety of North Canton citizens. Seventy-six percent of those ordinances (80 out of 105) were adopted with just one reading. Would citizens have been able to learn of and make comments on proposed legislation before passage with a single reading? I suspect not.

Enacting laws, at any level of government, as emergency legislation as routinely as North Canton City Council has done for years, diminishes the very definition of an emergency.

The greatest impact to the citizenry is the fact that ordinances passed as an emergency preclude a citizen referendum of that ordinance. A referendum is the practice of referring measures proposed or passed by a legislative body to the vote of the electorate for approval or rejection. It is there for a purpose. It is one of the many checks and balances that are built into our process of government. A referendum protects the public from overzealous legislators and is allowed in 24 states.

The adoption rate of 92% of all North Canton City ordinances, each as an “emergency” is beyond sloppy. It tells the citizens of North Canton that its leaders cannot be bothered with democracy and the law.

I hope North Canton’s elected officials will work harder to represent its citizens in the future and not trample their rights simply for expediency and convenience.

Thank you,
Chuck Osborne
City of North Canton

Corporate Charity Continues Unabated in North Canton

2011-05-23T23:42:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
May 23, 2011

On tonight’s agenda for a 2nd reading is Ordinance No. 53-11. This is an ordinance authorizing the Mayor of the City of North Canton to enter into an Industrial and Commercial Occupancy Grant Agreement for project Omega.

What is Project Omega? Is this a CIA covert operation that is being undertaken by the City of North Canton that requires the utmost secrecy? Are City leaders embarrassed to identify the beneficiary of this legislation?

Why continue this cloak of secrecy? Is North Canton financing a raid in a foreign country that must be kept quiet for security reasons?

As we all know, this is an occupancy grant agreement to Suarez Corporation Industries (SCI). Unless it is your desire to hide this fact from city residents, I ask that City Council documentation reflect who is the recipient of the grant and drop the cloak of anonymity? Transparency in government is best for all of us.

Why do City Leaders believe that the only way to bring jobs to North Canton is to provide tax abatements?

Economic development and jobs can and do come to North Canton without corporate charity.

In 2006, Dr. Suglio continued with his investment in our community in spite of the fact that he did not receive an abatement of taxes. Café Gelato and Suglio’s Dental Practice are thriving on Main Street.

Next door to Dr. Suglio on Main Street, Legacy Bank located a branch bank without ever asking for tax abatement. This was a sizeable investment in our community that came without the need for a tax giveaway.

In May, 2007, a proposed abatement of taxes for the Sherwin Williams Paint store never progressed beyond discussion after the public questioned the need for tax abatement for a public corporation, traded on the New York Stock Exchange, with sales of $7.8 billion dollars. Sherwin Williams built their store and invested in the community without any abatement.

North Canton has seen other businesses locate here and contribute to the community without asking for abatements. CVS Drugs and O’Reilly Auto Parts are under construction at the present time without public assistance. Walgreen’s has built two stores in North Canton without tax abatements.

New tenants have located to the Hoover District without receiving tax benefits for themselves. They include The Schroer Group with a large number of professional jobs, TruBridge Total Care, and Commercial Fluid Power and several other smaller businesses.

There are companies that want to come to North Canton and willingly contribute, financially, their fair share to support our community. These companies want North Canton to prosper because they understand that a thriving community benefits their business.

It is unfortunate that not all businesses want to share in the financial stability and growth of our community. Apparently, there are some businesses that feel that tax laws are too burdensome or unfair. These businesses ask that they be treated differently.

Over the last four years, the City of North Canton and the taxpayers of North Canton have enriched the Industrial Realty Group (IRG), the owners of the Hoover District, with the transfer of $3,440,000 of public money directly into their pockets to jumpstart the rebirth of jobs at the former Hoover site.

How much more public money must be diverted to enrich private interests at the Hoover District?

How much longer does the City of North Canton have to continue to provide corporate charity to IRG owner Stuart Lichter, a millionaire many times over?

Mr. Lichter and IRG have been paraded to the public as being the answer to North Canton’s prayers regarding the restoration of jobs at the Hoover District. It seems to me that given the state and local tax dollars that North Canton has put into the pockets of IRG, with no obligation for any payback, that the reverse is true. North Canton is the answer to Mr. Lichter and IRG’s prayers.

And now, Benjamin Suarez, owner of the Suarez Corporation Industries, wants public money put into his pockets as well. Why does the City of North Canton have to provide corporate charity to Mr. Suarez, also a millionaire many times over?

Taxes are the lifeblood of a community. Taxes fund all the services needed by a community to exist. If leaders continue to find ways to unravel the obligation to support the community, who remains to financially support North Canton City services?

In the case of the occupancy grant proposed for the Suarez Corporation, apparently this legislation has progressed to a second reading without any agreement or specific terms ever appearing in written form to City Council. From media reports it appears that the City of North Canton is prepared to return to the company fifty percent of City income taxes collected from individuals, working at or near minimum wage, for the Suarez Corporation Industries.

Does it seem fair and equitable to take income tax money collected from economically disadvantaged individuals and turn around and give that money to the multi-millionaire owner of the corporation where they work?

If employee salaries are taxed for needed income taxes to the community in which they work, they should be able to realize that their taxes have gone for the betterment of the community in which they work rather than the enrichment of their employer!

This proposed Occupancy Grant goes beyond corporate charity. I hope that North Canton City Council reconsiders any endorsement of this proposed Occupancy Grant agreement or any other agreement such as this.

If the Suarez Corporation has a viable plan to locate some of its operations to the City of North Canton, that plan should include supporting the City, fully, under the tax structure that applies equally to all North Canton businesses.

Thank you,
Chuck Osborne,
Resident, City of North Canton

Was $15,000 Review of Performance Audit Beneficial to North Canton?

2011-04-26T00:02:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
April 25, 2011

It is no secret that the City of North Canton is struggling financially. Not only is that fact front and center in weekly discussions at city council meetings, it is apparent in the condition of the City’s infrastructure in this community we call home. Are City dollars being spent wisely?

Three years ago on February 11, 2008, North Canton City Council passed legislation to authorize the Auditor of State to undertake a Performance Audit to identify cost savings for City operations. On January 6, 2009, after nearly a one-year audit of city operations at a cost of approximately $62,000, the Auditor of State made 40 recommendations to the City in a 123 page report.

Not long after the release of the Performance Audit by the Auditor of State, City e-mails, dated May 14, 2009, indicate that then City Administrator Earl Wise was advised by Bruner-Cox that Mayor Held had asked their CPA firm “to assist The City of North Canton in regards to the January 6, 2009, Performance Audit….”

On July 13, 2009, Mayor Held signed a Letter of Agreement (LOA) with Bruner-Cox, LLP.

On October 14, 2009, former City Administrator Earle Wise signed a purchase order authorizing the expenditure of $15,000 for the review of the Performance Audit by Bruner-Cox. Three months later on January 9, 2010, a 32-page draft report labeled “Review of the North Canton City Performance Audit Project” was released.

Why has North Canton not received the final report that is contractually promised in the LOA? The last two bullet points in Attachment A of the LOA state that “[Bruner-Cox] will meet with North Canton City Council to review the draft of the report….[and] issue a final report to mayor and council.” This has never happened!

I spoke on this issue before City Council on July 12, 2010, in a presentation titled “$15,000 Audit of State Auditor’s Performance Audit Was an Utter Waste of Public Funds” (found in the minutes of the meeting
and online at http://opengovernment4nc.blogspot.com).

The Bruner-Cox review consisted of a replication of the recommendations made in the Auditor of State’s Performance Audit with the addition of very brief information from city department heads that was already generally known or could be found out in a brief telephone call.

Mayor Held, you stated last year that “[you] did support and authorize Bruner Cox to come in and provide oversight to the City… and that [you were] very confident, very comfortable with the work that Bruner-Cox did.”

I do not believe that North Canton City Council shares that position given that there was discussion under the Finance and Property Committee on July 6, 2010, to limit spending by your administration without an appropriation from council. Unfortunately, Council never moved forward with action on this.

Given that taxpayers have paid out $15,000 for this review, I ask that the Bruner-Cox Draft report be posted on the City’s Web site along with the State’s Performance Audit to allow residents to judge whether the City really benefited from a review of the Performance Audit for an added expense of $15,000 to the City.

Thank you,
Chuck Osborne,
Resident, City of North Canton

North Canton Finance Chairman Acts to Quash Illegal City Contract

2011-04-11T23:12:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
April 11, 2011

The City of North Canton is currently at odds with the Ohio Department of Development (Ohio DOD) as to whether North Canton did or did not follow proper bidding procedures as required by the terms of a JRS grant awarding $5.0 million of State funds to the City for the Hoover Campus Redevelopment project.

Although North Canton explained to DOD in a letter dated September 7, 2010, that the City did follow proper procedures, DOD concluded in a January 7, 2011, letter to the City that North Canton did not follow proper competitive bidding procedures in the procurement of goods and services in the expenditure of $3.0 million.

The stakes are high for North Canton at the present time. Development officials have stated that if the City is unable to demonstrate that proper bid procedures were followed, they will demand repayment of the $3.0 million already paid to the City and terminate the Grant Agreement without disbursement of the remaining $2.0 million of grant funds.

One would think that the Held Administration would be mindful of the laws regarding the expenditure of public funds and of competitive bidding procedures, especially in light of the fact that the City is playing a high-stakes game with the Ohio Department of Development that could cost North Canton millions of dollars, but apparently that is not the case.

Finance Chairman Jon Snyder has revealed to me that he is holding his ground regarding the recent purchase of new cell phones for City employees and is telling the Held Administration to return the recently purchased cell phones as their purchase has not followed proper bidding procedures and been approved by the Board of Control.

Chairman Snyder became aware of the purchase when the Finance Department was billed by Verizon for the initial purchase of the phones and for service but had no funds with which to pay the bill. Chairman Snyder has told me that he has told Interim Finance Director Loretto to return the Verizon bill to the Administration and to tell City Administrator Grimes to return the phones to Verizon.

Chairman Snyder also advised me that when he asked for a copy of the cell phone contract, the Administration was unable to provide him a copy. After my written records request, a copy of the cell phone contract was provided to me and Chairman Snyder.

The one-year Verizon contract was estimated to cost $37,165.08. This is well above the current statutory limit of $25,000 set by ORC 735.05 requiring competitive bidding.

The previous contract with Sprint cost the City $31,386.20 in 2010. An e-mail from North Canton Finance department (March 17, 2011, from Chris Leamon) indicates that the City had 44 separate lines under the Sprint contract. The Verizon contract is for 66 separate lines.

Does the City really need a 50 percent increase in the number of cell phones in use throughout the City? I thought North Canton was in financial distress?

Section 4.05 of the City’s Charter controls the procurement of goods and services for North Canton. One provision states, “No contract involving expenditures [in excess of the statutory limit set by ORC 735.05] shall be entered into without prior approval of the Board of Control.” There was no such approval.

Section 4.05 also states, “No purchase or contract involving expenditure in excess of … [the statutory limit set by ORC 735.05] shall be made except with a qualified, responsible bidder submitting the lowest and best bid as determined by the Board of Control….” There was no competitive bidding for the contract.

ORC 735.05 is intertwined into the City’s Charter and it states that “When an expenditure…exceeds twenty-five thousand dollars, the expenditure shall first be authorized and directed by ordinance of the city legislative authority….” The Held Administration had not been authorized or directed by legislative ordinance to proceed with the purchase of new cell phones.

Mayor Held, the City is currently at odds with the Ohio DOD over the issue of failing to follow proper competitive bidding requirements. How can you make the same mistake again and not competitively bid the cell phone contract?

On May 24, 2010, Mayor Held signed into law Ordinance No. 45-10 requiring the Director of Law to provide written approval of all contracts as to form and content.

Mayor, did your administration comply with Ordinance 45-10 before the City entered into the cell phone contract with Verizon, an ordinance you yourself signed less than one year ago? City Administrator Grimes has provided no written record to me that shows North Canton’s Law Director approved the Verizon contract.

I might add that state statute, ORC 705.11 states that, “No contract with the municipal corporation shall take effect until the approval of the... city director of law is indorsed thereon….”

North Canton’s Charter, Section 3.01, states, “The Mayor shall sign, on behalf of the municipality, all contracts…”

Not until the City complied with my records request did Chairman Snyder and I learn that Interim City Administrator/City Engineer Jim Benekos signed the Verizon cell phone contract.

Mayor Held, why did you not sign the contract as is spelled out as a duty of the Mayor under the City’s Charter?

The lapses of leadership and the bold non-compliance with state and local laws by your administration are becoming quite worrisome. The financial costs to the citizens of North Canton for the failed leadership of your Administration continue to take a toll.

I ask this city council to hold Mayor Held accountable for these lapses. Please do not just talk amongst yourselves privately about these lapses of leadership. The repeated violations of the City’s Charter and state law are taking a financial toll on the City with each revelation of failure.

North Canton citizens need to be informed of the actions of government if democracy is to work. I ask that this council do its part and investigate the lapses that have occurred with the Verizon cell phone contract and report the findings to the public.

Thank you,
Chuck Osborne,
Resident, City of North Canton

Appointment by Mayor Held for North Canton’s Chief Zoning Inspector Adds to Leadership Concerns

2011-03-14T22:49:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
March 14, 2011

In a March 10, 2011, Beacon Journal story, titled “Population declining,” Akron’s Planning Director, John Moore, states, “Deteriorating neighborhoods are a major reason that people leave.”

I wholeheartedly agree with Akron’s Planning Director and would expect that almost everyone in this room would agree as well with that basic premise. I only wish that Mayor David Held had the same understanding of the need to stay on top of the city’s zoning and code violations.

Even during the best of economic times, nuisances in neighborhoods detract from the peace and tranquility of city life. In hard economic times such as we are all living through now, well-kept neighborhoods can turn into blighted ones before anyone realizes what is happening.

Late in January of this year, North Canton’s Superintendent of Permits & Inspection resigned unexpectedly. Without delay, one would have expected an announcement that a key city department head had left the city and that North Canton was aggressively looking for a qualified replacement.

Per the city’s Web site, North Canton’s Superintendent of Permits & Inspection heads up a department that is responsible for plan review, permit issuance, and code inspections for commercial and residential construction and renovation. The department also conducts zoning, housing, and nuisance inspections and issues Zoning Certificates and Occupancy Certificates. The department tests and registers contractors and journeymen, issues water-connection permits, raze-building permits and sewer permits.

This is a great deal of responsibility, even for someone who is qualified to hold the position and a greater challenge in a department that is operating with reduced staffing.

Not until a March 4, 2011, news story in the Repository, titled “Changes in works for North Canton government,” was the public advised that a key city department head had left the city. For four weeks North Canton had no Superintendent heading up the Permits & Inspection department. In the same Repository story, Mayor Held relates that Economic Development Director Eric Bowles will serve as the city’s interim superintendent and might hold that position for six months.

Mr. Bowles has no certifications as an inspector in any building trades, as is required by the job description, so clearly he cannot be the Chief Building Inspector for the city.

Aside from that, one might ask if Mr. Bowles doesn’t already wear too many hats as it is.

Mr. Bowles has advised me that in addition to being North Canton’s Economic Development Director, with no staff support I might add, that he is also the Administrator for the North Canton Community Improvement Corporation (NCCIC), the Housing Officer for the Residential & Commercial Community Reinvestment Area, and the Project Manager for the Ohio Job Ready Sites (JRS) Grant for the North Canton Hoover Campus Redevelopment Project.

Mayor Held, Mr. Bowles cannot devote the hours that are needed to adequately serve in the capacity of Superintendent of Permits & Inspection and diligently enforce the city’s zoning and nuisance inspections. It is unfair of you to expect this of Mr. Bowles.

Furthermore, it is disingenuous of you to tell the residents of North Canton that the city is working to preserve the investment homeowners have in their properties and neighborhoods under this current interim appointment of Eric Bowles as Superintendent of Permits & Inspection.

I have been a long-time observer of North Canton City Government. For you, Mayor Held, I have observed your entire tenure here in North Canton. I question your decision-making and am keenly aware of the impact it has had on the city.

The first lease of the Arrowhead Golf Course comes to mind. The lease was negotiated by you as City Administrator, and ultimately resulted in a loss of $70,000for North Canton when the first operator of the golf course walked away owing the city a great deal of money.

The decision by you to have a local accounting firm re-audit the Performance Audit done by the Auditor of State cost North Canton $15,000. That audit was never completed after a draft was provided to the city. The draft simply duplicated the Performance Audit only months after the Auditor of State completed the work.

The delay by your administration for several years to renegotiate the water agreement with Aqua Ohio cost North Canton millions of dollars in water sold below water production costs. The dumping of street sweepings for years under your watch in violation of state law was another needless expense for North Canton taxpayers.

I am sure I could add to the above list but I believe my point is made.

Mayor Held, where is your leadership on issues before the city? You did not take a position on the proposal to house individuals with mental illness at the Harleigh House on North Main Street. You have not taken a stand on the possible threat hydraulic fracking has on the city’s water sources.

My concerns about failed leadership in your administration on various issues over the years reminds me of a fictional character, named Lieutenant Commander Philip Queeg, the Captain of the U.S.S. Caine in the movie, The Caine Mutiny.

In the fictional story, Captain Queeg is relieved of command by the First Officer of the Caine believing the Captain was unable to command effectively.

Further, I ask why you as Mayor did not relieve your City Administrator when you had told me several years ago that you were unhappy with his leadership of the city.

Just as you have shown repeatedly over the years that you have been unable to lead and effectively manage the City of North Canton, I believe I can say that the appointment of an overburdened Economic Development Director to be the Superintendent of Permits & Inspection Department will only reinforce the perception of your lack of leadership.

Deteriorating neighborhoods will only reinforce that perception by the city and the world at-large.

Please appoint a Superintendent of Permits & Inspection who has the time and expertise to handle the position and who can effectively and diligently work to maintain North Canton neighborhoods from decline.

Thank you,
Chuck Osborne,
Resident, City of North Canton

North Canton Streets Go Unpaved While Extraordinary Bonuses & Benefits Are Paid to City Workers

2011-01-31T22:30:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
January 31, 2011

For the last several years, council has made no secret of the precarious financial situation that the city has been facing for a number of years now.

One might ask if Mayor Held over the last five years as Mayor has made the tough decisions that are needed to put North Canton on a sound financial course for the future. Has City Council made the tough decisions it told residents were needed when town meetings were held at the Civic Center several years ago. President of City Council Revoldt talked of a state takeover during the town hall meeting if North Canton did not stop the City’s downward fiscal spiral.

Anyone who was at the meeting of the Council of the Whole last Monday, January 24, 2011, might question if city leaders really have a grip on the city’s financial condition. It seems to me that financial decisions are only being made at the eleventh hour when there are no other options available.

A good example of a crisis now facing the City is the revelation that North Canton’s promises to City employees to pay an unlimited amount of accumulated sick time as well as accumulated vacation pay and Medicare payments to City employees upon retirement has grown to an obligation of $1,849,075. This debt obligation, partially offset by a fund, called the Compensated Absences Fund, containing $608,436 leaves an unfunded liability of over $1.2 million for the City. This liability will continue to grow unless action is taken to control them.

Benefits such as these in the private sector were contained or completely eliminated long ago.

How many more financial body blows can the City of North Canton take before the City reaches the point of financial collapse?

This year, four city employees have indicated that they will take retirement. North Canton will have to cut checks to these four employees upon their retirement for accrued sick time, vacation, and Medicare totaling $215,040. These are benefits that retirees will receive over and above their pension.

Ward 3 Councilman, Jeff Davies, went on the record last week stating, “The City is facing a crisis.” I agree with you, Mr. Davies!

Since creation of the Compensated Absences Fund in 2006, Council has funded that account to the tune of nearly $200,000 per year. Added to the $100,000+ annual cost of the longevity bonuses paid out to city employees just before Christmas each year brings the cost of providing these benefits to well over $300,000 each year.

During the presentation of the City’s 2011 budget by Finance Chairman and Fourth Ward 4 Councilman Jon Snyder, Mr. Snyder noted that NO street improvements were in the 2011 budget.

Typically, North Canton budgets approximately $250,000 for street resurfacing, annually. This is not a total rebuild of streets but a replacement of the asphalt surface only on neighborhood streets.

Sadly, it is apparent that longevity bonuses at Christmas for city workers and windfall payments of accumulated sick leave, and vacation pay doled out upon retirement are going to be paid before city streets are resurfaced. That appears to be the case as City Council has budgeted NO funds this year for street resurfacing.

Given that North Canton can only pay down the unfunded liability of $1.2 million at the rate of $200,000 per year, could one assume that funds needed for street resurfacing will not be available for the next six years?

Several on City Council have stated that current bonuses and benefits for city workers were put in place by administrations of years past. I can only ask you, Mr. Revoldt, and others who have made those statements, if each of you is acknowledging your past participation in those decisions when you make those remarks?

Will your participation in the decisions of today be more farsighted than your decisions of the past? Taxpayers can only hope.

It was stated last week by Finance Chairman Snyder that payments for sick time and vacation pay that city workers have accumulated “must be brought in line with the City’s ability to pay.” With that said, I must ask Mayor Held if he thinks his selection for City Administrator will be able to lead the city with Mr. Snyder’s marching orders as city policy?

I say this because as a retiring city employee, Police Chief Grimes is by far receiving the largest payment of accumulated sick time and vacation time, under the city’s present benefits program with nearly $79,000 to be paid at retirement.

The greatest portion of the unfunded liabilities is benefits promised to unionized city workers. Mayor Held, when Police Chief Grimes retires and becomes City Administrator in March, will he have marching orders from you to work to curtail benefits paid to future retiring city workers covered by union contracts?

Given how Chief Grimes has benefited from the current City policy on payment of accumulated sick leave and vacation pay on retirement, how effective will Administrator Grimes be in persuading unionized city workers in renegotiating those benefits?

Passage of Ordinance No. 13-11 as written will curtail payments for accumulated sick time and vacation pay only for the City’s exempt employees. Council must make the hard choice. There is no room to fudge on this.

Decisions such as this should have been made years ago when tax collections with the loss of the Hoover Company reduced city revenues by a million dollars annually.

I would urge everyone on this council and in the administration to remember whom they represent and who elected them to office. Benefits such as the ones that are paid out now are unsustainable. This council knows that and has stated that fact publicly.

Please get a grip on the cost of government or I assure you it will get a grip on you.

Tax money paid for these unsustainable worker benefits must be squeezed out to allow for road improvements.

Taxpayers must come first. The future of North Canton depends on it.

Thank you,
Chuck Osborne
Resident, City of North Canton

North Canton Increases Debt While City Leaders Stockpile Cash

2010-10-25T22:26:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
October 25, 2010

On tonight’s agenda are five pieces of legislation dealing with the issuance and sale of bonds on behalf of the City of North Canton. Three of the five proposed bond issues will increase North Canton indebtedness by $2.4 million. The remaining two proposed bond issues seek to convert existing debt, totaling $1.6 million, from short-term notes to long-term bonds.

The proposal to convert the $700,000 short-term note of indebtedness on the former Arrowhead Golf Course property to a long-term bond is the purpose of my remarks tonight. It is titled on tonight’s agenda as Ordinance No. 78-10.

The City of North Canton paid a total of $4.2 million for the Arrowhead property in 2003. Two million dollars was taken from the city’s reserves and $2.2 million was rolled into a short-term note. North Canton made annual payments of $300,000 on this note but found itself unable to make those payments without subsidies from the City’s General Fund. This practice forced the city to divert funds that could have been used for city services to make the annual note payments.

Per recommendations of the 2008 Performance Audit by the State (R2.11), the City reduced its annual payments on the Arrowhead note to $100,000 per year. The present balance on the note is $700,000 which is the amount of the proposed bond on the agenda tonight.

If passed tonight, the annual bond payments will further reduce the annual payments on the Arrowhead indebtedness. Recommendation 2.11of the Performance Audit cautions that, “by prolonging the debt, the City will incur additional interest and issuance cost, and the note will not be paid off until 2015 or 2016.” In discussions, some council members have also made this point regarding the increased interest expense if the debt is extended further into the future.

Doesn’t this sound like someone who is overextended on his credit cards and can’t make his credit card payment so he only makes the minimum payment each month?

Paralleling, what I believe to be, the ill-fated decision to purchase the Arrowhead Golf course property was a decision in 2005 to remove $1.5 million from the City’s General Fund and begin making $100,000 per year payments to the North Canton Community Improvement Corporation (CIC).

Of the original $1.5 million removed from the General Fund, $757,000 remains in an escrow account controlled by the City.

To date, $743,000, or about one half of the original $1.5 million has been given to two businesses with no requirement to repay those funds back to the North Canton CIC. City leaders promised in 2005 when the $1.5 million was removed from the City’s General Fund that the CIC would operate as a revolving loan fund.

Sadly, that has not been the case.

The North Canton CIC currently has a balance of approximately $190,000 and can ask for the balance of the $1.5 million at any time. As I noted earlier, $757,000, currently sits in an escrow account controlled by the City.
City leaders are waiting for the next opportunity to hand out the remaining nearly one million dollars with no obligations for repayment while the city struggles to pay its expenses.

Should North Canton pay its bills with money it has on hand or should the city borrow and increase its indebtedness?

At this time, North Canton has cash funds available to wipe out, entirely, the $700,000 note owed on the Arrowhead property. There is no need to issue and sell long-term bonds.

If this council and the Held Administration are truly serious about the fiscal plight of the City of North Canton, it would use those escrow funds and extinguish that indebtedness.

North Canton’s fiscal future continues to hang by a thread and North Canton increases debt while city leaders stockpile cash.

There is no logic in continuing to hand $100,000 per year to the CIC through the year 2017 while the city faces fiscal crisis. As it is, this council is borrowing $1.3 million to replace the very roof over our heads here at City Hall and at the Civic Center along with another $1.1 million for other infrastructure improvements in the city.

