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
Monday, August 23, 2010
Tuesday, July 13, 2010
$15,000 Audit of State Auditor’s Performance Audit Was an Utter Waste of Public Funds
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
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
Monday, June 28, 2010
$100,000+ Annual Cost of Christmas Bonuses Burdens North Canton’s Budget
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
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
Monday, May 10, 2010
Aqua Water Agreement Exposes North