This $2.4 million in new debt is in addition to the more than $16.0 million of debt the city already has on its books. Whether the debt is enterprise debt or general obligation debt makes no difference.

Debt is debt and it all must be paid back.

The purchase of Arrowhead Golf Course property for $4.2 million in 2003 along with the removal of $1.5 million dollars from the City General Fund in 2005 constituted nearly one third of the $18.0 million dollars the city had in reserves in 2003. With spending decisions such as these, it does not take long to blow through $18.0 million. And that is what has happened before our very eyes.

Economic conditions are not good and economic prospects are not bright, locally or nationally. If this council and the administration are remotely interested in fiscal stewardship for the City of North Canton, it is time
it demonstrated its beliefs in actions instead of letting business and politics continue as usual.

Thank you,
Chuck Osborne
Resident, City of North Canton

New Position of Assistant Law Director for Mayor’s Court Has No Functional Role Whatsoever

2010-10-11T23:34:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
October 11, 2010

Two weeks ago this council passed Ordinance 73-10 establishing the position of Assistant Director of Law/Mayor’s Court Prosecutor. The legislation was passed on its second reading on an emergency.

I appealed to this council in remarks prior to each of the two readings to reconsider this course of action and urged this council to restructure the position of Law Director to a full-time position and get control of legal fees and services for the City which presently come at a very high cost. A sixteen-hour work week for the City Law Director in this day and age is inadequate.

Two weeks ago I noted that North Canton has expended $414,870.41 for outside legal services over the last five years. Adding in the $245,000 paid to the City’s law director for each of the last five years at $49,000 per year for a sixteen-hour work week results in the expenditure of nearly $660,000 ($659,870.41) for legal services in the last five years. This is an average of $132,000 per year.

North Canton is paying $62.50 per hour for the services of an attorney to fill the role of Law Director while the Stark County Prosecutor’s office pays $39.14 per hour to its most senior attorney. Nearly two dozen other attorneys at the prosecutor’s office earn less than $30.00 per hour.

My point tonight after further research on this issue is the fact that the newly passed legislation creates a position of Assistant Law Director to serve specifically as a prosecutor in mayor’s court when in fact there is no role for a prosecutor in mayor’s court.

Councilmembers should avail themselves of the time to sit in on a North Canton Mayor’s Court and see how the process works.

Mayor’s Court is an administrative action. People are cited to appear for violation of local ordinances and traffic laws. The city official charged with enforcement of local ordinances issues the citation. In the case of traffic offenses, it is the local police. In the case of zoning violations it is whoever is responsible for enforcement of local zoning laws, which in North Canton is the Superintendent of Permits.

Mayor’s Court does not unfold as a capital case as seen on TV. There are no prosecuting attorneys. There are no defense attorneys.

The individual simply appears before a magistrate and pleads guilty, no contest, or not guilty. If the individual pleads either guilty or no contest, the magistrate levies a fine and the individual pays the fine and court costs. If the individual is found guilty after pleading not guilty, the ruling can be appealed and heard in Canton Municipal court and proceeds as a trial de novo per ORC 1905.25, meaning a new trial in a new tribunal.

Further research has uncovered a contract between the City of Canton Law Department and the City of North Canton for the purpose of providing legal representation in Canton Municipal Court for $17,000 per year.
This annual contract expense with the Canton Prosecutor’s office raises North Canton’s legal costs per year to $149,000 per year.

The latest contract covers 2010 and 2011 and was approved by council in Ordinance No. 99-09 on November 23, 2009.

Among the list of services itemized in the contract with the Canton Law Department is Item a. – Acceptance for prosecution of transfers from Mayor’s Court.

Thus there is no role for a prosecutor in North Canton Mayor’s Court nor is there a role in Canton Municipal Court. What exactly is North Canton’s new Assistant Director of Law going to do?

Ordinance 73-10 narrowly defines the duties and compensation of the Assistant Director of Law as pertaining to Out of Court and In Court Work as a prosecutor in Mayor’s Court.

What work is there to do? Can this legislative act of North Canton City Council serve any purpose?

I would say nothing has been accomplished with the passage of Ordinance No. 73-10.

I also would say that North Canton should have been working harder long ago to maintain neighborhoods in the City and citing violations of its zoning laws.

You do not need a prosecutor in North Canton Mayor’s Court. Furthermore, the services of the City of Canton Prosecutor’s Office also preclude the need for a prosecutor for enforcement of local ordinances.

Lastly, I am compelled to ask why the City has been billed $1,548.90 by the law firm of Morrow & Meyer, LLC for prosecution of the Prater zoning violation when there are provisions in place to deal with enforcement of the zoning violation in both Mayor’s Court and then in the Canton Municipal Court.

The zoning violation could very easily have been handled administratively in North Canton Mayor’s Court and if forced in to Canton Municipal Court, handled per the contract in place with the City of Canton Prosecutor’s office.

As events have unfolded, the City of North Canton chose not to utilize the services of the Canton Prosecutor’s Office and paid a second time for legal services of a private law firm for which it need not have paid.

I believe this is a violation of public trust and is most certainly fiscally irresponsible.

I ask at this time that the law firm of Morrow & Meyer, LLC refund back to the taxpayers of North Canton the $1,548.90 it has received regarding the prosecution of the Prater zoning violation case as the Canton City Prosecutor’s Office was under contract to provide such legal services in Canton Municipal Court and would have done so without added cost to the taxpayers of North Canton.

I urge this council to also ask that those funds be returned. The city has been double-billed for legal services and taxpayers are due a refund.

Thank you,
Chuck Osborne
Resident, City of North Canton

North Canton Legal Costs Skyrocket as Fiscal Crisis Grows

2010-09-27T21:53:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
September 27, 2010

Two weeks ago, I made comparisons between the compensation rate paid to the North Canton Law Director and the rates paid by other governmental agencies in Stark County and asked why North Canton cannot do as well as those other Stark County governments.

North Canton is paying $62.50 per hour for the services of an attorney to fill the role of Law Director while the Stark County Prosecutor’s office pays $39.14 per hour to its most senior attorney. Nearly two dozen other attorneys at the prosecutor’s office earn less than $30.00 per hour.

The City of Canton, likewise, has three full-time Assistant Prosecutors on staff that are paid an hourly rate of $20.10 per hour.

Why can’t the citizens of North Canton be afforded legal services from its law director at equitable hourly rates?

Furthermore, North Canton needs a law director who is available to work more than the currently required sixteen hour work week and I believe the following clearly supports my argument.

One, the request in Ordinance No. 73-10, in its second reading tonight, to create the position of Assistant Director of Law shows that the current law director cannot do the job in a sixteen-hour work week.

Two, the current law director has already billed the taxpayers of North Canton for $4,128.84 for hours over and above his sixteen-hour week. Those charges for legal services are over and above the law director’s annual salary of $49,000. Again, an indication that the current law director cannot do the job in a sixteen hour work week.

Third, over the last five years, North Canton has paid out $414,870.41 for legal professional services. Adding in the $245,000 paid to the law director for each of the last five years at $49,000 per year results in City legal costs of nearly $660,000 ($659,870.41).

Over the last five years, North Canton has averaged spending nearly $132,000 per year ($131,974.08) for legal services. In the last eighteen months alone, North Canton has spent more than $275,000 ($275,141.85) for legal services.

North Canton needs a full-time law director at a fair salary, not an assistant law director as Ordinance No. 73-10 proposes.

The law director’s salary was more than doubled seven years ago and justified then by the elimination of the position of assistant director of law. Now the position is being resurrected.

In brief discussions in support of Ordinance No. 73-10 to create the position of assistant law director, Superintendent Tom Hampton stated that the city has about a dozen violators of zoning laws that habitually ignore letters from the city and that there are four or five cases ready to cite to mayor’s court.

Why has this effort been delayed?

Two weeks ago, I stated, “….one might wonder why the city failed to initiate such enforcement of its zonings laws beginning early in 2005 when Earle Wise took over as city administrator. Mr. Wise is an attorney and worked for many years as a Stark County Prosecutor before coming to North Canton.

Given that Mr. Wise is still on the city’s payroll at a salary of $70,000 per year, why can’t Attorney Wise assist Law Director Nilges in the prosecution of the zoning violators in North Canton Mayor’s Court?”

I am still awaiting a valid response to that question?

Prosecution of zoning violators in North Canton Mayor’s Court is likely to come at additional financial costs to the city if Ordinance No. 73-10 is enacted.

I say this for the following reasons: One, it is unlikely that fines will cover the assistant law director’s anticipated two hours on each case. Two, if a case is appealed to Canton Municipal Court, the fine is even less likely to cover the assistant law director’s time. And for everyone’s information, Ohio Revised Code 1905.25 states that, “An appeal from the mayor’s court to the municipal court or county court shall proceed as a trial de novo.” This means that the case starts fresh as if there had been no previous hearing before a judge requiring more time of the assistant law director. Three, if the zoning violator fails to pay the court ordered fine, do you jail the individual at added expense?

There are other expenses related to prosecution of these zoning violations that have not been explained. Ohio Revised Code 1905.26 allows for the payment of witness fees from the treasury of the municipal corporation. Is the city prepared for expenses such as these if they arise?

Does the city have clerical help who know how to send out court summons and subpoenas? Is this expense being factored into the total cost of prosecutions? People need to know all of the costs and not just be given a snapshot of the costs to prosecute violators in mayor’s court.

The bottom line is this. North Canton must maximize the resources available to it now and minimize the costs of prosecuting zoning violators. The city can do this by utilizing former city administrator Earle Wise who is already on the city’s payroll. The city also must restructure the position of city law director for a full-time position at a fiscally responsible salary for the citizens of North Canton.

North Canton must get control of the cost of government and this is a good place to start. If this council would proceed in that manner and get of control of its legal costs, to use the council president’s words from two weeks ago, that would be good stewardship and a good use of the public resources.

Thank you,
Chuck Osborne
Resident, City of North Canton

North Canton Law Director Paid Well For Part-time Service to City

2010-09-13T22:51:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
September 13, 2010

In last week’s Council of the Whole meeting, city officials remarked that zoning laws and building codes in the city have not been enforced for many years and that they now want to get serious with violators through prosecution of violators in North Canton Mayor’s Court.

In 2003, as a member of this council and Chairman of Ordinance, Rules, and Claims Committee, I begged fellow council members to put some teeth into enforcement of the city’s zoning laws without success. If you recall, I was running for the office of mayor that year and it was more expedient at that time to let politics prevail than do what was needed for the citizens of North Canton. Many of you who failed to act at that time still sit on this council. It is good to see that after seven years, you finally are on board to facilitate enforcement of zoning laws for the city.

My discussion on this legislation before you lies with who is responsible for implementation of that goal. On tonight’s agenda Ordinance No. 73-10 proposes to establish a rate of compensation and the position of Assistant Director of Law for prosecution of code violators in mayor’s court.

I believe this proposal for an Assistant Director of Law should first prompt an evaluation of what is expected of the City’s current Director of Law and the salary he is paid.

In 2003, under Ordinance 123-03, the salary for the Director of Law was increased from $16,100 to $49,000 per year. A Repository September 30, 2003, report titled, “Canton attorney appointed interim city law director,” noted that medical benefits of $7,000 were also paid prior to the salary increase.

In spite of the added cost of medical benefits, the increase in salary under that ordinance more than doubled the cost of the law director. On October 13, 2003, I voted against Ordinance No 123-03.

The current salary structure for law director does not now allow for medical benefits, but state law does mandate PERS. This adds nearly $9,000 a year to salary costs for the law director.

Ordinance No. 34-10 passed earlier this year spells out the duties and responsibilities for the position of Director of Law. The law director receives 3 weeks of paid vacation and is expected to work 16 hours per week.

A 16-hour week, at $49,000 per year results in an hourly rate of nearly $62.50 per hour ($49,000 / 784 hours worked per year). One way to better understand the present salary costs for the Law Director is to compute the equivalent annual salary if he were full time.

Using an hourly rate of $62.50 per hour and a full-time work schedule of 2,080 hours, the North Canton Director of Law receives an equivalent annual salary of $130,000. The cost of PERS adds an additional $23,725.

Why is North Canton paying exorbitant hourly rates when other governmental agencies here in Stark County are able to pay more reasonable hourly rates? The hourly rate for the most senior attorney working for the Stark County Prosecutor’s office is $39.14 per hour.

Why is North Canton’s Law Director receiving an hourly rate for legal services that is 60 per cent higher than the hourly rate received by the most senior attorney in the Stark County Prosecutor’s office?

Nearly 86 percent of the attorneys on staff at the Prosecutor’s office receive an hourly rate of $30.00 per hour or less.

Is North Canton getting the most bang for its buck for legal services?

The City of Canton, likewise, has three full-time Assistant Prosecutors on staff that receive an annual salary of $41,796 each for full-time legal services. That equates to just over $20.10 per hour.

North Canton needs a Director of Law that is full-time. The past and present arrangement of hiring an attorney whose focus is on maintaining and supporting a full-time private practice with all the attendant demands and expenses shortchanges the city that hires him/her part-time.

This is borne out in the myriad of added legal costs that North Canton has paid over and above the law director’s salary. Thousands of dollars in legal costs have been paid to the last three North Canton Law Directors for fees over and above their stated salary year after year. Legal fees in the tens of thousands of dollars and most recently legal fees in six figures have been paid to outside law firms while North Canton pays top dollar salary to a law director who is only expected to work 16 hours per week.

On a weekly basis, while in attendance at city council meetings, I am continually reminded of the fiscal crisis the city is facing yet I do not see corrective action to minimize costs and expenses.

Working as a full-time Law Director for the City of North Canton would be an attractive proposition.

A full-time attorney for the City would not need to look for clients, would not need to pay rent for office space, would not need to pay utility expenses, would not need to make payroll for support staff. These are all the expenses that make up the billing rate charged by an attorney in a private practice. This is what makes up the $156.00 per hour billing rate the law director now charges the City for hours in excess of the 16 hours he is required to work for the City.

I do hope the City moves ahead to prosecute violators of its zoning laws. I also hope City Council will revisit the compensation and job requirements of the position of Director of Law and not move ahead with passage tonight of Ordinance No. 73-10. Enforcement of city zoning laws is one of the most basic and simple of a city law director’s duties. That should be handled by the North Canton City Law Director.

Lastly, one might wonder why the city failed to initiate such enforcement of its zonings laws beginning early in 2005 when Earle Wise took over as city administrator. Mr. Wise is an attorney and worked for many years as a Stark County Prosecutor before coming to North Canton.

Given that Mr. Wise is still on the city’s payroll at a salary of $70,000 per year, why can’t Attorney Wise assist Law Director Nilges in the prosecution of the zoning violators in North Canton Mayor’s Court?

Remember, the city is facing budget deficits. Spend the public’s limited tax dollars wisely. Spend those dollars as if they were your last dollars, because those dollars may soon be our last dollars.

Thank you,
Chuck Osborne
Resident, City of North Canton

North Canton Veterans Memorial Fails to Pass Muster

2010-08-23T21:51:00.000-04:00

Prepared Comments Made to
North Canton City Council

August 23, 2010

The North Canton Hoover World War II Veterans Monument relocation plans have run amok, clear and simple. One only has to observe what is unfolding before our eyes to see that this project has turned into a debacle that only memorializes the destruction of a small park and the faulty planning of everyone who has had a hand in forcing the the placement of the memorial in that park.

At last Monday night's Council of the Whole meeting, three members of the Veterans Memorial committee, Jim Dansizen, Ken Dansizen, and Jim Repace came before council to ask for council's blessing for Phase II of the project. Board member Jim Repace dropped a bombshell on a fiscally strapped North Canton City Council and requested $65,000 of scare taxpayer funds to be put toward completion of the project. A citizen request to address council regarding remarks made by the Veterans Memorial committee members that night was denied.

Resolution No. 72-10 to be voted on tonight calls for North Canton City Council to authorize the Hoover World War II Veterans Monument committeeto work in conjunction with the Administration of the City of North Canton to begin Phase II of the Veterans Memorial in Bitzer Park.

The resolution is to be passed on an emergency. Emergency action by this legislative body is deemed necessary for the preservation of the health, safety, and peace of the City of North Canton.

Unfortunately, I do not see any preservation taking place in Bitzer Park. I am not alone with that opinion. Online comments from last week's Repository story on August 17, 2010, titled, "N. Canton veterans memorial to be done by Nov." are unanimous regarding the poor placement of the Veterans Memorial in Bitzer Park.

One commenter, jpbarr, states: "...I have not found one person yet that understands why the memorial structure was placed where it is situated & and at that angle in relation to the street. Everyone I've talked to is dismayed at its position...now the committee is expecting the city to make it blend in. In my eyes, very poor planning. It is nothing but a brick wall coming from the south...anything but a good angle. It blocks the view into the park."

Commenter Whitten agrees with the previous posting and adds: "The positioning of the structure is horrible. It blocks the whole view of the park...Not attractive at all. I could not believe this was not more thought out or designed better. What an eyesore. I don'tsee any way possible to get this monstrous wall to 'blend in now.'"

Commenter Interloper also agrees stating, "I also agree with the poor placement and overall designs of the memorial....You only see a huge pile of bricks, in what used to be a cute little park....The designers and committee members should all have their heads examined. the idea of a memorial for these men is a wonderful thing, leave it to North Canton to screw it up...."

The North Canton Hoover World War II Veterans Monument committee has not only failed in the implementation of its plan for the memorial but the committee has also not kept their word.

A January 6, 2010, Repository story titled, "North Canton may get veterans memorial at Bitzer Park," states that the W.H. "Boss" Hoover statue will be relocated. plans submitted to the city show that the memorial wall was to be located where the "Boss" Hoover statue now stands.

That is not where the Memorial wall has been placed.

At the very outset of the public discussions I stated that placing that large of a memorial in Bitzer Park was like putting twenty pounds of potatoes in a ten-pound sack.

In the same Repository story, Jim Repace states that "...he also hopes the project will help correct drainage problems in Bitzer Park and that [he] is confident that fundraising will be finished quickly enough to have work completed by Memorial Day." We all know that has not panned out.

Apparently the confidence of Mr. Repace has evaporated regarding the group's efforts to raise funds and they now come to the city requesting financial assistance to the tune of $65,000. If anyone thinks the completion of Phase I of the memorial wall is going to spur financial contributions from the public, the comments I read to you from the Repository story would tell you absolutely NOT!

As we all know by now, the memorial wall has not been placed where we were all told it would be placed. The decision to abandon the plan presented to council should have been re-presented to council for further study.

The decision to change plans for the location of the memorial wall was a fateful decision that destroys not only a cute little park but also undermines the very goal we all hoped to achieve, a fitting memorial to honor our veterans.

In the same Repository story, local architect Ken Dansizen states, "...the design uses existing features in the park and no trees will be removed...."

But in reality two large trees were removed contrary to promises made publicly to this body. Furthermore, limbs continue to be trimmed to further accommodate the project.

In City Council minutes of January 11, 2010, Jim Repace is quoted as saying, "...there's some concern if we do the first part of this project what happens--will the city be on the hook if we can't finish the project; absolutely not. We will be able to get enough funds for this project. There's no doubt in my mind we'll be able to get enough funds. The city will not be on the hook."

Apparently, those statements are not true like so many other statements made by members of the committee.

Further investment of monies, public or private, cannot salvage this debacle. The North Canton Veterans Memorial fails to pass muster and deserves a dishonorable discharge.

I urge this council to halt any further construction on the Veterans Memorial in Bitzer Park and not pass Resolution 72-10.

This country's veterans deserve a more fitting location for a memorial.

The memorial is intended to stand long after we are gone from this earth. Please do not memorialize a structure that clearly is poorly placed in a small park that only serves to elicit derision every time it is seen when it should be a source of pride for North Canton and its residents.

Thank you,
Chuck Osborne
Resident, City of North Canton

$15,000 Audit of State Auditor’s Performance Audit Was an Utter Waste of Public Funds

2010-07-13T00:54:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
July 12, 2010

On February 11, 2008, Item 13 on the North Canton City Council agenda was Ordinance No. 10-08. The legislation, presented by the Finance & Property committee for passage on an emergency, was introduced as “authorizing the Mayor of the City of North Canton to enter into a professional services agreement by and between the City of North Canton and the Auditor of State for completion of a Performance Audit of the various City of North Canton departments, in an amount not to exceed $64,500.”

On January 6, 2009, Auditor of State, Mary Taylor, presented her findings in a 123 page report. The cover letter to the Performance Audit is addressed “To the Residents, Mayor, and City Council of the City of North Canton.” In it Taylor states, “The audit provided an independent assessment of select City services and administrative processes, and identified opportunities to optimize operational and service levels. The recommendations in the audit are intended to assist the City in its efforts to prepare for its projected financial condition.”

The Performance Audit is comprehensive in its scope and contains 40 recommendations to help city leaders identify cost savings and opportunities to optimize efficiency and deal with forecasted deficits.

The recommendations are broken down into three major areas. The area of Administration and City Management has 22 recommendations for improved cost savings and efficiencies. The area of Safety Services has nine recommendations as does the area dealing with the City’s Service Departments.

Apparently this “Paint by the Numbers” guide that details specific opportunities to optimize operational and service levels and identify cost savings and opportunities was not of as much help for Mayor David Held as one might expect.

In little more than four months from the January 6, 2009, release of the Performance Audit by the Auditor of State, City e-mails indicate that then City Administrator Earl Wise was advised by Bruner-Cox, on May 14, 2009, that Mayor Held had asked the firm of Bruner-Cox, LLP, “to assist The City of North Canton in regards to the January 6, 2009 Performance Audit….”

Mayor Held, I do not understand and I hope you can explain. Why would anyone need assistance understanding the recommendations made to the City in the Performance Audit?

On July 13, 2009, Mayor Held signed a letter of engagement with Bruner-Cox, LLP. The engagement letter states that their services are “for the purpose of assisting in the proposed review, implementation, and evaluation of the recommendations in the [Performance Audit].”

Why does the City of North Canton, whose Mayor has a master’s degree and a City Administrator who is a licensed attorney need assistance in reviewing, implementing and evaluating recommendations in the Performance Audit?

The engagement letter states that the services that Bruner-Cox are to perform for the City do not constitute an audit made in accordance with generally accepted accounting procedures, commonly referred to as GAAP.

The engagement letter states that fees for the services will range from $12,000 to $15,000.

On October 14, 2009, City Administrator Earle Wise signed a purchase order authorizing the expenditure of $15,000 for the Performance Audit Review by Bruner-Cox.

On January 9, 2010, Bruner-Cox provided a draft of what I call an “Audit” of the “Audit.” The draft is labeled “Review of the North Canton City Performance Audit Project.”

Despite my repeated written records requests to City Administrator Wise for copies of the Bruner-Cox draft report, Administrator Wise has never complied.

At this time, I have no idea if Bruner-Cox has ever complied with the terms of its engagement letter with the City of North Canton with the submission of a final report. It has been six months since the draft report was provided to the City.

What did Mayor Held get for his expenditure of $15,000 of taxpayer funds? Seemingly nothing of any value!

The review of the North Canton City Performance Audit by Bruner-Cox in my opinion is an utter waste of $15,000 in public funds.

The review consists of 32 pages which simply restate the recommendations made in the Performance Audit along with brief interviews with City employees.

Mayor Held, if you wanted to know the current status of operations in the City, why did you not talk to your City Administrator or your department heads?

As a former City Administrator yourself, I would suspect that you were quite personally familiar with City operations and City departments. With six years’ experience in the City of North Canton, two years as City Administrator and nearly four years as Mayor, I do not understand why you felt you needed added guidance into the administration and operation of the City of North Canton.

Mayor, if you are wondering why city council is formulating plans to limit your authority on future expenditures, I do not believe you need to look any further than this expenditure of $15,000.

This expenditure was an “utter waste” at a time when this city can ill afford it. There is no plausible explanation for this waste of taxpayer funds.

How could you possibly think this would have been of any benefit to the City of North Canton?

Why has this expenditure by Mayor Held not been discussed publicly by city council?

Where is the accountability and transparency in government that is so desperately needed here in North Canton?

Thank you,
Chuck Osborne
Resident, City of North Canton

$100,000+ Annual Cost of Christmas Bonuses Burdens North Canton’s Budget

2010-06-28T22:08:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
June 28, 2010

“In January 2008, the City of North Canton requested a performance audit to assess its Administration and City management; safety services; street operations; and civic center. The City also requested the audit include the development of a five-year financial forecast. The administration and City Council requested the performance audit to help identify cost savings and opportunities to optimize efficiency.”

These words come from the first paragraph of the cover letter of the performance audit completed by Mary Taylor, Auditor of State for Ohio, dated January 6, 2009.

Recommendation 2.15 of the Performance Audit states: “The City should attempt to renegotiate provisions within its employee bargaining agreements that exceed peers or industry standards. These provisions are costly to the City, and successful renegotiations could result in significant savings.”

The audit finding further states that “The City’s collective bargaining agreement for Patrolmen, Fire and Paramedic, and Clerical and Service employees are comparable to peer cities in some areas, but more [emphasis added] generous than peers or recommended practices in other areas.”

The audit listed seven areas where North Canton’s agreements exceed those of peers or recommended practices. These areas were 1) Maximum number of sick-leave days accrued and sick-leave payout; 2) Vacation leave; 3) Sunday overtime; 4) Personal leave with pay; 5) Personal time with holiday; 6) Uniform allowance and stipends; and 7) Holiday counts as overtime.

Unfortunately, the performance audit failed to identify another contract benefit that by all probability exceeds peers or recommended practices. This is the annual practice of providing Christmas bonuses to city employees. ” I refer to it as a Christmas Bonus as it comes just before the Christmas holiday season.

These annual payments are titled “Longevity Pay” in labor contracts with seven unions representing city workers as well in a city ordinance for 17 city employees who are classified as exempt.

Language describing “LONGEVITY PAY” for contract and exempt city workers states: “All employees shall receive longevity pay at the pay rate of seventy dollars ($70.00) per year of full-time employment with the employer. Annual longevity payments shall be made during the first half of the month of December to all employees who have completed at least five (5) years of continuous service and who are employed by the employer on November 30th of the year in which the longevity payment is made.”

Five of the union contracts as well as the language for exempt employees further expand the number of city employees who are eligible for the payments with added language stating, “Any employee hired prior to August 1, 2003, shall begin to receive longevity after completion of three (3) years at the above rate.”

How much, one might ask, do these annual Christmas bonuses cost the citizens of North Canton?

According to figures supplied to me earlier this year by Finance Director Alex Zumbar, “Longevity Payments” to all city employees are clearly a significant cost for the city. The annual cost to the city to provide “Longevity Payments” to city employees each December just before Christmas for the past seven years is:

2003 -- $ 81,360; 2004 -- $ 99,190; 2005 -- $106,400; 2006 -- $106,120; 2007 -- $100,730; 2008 -- $99,400; and 2009 -- $102,340.

For as long as I have been involved in North Canton city government, I had no idea city employees received such benefits.

My question to any city official who can answer this is why have these costs not been openly discussed on the floor of council? Surely, an elected body can report to its citizens how tax dollars are spent and the purpose of the expenditures!

Taxpayers should not be kept in the dark about the business of government and deserve to know how their tax dollars are being spent and if those tax dollars are being spent prudently and wisely.

Painting a broad brush on anything and everything related to personnel and cloaking those discussions in executive sessions behind closed doors does not provide accountability to taxpayers. Everyone in government talks a good game about transparency in government but no one works to make it happen.

I say this because the number of Executive Sessions held by the North Canton City Council has multiplied exponentially in the last few years and I think this practice is being abused. When I was on council in the early part of this decade, I do not believe I attended more than a handful of executive sessions in a whole year. Over the last year or two, city council has an executive session every week.

As for the performance audit for which the taxpayers expended over $64,000, city leaders do not appear eager to follow through on areas where significant savings can result.

This December, the estimated cost to provide a Christmas Bonus, or should I say “Longevity Pay” to city
employees is a staggering $102,550.

For Mayor Held, I would like to ask why have you elected to cut manpower and services over the last five years rather than seek elimination of labor benefits that exceed peers or industry standards and further inflate labor costs?

In my entire forty-year working career all I ever saw handed out at Christmas was the choice of a ham or a turkey.

Unfortunately, in North Canton, City officials are turkeys for continuing such a practice. And taxpayers are left not with ham for Christmas but with a lump of coal and growing deficits.

Thank you,
Chuck Osborne
Resident, City of North Canton

Aqua Water Agreement Exposes North Canton to Risks and Is Unfair to Citizens

2010-05-10T23:45:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
May 10, 2010

Two weeks ago, I remarked to this council that if the water production costs detailed in the Arcadis Water Utility Rate Study were accurate then practically all the water being sold by North Canton is being sold at a loss.

The Chairman of Water, Sewer & Rubbish responded that water sold in the city at $4.60 per thousand gallons did not cover all the costs of water production. The Arcadis water study shows that in 2008 water consumption inside the city amounted to nearly 57 % of the city’s annual water sales.

Is it a fiscally prudent policy to sell more than half the city’s water below production costs? Shouldn’t all water customers be paying their fair share to ensure the water fund is financially sound?

Per the Arcadis study, in 2009 the city sold water to Aqua Ohio at a net effective sales rate of $1.52 per thousand gallons while at the same time, the total cost to collect and treat the water and pump the water into the distribution system was $2.20 per thousand gallons yielding a net loss of $0.68 per thousand gallons or more than $124, 000.

A look at table 2 of the water study presents a graphic picture of the outcome of the city’s current water agreement with Aqua. In 2008, with nearly identical quantities of water sold to Aqua and to outside residential and business water customers, Aqua paid $280,388 as opposed to the $3,242,067 paid by outside residential and business water customers.

Why was Aqua allowed to pay nearly $3.0 million dollars less than other water users for nearly the same quantity of water in 2008? What were the revenue shortfalls in the other four years that the present agreement has been in force? No one in the city has offered those figures for review. This is not a pretty picture for the North Canton water fund.

Under the renegotiated water agreement that is to be voted on tonight, Ordinance No. 33-10, water rates charged to Aqua will be increased to $3.60 per thousand gallons.

This raises the following question: If water rates of $4.60 per thousand gallons to city residents, admittedly, do not cover the cost of water production, why would you want to enter into an agreement to sell water at a lower water rate of $3.60 to Aqua?

Water sales to Aqua Ohio accounted for slightly over 21 % of the city’s annual water sales in 2008. If city water sales amounting to 57 % of total water sales are sold, at $4.60, admittedly below costs, and 21 % of water sales to Aqua are sold at $3.60 per thousand gallons, couldn’t one conclude that the city is selling as much as 78 % of its water at a loss?

What are the city’s water production costs?

According to the Arcadis study, total water production costs per thousand gallons vary widely from year to year for North Canton. The study shows that the city’s actual total water production costs per thousand gallons in 2006 was $9.38; in 2007 $10.45; in 2008 $5.55. The study shows budgeted water production costs for 2009 were $7.28 and projects water production costs for 2010 at $5.74.

What are the city’s water production costs for water sold to Aqua? Should there be any difference in water production costs between water sold to Aqua and water sold to any other water customer of North Canton?

All of the water is processed at North Canton’s water treatment plant. The water is all treated the same.

The Arcadis water study, dated January 2010, notes that water production costs to Aqua are $2.20 per thousand gallons. A subsequent e-mail from Bob McNutt to council, dated April 21, 2010, titled Aqua Agreement Review, now states that water production costs for Aqua are $1.15 per thousand gallons.

As the water production cost figures seem to change for political reasons to justify the planned political agenda to ratify the new agreement tonight, I again ask for an independent auditing agency, preferably, the state auditor, to audit the entire water fund to give city officials and the public reliable data from which decisions can be made with confidence on how best to set water rates and water policy for the North Canton water system.

As for the renegotiated agreement that is about to be hastily voted on tonight, I believe the 3 % rate cap and ten-year term in the renegotiated agreement present great risks for problems for the city in the future.

The renegotiated agreement with a rate cap of 3% only benefits Aqua. Further, any rate cap, especially with a ten-year term presents great risks for the city. Economic forces are already in play in the United States and globally that could bring about inflationary pressure within the term of the agreement and burden the city.

What is highly illogical about the new rate cap is that your very own consultant, Arcadis, has recommended a higher rate cap of 4 % and the present agreement with Aqua has a rate cap of 5 %. Why are you subjecting the city to such a low rate cap?

At the very least, why can you not continue with the same rate cap of 5 % as is in the present agreement?

A rate cap of 3 % for Aqua will not even keep pace with the historical rate of inflation which is 3.2 %.

Lastly, I would like to say how disheartening it is to see elected officials show more concern for Aqua than the very citizens they are sworn to represent. I am talking about the residents of the Sanctuary who are served by Aqua for their water.

In recent weeks, Aqua has announced rate increases of 20 percent for its water customers which will include North Canton residents in the Sanctuary.

The renegotiated water agreement limits rate increases to Aqua to a cap of 3 % yet Sanctuary water customers have no such protection on rate increases from Aqua.

Aqua Ohio is Ohio’s largest investor-owned water utility. Their parent company, Aqua America, Inc., is the nation’s largest U. S. based publicly traded water company.

I would ask that before ratifying the renegotiated water agreement that equal protection from rate increases as afforded to Aqua be included in the water agreement for Sanctuary residents.

If that cannot be done, then I would urge you to not proceed with passage of the water agreement as the water agreement exposes North Canton to risks and is unfair to citizens.

Thank you,
Chuck Osborne
Resident, City of North Canton

North Canton Should Rethink City’s Water Policy and Restructure Water Rates

2010-04-26T21:30:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
April 26, 2010

North Canton’s current water rate structure has become outmoded and is counterproductive in serving the needs of its customer base and in generating needed revenue to pay down the indebtedness of the water fund. I say this because there are some puzzling questions that arise as one studies the city’s water rate structure.

First, why do water rates increase as consumption levels increase for all water users except Aqua Ohio? Wouldn’t this tend to discourage water consumption by these water users who are paying higher water rates than Aqua? If anyone is unfamiliar with the city’s water rates, I should refresh your memory. Residential users, inside the city, pay $4.60 and outside $8.66 per thousand gallons for the first 15,000 gallons of water. Water usage above 15,000 up to 30,000 gallons rises to $5.27 inside and $9.28 outside.

Why does the city discourage higher levels of consumption for residential users who are already paying considerably more than any rate you ever expect to charge Aqua Ohio or any other bulk user? If your goal is to sell more water and bring in more revenue, the current rate structure is counter-productive and limits revenue for the water fund.

Inside and outside residential and business water rates need to be restructured to facilitate greater revenue to the water fund.

Before the city expanded its raw water capacity and its processing production, I surmised that the rate structure was designed to discourage water consumption and stretch limited water resources. The present water agreement with Aqua Ohio seems to indicate that raw water capacity and processing capacity are now of no concern to the city. If that is entirely true, water rates need to reflect that change in policy.

What is the goal of the city’s water policy? Do we want to encourage consumption or discourage consumption? Are you trying to ration limited resources? Water rates affect people’s behavior and thus consumption.

In regards to the Aqua Ohio water agreement, I must ask why the city wants to exhaust the newly added capacity of our water system? To promise two-thirds of the city’s newly added capacity in one gulp could find the city over-committed on water sales when it least expects it and long before the indebtedness of the water treatment plant is paid down?

My second concern regarding the city’s water rate structure is the bulk rate charged to Aqua Ohio of $1.52 per thousand gallons. This water rate defies logic when looking at water rates for all other businesses.

Prior to water sales outside the city, a bulk water rate applied only to bulk sales in the city. The bulk water rate charged to a high-volume business in the city supported jobs in the city from which the city received added income to the general fund in the way of income taxes. Selling water outside the city at a hugely discounted rate in bulk returns nothing to the city’s general fund. There is no added benefit for the city.

The city is not supporting jobs by selling water in bulk to Aqua Ohio. Why is the city interested in such an arrangement?

Clearly, bulk water rates outside the city should be looked at and priced much differently than bulk water rates inside the city.

At last weeks Council of the Whole meeting, the latest draft of the new water agreement with Aqua Ohio limited annual rate increases for Aqua to 3 percent per year for the ten-year term of the agreement. That proposed commitment to Aqua is just as fiscally imprudent as promising all remaining rate payers that same promise.

If you cannot make that same commitment to your constituents who vote for you and the citizens who are responsible for the indebtedness of the bonds on the water treatment plant, why would you make a commitment to Aqua Ohio, a public utility whose only interests are its water customers and its stockholders?

Whose well-being and interests are you putting first?

I would urge this council to table any further action on the Aqua Ohio water agreement until a complete assessment of the city’s water rates is completed and new rates are implemented.

Further, I would like to encourage the city to look closely at the city’s water production costs on page two of the Arcadis Water Study. The city’s water production costs are all over the board, ranging from a low of $5.55 per thousand gallons to $10.45 per thousand gallons. Wide fluctuations in water production costs as detailed by Arcadis are not reality. If these figures are true, practically all water being sold by North Canton is being sold at a loss.

It is common knowledge that water funds must be kept separate from all other fund accounts as water is an enterprise fund. In order to have accurate information on water production costs, only actual expenses directly related to water production should be allocated to water costs.

Rumors abound from several sources that the current administration is using creative budgeting and bookkeeping to charge the water fund a percentage employees payroll expenses to the city’s water fund. I fear something is going on as water production costs in the water study vary wildly and are clearly excessive.

Drinking city water out of a city water fountain does not warrant charging that employee’s expenses to the water fund. I have heard these reports from several reliable sources. If these reports are true it is very unfortunate. Fiscal crisis is apparently leading to desperate actions on the part of the administration.

Creative accounting is simply going to lead to confusion and disaster and put the water fund in the same fiscal crisis that we now are facing with the city’s general fund.

I would urge that an independent auditing agency, preferably, the state auditor audit the entire water fund to give city officials and the public reliable data from which future decisions can be made with confidence on how best to set water rates and water policy.

Thank you,
Chuck Osborne
Resident, City of North Canton

Economy Provides North Canton Opportunity to Undo Inequities of Aqua Ohio Water Agreement

2010-04-12T22:18:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
April 12, 2010

The City of North Canton has negotiated many agreements in the course of conducting the public’s business but, unfortunately, many of those agreements have resulted in financial loss for the taxpayers of North Canton. Some of these agreements that have lead to financial loss are the agreement to lease Arrowhead Golf course to Kevin Larizza and the option agreement to purchase twenty plus acres of swamp land on the east side of town from the Crowder family.

The Cooperative Economic Development Agreement (CEDA) agreement for the Sanctuary is another negotiated agreement that has resulted in financial loss for the City of North Canton. In that agreement, no one in the city bothered to negotiate any concessions on behalf of the City. There were three signers to the agreement, Plain Township, City of North Canton, and McKinley Development Company. In the CEDA, Plain received assurances that North Canton would not pursue further annexations for a period of three years. McKinley Development received a less cumbersome annexation process.

But what did North Canton negotiate for itself in its 2003 CEDA agreement? Nothing!

North Canton could have negotiated the water distribution rights to the Sanctuary if city
leaders had negotiated a CEDA that benefited all parties to the agreement but the city did not do so.

The present water agreement with Aqua Ohio allowing Aqua to serve the Sanctuary is another agreement that has cost the city dearly. Rushed through city council in 2005 on an emergency, the water agreement has led to the sale of water at below cost for five years, resulting in millions of dollars in revenue losses.

Luckily, for the City of North Canton, the unforeseen downturn in the economy has a silver lining for North Canton. The build out of the Sanctuary of nearly 206 homes as well as other planned development has not happened and is not likely to happen in the foreseeable future.

Aqua does not want to be committed to a required minimum purchase of 500,000 gallons per day which increases to 600,000 gallons per day beginning May 1, 2010. Paying for water, even when North Canton has discounted the water price at less than North Canton’s production costs, is an expense to Aqua when it does not take delivery of the water. Aqua does not want to continue in this fashion.

North Canton may not be accountable to its citizens for financial losses resulting from water sales but Aqua Ohio is accountable to its shareholders for operational expenses and the bottom line.

Any renegotiated water agreement with Aqua needs to be handled with due diligence and a study lest this city find itself again on the losing end of another agreement.

Aqua Ohio is Ohio’s largest investor owned water utility. Their parent company, Aqua America, Inc., is the nation’s largest U. S. based publicly traded water company. Neither company is responsible for the millions in debt owed by North Canton’s water fund. The rate payers and citizens of North Canton are responsible for these bonds on the water treatment plant.

The citizens of North Canton should not be enriching public corporations as has been the case with the current water agreement with Aqua Ohio.

Regarding the draft of the new water agreement, I have the following remarks:

One: Water rates charged to Aqua should be handled as any other BULK WATER user and subject to rate increases as any other water customer the city serves. Restricting rate increases to Aqua will add inequities to the city’s water rate structure as other water user’s rates are increased at a higher rate over time and create greater problems in the future.

Two: The water rate charged to Aqua should take effect as soon as the contract is ratified. Given that the Arcadis Water Utility Rate Study has documented that the city is selling water to Aqua below the city’s production cost, it is not financially prudent to agree not to raise Aqua water rates in the first year of the new water agreement.

Three: The ten-year term for the new agreement is not prudent and exposes the city to a great deal of uncertainty and financial risks. There is no benefit to the city for a long term agreement. A two or three year term would be much better and allow the city to weather an unforeseen financial downturn arising from water sales.

Four: Reserving 2.0 million gallons per day (mgd) for possible sale to Aqua is an unfair provision in the agreement. In effect, Aqua is asking that North Canton provide the basis for Aqua’s future growth of water sales at the expense of the citizens of North Canton.

Five: Monthly billing, late payments, and penalties for late payments should be brought in line with North Canton’s policies that are presently in effect for all water users.

I ask city leaders to look closely at all aspects of any agreement and understand the agreement you ratify. North Canton must negotiate agreements in the future with a keener mind. The city cannot weather too many more financial boondoggles and giveaways.

You must negotiate agreements like it is your money. The city does not have the funds to pour down the drain as has been the case in the past.

North Canton must do better.

Thank you,
Chuck Osborne
Resident, City of North Canton

North Canton Water Study Highlights Failures of City’s Water Agreement with Aqua Ohio

2010-03-22T22:35:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
March 22, 2010

On July 10, 2006, I presented concerns in public to city council regarding a water agreement with Aqua Ohio that had been ratified in legislation by North Canton City Council. The ratification of the agreement had been approved unanimously by city council on an emergency on February 28, 2005, as Ordinance No. 49-05.

Four current members of this council, Jon Snyder, Jeff Peters, Marcia Kiesling, and Doug Foltz, were members of that council in 2005 when the Aqua Water agreement was ratified. For reference, I have a copy of my 2006 comments for you today.

In that presentation I stated, “The Aqua Ohio water agreement, to put it mildly, is grossly unfair to the City of North Canton….”

The recent Water Utility Rate Study completed by Arcadis, dated January, 2010, comes to the very same conclusion that I came to nearly four years ago. Unfortunately, no one in city government took me seriously when I presented my concerns in the summer of 2006.

For you present members of council who voted to ratify the water agreement with Aqua Ohio, I think it is fair to ask why you didn’t ask for a water study before ratifying the water agreement?

In those remarks of nearly four years ago, I noted that former City Administrator Michael Miller negotiated the Aqua water agreement without input from the City’s water superintendent and did not ask the City’s finance director for her thoughts on the agreement. Was Mr. Miller qualified to negotiate an agreement such as this?

The Arcadis Study would indicate that Former Administrator Miller was not qualified to negotiate the agreement.

How much did it cost the North Canton to have Arcadis tell you the very same thing I told you nearly four years ago? Finance Director Alex Zumbar has advised me that the Arcadis Water Utility Rate Study cost $18,500.

My study of the Aqua Water Agreement and public presentation of my concerns came at no cost to the City of North Canton.

My 2006 presentation was lengthy as I took great pains to detail the overwhelming shortcomings of the agreement. A few of the concerns I presented were:

Under the Aqua Ohio Water Agreement:
1) Water rate increases for Aqua Ohio were limited to a maximum of five percent yet future water rate increases for residential customers were as high as 7.1 percent.

2) Aqua was allowed until the thirtieth day of the month to pay their monthly bill and was subject to a late penalty of one percent (1%) per month if payment was late. At the same time, North Canton’s policy for residents regarding payment of water bills required payment by the fifteenth of the month and a five percent penalty for late payments.

3) There was a stipulation in the agreement stating, “If during the agreement, additional facilities are necessary for sale of water hereunder, such facilities will be constructed by the city.”

I never heard anyone ever ask what possible expenditures and at what cost to the City these expenditures would entail. I would like to know what additional expenditures the city has been required to spend in order to facilitate water sales to Aqua Ohio? Does anyone even know? Has this been tracked and how does this stack up against the pittance the city has received in water revenue from Aqua Ohio?

4) Aqua Ohio could tap North Canton water lines and extend water lines to service areas outside the city. There is nothing more devastating than a clause such as this for ending the growth and expansion of the North Canton water distribution water system.

The shortcomings of the water agreement with Aqua Ohio cover every aspect of the agreement. Four years I stated, “The Aqua Ohio water agreement is so patently unfair as to be nearly criminal.” The Arcadis Water Utility Rate Study validates my remarks in “spades.”

The very sad part of this situation is that this agreement has continued in effect for five years at great cost to the City and without any concern of Mayor David Held or City Administrator Earl Wise.

The losses to the North Canton water fund are quantified on page 2 of the Arcadis Water Utility Rate Study. In table 2, water sales in 2008 to residential and business customers total 22.3 percent of the total water sales for the year and resulted in revenue of $3,247,067. Water sales in the same time period (2008) to Aqua Ohio total 21.2 percent of total water sales for the year and resulted in revenue of $280, 388.

Nearly identical volume of water sales and yet the resulting revenue to the City is nearly $3.0 million less from sales to Aqua Ohio. These are not my figures but your very own consultant’s figures.

On page 6 of the Arcadis Study, the report cites the fact that the City of North Canton has sold water to Aqua Ohio in 2009 at a net effective sales rate of $1.52 per thousand gallons while at the same time, the total cost to collect and treat the water and pump the water into the distribution system was $2.20 per thousand gallons. The report concludes, “This would yield a net loss of $0.68 per thousand gallons.”

Is this an oversight? Is this ineptness? Who is in command of the city?

Mayor Held, I did attend your State of the City presentation. Why did I not see any commentary from you on the conclusions of the Arcadis Study presented in your State of the City speech?

Four years ago I noted, “The Aqua Ohio water agreement appears to totally ignore the City of North Canton’s production costs and how they are allocated.” The 2010 Arcadis Water Utility Rate Study remarks are similar.

Why did city leaders not look more closely into all of the concerns I presented in 2006?

Basing water rates on known water production costs for North Canton water users while at the same time ignoring those production costs when setting water rates for Aqua Ohio is unfair and financially perilous.

In addition, water users in North Canton have been subsidizing the profits of the nation’s largest U. S. based publicly-traded water company for the last five years.

In my 2006 presentation, I calculated that the City of North Canton was losing $7,254.57 per day in revenue as a result of the artificially low price of water sold to Aqua Ohio. In a year’s time, that equates to more than $2.6 million dollars in uncollected revenue under the Aqua water agreement.

Why is the bulk water rate charged to all other bulk water users not good enough for Aqua Ohio?

I believe it is safe to say that the City of North Canton has lost between $2.6 million per year (my projection in 2006), and $3.0 million per year, (using figures from the Arcadis 2010 Study) since the Aqua Ohio agreement has been in effect.

Factoring in the five years that have elapsed since the contract was ratified results in a loss to the North Canton water fund of between $13.0 and $15.0 million.

Again I ask, why has this agreement not been challenged before now?

Where are our investigative journalists who truly report on the actions of our elected officials instead of parroting their propaganda?

The Arcadis Study states on page 6: “…the City may realize benefits by renegotiating agreements with Outside City Users, with specific emphasis on the Bulk Water Sales agreement with AQUA.”

The Arcadis Study continues “…the City is selling its water capacity at a rate of $1.65 per thousand gallons to AQUA while the current rate schedule for Outside City Business Accounts sells at a rate of $9.72 per 1,000 gallons.” An $8.07 per thousand gallon discount over other Outside City Business Accounts is unfair to those users and undermines the fairness and integrity of the rate structure set by the city for all waters customers of the city.

The argument in the past has been that the reduced water rate to Aqua brings in added revenue. Generating added revenue by selling a product below cost just to say we are bringing in added revenue to the city is not only illogical, it is also financially unsound.

The Aqua Ohio Water Agreement is a total failure. I urge this council to void this Aqua Ohio water agreement in its entirety without further delay and adhere to bulk water rates that apply equally to all.

Thank you,
Chuck Osborne
Resident, City of North Canton

North Canton Variance Request Mired in Politics & Mistakes

2010-02-08T22:39:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
February 8, 2010

Democracy in America gives citizens a voice in how they wish to be governed. The American electoral process allows for citizens to choose who will govern them. There are governmental processes that allow citizens a voice in the process of government. We all enjoy and revere the democratic form of government and the protections it affords each and every one of us. Democracy at all levels of our government is what we have all come to expect. Nothing less is acceptable.

At a recent meeting of the North Canton Zoning Board of Appeals citizens were not afforded the opportunity to speak. In addition, actions by a city council member raise questions in my mind as to whether the process of government is being misused to benefit the few at the expense of the public at large.

On January 26, 2010, there was a meeting of the North Canton Zoning Board of Appeals. The meeting was scheduled to hear an application from McKinley Development Leasing Company, Ltd. for a variance from existing zoning law requiring a minimum lot width of 150 feet for a commercial lot in Washington Square to allow for the construction of a Sonic drive-through restaurant.

As is the course for public decisions made by government bodies, public comments, favoring and opposing the proposal are allowed before a vote is taken.

The North Canton Board of Zoning Appeals did not allow any public comment before the board voted on the application for a variance.

Beth Borda, the spokesperson for McKinley Development spoke on behalf of the variance. She was given ample time to present her reasons why the zoning board should approve the variance. Before Ms. Borda had time to return to her seat, Chris Feller made a motion, seconded by Sam Bacon, to vote on the variance request.

Before I could raise my hand and ask when citizen comment would be allowed on the merits of the variance, voting by the zoning board was complete. The board approved the requested variance 3-1.

There were several individuals who attended the meeting who had hoped to speak regarding the requested variance. There were no other items on the agenda.

The Vice Chairman of the zoning board, Brian Mihalcin, chaired the meeting in place of Chairman William Cline, who was absent. Only after the vote had been taken and the zoning board was about to adjourn were citizens allowed to speak to the merits of the requested variance.

What happened to our democratic process in this instance? Was there nobody present who knew how to conduct a proper meeting?

Who has oversight of the North Canton Zoning Board of Appeals?

Are board members given any kind of training on how they are to function in their roles when they are appointed to serve on these boards?

Does the conduct of the North Canton Zoning Board of Appeals raise any concerns for any members of city council? I certainly hope so!

As I raised my hand in utter amazement at the Zoning Board of Appeals meeting to question what was happening before me, Councilmember Snyder who also was in attendance leaped to his feet and shouted from the audience, “You cannot revote.”

This was not very impressive public conduct for a sitting councilmember. It also raises questions in my mind as whether or not Mr. Snyder had used his influence on the deliberative process of the Zoning Board.

Councilmember Snyder’s conduct on this variance request is further heightened by the existence of a letter that he wrote nearly two weeks before the North Canton Zoning Board of Appeals were to meet to discuss the variance.

The letter, dated January 14, 2010, from Council Vice President Jon Snyder to Council President Daryl Revoldt, states “McKinley Development cannot get relief from the Zoning Board of Appeals; hence the recommendation to amend Zoning Ordinance No. 50-03, specifically Section 1137.04 LOT AND DENSITY REQUIREMENTS.”

The North Canton Zoning Board of Appeals was not scheduled to meet to discuss the requested variance until January 26, 2010. How is it that on January 14, 2010, Mr. Snyder could unequivocally state in writing “McKinley Development cannot get relief from the Zoning Board of Appeals.”

That letter from Mr. Snyder is blatantly false and upon that falsehood, Mr. Snyder asked Mr. Revoldt, Chair of the Ordinance, Rules & Claims Committee, to begin the legislative process to change the city’s zoning code.

I am stunned that the legislative process can be initiated based on false and misleading information.

Subsequent to the favorable vote by the zoning board on January 26th, City Council, at its’ February 1st meeting, under the Ordinance, Rules & Claims Committee, withdrew a request made to the Planning Commission on January 19th to rewrite the zoning requirements regarding Lot and Density Requirements under Section 1134.07 of the city’s zoning code.

I ask that the minutes of the Zoning Board of Appeals meeting of January 26, 2010, be transcribed verbatim to determine without a doubt in what manner the meeting was conducted. It was a very short meeting and would not entail a great deal of effort or expense.

Furthermore, I ask that a study be conducted by the city law director to determine the extent of the manipulation and undue influence that was exerted that resulted in the variance approval.

It is one thing to assist a constituent in navigating the process of government. It is a horse of a different color to lobby aggressively and abuse the process of government that citizens depend on.

I hope this council will care enough to learn what went wrong in the course of this application for a variance and how the process was manipulated and how council itself was drawn into playing along. You should learn the facts from beginning to end and not brush these abuses of the process of government aside.

We are supposed to have a government of the people, by the people and for the people. I just hope those are not idle words etched in stone at the Lincoln Memorial in Washington.

Thank you,
Chuck Osborne
Resident
City of North Canton

Continued Dumping Practices by North Canton Defies Logic and the Law

2009-11-23T22:54:00.000-05:00

Prepared Comments Intended for
NORTH CANTON CITY COUNCIL
November 23, 2009

Last week the public learned in a November 17, 2009, Repository story titled, “North Canton told to stop dumping debris at Jackson site” that the City of North Canton, once again, has been found dumping waste material in violation of the law. According to the report, “The city has for several years dumped street sweepings and construction dirt on parcels along Freedom Avenue NW. The property is next to the city’s water treatment plant….”

An EPA email indicates the waste material included catch basins’ cleanings and that the dumping took place on a 2-3 acre wetland on private property.

How could this happen?

It was ten years ago that the city learned of the damage it had inflicted on its own Dressler well field with dumping practices dating back to the 1980s. This resulted in an EPA mandated cleanup of the property costing approximately $500,000.

Mayor Held, you were the City Administrator at that time and as administrator you handled the cleanup for the city. In an April 5, 2002, Repository story, titled “PCBs found in Dressler Road well field,” your photograph appeared with the story showing you standing in the midst of all the excavation at the well field.

After going through that experience in your first few months on the job in 2002 and seeing the expenditure of nearly one half million dollars of public funds to abate the damage from the dumping done by city employees, didn’t that experience make an indelible impression in your life on the proper disposal of waste material?

Why then, as city administrator, did you not put into place proper methods for the disposal of all wastes generated by the City?

Why hasn’t the city’s current city administrator, Earl Wise, taken action to stop the continued practice of dumping solid waste? Mr. Wise you are an attorney and surely you are knowledgeable of the city operations, past and present, and what is acceptable or not acceptable.

Each of you should be capable of seeking out answers to questions you have to issues that present themselves to you on a daily basis. I do not expect either of you to know everything but I do expect you to be able to seek the correct answers when called upon to do so.

Mayor Held, I believe you and the City Administrator have failed in this regard and as a result, the city could very well incur expenses to the tune of several hundred thousand dollars for abatement of the illegal dumping. Furthermore, the city could be exposed to lawsuits from the landowners who agreed to this illegal practice not to mention the harm you have inflicted on the city’s image and reputation.

Can you imagine a municipality inducing landowners in an illegal scheme to dump solid wastes? For what purpose does the city continue to dump?

Actions such as these only serve to soil North Canton’s reputation and diminish the stature of those involved.

Mayor Held, as Director of the Joint Solid Waste District for Stark, Tuscarawas and Wayne Counties since July of 2004, I am astounded that you are unaware of the consequences of the illegal dumping and that you have failed to take any leadership position on this issue. When you were first sworn in as Mayor, you had already served six months as Director of the Solid Waste District.

Why have you not used your insight as Director of the Solid Waste District to the benefit of North Canton to spare the city the embarrassment of this revelation not to mention the tremendous cost that taxpayers will ultimately bear for the cleanup?

In a North Canton Sun Journal report dated March 3, 2001, titled “Report that spill,” the paper reports on the purchase of a dozen signs by the city that will be “ …prominently displayed near the city’s well fields to remind residents to take an active role in protecting the city’s drinking water. The signs tell people to call 9-1-1 if they see or have knowledge of a spill that could contaminate the ground near a well field.” North Canton Water Superintendent Rich Steinhebel is quoted in the article as stating “The signs are to make people aware of the wells and they send a message to people to take responsibility.”

One would think that city officials would have enough reminders of the need to protect water resources but on August 14, 2002, I felt compelled to address the issue when I was a councilman. My letter addressed to former Mayor Tom Rice and copied to City Administrator David Held states:.

“I am writing to you to ask that the city’s street department stop the practice of washing the city’s street sweeper on the grounds of the city’s water treatment plant.

While on a recent visit to North Canton’s Water Treatment Plant, I observed the cleaning of the city’s street sweeper on the grounds of the water treatment plant. In close proximity, was a production well supplying raw water to the treatment plant.

The street sweeper had just come from dumping its collection of debris (location unknown), and with the truck’s rear gate open and its dump bed elevated, the driver hosed out any remaining dirt and debris onto the grounds of the treatment plant. All of this was happening in close proximity to a water well and within the perimeter of the security fence of the water treatment plant.

This is not the kind of activity that should occur on the grounds of North Canton’s Water Treatment Plant and seems to run counter to the message on the Drinking Water Protection Area signs that are posted near all the city’s well fields.

Whether there is any possibility of water contamination from this is irrelevant. The city’s street department should utilize an approved area for the cleaning of its street sweeper. All refuse from the city’s street sweeper should be properly disposed of including the rinse water used in the cleaning process.

This kind of activity does not send a good message to the public nor does it show that North Canton is serious about running a model water treatment facility.

I trust that you want to protect North Canton’s water treatment plant as well as its water resources and will act promptly to correct this situation.”

Mayor Held, my letter of seven years ago apparently did not make an impact on you.

Clearly, the North Canton City Administration has not taken responsibility nor have city department heads and supervisors. I believe there is a systemic reason for that and that is the fact that city employees are concerned about retaliation. The city’s dumping practices have been well known for decades and that information came out in the investigation of the contamination of the Dressler well field.

For this reason, I am asking that city council pass whistleblower legislation to protect any and all city employees who want to report illegal activity or any activity that is harmful to the city and the community at large.

In a related topic, I have learned that in the last four years there has been a great deal of turnover at the city’s water treatment plant and this council must investigate the reasons for the turnover. I am in contact with several past employees and they all tell a similar story.

Why would anyone leave a coveted position with the City, making in excess of $40,000, in a dismal economy? The lack of leadership from the mayor, the city administrator and city supervisors has left good employees with no support when they report wrongdoing or illegal activities.

I ask that a complete and independent investigation be undertaken to root out the reasons for the high employee turnover and that procedures be put in place to improve management of city employees. I also urge that job descriptions be written along with minimum job qualifications. At a minimum, the position of Water Department Superintendent should specify a four year degree in Chemistry or a related field of science.

The citizens of North Canton deserve much better leadership than what we are seeing. This council wants to improve North Canton economically but if there is no leadership and no management for its employees, you efforts will all be in vain.

Thank you,
Chuck Osborne

Note: President of North Canton City Council, Daryl Revoldt, to the astonishment of several city council members, chose censorship over freedom of speech at tonight's city council meeting and refused to allow me the opportunity to read the prepared comments on this topic.

Financial Losses From Failures of City Officials Must Be Investigated

2009-09-14T22:09:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
September 14, 2009

On tonight’s agenda is legislation on an emergency asking for city council’s approval of a settlement agreement between the City of North Canton and Larizza Management Group, Ltd. It is Ordinance No. 93-09. Larizza Management, Ltd. is the previous lessee of The Fairways of North Canton.

The settlement agreement calls for the City of North Canton to accept $35,000 as payment in full for delinquent lease payments and property taxes totaling $104, 311.74. In financial terms, this is a good deal for Kevin Larizza, the President of Larizza Management Group, Ltd. In ethical terms, a clear conscience for Mr. Larizza might not come as easily.

The seeds for the economic loss now facing the city arise out of the passage of emergency legislation in 2003, Ordinance No. 98-03, which gave blanket approval for the Rice Administration to negotiate the lease contract without subsequent review of the terms negotiated by then City Administrator David Held.

The bottom line for North Canton taxpayers is that the city is unable to collect nearly $70,000 in revenue for which it is rightfully owed. There is a need for a public accounting of the failings of the lease contract.

These failings are numerous. 1) Lack of a performance bond as urged by former North Canton Law Director Roy Batista; 2) No personal guarantee by the lessee; 3) No review of the contract by the city law director as required by state law; and 4) Failure to collect the $50,000 security deposit as specified in the lease.

Three weeks ago Mayor Held attempted to answer in this chamber why the above protections for the city were not incorporated into the lease when he negotiated the contract with the lessee. In all honesty, Mayor Held’s answer as to why the $50,000 security deposit was never collected by him and former Finance Director Julie Herr raises more questions than it answers. It also raises other issues foremost is the failure of a city official to enforce a city contract resulting in great financial loss to the City of North Canton.

Mayor Held, you stated in your answer that a performance bond “just priced Kevin Larizza right out. He [Larizza] said I simply can’t do it.” You continue “So we decided at that time that we were going to forego the security deposit because he [Larizza] said I don’t have that kind of money or was unwilling to invest the security deposit….”

Mayor Held, your answer brings up a number of questions. I would like to ask who is the “we” you are referring to in your statement. It appears it is you and Mr. Larizza.

Who decided to “forego” as you put it, the security deposit? It appears to me from your response that this was a mutual decision between you and Mr. Larizza. If this was a mutual decision between you and Mr. Larizza, when was this decision arrived at?

Was that decision arrived at before or after the lease was signed?

If this were agreed upon before the lease was signed, why wasn’t ARTICLE IX of the lease requiring the $50,000 security deposit deleted before signatures were affixed to the contract? Why would Mr. Larizza sign a contract that had terms he opposed?

Who else had knowledge that the security deposit would not be collected?

If there were a mutual agreement with Mr. Larizza that no security deposit would be collected after the lease was signed as appears to be the case, why was the lease not amended to reflect that?

Why would you agree to not collect a security deposit? Surely, you understand that doing so would leave the city completely exposed to financial risk. And, in fact, this is what has happened.

Mayor Held, your explanations do not hold water and I can only conclude one of two things happened. One, you as well as former Finance Director Julie Herr forgot to collect the security deposit outright; or two, without authority you, Mr. Held, had a private understanding with Mr. Larizza that you would not enforce the signed contract and no one in the city, including former Finance Director Herr, questioned your actions.

Your decision to remove the last vestige of any financial security that the city had in the lease contract has resulted in great financial harm to the taxpayers of North Canton.

For City Council, I understand that accepting $35,000 is better than walking away with nothing at all. The loss of nearly $70,000 at a time when the city is struggling to maintain city services while remaining fiscally solvent is heartbreaking to say the least.

What I find more wrenching is the fact that as a former City Administrator and now Mayor that you have misled city officials, the citizens of North Canton, and the general public with a lease that offered absolutely no protections for the city.

This is a lease for which you expended $4,200 in public funds to a law firm a thousand miles away for legal services and stated, “From my perspective it was the best $4,200 that I spent while I was working as City Administrator.”

Mayor Held, the contract to lease The Fairways of North Canton is not worth the paper it is printed on and you have either known this fact or been oblivious to that fact from the beginning. One can only conclude that your performance in this matter as North Canton City Administrator and now as Mayor has resulted in great financial loss to the city.

I ask again tonight that this council and that Law Director Randy McFarren commence an investigation into how one individual could single-handily inflict financial loss of this magnitude on the city and have it go unnoticed for five years.

Mr. Revoldt, as President of City Council, I am aware you are a member of the Host Committee in support of Mayor Held’s reelection. I hope you will place politics aside and support an investigation of how and why the city has suffered a loss of nearly $70,000.

If funds were embezzled from the city of this magnitude, there is no doubt that an investigation would be conducted. The financial loss to the taxpayers of North Canton highlights failures that cannot be swept aside.

The process of government in North Canton has failed its citizens and it has resulted in a substantial loss to the city. Last year this council expended in excess of $64,000 for a state audit looking for increased efficiencies in government. Surely, there is an equally compelling interest to determine how, why, and who is responsible for the loss of nearly $70,000 of public funds.

The citizens of North Canton deserve answers.

Thank you,
Chuck Osborne
Resident
City of North Canton

Shortcomings of Arrowhead Lease Adds to North Canton’s Financial Distress

2009-08-24T21:18:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
August 24, 2009

Last fall, in a Committee of the Whole meeting held on October 20, 2008, there was an item on the agenda for discussion under the Finance & Property Committee regarding the collection of delinquent city income taxes. The agenda request had been made by Finance Director, Alex Zumbar. In a memo to council, dated October 17, 2008, Mr. Zumbar states “…The collection of these delinquent taxes is of great importance to the City.” Fortunately, for the city, there is a legal process that allows for the collection of delinquent income taxes and this was explained to council by Law Director, Randy McFarren.

Finance Committee members have advised me that delinquent income taxes owed to the City of North Canton total as high as $150,000 and that these are delinquencies that have accumulated over a number of years and are owed by hundreds of debtors.

Tax collections are significant for every community and given North Canton’s current financial plight, collection of city taxes takes on added significance. Equally important is fairness in tax policies. Everyone must pay his fair share.

My topic of concern tonight is the delinquency of a specific account and how the city has found itself with little or no means to collect on this delinquent account.

I am referring to a debt owed to the city by the former lessee of the Fairways of North Canton. According to city documents, the city is owed $104, 311.74. Despite numerous letters from the city, the earliest dated October 7, 2008, the city has not received payment.

City records indicate that the overdue amount is comprised of $55,000 in past due lease payments and $49,311.74 is property taxes for 2008. Under the triple-net lease with the city, the lessee was obligated to pay property taxes. To prevent a delinquency on the property taxes for 2008, the city paid the taxes to the county directly and is now attempting to collect from the lessee, Larizza Management Group, LTD.

In contrast to the delinquent income taxes discussed above in which the city has legal standing to force collection, it appears that the City of North Canton has little or no legal basis to force the collection of this debt of over $104,000.

It is not my intention to embarrass anyone at this time but there should be a public understanding of how and why the city has found itself facing an economic loss of this magnitude should the former lessee continue to ignore demands for payment. Steps should be taken to prevent repeating the same mistakes in the future.

The seeds for the predicament that North Canton now finds itself originate with the contract to lease the Arrowhead Golf Course property, signed on December 31, 2003, by former Mayor Tom Rice.

The handicap facing the city today arises from the fact that the city required no performance bond, received no security deposit, and failed to require the lessee to sign the lease contract both as a corporate officer and personally. Kevin Larizza signed only as President of Larizza Management Group, LTD, which allows him to shield himself personally from any legal obligation to honor the contract with the city.

ARTICLE IX of the contract to lease the golf course specifies a $50,000 security deposit to be collected in two $25,000 installments. The first installment was to be paid within the first six months of the lease and the second installment was due no later than eleven months into the lease. No security installment was ever collected.

Mayor Held, as city administrator at the time, why were no lease payments ever collected?

In minutes of an August 26, 2003, Board of Control meeting to authorize the Mayor to enter into a Lease Agreement for the premises known as Arrowhead Country Club, City Administrator Held asked Law Director Roy Batista if Batista preferred a $500,000 performance bond over a security deposit. Law Director Batista replied “….I really would want both.”

On August 19, 2003, a Repository story titled, “North Canton agrees to lease Arrowhead,” reports “….the lessee will have to sign a $500,000 performance bond to protect the city if Arrowhead is damaged or neglected while leased.”

Mayor Held, the record begs the obvious question of why was there no requirement for a performance bond as urged by Law Director Batista and reported to the public in the newspaper?

On August 28, 2003, a Repository story titled, “Chippewa offered city most bang for its buck,” reports “The city is paying a leasing consultant from Texas for its advice on the seven proposals and has hired Addison Law Firm of Dallas, Texas, which specializes in golf course management contracts and leases, to formulate the final lease agreement with Chippewa.”

City records document that North Canton paid the Addison Law Firm of Dallas, Texas, at least $4,200.15 for their legal services. The identity of the leasing consultant or the costs to the city for their services could not be located.

Mayor Held, why did the city have to retain a law firm located a thousand miles away at an added expense to the taxpayers of North Canton to draft a contract to lease property when North Canton had not one but two law directors already on the city’s payroll?

In your opinion, did the city benefit from the use of outside legal expertise in the drafting of this lease?

Further, Mayor Held, was there any thought given to requiring Kevin Larizza to sign the lease contract as an individual as well as in his capacity as an officer of the corporation?

The minutes of the Board of Control meeting dated August 26, 2003, referenced above, have former Mayor Tom Rice stating, “I never enter into a contract before it’s been approved by the law department….”

However, a search of all city records related to the Arrowhead Golf Course property fails to show that the lease was ever reviewed by the North Canton City Law Director. Failing to have the city’s law director review and approve the lease for form and content is a violation of state law under ORC 705.11.

The statute states in part “[The city director of law] shall indorse on each [contract] approval of the form and the correctness thereof. No contract with the municipal corporation shall take effect until the approval of the …city director of law is indorsed thereon.”

I urge this council to pass legislation codifying this requirement under the laws of North Canton as added protection against economic loss to the city and its taxpayers in future contracts.

Lastly, I would like to speak to another aspect of this sad saga that resulted in a contract that has failed to protect the City of North Canton and exposed the city to economic loss. Council minutes along with Board of Control minutes clearly reveal city council’s failure to provide oversight of the Rice administration and City Administrator Held who are ultimately responsible for the failed contract.

At a special council meeting held on August 18, 2003, city council voted, on an emergency, to give the former Rice Administration total authority to negotiate the lease contract.

I was on city council at this time and after I was prevented from speaking out against the lease in the proceeding Committee of the Whole meeting, I refused to vote on the measure and excused myself from participation in the vote. The remaining six members of council voted to authorize Mayor Rice to enter into a Lease Agreement for the premises known as Arrowhead Country Club for a term yet to be negotiated.

Whatever happened to the idea of checks and balances in government and of the fiduciary responsibility city council has to their constituents?

The potential economic loss of over $104,000 facing any municipality is nothing to brush aside, and given the devastating financial distress now facing the city, any loss in revenue is devastating.

Mayor Held, I realize that less than a month after the Arrowhead lease contract was signed you were removed as city administrator and that might explain why the security deposit was never collected by you.

But you did return to the city as mayor two years later in 2005. For the last three years of the lease you did have an opportunity to collect the long overdue security deposit. It is unfortunate that your city administrator, Earl Wise, also has not thought to collect the security deposit in his nearly four years at city hall. And I might add, neither did former City Administrator Michael Miller who served during the first two years of the lease and made modifications to the lease that expanded the definition of capital improvements.

The potential economic loss that the city finds itself facing is the result of what one might call a “perfect storm.” First, city council gave blanket approval for the Rice Administration to negotiate the lease contract and never asked to review the terms negotiated; second, the contract was signed within the first ninety days of a change in city law directors; third, there was a change in city administrators thirty days after the lease was signed; fourth, there was a failure to have the North Canton City Law Director review the lease contract as required by state law.

I urge this council to commence an investigation into all the shortcomings that apparently have now put the city at a great disadvantage in pursuing the collection of these badly needed funds and conceivably could result in a sizeable economic loss to the city.

Clearly, the city’s law director needs to review all contracts as state law mandates. I will wait to see what other recommendations this council elects to put in place after their study is completed.

Thank you,
Chuck Osborne
Resident,
City of North Canton

Construction Management Agreement with Developer Not a Public Emergency

2009-06-22T21:54:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
June 22, 2009

At last Monday’s council of the whole meeting, there was discussion under the Community and Economic Development Committee, chaired by Marcia Kiesling, to ratify a Construction Management Agreement appointing Maple Street Commerce as “Manager and Construction Agent” for the City of North Canton. This agreement will allow Maple Street Commerce to oversee the expenditure of $3.0 million of Ohio’s Job Ready Site funds that were recently awarded to the city for the North Canton Hoover Campus Redevelopment Project.

I have a number of concerns.

For me this agreement is a little like letting the fox guard the hen house. There should be qualified and independent oversight of the expenditure of the millions of dollars of public funds that are being made available to Maple Street Commerce, a private developer. There is no such requirement under this agreement.

Another concern is that I do not believe the city’s economic development director, Eric Bowles, should be thrust into the role of “Project Manager” as outlined in this agreement. I do not feel Mr. Bowles has the necessary academic credentials or experience in construction management to manage the depth, breadth and complexity of a project of this size.

Furthermore, Mr. Bowles should not be placed into the position of “good cop bad cop” and that is exactly what you are asking him to be. How can the economic development director of any community be asked to promote and market his community to business interests and then oversee enforcement and compliance by those same business interests that locate into the community? Wearing two hats in this manner diminishes the effectiveness of each position and presents conflicts of interests.

Has anyone ever seen a single real estate agent represent both the buyer and the seller in a real estate transaction?

The discussion last week to allow Maple Street Commerce to be Manager and Construction Agent for the city is on tonight’s agenda as Ordinance No. 56-09 and is slated for passage on an emergency.

Do the health and welfare of the city or of its citizens require immediate passage of this legislation tonight? I believe the health and welfare of the city and its citizens would be better served if this legislation
were discussed further and passage not rushed.

I applaud my 3rd Ward Councilman, Councilmember Jeff Davies, for urging last week that the legislation have at least one additional reading before final passage. Mr. Revoldt, I did not care for your heavy-handed tactics when you replied that the legislation was going to be passed tonight.

I wonder how closely every member of this council has read through the agreement. Though some council members asked questions last week, it appeared to me that it was easier for some council members to coast along and rely on the law director’s legal craftsmanship of the document to protect the city and its taxpayers.

I would encourage every council member to closely review the “Construction Management Agreement” and then read the Phase I Environmental Site Assessment Report for the Hoover Company Facility.

Why are the concerns of the Phase I Environmental Site Assessment not addressed in the Construction Management Agreement?

Page 6 of the environmental assessment states that there is a substantial asbestos presence on the site and it is deemed an environmental concern. Page 39 of the environmental assessment recommends that “a new owner/occupant utilize an asbestos management plan when conducting any building renovation or demolition.”

Not surprisingly, there are many environmental concerns noted in the Phase I Environmental Site Assessment at the former Hoover Facility and there are recommendations made that deal with each of those concerns.

Why are these concerns not addressed in the Construction Management Agreement?

Who is going to ensure that those concerns are addressed? Who has the expertise to judge if those concerns are handled properly?

Will Maple Street Commerce choose to spend grant funds to implement management plans for asbestos, lead paint, concrete, groundwater, and other environmental issues as recommended in the Phase I Environmental Site Assessment Report over spending funds for planned renovations? Who will ensure that they do?

I can not see the Held Administration standing up to Maple Street Commerce and demanding that environmental issues be remedied over planned renovations. I do not see Maple Street Commerce alleviating environmental issues without a contract stating that environmental issues will be remedied.

Any Construction Management Agreement that is put in place needs to address environmental concerns as well as construction oversight with total objectivity.

I urge this council to not rush passage of this legislation and to implement an agreement that truly safeguards the city and the taxpayers.

Thank you,
Chuck Osborne
Resident
City of North Canton

North Canton Continues to Gratuitously Provide Tax Abatements to Able Corporations

2009-04-13T22:24:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
April 13, 2009

My comments tonight deal with an issue I have addressed before to this council and that is the issue of tax abatements and how they are given out simply for the asking in North Canton.

Nearly two years ago, council was considering tax incentives for the construction of a Sherwin Williams Paint Store on Applegrove Street. In remarks to council regarding the tax abatement for Sherwin Williams on May 14, 2007, I said “Tax abatements for businesses in North Canton took on a whole new meaning at last Monday night’s Council of the Whole meeting when Economic Development Committee Chairman Jim Repace brought to the table a request for a CRA Tax Incentive for a Sherwin Williams Paint Store on Applegrove Street, NE.” Continuing, I asked “...[are] the taxpayers of North Canton now expected to subsidize a public corporation, traded on the New York Stock Exchange with sales last year of $7.8 billion with an exemption from property taxes.”

The discussion of tax incentives for the Sherwin Williams Paint Store subsequently ended and the Sherwin Williams Paint Store was later constructed without the need for tax incentives. Imagine that!

On tonight’s agenda, titled as Ordinance No. 33-09, is yet another request for tax incentives for a corporation. This corporation also has sizeable annual sales and financial clout.

And typical of tax abatement requests before North Canton City Council, the legislation is being considered as emergency legislation.

The emergency legislation is for an abatement of taxes under the city’s Community Reinvestment Area Tax program for remodeling and improvements that are planned at the Acme Fresh Market Store located on North Main Street. The store is operated by the Fred W. Albrecht Grocery Company.

The Fred W. Albrecht Grocery Company is a privately owned corporation that has sales in excess of $400 million dollars a year. I am gratified that the Acme Fresh Market store here in North Canton is going to be remodeled and expanded and I look forward to the expanded services that the new Acme will provide to me and the community, but are tax incentives actually needed in this situation?

As I stated in my opening statement, tax abatements are given out simply for the asking in North Canton and they have not been a factor in any of the decisions by businesses who have received them to invest in the city. They have been an afterthought and simply a handout.

In the case of the Fred W. Albrecht Grocery Company, the tax incentives being offered are more than a handout. Last Tuesday, I met with a representative of the Fred W. Albrecht Grocery Company at the company’s headquarters in Akron. In that meeting, the company’s secretary/treasurer told me that Albrecht Grocery Company does not generally ask for tax incentives and in regards to the planned improvements of their Acme store here in North Canton the city simply offered the tax incentives carte blanche, with no questions asked. Sort of like last week’s council meeting when not one single council member posed a single question regarding the request for tax incentives.

The secretary/treasurer for the Albrecht Grocery Company advised me that tax incentives offered to the company have no bearing on plans for the remodeling and improvement being made to the Acme Fresh Market on North Main.

Do I need to refresh everyone’s mind that North Canton is still facing a fiscal crisis? President Revoldt, in Town Hall meetings has indicated that the city could face fiscal emergency and state takeover of the city’s finances. Has anyone forgotten the $1.0 million plus deficit that the city is facing for 2010 and beyond?

And what is truly sad in terms of each and every one of these tax abatements is the fact that the majority of the tax monies that this council is talking of abating are funds destined for the North Canton City Schools.

Is anyone on this council aware of the financial constraints that the North Canton City School District is facing over the next three years?

The North Canton Education Association has just been told the following in a recent meeting of its members: For the school year, 2009-2010, if the district is able to trim this year’s expenditure by $1.5 million, the school district can end the school year with a $2.4 million carryover. For the school year, 2010-2011, the carryover will have dwindled to $660,000. For the school year, 2011-2012, the North Canton School District expects a deficit of $1.7 million.

In last week’s Council of the Whole meeting, Finance Chairman Jon Snyder remarked that the dollar amounts that have been abated in previous tax abatements by council were insignificant. Mr. Snyder, the only thing insignificant about the amounts of those tax abatements is how insignificant the tax incentives were in persuading those businesses to locate and build in North Canton.

The tax abatements given in this city are corporate charity and they take away money from the North Canton City School District and if this council continues to hand them out like party favors you will drive the city’s school district into budget deficits that we now face in the City of North Canton.

Mr. Snyder, an abatement of $6,600 a year on property taxes for a corporation that does $400 million a year in sales is insignificant. It is also tax deductible. Downsizing the City of North Canton and the North Canton City School District is not insignificant.

Last Friday, I delivered a letter to the President of The Fred W. Albrecht Grocery Company, Steve Albrecht, asking him to decline the city’s offer for tax incentives. I am appealing to his moral sense of duty for a community that is in deep financial distress.

Lastly, I must say that I am disheartened that no one in North Canton City Government knows that his fiduciary responsibility is to the citizens and taxpayers of this city first and foremost. Offering tax abatements just because you can clearly is irresponsible.

I am hoping that The Fred W. Albrecht Grocery Company is a good corporate citizen and will be a strong supporter of our community and decline the offer of tax incentives.

The North Canton City Schools need all the money they can collect and most certainly the City of North Canton needs all the revenue it can collect.

Thank you,
Chuck Osborne
Resident
City of North Canton

North Canton's On Again Off Again Annexation Policy Hinders City's Future

2009-02-09T21:15:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
February 9, 2009

I would like to begin by commending City Council as well as Mayor Held in the city’s newfound efforts to expand the city’s borders through annexation of 22 acres of property belonging to Dan Fosnaught. City leaders should follow through at all costs to make this annexation a reality for North Canton. If required, the city can fund the annexation efforts with the $973,000 remaining of the $1.5 million previously set aside for the North Canton CIC.

I would also urge city leaders to pursue efforts to undue the advantages that townships have now been afforded in fighting annexations recently enacted into state law. I do not believe that the legislature envisioned the collusion that is now occurring between Plain and Jackson townships and the City of Canton that effectively ends the growth of small cities such as the City of North Canton. That law is also counterproductive to increased efficiencies that can be achieved as cities increase in size with consolidation of services and bureaucracies that can better serve the public. I urge North Canton to pursue changes to the annexation laws, both through the courts and through the state legislature.

My concern tonight is the history of North Canton’s annexation policy regarding use of city water as a tool for annexation over the last decade and a half and how it has or has not been used and most importantly why that policy flip flops every few years.

Research shows that North Canton first began requiring nonresidents to agree to annex into the city in exchange for city water with the passage of Ordinance No. 118-93. Council member Tim Watkins, Chairman of the Water, Sewer & Rubbish committee at the time this legislation was passed is quoted from city council minutes of December 20, 1993, as stating: “…this is probably going to be one of the single most effective tools that exists that we currently have to promote and increase our viability as a city and a city of growth.”

Ordinance No. 118-93 passed unanimously with votes from Greg Wernet, Paul Blohm, Rick McLaughlin, Daryl Revoldt, Tim Watkins and Gary Wechter. The legislation was immediately signed by Mayor William Hines.

In a Repository news report titled, “Canal Fulton wants to grow through annexation,” dated November 9, 2001, Mayor Shawn Kenney tells Canal Fulton City Council “A city that doesn’t expand is a dead city.”

In another Repository news report titled “City pushes annexations,” dated October 15, 2006, the report states “The population of the state capital now exceeds that of Cleveland. And one big way Columbus did it was through annexation, using water to lure property owners into the city limits.”

The same news article reports that the City of Canton had annexed roughly 2,500 acres in the previous decade and that the City of Massillon had doubled in size since 1974. The article goes on to quote Canton Council Majority Leader Donald Casar who states “Without annexation, we’re going to die on the vine…we have to grow to survive.”

North Canton was put on the proper path for growth with the passage of Ordinance 118-93 in 1993 using water as a tool to requiring annexation into the city.

Unfortunately, this policy was changed under the administration of former Mayor Tom Rice and City Administrator Michael Miller with Ordinance No. 132-04. Under that ordinance, North Canton City Council removed the annexation requirement for nonresidents who receive city water as a precondition for those services.

Marcia Kiesling, Chairwoman of Community & Economic Development headed the committee to amend the annexation requirement with passage of Ordinance No. 132-04. Council members voting to remove the annexation requirement were Dave Lindower, Jeff Peters, Greg Sarbach, Jon Snyder, Doug Foltz, and Marcia Kiesling.

The reason given for removing the requirement according to a Repository report on October 5, 2004, titled “Annexation clause removed from water pacts,” was that “[the requirement] had outlived its usefulness and hoped that it would make the city more competitive with other water companies.”

Well apparently that requirement is useful after all as North Canton City Council has reinstituted the annexation requirement with the passage of Ordinance No. 13-09. This latest legislation was passed on an expedited schedule with Marcia Kiesling, Jeff Peters, Daryl Revoldt, Jon Snyder, and Jeff Davies supporting final passage on February 2. Council members Doug Foltz and Pat DeOrio abstained due to conflicts of interest.

I am a little unnerved to observe my elected leaders pass whatever legislation is placed before them without great care and deliberation. Shouldn’t there be more debate on issues?

Shouldn’t each council member come to his/her own conclusion on passage of legislation instead of acting like lemmings? For council members Peters, Snyder, and Kiesling, your vote for Ordinance No. 13-09 reinstating the annexation requirement was in direct opposition to legislation you supported when you voted on Ordinance No. 132-04 removing the annexation requirement.

Former City Administrator Miller’s recommendation to Council to remove the annexation requirement was noted in an Email dated September 9, 2004. Mr. Miller stated that when he was employed with the City of Canton “[he] found that the requirement of North Canton to annex in exchange for water service to be an advantage to Canton in extending its water.”

Has anyone given any thought to the fact that Canton under state law can require annexation into the City of Canton when providing Canton water to nonresidents?

Any municipality that provides services such as sewer and water outside its borders can require a property owner to annex into the municipality providing those services. That is per the Ohio Supreme Court in Bakies v. Perrysburg, 2006-Ohio-1190.

Maybe the City of Canton is playing the game a little smarter than North Canton by not stating its intentions for annexation as a precursor to receiving those services. North Canton is upfront with its intentions of annexation when it supplies city water to nonresidents.

Who knows what the City of Canton may require in the future after it extends water to nonresidents? Bakies v. Perrysburg certainly raises the possibility that the City of Canton could require annexation to Canton at some point in the future for its nonresident water customers.

That possibility should be pointed out to all prospective North Canton water customers when annexation opportunities arise for North Canton and potential customers believe that Canton is a viable choice without the upfront requirement to annex into Canton. That requirement is supported by state law and not pointed out by Canton when it extends its water lines.

The City of North Canton is not asking any more than what Canton or any other community would ask for when it extends city services.

Without annexations, municipalities die on the vine. Canton Council Member Mr. Casar had that exactly right. North Canton will die on the vine if it does not pursue annexations.

North Canton must embark on an aggressive annexation policy. Municipalities came into existence with annexations and they do not stay vibrant without continued growth of city boundaries through annexations. Water is a tool for annexations and should not be given away. For far too long North Canton has given away the store and not asked for anything in return.

Good quality water is a service we can provide for our residents and should not be used to build a water system that grows far beyond what the city needs or what the city can operate effectively. We have a municipal water system for the city and its residents. It should be nothing more.

If North Canton continues to play water provider to the world it will only create a system it cannot manage and the city will lose in the end. And along the way, North Canton will have lost opportunities to grow the city.

Thank you,

Chuck Osborne
Resident,
City of North Canton

Fairways Lease Credits Private Business Expenses Toward Capital Improvements

2009-01-12T21:49:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
January 12, 2009

On December 8, 2008, this council body voted on legislation authorizing a lease of The Fairways of North Canton to R & S Properties, Inc. The legislation, Ordinance No. 119-08, was passed on “an emergency” and passed with a unanimous vote of council.

The original term of the lease with R & S Properties was for a three year period with provisions to extend the lease for two three-year periods. Under the terms of the lease, the lessee is to pay rent totaling $100,000 per year as well as monthly payments to the city to cover annual property taxes totaling $49,311.74.

The lease also requires for the Lessee to pay a Benchmark of $80,000 per year of capital improvement investment pursuant to Exhibit B. My comments tonight are in regards to line items detailed in Exhibit B.

Exhibit B details seventeen areas for capital expenditures and is a budget for capital expenditures over each year of the nine years of the lease. The areas listed for capital improvements itemized in Exhibit B are the following: Carpet, Paint, Bar and Flooring, Tee Program, Air Conditioning & Heating, Cart Paths, Kitchen Equipment & Coolers, Clubhouse Roof Repair, Out Buildings Roofing, Parking Lot, Pool Paint, Fence & Gas Tanks, Pavilion Removal, Basketball Courts, Sidewalks, Course Equipment, and Golf Carts. There is a dollar amount budgeted for the various areas over the term of the lease.

Expenditures for many of the areas noted above are worthwhile capital improvements and are certainly needed given that capital improvements were ignored by the previous lessee. Two of the areas listed in Exhibit B are highly questionable.

I am at a loss as to how Course Equipment and Golf Carts can be considered capital improvements. The budgeted amount for Course Equipment and Golf Carts represents seventy-two percent of the total $89,000 budgeted for capital improvements for 2009. If one were to recalculate the percentage each of those two line items represent using the Benchmark of $80,000 required by Article 4.1.1 of the lease, the percentage increases to nearly eighty percent of the required Benchmark.

Why there is a conflict within the lease itself is unexplainable. Exhibit B details an annual capital improvement budget figure averaging $89,000 per year while Article 4.1.1 of the lease mandates an $80,000 Benchmark figure. The conflict between the budgeted figures in Exhibit B and the stipulated Benchmark figure stated in the lease introduces confusion and ambiguity.

It is not very hard to satisfy the required Benchmark of $80,000 per year of capital improvement investment when one includes business expenses of the lessee in the tally of expenditures. Allowing credit for business expenses toward the Benchmark of $80,000 per year of capital improvement investment pursuant to Exhibit B undermines the very purpose of requiring the lessee to make capital improvements while in possession of the property.

A footnote included in Exhibit B describes the capital improvements listed in Exhibit B as “…the ongoing commitment for modification and improvements made by the lessee for the benefit of the lessor.”

How are the profit motivated business expenditures of a private business of any benefit to the taxpayers of North Canton?

Article 1.6 of The Fairways lease defines “Capital Improvement” as “…the addition of a permanent structural improvement or the restoration of some aspect of a property that either enhances the property’s overall value or increases its useful life as recognized under generally accepted accounting principles.”

Crediting lease payments for Course Equipment at $24,500 per year and lease payments for Golf Carts at $39,000 per year as “Capital Improvement” does not satisfy the very definition stated in Article 1.6 in The Fairways lease.

In year nine of the lease, the budgeted expenditure of $75,000 for Course Equipment and Golf Carts is eighty-five percent of the average yearly expenditure of $89,000 budgeted in Exhibit B. If one calculates the budgeted expenditure of $75,000 in year nine of the lease for Course Equipment and Golf Carts against the Benchmark of $80,000 per year of capital improvement investment pursuant to Exhibit B, those two expenditures alone qualify for nearly ninety-four percent of the required “Benchmark” required by the lease.

In other words, those two business expenditures alone, which are not capital expenditures, will qualify for nearly all the capital improvements required by the lease with no actual capital improvements being made on the property.

What was the purpose in creating this illusion that the City of North Canton is actually receiving $80,000 of “Capital Improvements” when in reality it is all smoke and mirrors and puffery. The true level of capital improvements made under the budget figures detailed in Exhibit B is about $20,000 per year.

Why not report the actual capital improvements that the lessee would be required to make under the lease? Capital improvements that meet the very definition under the lease? Capital improvements that truly address maintenance of the facility and the infrastructure.

In news coverage of The Fairways lease, the press has reported that R & S Golf Properties is to spend at least $80,000 per year on capital improvements to the property. City officials who have given this information to the press have used the media to mislead the public. How sad for the taxpayers of North Canton.

The cat is out of the bag. The citizens of North Canton know that the purchase of Arrowhead was not a prudent decision. Ownership of Arrowhead is a financial burden on the city. No amount of spin or misinformation will change that. Was there a deliberate plan to dress up this new lease and make something appear that really is not there? Who is responsible for misrepresenting the merits of the lease?

Maybe council members should have looked over Exhibit B and questioned whether leasing Course Equipment and leasing Golf Carts qualify as capital improvements.

Oh, I forgot, the legislation had to be passed on an “emergency.” I guess there was no time for questions since council and the administration was dealing with an “emergency.” But there was time for fabricating creative financing of capital improvements by city leaders.

Taxpayers and the public can only hope city leaders will do better on the next piece of legislation passed on an “emergency.”

Thank you,
Chuck Osborne
Resident,
City of North Canton

North Canton Leaders Ignore Signs Leading To Financial Calamity

2008-12-09T12:55:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident,
City of North Canton

Overdue Civic Center Rate Increase Counterproductive And Too Late

2008-11-24T22:38:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident,
City of North Canton

North Canton Officials Ignore City's Charter & Voters

2008-10-27T22:37:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident,
City of North Canton

Financial Subsidies For Arrowhead And Civic Center Burden City

2008-10-13T22:39:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident,
City of North Canton

Council Discusses Waiver of Fees While City Faces Financial Crisis

2008-09-30T07:08:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident,
City of North Canton

North Canton Proposes Corporate Welfare at Taxpayers' Expense

2008-06-09T21:49:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident,
City of North Canton

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

2008-04-28T22:52:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident,
City of North Canton

Short Sighted Thinking Thwarts North Canton City Council's Progress

2008-03-27T22:07:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident
City of North Canton

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

2008-03-27T21:54:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident
City of North Canton

Wasted Expenditures Continue In North Canton Despite Budget Woes

2008-02-11T21:28:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident
City of North Canton

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

2008-01-30T21:04:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident
City of North Canton

North Canton's Outgoing Council Muzzled Citizens Commentary On Public Business

2007-11-26T21:53:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
November 26, 2007

Every two years the citizens of North Canton elect a new city council. As this current membership of council completes its term in office, it is customary to write into the history books the accomplishments and shortcomings of this council and its members.

Given that politicians continually lavish praise and congratulations on each other as they conduct the public’s business and wield power given to them by the electorate, there is no reason for me to add to that chorus.

What I will do is talk about how these outgoing members of council have wielded power, in my opinion, to the detriment of the public during their term in office.

First of all, I feel that the public has not been served by this council with the limitations it has imposed on the public when one wishes to address council in its public sessions. The public wants to address council on the record and not after the meeting or in the parking lot or on the telephone.

This council continues to prohibit public input at Council of the Whole meetings when proposed legislation is being discussed. Why do you fear citizens that you are sworn to represent, from speaking in a public forum on issues that are important to them and the community? Earlier this year, this council further limited public comment by citizens at regular council meetings by instituting a five-minute speaking limit. As a result, citizens can only address this body while everyone watches the clock.

In a concurring opinion from a well known 1964 U. S. Supreme Court case, New York Times v. Sullivan, Justice Hugo Black joined by Justice William O. Douglas stated the following:

“…a representative democracy ceases to exist the moment that the public functionaries are by any means absolved from their responsibility to their constituents; and this happens whenever the constituent can be restrained in any manner from speaking, writing, or publishing his opinion upon any public measure, or upon the conduct of those who may advise or execute it. An unconditional right to say what one pleases about public affairs is what I consider to be the minimum guarantee of the First Amendment.”

I feel that this council has not served the public in another way and that is by failing to provide a conducive atmosphere in which good government can function. This council has repeatedly turned a blind eye to the actions of one of its members and at many times even supported this councilman as this councilman openly and boldly displayed his disdain for the mayor and city administrator of the City of North Canton.

The mayor’s refusal to relent on laws of nepotism last year only fueled the animosity of this member of council. What did this council body do regarding the allegations of nepotism against this fellow member of council last year? This council body did more than just sit idly by and do nothing. This council body united together against the mayor and refused to address the issue of nepotism.

This same councilmember has also designated himself as the city’s sole negotiator and undertaken to negotiate agreements with adjoining townships while publicly telling the administration that they were not welcome in the negotiations.

Why has this council not reigned in a councilmember who is clearly exceeding his authority in placing himself in these meetings?

Why are council members not concerned that many of these meetings have been behind closed doors and in violation of state law?

And this evening, at this council’s last meeting, this council member is attempting to persuade this council to adopt agreements that are highly beneficial to both Plain and Jackson Townships and very detrimental to the City of North Canton. Politics is being placed before good policy if these agreements are implemented and North Canton’s future growth is in jeopardy while other communities grow their boundaries.

If this council’s memory is a little short, let me remind you that the officials from Plain and Jackson Township who are pushing for this agreement negotiated by North Canton’s rogue council member were the same officials who were here in this chamber speaking in opposition to the recall of this council member earlier this year. Are council members blind to what is happening before their eyes?

The North Canton council member who was the subject of a recall earlier this year responded with a defamation lawsuit. This action was not only a detriment to me but to all citizens who comment on the actions of their public officials in the performance of their public duties.

I cannot fault this council body for the actions of this council member regarding the lawsuit. What I can do is quote the concurring opinion of U.S. Supreme Court Justice Joseph Goldberg and Justice William O. Douglas in New York Times v. Sullivan.

"In my view, the First and Fourteenth Amendments to the Constitution afford to the citizen and to the press an absolute, unconditional privilege to criticize official conduct despite the harm which may flow from excesses and abuses. The prized American right "to speak one's mind," about public officials and affairs needs "breathing space to survive..." The right should not depend upon a probing by the jury of the motivation of the citizen or press. The theory of our Constitution is that every citizen may speak his mind and every newspaper express its view on matters of public concern and may not be barred from speaking or publishing because those in control of government think that what is said or written is unwise, unfair, false, or malicious. In a democratic society, one who assumes to act for the citizens in an executive, legislative, or judicial capacity must expect that his official acts will be commented upon and criticized. Such criticism cannot, in my opinion, be muzzled or deterred by the courts at the instance of public officials under the label of libel."

U.S. Supreme Court Justice Louis Brandeis, in Whitney v. California said “Those who won our independence believed…that public discussion is a political duty…”
My hope is that elected leaders would do their duty.

Thank you,
Chuck Osborne
Resident
City of North Canton

Development Costs Shouldered By Taxpayers Benefit Developer of Waterside Park

2007-11-13T21:21:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
October 22, 2007

Although I have not attended city council meetings since council came back from their summer recess, I have followed news reports of council meetings and, as in the past, it is clear that council will continue to spend declining public funds wherever it is politically expedient.

Never mind that over the last two years, this council has seen fit to forego staffing positions in the city’s police department as well as other departments in the city. Never mind that citizens have come before this council body asking for needed infrastructure improvements in their neighborhoods. All of those needs were left unfilled as council repeatedly said that the city did not have the funds.

But miraculously, this council has come up with funds to benefit and enrich private interests using the pretext that they are bringing jobs to the city. I am talking about the planned expenditure of $275,000 of public money to assist McKinley Development in the development of Waterside Technology Center Park on South Main Street.

A recent newspaper article stated that Council member Kathy Magel had concerns because infrastructure costs of the project had risen from $600,000 to $951,000. According to press reports, others on council also expressed concerns on the city’s participation in this project. I believe those concerns are just the tip of the iceberg.

How is it that the city could budget $125,000 for commercial development of Waterside Park and then state on numerous occasions publicly all year long that funds were not available to maintain city services or make desperately needed residential infrastructure improvements?

And now, not only can council budget $125,000 to provide assistance to a developer in times of declining city revenues, it can more than double that budgeted financial assistance to the tune of $275,000.

I have concerns about these expenditures. It is on you agenda tonight as Ordinance 126-07 and of course it is an emergency. Clearly council does not want to allow the public the time to discuss the pros and cons of this decision.

I would like to know what additional costs the taxpayers of North Canton are going to have to shoulder to assist the developers of this property. There is a new light signal that has been promised at South Main and Mississippi to accommodate an alternate access to the Waterside Technology Center Park. I suspect that will require more than $100,000 from the city. Further improvements will be needed on Mississippi where the road for Waterside Center Technology center will intersect. Would $200,000 cover that expense?

The public monies going to assist in the development of the Waterside project have now risen to $575,000. Did anyone on this council discuss or acknowledge any further costs the city might have to incur for this project that are incidental to this development?

The grant requires that a majority of jobs in the Waterside Technology Center Park be in the high tech/research and development field. If this commitment is not met, the grant funds must be returned.

The City of North Canton is clearly at risk in this arrangement and could be expected to repay the grant funds back to the Ohio Department of Development. That is a liability to the city of $350,000. Is there anything in writing requiring the developer to reimburse the City of North Canton for repayment of the grant funds if the project fails to generate the required number of technology jobs?

The City of North Canton’s financial obligations for Waterside Technology Center Park are conceivably at least $925,000. This is equal to, if not more than, the stated infrastructure cost of the entire project. Why are taxpayer’s funds being utilized in this fashion?

Revenues for North Canton are dwindling and yet this council continues to pledge taxpayer funds that further the well-being of private individuals. In a related expenditure of public funds a few months ago, the city’s CIC authorized expenditures to purchase a half acre of Waterside Technology Center Park property to expand parking for Abbott’s Bridal Shop.

As you all know, Abbott’s Bridal Shop is the abutting property to the south of Waterside Technology Center Park. Abbott’s Bridal Shop is private business and yet the expanded parking is to be paid for by the North Canton CIC with funds removed from North Canton’s general fund.

McKinley Development, the owner of Waterside Technology Center Park is also a private business and it, too, is receiving assistance at the expense of North Canton taxpayers.

Waterside Park, as it’s been known for years, fronts right on South Main Street. The property has been promoted and marketed for development for years. If the State of Ohio will provide $350,000 in grant funds, why isn’t that enough of an incentive to develop the property.

The City of North Canton does not need and cannot afford to bear the development risks of this property. Developers are duly compensated in the marketplace for the development risks they take. Free market forces must be allowed to play out. Citizens pay their taxes to fund city services, not to have those funds risked for the gain of individuals.

I ask that you limit the City of North Canton’s participation in the development of the Waterside property by assisting in securing the $350,000 grant from the state and that McKinley Development assume all risks regarding compliance with the requirements of the grant.

Financial assistance from the State of Ohio covering one-third of the infrastructure costs for Waterside Park is quite a windfall for any developer. If that is not enough of an incentive to develop the property, then it is not a good risk under any circumstances for anybody.

Thank you,
Chuck Osborne
Resident
City of North Canton

North Canton CIC in Violation of its Plan and the Ohio Constitution

2007-07-10T21:14:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
July 9, 2007

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 a that “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
Resident
City of North Canton

North Canton Tax Dollars Benefit Private Business for the Second Time

2007-06-25T22:24:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
June 25, 2007

Two weeks ago on June 11, 2007, I questioned before this council the decision of the North Canton CIC to purchase a ½ acre property abutting the rear parking lot of Abbott’s Bridal Shop for additional parking needs to benefit private business. The need for expanded parking at the rear of Abbott’s is the only hurdle to the property owner for leasing 11,000 sq, ft. of office space to the Service and Support Administration of the Stark County Board of MRDD and bringing 70 jobs to the city.

The four-year lease, with an on option to renew for one year will generate $428,450 for Mr. Randall McNurlin. In Mr. McNurlin’s own words before the CIC, this was net revenue. The CIC will be expending $115,000, not including engineering and other soft costs, for the purchase and development of the ½ acre parking lot. These are funds that were removed from North Canton’s General fund and given to the CIC. The CIC will recoup from Mr. McNurlin $1.00 per year over the five-year span of the lease and be left owning a landlocked parking lot with no value at the end of the lease.

This handout of what was once taxpayer dollars to benefit the private business interests of Mr. McNurlin is not the first time the owner of Abbott’s Bridal Shop has benefited from taxpayer assistance.

I call it a part of the city’s genealogical history. Paul Harvey would call it “The Rest of the Story.”

I have learned the following from a search of city records: In 1998, the City of North Canton purchased the property on which Abbott’s Bridal Shop is now located for $180,000 and paid $9,600 to clear several structures from the property. These figures do not include appraisal costs, survey costs and other soft costs required in the purchase of the property. The property consisted of 1.51 acres. The city subsequently sold 1.26 acres to Mr. McNurlin and carried a no-interest note on the sale of the property for him.

The North Canton City Council passed the legislation to sell the property on “an emergency” on December 14, 1998. In city council minutes from the meeting Council member Jon Snyder is quoted as saying “…it’s a win, win situation for the city. And my compliments to Mr. Sumser for putting it together.”

After months of delays on the part of Mr. McNurlin to finalize the purchase of the property, the following comment were made by council members in a council meeting held on May 10, 1999. Council member Tim Morrow stated “…We have—you know there’s a valuable piece of Main Street property…we spent taxpayer dollars to tear this down…."

Mr. McNurlin subsequently finalized the purchase of the property on July 14, 1999.

After Mr. McNurlin received a “moving credit” of $65,000 from the city for business moving expenses, his net cost for the purchase of the property was $50,000. Mr. McNurlin became owner of a “valuable piece of main Street property” for a fraction of its true costs at the expense of North Canton taxpayers.

At the May 10, 1999, council meeting, Council member Doug Foltz is quoted as saying “…It’s a sweetheart deal for him….” The vote by council, “on an emergency,” to sell the property to Mr. McNurlin was unanimous. Is that any surprise?

Yes, Mr. Foltz, it indeed was a sweetheart deal.

How many other business owners would like to acquire frontage on Main Street for a fraction of its costs?

The city used the rear portion of the property, approximately ¼ of an acre, to locate a water storage tank that water distribution studies have identified as a less than an ideal location for a water storage tank.

The poor location for this South Main Street Water Storage tank is due to low ground elevations that have been acknowledged only recently by this administration. I thank Mr. Wise for his candor in this regard as past city administrations have denied there are problems.

As we all know from grade school, water does not flow uphill. Why city council approved this location for construction of a water storage tank does not speak well for their grasp of basic principles of physics. The construction of the water storage tank at this location received unanimous approval from City Council.

The owner of Abbott’s also received waivers for sewer frontage fees and water tap-in fees totaling $5,021.00. Additional zoning variances were given including reduced parking size requirements.

In 1999, the City of North Canton gave Mr. McNurlin a five-year, fifty percent abatement of taxes on the Abbott Bridal Shop property. Unfortunately, the city was not able to provide any documentation as to the amount of taxes that were abated. From the outset, it appears from the records that Mr. McNurlin failed to comply with the terms of the original five-year tax abatement. That abatement was amended to a three-year, fifty percent abatement of taxes. I was unable to determine whether the terms of the amended tax abatement were ever met as well, but as we have seen from ongoing tax abatements, the tax exemption continues whether there is compliance with the terms of the agreement or not.

It is interesting to note that the city also could not provide any kind of estimate in terms of income taxes that have been collected from business activity from this property yet the city was quick to provide estimates of the income tax that would be collected if MRDD relocated to the office space located below Abbott’s Bridal Shop.

In summary, the assistance to the owner of Abbott’s Bridal Shop has ranged from “sweetheart” deals to outright giveaways at taxpayer expense. These actions, past and present, are a blatant slap in the face for North Canton taxpayers who are subsidizing financial gain for private interests. Furthermore, other business interests throughout the city do not receive the same corporate charity that has been lavishly showered on Mr. Randall McNurlin.

At 1280 South Main Street, the business owner has received the following: deep discounts for purchase of Main Street property, waivers of fees, no interest loans at taxpayer expense, exemption of property taxes on commercial property despite noncompliance with terms of the agreements, free use of property and property improvements at the expense of others. All of these giveaways are at taxpayer expense and create unfair advantage between businesses that operate without handouts. None of this speaks well of city leaders who promote the city in this manner.

It is a sad thing to watch the abuse of public monies in this manner.

This is North Canton’s past practice and it continues today. Something is wrong!!

Thank you,
Chuck Osborne
Resident
City of North Canton

North Canton CIC Provides Illusion of Great Benefits

2007-06-11T22:23:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
June 11, 2007

The trumpeted arrival of the Service and Support Administration of the Stark County Board of MRDD and its promised seventy jobs is not a windfall for the City of North Canton. All one has to do is simply crunch the numbers as supplied by North Canton Economic Development Director Eric Bowles in his presentation to the CIC Board of Trustees last Tuesday, June 5, 2007.

I should have known that this was a done deal as the prospect of MRDD moving its offices to the City of North Canton had already been announced on WHBC radio days before this CIC meeting.

At last weeks CIC meeting, the CIC Board of Trustees agreed to purchase ½ acre of property from McKinley Development, the owner of property abutting Abbott’s Bridal Shop on the north for $75,000. Mr. Lemmon, the owner of McKinley Development, stated to the CIC Board that the property is valued at $150,000 per acre. The valuation of the property was questioned in the meeting by a trustee.

Why was their no independent appraisal on the valuation of the property? Most attorneys would be on safe ground in suggesting an independent appraisal of real estate before making an offer to purchase.
The city’s Law Director who was in attendance at this meeting made no such suggestion.

While I watched the owner of Abbott’s Bridal Shop, Mr. Randall McNurlin, present his request for assistance to the CIC Board of Trustees, the obvious question to me was why didn’t the owner of Abbott’s Bridal Shop sit down and work out a business deal with Mr. Bill Lemmon, owner of McKinley Development? The property that the CIC will own is landlocked and is of no value to anyone except Bill Lemmon, and, for the moment, Randall McNurlin, who is in need of additional parking to accommodate the prospective tenant noted above.

The proposed development project that was presented to the CIC Board of Trustees was for the CIC to purchase the McKinley Development property for $75,000 and make improvements to the property (clear trees, install drainage and fill, and pave with asphalt) to create additional parking for the building containing Abbott’s Bridal Shop. The cost to the CIC was said to be an estimated $115,000, excluding engineering and other soft costs.

Given that development costs of the property are only estimates and that they do not include engineering and other soft costs, the final costs to the CIC could reasonably total $130,000.

The owner of Abbott’s Bridal Shop will have use of this parking lot for $1.00 per year for the entire term of the lease with no obligation to repay the CIC its costs.

In the initial four-year term of the lease, Mr. McNurlin told the CIC Board that he will receive net revenue of $7.79 per sq. ft. on his 11,000 sq. ft. of office space. This equates to $342,760 over four years.

The City of North Canton is expecting on average for 70 jobs, $34,500 per year in income taxes for a total of $138,000 over the four-year life of the lease with MRDD. The seventy jobs are only promised, not guaranteed.

To calculate the true benefits of this deal, the benefit of the CIC leaving the $130,000 in the bank must be factored into the financial analysis. In this case, if the CIC simply left the $130,000 in the bank for four-years, simple interest alone would increase these funds to $156,000.

Does it make economic sense for the CIC to expend or forgo $156,000 to generate $138,000 over a four-year period?

In addition to the above financial analysis, there is the added risk at the end of the four-year lease, when the owner of Abbott’s Bridal Shop may no longer need the added parking, that the CIC will own a non-marketable landlocked ½ acre parking lot and lose its entire investment in the property.

The bottom line is that the CIC will be out $156,000. This proposed development on behalf of the owner of Abbott’s not only fails to recoup the original costs borne by the CIC, but leaves the CIC owning a real estate asset with no resale value.

Apart from the financial aspect of this giveaway of former taxpayer funds, there are the limitations of the property itself. This property was never designed to accommodate this volume and density of traffic into and out of the property. It will be a horrendous traffic nightmare and compromises safety in every way.

The monies being used in this giveaway were removed from North Canton’s General Fund just two years ago by City Council.

Now these former tax dollars are being handed out, with no demand for repayment, to benefit private business and with no real benefit to the taxpayers of North Canton.

Former Mayor Tom Rice, a trustee on the CIC Board stated that he could not be Santa Claus and was the only trustee on the CIC board to vote NO on the request for financial assistance.

People with clearer minds need to rethink this deal.

We all know this is an election year and we all know that politicians want to provide the illusion that under their leadership positive things are happening in North Canton but at what price?

This is all smoke and mirrors under the guise of jobs for the city with politics thrown in to spin a giveaway of tax dollars into an illusion of progress.

As the old proverb says, “You cannot make a silk purse out of a sow’s ear.”

Financially and economically, there is no gain to the city. This deal simply enriches private business at the expense of the public and creates safety issues and traffic headaches that the public will have to bear.

Thank you,
Chuck Osborne
Resident
City of North Canton

Council Contemplates Tax Abatement to Large Publicly Traded Company for Two Jobs While North Canton Taxpayers Brace For Higher Taxes

2007-05-15T08:08:00.001-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
May 14, 2007

My comments tonight deal with an issue I have addressed before to this council and that is the issue of tax abatements and how they are given out simply for the asking in North Canton.

If everyone in this room believes North Canton is such a nice place to live, work, and play, why does this council body feel we have to pay a business to locate here or to remain here?

On tonight’s agenda is the second reading of Ordinance No. 51-07 which accepts the recommendations of the Tax Incentive Review Council (“TIRC”). The legislation is to continue four of the existing agreements granting exemptions and modify three existing CRA agreements. Two of the seven agreement holders received abatements of their 2006 taxes that are hardly worth the time and expense of the paperwork involved. One agreement involves an abatement of $241 and the other $177. Can anyone tell me with a straight face that an abatement of $241 or $177 convinced these two businesses to commit to North Canton?

The agreements for three of the businesses are being modified because they have not met the job creation requirements agreed to in their original abatement agreement. Furthermore, these three businesses have never complied with the job creation requirements of the agreement.

The options available to the TIRC when reviewing compliance with CRA agreements is to either continue the agreement, amend the agreement, or to terminate the agreement. I am sure most people would expect their elected official to terminate the tax abatement of a business that never complied with the terms of the abatement. But that does not seem to be the logical choice for North Canton politicians.

Would anyone in this room be surprised to hear that the recommended modification for two of the businesses is to simply reduce the job creation requirements of the original agreement? This will then bring these businesses into compliance. This will allow the exemption of their property taxes to continue.

If you cannot make the grade, just lower the standards. Is that how it works? Taxpayers can surely sympathize with the plight of the politician. We all know that no politician wants to alienate himself from prospective voters and campaign contributions from local businesses. That just would not be right would it?

One of the abatements up for modification is for Spee-D-Foods on South Main Street. This business also has never complied with the job creation requirements of its agreement. Spee-D-Foods has now admitted that it cannot comply with the terms without liquor sales. Their liquor option failed at the polls last fall and they cannot go back to the voters for four years.

In 2005, taxes totaling $1,731 were abated for Speed-D-Foods. For the tax year 2006, taxes totaling $2,353 were abated. Despite not meeting the job creation requirements, the abatement has continued. The modification being recommended for Spee-D-Foods is to continue the abatement for four years instead of the eight years remaining per the original agreement.

This is just a sampling of some of the tax abatements that have been approved by this council in the last few years and how they are kept alive when they should be ended.

Tax abatements for businesses in North Canton took on a whole new meaning at last Monday night’s Council of the Whole meeting when Economic Development Committee Chairman Jim Repace brought to the table a request for a CRA Tax Incentive for a Sherwin Williams Paint Store on Applegrove Street, NE.

I would like to know if the taxpayers of North Canton are now expected to subsidize a public corporation, traded on the New York Stock Exchange with sales last year of $7.8 billion dollars with an exemption from property taxes. If this is seriously being considered, this council has sunk to a new low.

According to the Sherwin Williams Company’s 2006 annual report, the company opened 120 new stores last year. At year-end Sherwin Williams operated 3,046 stores in North America. They plan to open 100-plus new stores in 2007.

Do you think Sherwin Williams demands tax abatements before the company will open up a store in a community? If they do, I do not think they are a very good corporate citizen.

And I do not think that North Canton should give this request any consideration.

In the twenty-five minute presentation, the applicant stated that the North Canton location was the preferred location. What other incentive do you need? Why isn’t that enough?

How can this council seriously entertain the abatement of taxes for a retail business that promises two & 1/3 jobs? There is growth that has occurred in this city that has not necessitated the abatement of property taxes.

Applegrove Street offers a lot of amenities to a business wanting to locate in North Canton. Utilities are new and accessible. Traffic flow on a new four-lane modern road could not be better. North Canton has good police, fire and EMS services. And all of these services have a cost. And these costs should be shared by all businesses.

In recent months, weekly discussions continue to revolve around funding shortfalls and maintaining city services. How can you resolve the funding shortfalls in North Canton when you offer tax incentives such as these?

Why settle for collecting a portion of the property taxes when the city could collect all the taxes that are due. There are a lot of other businesses in this city paying their fair share and there are homeowners paying their fair share as well. The North Canton City Schools need all the money they can collect and most certainly the City of North Canton needs all the revenue it can collect.

Thank you,
Chuck Osborne
Resident
City of North Canton

Negotiated Agreement With Plain Township by Councilman Repace Raises Questions

2007-03-27T12:11:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
March 26, 2007

I would like to know where in our North Canton City Charter Council Member Jim Repace believes he is authorized to serve as the city’s negotiator in meetings with other local governments or agencies?

This question has perplexed and unnerved me ever since Mr. Repace revealed last summer at a council meeting that he and Council Member Pat DeOrio had been meeting for months in closed door meetings with Jackson Township trustees.

At least one council member was similarly perplexed at a council meeting last summer when Mr. Repace reported that he had been holding discussions with Jackson Township trustees. According to the minutes of the July 10, 2006, meeting, Council Member Lane naturally thought that other members of North Canton City government would be included in the discussions when he stated “…the Administration would have to get involved and so would the Law Director…”

Council Member Jim Repace replied “No… I’m gonna do the negotiating” and then quickly added “with Pat’s help”

Mr. Repace followed this proclamation by stating “[the] Administration is not going to do any negotiating.”

Clearly Council member Lane thought something was a little amiss as he continued his line of commentary on Mr. Repace’s bravado by stating “...I would think, what I am trying to say is, that side of the fence has to be represented as well, I would think.”

Obviously, one member of this council was questioning the role Mr. Repace was defining for himself. It is unfortunate that other members of council did not speak to this issue as well.

Apparently Mr. Repace is confused as to what his role is as a council member because Mr. Repace at this same council meeting stated that his closed door meetings with Jackson Township was “…something that former Mayor Tom Rice had started working on and I just kind of inherited this thing.”

Councilmember Repace, it may come as a surprise to you but you are not the mayor and you are outside your authority in negotiating any agreements for the City of North Canton. Your position as the President of the Hoover labor union does not give you negotiating privileges for the city. That is not your role as a councilman.

Quite frankly, I am more than surprised that remaining members of this council, City Administrator Earl Wise and Mayor David Held have all sat idly by while Mr. Repace overstepped his authority as a member of council and pursued closed-door negotiations with Jackson Township last year.

Does anyone in this room believe for one second that former Mayor Tom Rice, or any previous mayor or city administrator would have allowed a member of council to proclaim themselves as the city’s negotiator? Would any previous mayor or city administrator allow a council member to be the exclusive representative in negotiations with other local governments or county agencies? Not for a minute!

A few on this council have proffered charges against a council member before. This occurred just a few years ago. Why did council show so much concern years ago with that councilmember? Why is there no concern today for a council member who by self-proclamation takes a role that is clearly outside his authority? How can this kind of conduct be overlooked?

Now, after last summer’s failed attempt by Mr. Repace to have city council approve an agreement with Jackson Township that was highly unfavorable to North Canton, Mr. Repace is pushing a similar agreement with Plain Township.

The Repository reported in a June 30, 2006, article titled, “Officials spar over hiring family;” stated “The younger Repace has a job as a general laborer with Plain Township. He started in April.”

Mr. Repace, I am glad your son was successful in securing employment with Plain Township but it does raise questions given the close relationship you have with certain Plain Township officials.

And now, by all appearances citizens would now have to ask if Mr. Repace is now expected to return a favor to Plain Township by pushing a legislative agreement through council that is highly desired by Plain Township and detrimental to North Canton.

The presence of Plain Township Trustee Louis Giavasis at numerous North Canton City Council meetings over the last few months shows how eager Plain Township is to see the agreement passed by North Canton City Council.

Mr. Giavasis has been available in the audience at council meetings to assist Council Member Repace every time this legislation has been discussed. Apparently, Mr. Giavasis is now an adjunct member of North Canton City Council when legislation beneficial to Plain Township is on the agenda.

In a North Canton City Council meeting on January 16, 2007, Mr. Giavasis stated “…the reason why Plain Township is cooperating with North Canton right now is solely because of Jim Repace.”

The public’s business should be conducted in an arms-length manner. The fact that both Mr. Repace and Mr. Giavasis are Democrats and the fact that they are friends should not be the basis for any agreement passed by North Canton City Council.

Lastly, I would like to say that I was dismayed by the appearance of numerous Democrats at a North Canton City Council meeting on January 16, 2007. The list of Democrats included two Jackson Township Trustees, one Plain Township Trustee, the Stark County Treasurer, the Stark County Auditor, and others. These individuals were elected to serve the public not their party cronies. A city council meeting should not be turned into a political rally.

The purpose of a council meeting is to discuss the public’s business. Party politics does not belong in a city council meeting. It is not a place where partisan politics should be staged for the benefit of Democrats or Republicans.

The appearance of the Jackson Township trustees at the January North Canton City Council meeting turned political rally for Council Member Repace makes one wonder if their presence was payback for Council Member Repace’s effort to push a legislative agreement through council last summer that was highly favorable to Jackson Township but equally detrimental to North Canton.

City council scuttled the proposed agreement with Jackson Township last summer.
I urge this council to scuttle the proposed agreement with Plain Township that is before you now. The agreement has been pursued by a council member acting outside his authority. Furthermore, I believe the agreement furthers friendships and not the future of the City of North Canton.

Thank you,
Chuck Osborne
Resident
City of North Canton

Taxpayer Funds Destined For CIC Should Be Used For City Services as Intended

2007-03-12T23:24:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
March 12, 2007

Last week North Canton Police Chief Michael Grimes made a presentation to this body urging that funding be made available to allow him to hire an additional patrol officer. Chief Grimes clearly and professionally defined the city’s need to restore department staffing levels in the police department. Council’s response was that the funds just are not available.

For weeks, the residents of Lipton Avenue have appeared before city council pleading that the city make good on promises made since 1997 to fix storm water drainage problems on their street. Council’s response was that the funds just are not available.

Funds are available. There is $1.3 million that is available that has not been disbursed to the North Canton Community Improvement Corporation and I am surprised that there has been no public discussion on using this source of funds, as they are desperately needed.

In 2005, former Mayor Tom Rice asked that council transfer $2.0 million dollars from the general fund to provide seed money to the North Canton Community Improvement Corporation (CIC). Then Finance Chairman and President of City Council, Jon Snyder made the following statements at a March 7, 2005, Council of the Whole meeting:

“…I have reservations about the amount, and reservations about doing it….The city is not in a position to do this….I am against using the liquidity of the city….”

At the same Council of the Whole meeting Director of Finance, Julie Herr, remarked:

“…The figure that is floating around, $2.0 million, of course I have concerns over that. That is almost twenty percent of our carryover….Are there potential uses for this seed money or is it going to sit there for six months?”

“… Are we going to see results this year?...Is there any plan that might start seeing results of this seed money this year, next year, two years from now?...If two or three years down the road, the results of that CIC are slower than what we expected, there might be some more difficult decisions to make down the road, because that $2.0 million is not going to be there.”

Then Finance Chairman Jon Snyder subsequently submitted a proposal to fund the CIC for $1.5 million dollars. This funding was to be released in increments of $100,000 per year for fifteen years. The legislation received its third and final reading by council on May 9, 2005, as Ordinance 67-05.

The statements made two years ago by both Mr. Snyder and Mrs. Herr in response to the request to use taxpayer funds to fund the CIC was prophetic. This should be clearly evident to everyone at this time.

The city was not in a position to fund the CIC two years ago as then Finance Chairman Jon Snyder stated. Mr. Snyder, you were correct in that assessment. And without a doubt, the city is not in a position to fund the CIC today.

From her comments of two years ago, Finance Director Julie Herr was clearly looking for some kind of return on the money that she was being asked to remove from the general fund.

Finance Director Herr advised this council two years ago that if the CIC failed to provide results in a timely fashion, then the city would be facing more difficult decisions down the road. Mrs. Herr, you also were correct in your assessment regarding the impact of removing taxpayer funds from the general fund to fund the CIC. Each of you gave your best advice and it was ignored.

The legislation funding the CIC was forced on to the ballot as a result of a referendum and the citizens of North Canton approved the funding of the CIC, known as Issue 31, at the polls in the November 2005 elections.

Contributions from special interests groups totaling more than $13,000 supporting Issue 31 likely influenced its passage. The reality was that the public was mislead on what Issue 31 would or could do for North Canton with rosy pie in the sky predictions. That was truly unfortunate.

On or around December 31, 2005, $1.5 million dollars was removed from the general fund and placed in an escrow account. At this same time, the first $100,000 installment was made to the CIC. In June 2006, a second $100,000 installment was made to the CIC. At present, the CIC has $200,000 in its account and the escrow account under the city’s control has $1.3 million remaining of the original $1.5 million.

The remaining $1.3 million dollars needs to be restored to the general fund. As this council knows and as the public has learned, funding must be put where it will generate the most good for the citizens of North Canton. It does not make any sense whatsoever to continue to bleed the city of $100,000 a year when those funds are desperately needed elsewhere.

Economic development has to begin with a city that provides the necessary amenities that citizens naturally expect. The city must have visible police presence. Without strong safety forces you will not only fail to attract new business, you will likely lose the businesses that you have.

Without strong safety forces, all you will attract to your city is the wrong element as Chief Grimes described in his presentation.

Without a strong visible presence of law enforcement, you will see a decline in the quality of life in our neighborhoods. It does not happen overnight. It begins slowly.

This council’s failure to maintain the needed staffing in the police department is counterproductive to economic development prospects for the city.

I urge you to move quickly to rescind the legislation funding the CIC and recoup the remaining $1.3 million. These funds are desperately needed to maintain both the level of safety forces patrolling our city streets and to make the needed infrastructure improvements for the residents on Lipton Avenue.

What better way to promote economic development in the City of North Canton than providing good police protection for residents, visitors, and businesses and protecting the investment homeowners have in their homes with needed storm water improvements?

Thank you
Chuck Osborne
Resident
City of North Canton

North Canton City Council Muzzles Citizens in Public Meetings

2007-02-27T13:26:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
February 26, 2007

I would like to begin my comments tonight with an apology to Council President Doug Foltz, to this council and to the citizens of the City of North Canton. Two weeks ago, I made comments from the audience on two occasions during the Community & Economic Development Committee meeting without being recognized to speak. Mr. Repace, as Chairman of that committee, I apologize to you as well. During the regular city council meeting that followed, I attempted to follow-up my recognized presentation with one additional comment.

I recognize that no meeting can be conducted in that matter and I assure you Council President Foltz, that I will maintain the decorum that is needed in future public meetings at which I am present.

With that being said, I would ask that this council not penalize the citizens of this community by revamping the rule for public speaks in the manner that you now propose.

Citizens of this community have enjoyed the opportunity to attend city council meeting and speak publicly to their elected leaders for forty-six years. From my perspective this has not been a problem?

Since I have had the pleasure to sit on this council as well as in the audience, I think I can say that I have a pretty good perspective from both sides.

Do I think there is a problem with public speaks?

Yes! I believe there is a problem and that problem is a lack of transparency and accountability in the proceedings of North Canton City government that has developed in the last few years.

Having attended nearly every single council meeting since 2001, I can say that the public, for which each and every one of you work, is being allowed less and less input into the policy making decisions of their government.

I hope you realize that this body is conducting the public’s business. This council should understand that there are citizens who care about the quality and quantity of the debate that goes into each and every decision that is made up here on behalf of its citizens.

What I have observed in the six years of council meetings that I have attended is that the public has been losing the opportunity to provide input on public business that is conducted in this chamber.

The public has lost the opportunity to speak at Council of the Whole meetings when proposed legislation is being discussed. The opportunity to speak during Council of the Whole meetings was unimpeded until just a few short years ago. Unfortunately, the public is no longer allowed to speak at any of the Council of the Whole meetings.

There are exceptions made at the Council of the Whole meetings for certain people to be recognized to speak. Residents and nonresidents alike who are in good graces with those in power and who support the favored agenda of council are allowed to speak. Individuals who heap praise on everything their elected leaders do are allowed to speak. The criteria that this council uses to decide who shall be allowed to speak and who should not is obvious to all who attend council meetings.

This is not a rule but a practice that has crept into use in the last few years that muzzles the public and stifles honest discussion and debate. It tells citizens, that your input is not needed. It tells citizens that their elected officials, as members of council, do not care to hear what the public thinks on issues that come before them.

With this gag practice in place for public speaks at Council of the Whole meetings, I regularly encounter citizens who attend a council meeting hoping to speak publicly who are surprised to learn that they are not allowed to speak. They are told that they must come back next week for the regular council meeting.

For most citizens, this is one of the few meetings that they have attended in years or maybe this was their very first meeting. I am sure they are disappointed to find out that North Canton City Government prefers that citizens not participate in their government. And of course they leave the meeting without ever coming back.

The opportunity for the public to speak at the end of a regular council meeting titled “Final Call for New Business” is another practice that is no longer permitted. This is another lost opportunity for the public that has crept into practice and this again muzzles the public and stifles input from community residents.

In council meetings of years past, elderly residents would often come up to speak before the close of the meeting and comment on issues that were important to them or simply offer pearls of wisdom from their years of knowledge of the city. Public speaks at the Last Call for Business is no longer permitted.

What does the continuing loss of opportunities for the public to speak before this council say to the very residents they represent?

Ordinance 15-07 is now before this body. This ordinance seeks to place a time limit on the only remaining opportunity for the public to speak before this council.

What problem are you trying to correct? I believe you are manufacturing a problem to justify your actions.

The out of order comments I made from the audience two weeks ago did not occur during the Recognition of Visitors portion of a regular council meeting but at a Council of the Whole committee meeting. And you, President Foltz, had all the necessary authority to deal with it.

You dealt with it and that should be the end of it.

Why change the Recognition of Visitors portion of the regular council meeting? Is this the legacy that you want to leave behind?

Do you actually want to trample on the public’s opportunity to participate in their government just to stop one citizen?

This proposed change to the public’s opportunity to speak before council would create more harm than good. Surely some of you on this council can see that.

If you were to make changes to public comments at council meetings, the changes should be to RESTORE previously lost opportunities for the public to speak and NOT curtail what little opportunity that remains!

It would seem to me that this council has more pressing issues facing this city to address than limiting the remaining opportunity that the public has to address this council.

I assure you, President Foltz, and all of this council that I will not speak out of order in the future. There is simply no good reason to take drastic measures to further curtail the public’s opportunity to speak.

Do not let it be said that this council continued to allow the erosion of opportunities for the public to speak before this council or future councils.

Do not make this your legacy!

Thank you
Chuck Osborne
Resident
City of North Canton

North Canton Taxpayers Subsidize Golf Course Operator While City Cuts Budget

2007-01-29T22:04:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
January 29, 2007

Last week, in this chamber, I sat through the Council of the Whole committee meetings and observed the results of what reckless spending will do to future budgets of a municipality.

North Canton City Council is now trying to cope with its financial crunch by cutting capital projects, employing fewer city employees and doing less street maintenance.

Finance Chairman Pat DeOrio wonders how the city got to this point financially.

The sad fact in this scenario is that ill-advised spending decisions, over the last few years are, in large part, responsible for the budget cuts now required. Despite declining revenue collections, councils before you continued to outspend revenues. To use the vernacular, the chickens have come home to roost.

I have a list of ill-advised spending decisions made by city officials over the last few years that have robbed this city of its financial vitality and its financial cushion. I will limit my comments to the expenditure at the top of that list and at the top of this list is the purchase of the former Arrowhead Country Club property in 2003.

Four years ago, despite declining revenues, the City of North Canton purchased the former Arrowhead Country Club golf course, now called The Fairways for $4.2 million. Today, there should be no doubt in anyone’s mind that the exorbitant price paid for that property has diminished the city’s reserves and added to the city’s current indebtedness.

The purchase of the golf course property four years ago took $2.0 million from the city’s cash reserves and increased the city’s debt by an additional $2.2 million. That outstanding debt on the purchase of the golf course is approximately $1.6 million.

The purchase of the Arrowhead Country Club property by the city in 2003 was followed by an equally poor financial decision that also impacts the city’s finances today.

I am referring to the sweetheart leasing arrangement given to the operator who now leases the golf course property from the city. The lease terms for the golf course are an insult to the taxpayers of North Canton.

The lease, signed with the present operator of the golf course soon after the City of North Canton purchased the property, provides for lease payments that are a fraction of the costs that a bank would charge for extending a commercial mortgage on a property costing $4.2 million.

I have polled four lending institutions located in North Canton for rates on a commercial mortgage in the last week. They were Wayne Savings, Ohio Legacy, Key Bank and Stoffer Mortgage. The average lending rate charged by these four lenders for a commercial real estate mortgage was 8.13 percent.

Using the average interest rate charged by these four institutions of 8.13 percent, simple math calculations show that interest rate charges alone on a commercial real estate mortgage would result in annual interest charges of $341,250.
Yet, the lease payments made to the City of North Canton for the exclusive use of the 105 acre, eighteen- hole golf course with clubhouse and pool and all the other amenities that go with the property are less than half of that amount.

The operator of the golf course property did not have to secure a loan at commercial mortgage loan rates and pay $4.2 million for the property. The operator of the Fairways golf course let taxpayers do it for him.

The City of North Canton purchased the golf course with taxpayer funds and a private business benefits at taxpayer expense.

Lease payments made to the City of North Canton by the operator of The Fairways, formerly Arrowhead Country Club, have averaged $152,250 per year. And of that amount, the City of North Canton is required to expend $50,000 per year for capital improvements to the clubhouse.

Using the annual interest costs of $341,250 per year for a commercial real estate loan, the City of North Canton is undercharging the operator of The Fairways golf course $189,000 per year.

By the end of 2007, the fourth year of the five-year lease for the golf course, North Canton will have lost $756,000 in revenue as a result of the lease arrangements made with this operator.

The $152,250 annual cost to the present operator to lease the $4.2 million golf course property is the equivalent of getting a $4.2 million commercial mortgage loan for an interest rate of 3.63 percent.

This is substantially less than what North Canton taxpayers have to pay for residential mortgage. Residential mortgage rates are presently around 6.5 percent.

Why have city officials allowed private enterprise to profit itself on the backs of North Canton taxpayers under this lease?

Does fiscal irresponsibility ring load and clear here?

As I noted earlier, the lease also requires the city to spend $50,000 annually on capital infrastructure improvements for the clubhouse and pool for the exclusive use of the golf course operator. So effectively, the city only receives a little over $100,000 annually in lease payments.

The lease of the golf course property under these terms is a complete sellout of the taxpayers of the City of North Canton, plain and simple! The citizens of North Canton get NO enjoyment or benefit from the use of the facility.

On the other hand, the operator of the golf course benefits quite handsomely financially under the terms of the current lease.

In terms of the average annual loss of $189,000 to the city under the golf course lease, do you think that council could find a worthy use for that sum of money?

At last week’s council meeting, Finance Chairman stated that he has spent hundreds of hours looking for additional funds to plug a few of the budget shortfalls. Mr. DeOrio, I have found a sizable amount of additional funds for you.

Could this council find a worthy use for the average annual loss of $189,000 that the city loses under the golf course lease?

Could that money be used to fill a patrolman’s position on the police force that has gone unfilled? Could that money be used to pave streets in the city?

The annual loss to the city of $189,000 under the present golf course lease is three-quarters of the city’s annual paving budget of $250,000.

The lease for the golf course is renewable at the end of 2008. At the end of this first five-year term of the lease, the taxpayers of the City of North Canton will have subsidized the private operation of The Fairways by nearly one million dollars.

Mr. DeOrio, I think you must realize that it does not take too many unsound financial decisions such as I just described to put a community on the path of budget cuts that ultimately lead to reduced services and increased taxes.

Mr. Foltz, last week you said that it would be “…fiscally irresponsible not to prepare for the loss of revenue…” should the Hoover Company cease operations here in North Canton.

Mr. Foltz, you were on this council at the time these decisions were made and you voted for each of these actions.

I would call the purchase of the Arrowhead Country Club and the subsequent lease arrangement fiscally irresponsible. I hope with 20/20 hindsight that you would as well.

Every single person in this room is looking for additional funds that are desperately needed to maintain city services.

I would propose that the City of North Canton attempt to recover the bulk of its investment when it purchased the golf course property by selling the property and retaining the development rights.

The sale of the golf course while retaining the development rights to the property will save the green space from development while at the same time allow the city to recoup previously expended funds that are desperately needed now.

By selling the golf course, the city could recoup, upwards of $3.0 million dollars of the $4.2 million it paid for the property.

The present lease arrangement is patently unfair to taxpayers and should be ended. Taxpayers should not be subsidizing a private golf course operator. Selling the property when the lease expires next year would put an end to a lease that is fiscally irresponsible and unfair to the city and its taxpayers.

The sale of the property would help relieve the strain on the city’s budget by providing an infusion of perhaps $3.0 million.

This course of action would go a long way in showing taxpayers that this council is indeed fiscally responsible and that city council can act as fiduciaries on behalf of taxpayers as they should.

Thank you
Chuck Osborne
Resident
City of North Canton

North Canton Council Oblivious to Appearances of Impropriety Regarding Nepotism

2006-10-10T05:00:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
October 9, 2006

“N. Canton Council says no to ban on family hires.” That was the Repository’s lead in the paper last week. Are these really the actions of city leaders working on behalf of the citizens of North Canton?

Unfortunately, that does not appear to be the case.

What it does appear to be is politicians circling the wagons to wage an escalating war with the mayor which ultimately serves no one?

I was present at last week’s council discussion of the proposed legislation by the mayor to ban the hiring of elected officials’ relatives to city jobs and it was anything but a discussion of the proposed legislation. The Repository described the nepotism discussion as “heated.”

I believe council’s reception to the proposed legislation regarding nepotism was more like an ambush followed by an absence of professionalism and sincerity. There was no honest debate on the merits of the proposed legislation to ban the hiring of elected officials’ relatives to city jobs.

The question I have to each and every one of you is if you are actually a representative of the people and you want the public to maintain confidence in their government, how could you oppose legislation to ban nepotism in North Canton’s hiring practices?

Why not embrace Ohio’s Ethics laws regarding the hiring of family members of elected officials? If you don’t, you are only opening the door to problems for the city.

What were the reasons North Canton’s elected leaders chose to defeat the nepotism legislation?

Council President Doug Foltz believes the practice of hiring relatives of elected officials can work just fine and that having generations from the same family working for the city adds vast knowledge and expertise. If that line of thinking were the norm, Mr. Foltz, the pool of applicants for a city job would be narrowed down to merely the relatives of the existing employees already on the payroll. Furthermore, think of the problems you are creating when parents, spouses and siblings register their complaints as to how their little Johnny or Susie is being mistreated in the department.

Where is it written that if there were a choice between hiring your child or my child that just because you are already an employee of the city that your child already has more knowledge or expertise than my child for a city job?

Chairperson of the Personnel & Safety committee, Susie Hines, cited a list of cities from her prepared remarks on this topic noting that some municipalities prohibit the practice of nepotism and some municipalities do not prohibit the practice. From that, Chairman Hines somehow concluded that since there are still communities that do not prohibit the practice of nepotism that North Canton should also not prohibit the practice of nepotism.

Chairman Hines failed to mention that Summit County, the only county government in the state organized under its own charter has been exposed for abuses in the hiring of relatives of elected or appointed officials in numerous articles in the Beacon Journal throughout this year.

What do you think the public thinks when they see nepotism activity in their local government?

I believe I can safely say that the practice of nepotism in filling government jobs does not inspire confidence in the government nor does it inspire respect for the elected official and their relative who benefits in the hiring.

The Vice Chairperson of the Personnel & Safety committee, Pat DeOrio, stated that the proposed legislation to ban the hiring of elected officials’ relatives to city jobs was not a particularly good piece of legislation.

Mr. DeOrio, the proposed legislation simply reaffirms a very important restriction imposed by the State of Ohio on the hiring of family members. Apparently you do not believe that Ohio’s ethics laws regarding the hiring of family members is a good piece of legislation either. I am very sorry that you feel that way.

Councilmember Kathy Magel, the third member of the Personnel & Safety committee obviously does not believe that a city council meeting is the proper venue to discuss and debate issues of importance to the public. Mrs. Magel, your actions in displaying a picture of a STOP sign to the mayor as he began to present legislation for discussion by this body is beyond comprehension.

I believe that you owe an apology to the mayor, to the public, and to this council body for unprofessional conduct.

I hope I never see anyone in this chamber attempt to stifle or quash open and honest discussion of issues before this council body ever again.

Councilmember Jon Snyder, you provided your input on the proposed legislation and quite frankly, after listening to your comments at last week’s council meeting and reading a verbatim transcript of your comments, I can only guess that you were preparing for next year’s election a little early. In your comments regarding the proposed anti-nepotism legislation, you proclaimed “…We should be proud of the fact that there are very few elected officials in the country today that can stand as proud as the seven members of Council and the mayor and the Administration….”

What do comments such as these have to do with the proposed legislation to ban the hiring of relatives of elected officials to city jobs?

Councilmember Jim Repace, your bitterness and your anger on this issue rings loud and clear. The situation that you now find yourself in clearly has obliterated your ability to see this issue from the vantage point of your constituents and it appears that you are unable to vote on this issue as a representative for the public because of it.

If North Canton City Council had already enacted anti-nepotism legislation years ago when it was first discussed by prior councils, this council would not now have to choose whether or not to support one of its members and Mr. Repace would not now find himself retaliating against the mayor.

The circumstance this council now finds itself in is a perfect example of why North Canton City Council should embrace the proposed anti-nepotism legislation.

Mr. Repace, if you truly desire to make a difference in the City of North Canton as you stated last week, your personal disdain for the present Mayor of North Canton will have to be left at the door.

Mr. Repace, your strong-arm tactics and intimidation anytime you are unhappy with the actions of others is not what people expect from city leaders.

I would like to suggest to members of this council body that the proposed legislation to ban the hiring of elected officials’ relatives to city jobs should have been discussed utilizing what is termed the “appearance of impropriety” standard.

“Appearance of impropriety”, according to Wikipedia, is a term used in reference to a situation where ethics are deemed questionable. In other words, a layperson, without knowledge of the facts, would assume that something he/she saw or heard was inappropriate or a violation of a rule/regulation.

The impropriety standard at the turn of the twentieth century was termed the “appearance of evil” doctrine. The appearance of impropriety standard was later adopted by the Model Code of Professional Conduct which has served as ethics rules for lawyers.

The impropriety standard has long been a part of ethics rules for lawyers and judges. And it is intertwined into the ethics laws of the State of Ohio.

Why not embrace these laws and show the citizens whom you represent that you are working on their behalf and not for yourselves?

Ethical standards in government promote public confidence in the integrity of government.

When ethical standards are not implemented at all levels of government, there is the risk of disservice to the public interest.

Simply put, nepotism is not good for the City of North Canton and the city’s elected officials should recognize that without hesitation.

Thank you
Chuck Osborne
Resident
City of North Canton

North Canton Council Indecision on Application for State GrantsFor City Infrastructure Improvements Is Unreasonable

2006-09-12T07:32:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
September 11, 2006

It is apparent to me and I believe to anyone else who has followed the North Canton Council debate to apply or not apply for state grants over the last few weeks that this body has taken leave of its senses.

The lengthy discussions by this body have been on-going at no less than two Council of the Whole meetings and one regular council meeting over the last three weeks. The Repository’s report for North Canton City Council business for the last two weeks reads like the movie Groundhog Day.

The first report covering the August 28, 2006, North Canton City Council meeting was titled “N. Canton Council debates applying for state grants.” Two weeks later, The Repository report for the September 5, 2006, meeting was titled “North Canton still debates applying for state money.”

Council first began discussions on this issue at its Council of the Whole meeting on August 21, 2006. The Repository briefly reported that council wanted more information about the projects.

What information Councilmember Magel or Councilmember DeOrio were looking for is beyond me.

This was a simple request for authorization to apply for grants from the State of Ohio through the Ohio Public Works Commission for infrastructure improvements that the city can ill afford to do itself.

Without the assistance of grant funds for the 2007 Joint City/County Paving Project, many streets would go unpaved. Without the assistance of grant funds for the East Maple Street Safety Improvements Project, the city would be hard-pressed to accomplish the needed safety improvements. Without the assistance of no-interest loans, the city would have to bear a greater financial burden of replacing aging water mains in preparation for future road improvements to Applegrove Road.

How much clearer does this request have to be to each of you city leaders? If you cannot comprehend that fact, then maybe one should find other ways in which to pass the time than at city hall on Monday evenings.

I would like to ask everyone here on this council, what is there to debate? This is FREE money, simply for the asking.

Is this typical North Canton politics? What is to be gained with these kinds of political games?

And if it is not games, the only thing that comes to mind is stupidity!

These are grants made available by the state to communities for infrastructure improvements. An 80/20 match with the local communities paying only 20 percent of the project cost.

How can you go wrong? How much more information do you need? City Engineer Jim Benekos spelled everything out for you publicly and the information was in your packet.

The grant for the Joint City/County Paving project would allow for the paving of many streets throughout the city, for a fraction of the project’s estimated $1.3 million cost. North Canton taxpayers would receive a 10 to 1 return for the expenditure of their tax dollars with the award of grants from the Ohio Public Works Commission.

Where can you go wrong? Repeated comments from certain members of council that not enough information was made available to council are not the least bit valid.

The grant for the East Maple Street Safety Improvements would allow for safety improvements on a major east/west corridor that runs between Washington Square and Walsh University. Here again, grant funds would result in significant savings to taxpayers, improved traffic flow and safety for pedestrians.

Where can you go wrong? Repeated comments from certain members of council that not enough information was made available to council are not the least bit valid.

I believe it was very sad that Walsh University President Richard Jusseaume had to appear before this council last week to ask this body to reconsider its position not to apply for state infrastructure funds for the East Maple Street Safety Improvement project.

City Engineer Jim Benekos pointed out in his request to council for permission to apply for state grants that there was no commitment, no cost, no anything. Mr. Benekos simply asked that he be allowed to apply for state assistance to fund projects that will make this city a better place.

Mr. Benekos knows the smart thing to do is to take advantage of state resources designed to help communities make needed infrastructure improvements. Mr. Benekos simply wanted North Canton to compete for its share of FREE money from the state that undoubtedly would benefit this city and its residents.

For council, and in particular, council members Magel, DeOrio and Repace, I do not know on whose behalf you are speaking when you debate, delay and question ad nauseam anyone’s efforts to improve this city through grants from the state.

If you think this is your fifteen minutes of fame to exercise your power plays and showboat, I can only say that it exactly what it looks like.

The sad thing about all of this is that you have the balance of this council sitting up there seemingly buying into this mindless debate with no one fighting to make North Canton better.

For a better future for North Canton and its residents, this council must do better than this!

Thank you
Chuck Osborne
Resident
City of North Canton

Aqua Ohio Water Agreement Unfair & Detrimental to the Future of North Canton

2006-07-10T23:37:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
July 10, 2006

A few weeks ago, I spoke to this body about how difficult it is to sit in the audience and observe city leaders conduct the public’s business with little or no regard for the taxpayers of this community or for the future welfare of North Canton.

On June 12, 2006, I spoke of the CEDA that this council passed in 2003, without my vote, which provided something for Plain Township and something for the developer of the Sanctuary but nothing for North Canton. That CEDA agreement put North Canton on the path it is on today regarding the loss of the water distribution rights for the Sanctuary, now part of North Canton.

On February 28, 2005, city council rushed through, on an emergency, an agreement with a water competitor that is extremely burdensome and unfair to this city. The agreement allows profits to be generated by that company squarely on the backs of the taxpayers of North Canton.

This agreement places the City of North Canton on a path that jeopardizes North Canton’s future.

That water agreement was made with Aqua Ohio, Inc., and received unanimous approval by council as Ordinance No. 49-05. Several current members of this council were on council then and voted their approval. They include council members Snyder, Foltz and Lane.

Did anyone bother to read this agreement?

I am told by the administration that Michael Miller, the former City Administrator who negotiated this unfair agreement, did not consult the city’s water superintendent for his input. The finance director has also told me that she was not asked for her thoughts on the agreement.

North Canton now has a water agreement that lacked needed input from key city officials in North Canton City government. This is an agreement that was rushed through city council with unanimous affirmation that desperately needs to be voided.

I strongly believe that if a judge saw the terms of this agreement that he or she would void this agreement in a New York minute.

Before I get into the shortcomings of the agreement, I want to tell you a little about Aqua Ohio, Inc.

Aqua Ohio, Inc. is Ohio’s largest investor owned water utility. It provides drinking water and wastewater services to nearly 84,000 customers (nearly 250,000 people) in five counties from surface and groundwater supplies.

Aqua Ohio was most recently known as Consumers Ohio Water Company until it merged with Philadelphia Suburban Corporation (PSC) in 1999. PSC was renamed Aqua America, Inc., in 2004, and Consumers Ohio Water Company became Aqua Ohio.

Aqua America, Inc. is the nation’s largest U.S. based publicly-traded water company. Aqua America is a holding company for regulated utilities providing water or wastewater services in thirteen states.

Do you think Aqua America, Inc. would like to acquire the North Canton Water Treatment Plant?

Consider the following statements gleaned from the latest annual report (Form 10K) of Aqua America, Inc.:

“…Part of our strategy to meet the industry challenges is to actively explore opportunities to expand our utility operations through acquisitions of water and wastewater utilities either in areas adjacent to our existing service areas or in new service areas…”

“…. Because of the fragmented nature of the water and wastewater utility industries, we believe that there are many potential water and wastewater system acquisition candidates throughout the United States…”

“… We are actively exploring other opportunities to expand our water and wastewater utility operations through acquisitions or otherwise. We intend to continue to pursue acquisitions of municipally-owned and investor-owned water and wastewater systems of all sizes that provide services in areas adjacent to our existing service territories or in new service areas….”

Aqua America believes that one of the reasons driving the consolidation of these systems is the need for capital investment and that is where I believe this entanglement with Aqua Ohio is taking the City of North Canton.

The rush to sell the increased water processing capacity of the North Canton Water Treatment Plant (WTP) is going to require further expansion of the WTP long before North Canton has paid down the $12 million owed for the recent expansion.

The water agreement with Aqua Ohio requires that North Canton make available 2 million of the total three million gallon increased water processing capacity that has just been completed. And very soon, North Canton will find itself exhausting it’s newly acquired water processing capacity and will not have sufficient borrowing capacity to expand its facilities for a second time.

The Aqua Ohio water agreement, to put it mildly, is grossly unfair to the City of North Canton and I cite the following.

The agreement states water prices to Aqua Ohio “…may be adjusted by the City by a percentage equal to the percentage by which rates for residential customers within the City are adjusted, not to exceed a five (5) percent annual increase for the first twenty-four months of this Agreement.”

Does anybody realize that planned water rate increases passed in Ordinance No. 156-04 that set water rates for the City of North Canton mandate water rate increases for residential customers as high as 7.1 percent?

The ordinance (Ordinance No. 49-05) approving the Aqua Ohio water agreement conflicts with Ordinance No. 156-04 which set annual increases in North Canton water rates through the year 2009.

Do you think you can increase residential customer’s water rates at a higher annual percentage than what you increase Aqua Ohio’s water rates?

Is this fair? Is this legal?

Conversely, the City of North Canton is required to approve water rates set by Aqua Ohio without question.

In regards to billing and payment, the agreement states “Aqua agrees to pay monthly within thirty (30) days after receipt of the bill; all bills not paid by the thirtieth (30th) day after receipt will be subject to a late penalty of one percent (1%) per month.”

The City of North Canton’s policy regarding payment of water bills is that payment is due by the 15th of the month after receipt of the water bill which arrives on the first of the month. North Canton charges interest of 5 percent for late payments. Here again is a conflict between how Aqua is being treated and how all other water customers are being treated.

The agreement states that “If during the agreement, additional facilities are necessary for sale of water hereunder, such facilities will be constructed by the City.” What does this entail for North Canton? I would say that this is quite open-ended and obviously require additional expenditures by the City of North Canton.

The agreement states that Aqua Ohio will make available to North Canton an emergency supply of water subject to Aqua’s availability of supply and availability of engineering and equipment with prior notice and the availability shall be subject to Aqua’s prior consent.

Conversely, under the section titled Continuity of Service, the agreement reads that “In the event of disruptions or interruptions of service, the City shall not give preference or priority to customers other than Aqua…”

It sounds to me that North Canton water customers, other than Aqua, must go to the back of the line if there are water shortages or interruptions of service.

Under this agreement, it appears that North Canton must provide emergency water to Aqua but Aqua is not required to provide the same level of emergency water to North Canton.

The Aqua Ohio water agreement severely compromises any chances of North Canton’s expanding water service to areas not presently served by the City of North Canton. The agreement also requires the city to purchase the water distribution rights to the Sanctuary if the city wants to service that development.

The agreement sets the term of the agreement for 20 years with automatic renewal for up to four, 5-year terms and requires a 12-month notice to terminate the agreement. Trumbull County is presently in litigation with Aqua Ohio in an attempt to force automatic renewal of its water contract with Trumbull County.

It appears to me that once Aqua Ohio gets a foothold anywhere, it does not want to let go.

This appears to be the case upon any termination of the agreement. The agreement states that “Upon any termination, Aqua shall retain the right to purchase water from the City’s water system for ten (10) years…”

The Aqua Ohio water agreement is so patently unfair as to be nearly criminal!

The agreement states that “Aqua is hereby permitted to extend Aqua-constructed and owned water distribution facilities from points of connection with the City’s distribution system designated by Aqua in order for Aqua to serve customers outside of the City’s service…”

Allowing Aqua to tap North Canton water lines and extend water lines to service areas outside the city severely diminishes North Canton's chances to expand its water service area in the future. Clearly, this does not bode well for North Canton.

Aqua can tap North Canton water lines and extend water lines to service areas outside the city. What do you think that does for future growth of the North Canton water system?

There are other shortcomings to the water agreement with Aqua Ohio but I will not belabor them at this time.

But, I would like to add that I believe that the agreement is not valid for the following reasons:

First, the agreement states, “This Agreement is attached to and incorporated with the City’s Ordinance No 49-05 and the City represents that all actions of the City, including the actions of city council and administrative officers concerning and relating to the passage of said ordinance were adopted in open meetings of council in compliance with Ohio Revised Code §121.22, and that such legislation was not passed as an emergency measure [emphasis added], but was subject to a thirty (30) day period before taking effect….”

This legislation was passed on an emergency and it will have serious consequences for the City of North Canton.

Clearly, it appears that no council member ever seriously read this agreement. If they had, first of all, it would not have been passed on an emergency. Secondly, hopefully some city leader who cares about this city and its future would have stood up and said NO to this agreement.

Second, this legislation is in conflict with legislation passed in 2004 (Ordinance No. 156-04) which set water rates for the City of North Canton through 2009.

Third, this legislation violates fairness in the setting of water rates. How can you set one water rate structure for one water customer and then set a different water rate structure for other water customers.

I have shown this disparity in water rates in Chart One. The Aqua Ohio water agreement has opened a can of worms for anyone wanting to challenge the disparity in water rates for North Canton water customers.

Fourth, the Aqua Ohio water agreement appears to totally ignore the City of North Canton’s production costs and how they are allocated. The water production costs data for the City of North Canton were created for a reason and they continue to be utilized to structure the city’s water rates.

In each of the price points for water consumption for water customers billed under the city’s water rates, charges for water more than cover North Canton’s water production costs. This can be seen in Chart Three.

Why would this cost structure be totally ignored in the setting of water rates for Aqua Ohio?

The purchase of 60 million gallons of water a month by Aqua Ohio from the City of North Canton results in an average cost of $1.28 per 1,000 gallons for Aqua.

This is 35% below the city’s water treatment costs which are the city’s barebones cost of water production.

The same quantity of water (60 million gallons) purchased by outside business water customers results in an average cost of $5.25 per 1,000 gallons under North Canton’s present water rate structure. This is more than 400% higher than the rate being charged to Aqua Ohio. This is shown in Chart Two.

In Chart Four, one can see the shortfall in revenue from water sold to Aqua Ohio compared to North Canton’s water production costs.

The purchase of 2 million gallons in one day, which is what North Canton is required to provide to Aqua per the agreement, results in revenue shortfall of $7,254.57 a day. This shortfall would be slightly higher considering that Aqua Ohio’s effective average cost per 1,000 gallons drops from $1.39 per 1,000 gallons for the purchase of 2 million gallons to $1.28 per 1,000 gallons with the purchase of 60 million gallons over the course of 30 days.

Why would city leaders vote to approve such an agreement that is unfair to the city and taxpayers?

Why would city leaders vote to approve such an agreement without expert advice and study?

Why do city leaders not provide a system of checks & balances amongst themselves that is built into our form of government?

There are seven council members on city council for a reason.

Are city council members working for the electorate, feathering their own futures or are they just grossly inept?

I have seen many unanimous votes on this council which are clearly votes of lemmings.

This city council, Mayor David Held, City Administrator Earl Wise, and Finance Director Julie Herr must work aggressively and vigorously with Law Director Randy McFarren to void this agreement.

If you do not, North Canton residents will be consuming water purchased from Aqua Ohio at water rates far above the water rates you are charging Aqua Ohio and far above the water rates everyone in this room is paying today.

And North Canton will have more to lament than just the loss of the Hoover Company.

Thank you
Chuck Osborne
Resident
City of North Canton

Annexation of Sanctuary Results in Hidden, Unbudgeted Costs for North Canton

2006-06-13T22:45:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
June 12, 2006

Last Monday night, June 5, 2006, I sat in this chamber as a spectator to observe the actions of the North Canton City Council. I have attended council meetings regularly since serving as an at-Large councilman myself in 2002 term. I would like to tell this council publicly, that it is getting more and more difficult to sit in the audience and watch as agreements are made and funds are expended with no regard or concern for the taxpayers of the City of North Canton.

Last Monday, I heard the other shoe drop as Councilman Jon Snyder revealed his plan to purchase the water distribution rights for the Sanctuary for a price “a little south of $500,000.” And Mr. Snyder wants to rush this plan through council on “an emergency.”

Councilmember Snyder is the former President of Council under whom not one but two pieces of legislation were passed that has put this city in this very predicament. Why would council consider following this course of action? Three wrongs do not make a right!

The genesis of the circumstances allowing the Sanctuary to be served water by a competing water provider is found in legislation passed in 2003. It is Ordinance No. 49-03 and had council approval as the Community and Economic Development Agreement, commonly referred to by the acronym, CEDA.

I was a member of the council body at that time and I was the lone council member to vote against the CEDA. I had many reasons for voting against the CEDA and one of those reasons is that there was nothing “economic” about the agreement that was hailed as a great step forward for North Canton’s first CEDA agreement.

Plain Township negotiated a moratorium on future annexations in the CEDA agreement.

The developers of the Sanctuary, McKinley Development, Ltd., who by the way drafted the agreement, negotiated terms in the agreement in their favor.

What did the City of North Canton negotiate on behalf of the city and its citizens? NOTHING!

Passage of legislation approving the very first CEDA for the City of North Canton was all the glory the supporters of that piece of legislation needed when the CEDA was passed on council on May 12, 2003.

Unfortunately, the CEDA legislation put this city at a disadvantage!

But council, again under the leadership of Council President Jon Snyder apparently wanted to make a bad deal worse with approval of another bad deal. This was passage of Ordinance No. 183-05 on September 12, 2005.

This was a contract agreement to sell water to Aqua Ohio, the competing water provider, who in turn would be selling water inside the city limits to North Canton residents.

The legislation approving the water agreement with Aqua Ohio put this city at an even greater disadvantage!

Earlier, I referred to the fact that last week “I heard the other shoe drop.” This probably needs an explanation.

Three years ago, when council passed legislation approving the CEDA, there was no indication that annexation of the Sanctuary would require the expenditure of taxpayer funds in excess of one million dollars. Not one word. Not a hint that annexation would result in the need for the expenditure of monies by the City of North Canton on behalf of the development of the Sanctuary.

Last year the City of North Canton passed Ordinance No. 183-05 authorizing the expenditure of $1,200,000 for the construction of the Marquardt Sanitary Sewer project. Of that total, the Metropolitan Sewer District contributed $290,000, the developer, McKinley Development, Ltd., contributed $265,000. The balance of the costs, $645,000 was borne by the City of North Canton. This was the first shoe dropping.

The other shoe that is about to drop is the proposed expenditure of what Councilmember Jon Snyder described as “a little south of $500,000” to purchase the water rights to the Sanctuary.

If that expenditure is approved by this council, that will result in a cumulative expenditure of $1,145,000 by the City of North Canton on behalf of the development of the Sanctuary.

My exact comments from the council minutes of May12, 2003, regarding the CEDA were: “This CEDA is a community economic development agreement and there are no economies shared in this between Plain Township and North Canton… they’re all developer issues.”

Well, it looks like the developer issues I referred to in 2003 have become “BIG” dollar issues for the City of North Canton. I wonder why?

What was the motive for the inept legislation that council has passed, not once but twice regarding the development of the Sanctuary? I ask that this council not cure past missteps of council with another expenditure of city funds.

There is another option for the city which was discussed in a May 15, 2006, public meeting with representatives of Aqua Ohio. I urge this council to pursue that avenue.

According to a Repository report on April 7, 2006, regarding Mayor David Held’s State of the City address, the City of North Canton has outspent its revenue for the last three years. Continued expenditures that are unbudgeted such as the proposed expenditures for a little south of $500,000 will make this a fourth year of reckless spending.

How many more years can this city continue to outspend its revenue?

How many more failed council actions such as passage of the CEDA or passage of the Aqua Water agreement can the City of North Canton survive?

I ask you to solve this issue without paying out hundreds of thousands of dollars as recommended by Councilmember Jon Snyder.

Thank you
Chuck Osborne
Resident
City of North Canton

Tax Abatements Continue Unabated in North Canton While Schools Seek More Funding From Taxpayers at the Polls

2006-04-10T21:07:00.000-04:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
April 10, 2006

On the agenda this evening, are two pieces of legislation that I would like to address. The first is Ordinance No. 59-06 which is legislation from the Community & Economic Development Committee.

Tonight’s agenda for this piece of legislation reads: “An ordinance authorizing an agreement with Patrick J. & Georgeann Palonder for a project and real property tax exemption pursuant to the Ohio Community Reinvestment Area program, and declaring the same to be an emergency.”

First of all, I have to ask why is this on emergency? Emergency legislation according to Section 2.05 of the North Canton City Charter is legislation necessary for the immediate preservation of public peace, health or safety. Where is the emergency?

Fast-tracking legislation limits public comment. Corporate charity in the name of tax abatements is a topic that the public should be allowed to address.

Three readings would allow taxpayers notice of this legislation and give them a chance to comment.

The abatement of taxes for businesses that in exchange merely offer the businesses presence in the community might be a topic of interest to the taxpayers of this city who must continue to pay taxes without benefit of personal abatements.

The business requesting the abatement of taxes is the Pat Joyce Insurance Agency which has operated in North Canton since 1980. Mr. Palonder states on the application [that] “… without the tax incentive we will sell the property and build in Jackson Township.” The operative word here is incentive.

The property, according to the Stark County Auditor’s Web site was purchased September 9, 2005.

The purchase of this property on North Main Street, next to the former Bank One building evidently did not require an incentive so how can this be termed an incentive. The decision to purchase the property was made with plans to build on the property.

Since that purchase decision was made over seven months ago, any abatement of taxes is no longer an incentive but simply a handout at the expense of the North Canton City Schools.

An incentive by definition is “something that encourages someone to action.” The purchase of property on North Main Street has already happened. Seven months in the past.

Investment in Main Street properties is happening. It is happening without handouts that come at the expense of the taxpayers of the city and at the expense of the North Canton City Schools. Free-market forces are alive and well on Main Street and those free-market forces will continue to work unless disturbed with demands for more corporate welfare.

The application by the Pat Joyce Insurance Agency states that it will add two full-time jobs within one year. I do not want to play down any job creation in North Canton by any business but with the small numbers of businesses in North Canton, the abatement of taxes reduces the tax base. Furthermore, it places more of the tax burden on homeowners and directly impacts the North Canton City Schools.

City services can be supported best when tax revenue is derived from a broad tax base of residential, retail, commercial, and industrial properties. The tax base for North Canton is being whittled down with the loss of manufacturing and industrial property tax base from the Hoover Company and now ever so slowly, from the abatement of taxes on the few commercial properties that make up North Canton’s commercial tax base.

What remains are residential property owners supporting both the rising costs of city government and the increasing costs of the North Canton City Schools.

To quote Repository columnist, Michael Hanke, in today’s paper, “Do economic development supporters really believe real-estate tax abatement is more important than a good school system to prospective employers?”

To paraphrase Mr. Hanke, does this council believe that approving revenue cuts to the strongest asset that the City of North Canton has going for it, its city schools, is a good idea? I hope in my heart that you do not believe that!

And that brings to mind the timing of this requested abatement. I do hope that this council is aware that the North Canton City Schools do have a levy on the ballot for next month.

How can you stand up here one week and tell the public that you support the school levy and then the very next week give away revenue desperately needed to support the great school system that residents proudly enjoy.

In light of the plight of the city’s financial picture revealed in Mayor David Held’s state of the city speech just last week and in consideration of the voters who are being asked to vote for the North Canton City School levy in just a few weeks, I ask that this council seriously reconsider any plans to approve this tax abatement request.

The second piece of legislation I want to speak to is Ordinance No. 60-06 which is legislation from the Finance & Property Committee.

This legislation reads “An ordinance accepting the recommendations of the City of North Canton Tax Incentive Review Council (“TIRC”), concerning the agreements granting exemptions from property taxation, to continue the existing eight (8) Community Reinvestment Area (”CRA”) agreements.”

This piece of legislation is not scheduled for passage on emergency, but for everyone in this room tonight, we all know that this will be amended to pass on an emergency. How sad that legislation such as this will be fast-tracked before interested taxpayers can comment publicly.

I attended the meeting of the North Canton Tax Incentive Review Council (TIRC) on March 22, 2006, and I must say that the name of this group should be changed to the North Canton Corporate Welfare Review Council.

Three of the eight tax abatements that were reviewed have not met their promise of new or retained jobs as contracted when the abatement was granted

A member of that TIRC and also a member of city council, Mr. Jon Snyder appropriately described several of the troubling tax abatements that were reviewed at last week’s Council of the Whole meeting.

The tax abatements that Mr. Snyder described last week were indeed, troubling, and yet they were continued.

And to make a mockery of the review process, it was made clear by the representatives from each of the three companies that there was a high probability that they would not achieve their promised goals in the foreseeable future.

Why were the abatements of these companies not cancelled outright? At the very least three companies should have been put on probation?

The other companies reviewed only marginally met the requirements for their abatements as well.

As I sat and listened to each of the three companies explain their plight, I could only think that this process of so-called tax incentives had degenerated further from corporate charity to corporate welfare.

My last comment on the TIRC is in regards to the membership of the committee. The practice of appointing council members to serve on the TIRC undermines the system of checks and balances so important in our system of government.

When a council member also serves on the TIRC, that council member is quite possibly reviewing tax abatements that he or she approved as a council member. This runs counter to the checks and balances so vital to the process of government.

The practice of individuals’ serving as both council members and as members of the TIRC should end.

In the same Repository column today that I referred to earlier, Michael Hanke states that “It seems that the only greater anti-schoolchildren group is the City of Green, which never met a tax abatement it didn’t like….” I fear North Canton is running a close second.

I urge you not to seek to earn that sort of reputation. It will only harm our schools and our city.

Thank you
Chuck Osborne
Resident
City of North Canton

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

2006-03-13T21:55:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
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
Resident
City of North Canton

Council Actions Ignore Voters, Limit Access to Public Business & Create Anxiety for City Employees

2006-02-13T21:47:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
February 13, 2006

The new membership of the North Canton City Council has been in office for seventy-five days as of today. In this short time, there have been certain actions by this council that are not in the best interest of the residents of North Canton.

City Council actions which ignore the wishes of the electorate, limit the public’s access to public business, and create anxiety for key city employees are not what the public expects.

At the council meeting of January 23, 2006, Councilwoman Susie Hines nominated former Mayor Tom Rice to serve as a member of the CIC.

To make this appointment with the knowledge of the acrimony the City of North Canton endured under former Mayor Tom Rice and of Mayor Rice’s treatment of former City Administrator David Held, now Mayor, flies in the face of the mandate of the voters.

This appointment was noticed by the Repository editorial board in an editorial on Thursday, January 26, 2006. The editorial referred to the appointment as a “provocative choice.” Many people, including myself, would describe it as a repudiation of the wishes of the voters.

I applaud Councilmember Jon Snyder’s vote against this appointment.

Another recent action of this new City Council is the decision to close out the public from the council office. Last week, the door to the council office was closed to the public and in its place, a window was installed.

This action had been rumored for weeks and no one seems to know the reasoning for this action.

I find it quite interesting that former Mayor Tom Rice kept the doors to the Mayor’s office locked and now, to use a term from the Repository editorial noted earlier, that a “ pro-Rice Council” is elected, the doors to the council office are closed.

I might add that with the election of a new mayor, the door to the mayor’s office is now open again. It looks like musical locked doors at North Canton City Hall depending on one’s political affiliation.

The doors to the council chamber have been open to the public for as long as I remember. This is where citizens come to meet their elected representatives. They do not expect to stand at a window in a wall in a hallway next to the copier machine to ask questions from their elected officials regarding the public’s business.

And where is this window to the council office? It is behind a closed door that leads back to the finance department. And next to the council window is the now closed council office door.

The installation of this barrier to the public, I mean window, resulted in the expenditure of $375 and the reconfiguration of City Hall to suit the whims of someone on city council.

The funny thing is I have been unable to find out who requested the installation of the council window.

I was assured by the mayor’s office several weeks ago that this request would be discussed publicly in council. Unfortunately, that never happened.

I spoke to councilmember Jon Snyder and he had no knowledge of the plans to install a window in the council office. Former councilwoman Marcia Kiesling has relayed to me that Councilmember Pat DeOrio does not know who signed the invoices authorizing the installation of the council window.

By chance, I spoke to Councilwoman Susie Hines coming out of the council office last Monday regarding the council window and she did not know who authorized the council window either. Her response was that the council window would “increase efficiency.”

I will let you ponder the “efficiency” response yourself. It went right over my head and out the council window!

My last concern is the anxiety that this council has brought on our city government by delaying the appointments of two key city officials for weeks. In the past, the finance director and law director have been reappointed at council’s organizational meeting on December 1.

After a delay of six weeks, the city’s law director announced publicly on January 9, 2006, that he would
leave the position he had held since September 2003.

On January 23, 2006, after a delay of nearly two months this newly elected council did confirm the appointment of the finance director who has held this position for four years.

Both of these individuals have served this city with the highest degree of competence and professionalism. Each is vital to the day-to-day business of this city.

Is this anyway to treat employees of this caliber? I hope you know the answer to that question.

Why have these appointments been handled in this manner?

What is this council’s agenda?

Many of you on this council are brand-new to North Canton City government.

What direct knowledge did you have that caused you to doubt the job performance and professionalism of the current Finance Director and Law Director?

Your actions have created needless anxiety for these vital city employees, the people who work with them, and the stable process of city government that has been ongoing here in North Canton for many years.

Now, the city finds itself looking for a new law director.

In your search for a new law director, I believe you are abusing the privilege of calling “executive sessions under Ohio’s Open Meetings Act.

Invoking the subject of Personnel is a valid exception under the Open Meeting’s Act but it cannot be a catch-all for any and all personnel issues under Ohio’s Open Meetings Act and I believe that is what is happening in your search for a new law director.

Three years ago in the search for a law director, executive sessions were limited and the time in executive session used effectively.

The present Personnel Committee has invoked no fewer than five executive sessions, each lasting several hours and two more executive sessions are planned later this week.

The Personnel Committee has taken on the task of interviewing all twenty-two applicants for the position of law director.

To me, you are giving false hope to all the applicants and failing to effectively utilize your time.

Putting in a window to the council office may be someone’s idea of efficiency but interviewing all 22 applicants for the law director position is certainly not my idea of efficiency.

In a review of the resumes of all the applicants, I did not see any applicant who was as qualified as the present North Canton Law Director. Mr. Pusateri has almost three years experience on the job and has served this city well.

It is too bad that your politics have led you to now need to reinvent the wheel.

It is a shame we are losing the knowledge and experience that the present law director has attained here in North Canton!

The City of North Canton at present has a new Mayor, a new City Administrator, and the majority of the members of the present city council are new.

With this lack of experience and depth of knowledge spread through all three branches of North Canton City government, it does not make much sense to let Mr. Pusateri’s knowledge and experience leave our government.

I trust that this pro-Rice Council will surprise us all and be a pro-North Canton Council in all of its decisions, now and in the future.

Thank you,
Chuck Osborne
Resident
City of North Canton

Tax Abatements Used as Handouts in North Canton

2006-01-09T21:47:00.000-05:00

Prepared Comments Made to
NORTH CANTON CITY COUNCIL
January 9, 2006

First, I would like to say that I was very gratified by this council’s close scrutiny last month to the 2006 budget. Given the economic uncertainty that North Canton is now facing, I hope that this scrutiny of expenditures becomes the norm for this legislative body.

Beyond controlling expenditures, there is another part of the financial equation that must be managed and that is revenues. And this is what I want to address tonight.

At the January 3, 2006, Council of the Whole meeting, Economic Development Committee Chairman Jim Repace presented to this body proposed legislation to authorize a twelve-year tax abatement for Dr. Suglio. It is on your agenda tonight to be voted on as Ordinance 1-06.

In the past, I have spoken about two tax abatements, specifically, the abatements granted to Reed Funeral Home and to Spee D Foods.

Tax abatements for business are to be given as an incentive. They should not be given simply for the asking. A tax abatement is appropriate when it is needed to make something happen that would otherwise not happen.

The City of North Canton is giving tax abatements when none are needed and, furthermore, getting little or nothing in return for the abatement.

The Ohio Department of Development (ODOD) has a three page summary titled Ohio Community Reinvestment Area Program at http://www.odod.state.oh.us/edd/cra/crasummary.pdf and I would like to highlight some remarks from that summary.

“…This program permits municipalities or counties to designate areas where investment has been discouraged as a CRA to encourage revitalization of the existing housing stock (emphasis added) and the development of new structures.”

I do not believe that the Main Street of North Canton is a place where investment has been discouraged.

The recent purchase of nearby property for construction of a bank shows that investment on Main Street of North Canton is alive and well. Legacy Bank, next door to Dr. Suglio’s newly acquired property has made a substantial investment on Main Street with the construction of a new bank, and no incentives were needed.

Legacy Bank is one of several new banks to locate in the city in the past year and according to a recent report in the Repository, North Canton now has thirteen banks with most of them on Main Street.

The financial investment on the main street of North Canton by business clearly shows that investment on Main Street is not discouraged and that tax incentives are not needed to stimulate this kind of activity.

Another source of information that clearly defines the primary focus of a CRA as the revitalization of housing stock comes from the legislative comments regarding House Bill 754 of the 108th General Assembly.

The legislative comments regarding CRAs, state the following:

“…the incomes of residents generally in the area are such that taxes on property substantially affect the ability of residents or owners of housing to make expenditures for repair or rehabilitation of housing.”

It is the homeowner who ultimately bears the burden of taxes in the community and the abatement of taxes under the CRA Program was created to provide an incentive to invest in the revitalization of their homes.

Giving tax abatements to businesses that need no incentive to remain in North Canton is unfair to homeowners who bear the bulk of the burden of taxes in the community. It also undermines the beneficiaries of these taxes. They are the following: the North Canton City Schools, the North Canton City Library, the Stark County Park District, Stark County government, and the City of North Canton.

Tax abatements such as those recently given distort and pervert the true purpose of the Ohio Community Reinvestment Area Program.

The CRA summary from the Ohio Department of Development also states “…the exemption percentage and term are to be negotiated between the property owner and the local legislative authority.” The North Canton legislation creating the Main Street CRA, Ordinance No. 22-99, uses similar language stating “…improvements to commercial and industrial real property and the period of those exemptions shall be negotiated on a case-by-case basis…”

What sort of negotiations are taking place? From the seats here in the audience at last week’s council meeting, what I heard is that there was a request for a 12-year tax abatement in exchange for two part-time jobs and that this requested abatement of taxes should proceed.

Does anyone really sit down and evaluate the requested tax abatement to determine if it is a fair and equitable request that is truly needed and provides something to the city in return?

The ODOD CRA summary also addresses the fact that along with the creation of a CRA program, the local legislative authority must create a Tax Incentive Review Council to review performance on all agreements and projects. I believe the operative word here is “Incentive.”

Is this requested tax abatement a needed incentive to make this investment in the community a reality? That does not appear to be the case.

In the minutes of the Community Reinvestment Area Council meeting of November 29, 2005, that met specifically to discuss this tax abatement request, one of the members remarks “…that it looks like he is going ahead with this project whether or not he gets the tax incentive or not. There is nothing that says the project is contingent upon receiving the incentive.”

Also noted in these CRA Council meeting minutes is the following “because so many of his patients are local, he purchased the building for approximately $150,000. Apparently a good value since the County Auditor’s market value is listed at $229,000.”

It appears that the acquisition cost for the property abutting Dr. Suglio’s current dental practice was the incentive for Mr. Suglio to expand his dental practice on Main Street here in North Canton.

Clearly, tax abatements are not an incentive in this case. Dr. Suglio, as a wise businessman, saw an opportunity and took advantage of it. This is an example of free-market forces at work and free-market forces are alive and well on Main Street.

This request for a tax abatement is similar to the abatements given to Spee D Foods on South Main Street in January, 2004, and to Reed Funeral Home just off Pittsburgh Road in June of the same year.

No incentive was needed to secure these investments in the community and yet tax abatements were approved by North Canton City Council.

The approval of the tax abatements for Spee D Foods and for Reed Funeral Home simply discounted the tax liability for each of these businesses and now we are facing another similar request here in Ordinance 1-06.

I guess it gets council members a few extra votes at the next election and persuades people to like you more than they otherwise would. The tradeoff is that that the remaining taxpayers pick up the tax burden and the school district collects less revenue.

There is something a little unique in this tax abatement request that I would like to bring to your attention and this is the fact that this requested tax abatement appears to violate state and local law regarding when commencement of construction or remodeling can begin.

ORC §3735.671 (A) states the following: “If construction or remodeling of commercial or industrial property is to be exempted from taxation pursuant to section 3735.67 of the Revised Code, the legislative authority and the owner of the property, prior to the commencement of construction or remodeling (emphasis added), shall enter into an agreement, binding on both parties for a period of time that does not end prior to the end of the period of the exemption, that includes all of the information and statements prescribed by this section.”

A reference to this section in the ORC is also described in the ODOD CRA summary that I have referred to earlier.

This same information is repeated in an Ohio Attorney General Opinion (OAG 96-030), dated, May 29, 1996, in a response to a question from a Wood County Prosecuting Attorney.

The OAG opinion states in part: “…Commercial and industrial applicants must apply prior to beginning a project and negotiate with local legislative authorities for an exemption. R.C. 3735.66-.671.”

This same requirement is also posted on the North Canton Web site at http://www.northcantonohio.com/content/main-st-cra.htm.

Item 5 on this Web page, in bold print, states the following:

“Once Council has adopted legislation approving the abatement and all parties have signed the CRA agreement, construction of project can begin.

A memo from Eric Bowles, Director of Economic Development, dated November 28, 2005, documents the fact that remodeling work on the Suglio property was underway as early as October, 2005.

I have confirmed this with an onsite visit to the property. I was told by one individual that construction has been ongoing for well over six-months, and I observed that plumbing and electrical work are substantially complete. Many areas of the new office are complete with wall board and will soon be ready for paint.

It is public knowledge that construction and remodeling have been underway for some time.

I ask that this council seriously reconsider any plans to approve this tax abatement request and any similar request. This request is not made with any ill-intentions to Dr. Suglio.

This council must do everything in its power to insure that taxes are collected to support all the governmental bodies that rely on these funds.

The City of North Canton is facing some very difficult times ahead and funds will indeed be scarce. The Hoover Company is a ghost of itself, the Maytag Company is soon to be non-existent, and Whirlpool is not here to pull anyone out of an economic death spiral.

Thank you,

Chuck Osborne
Resident
City of North Canton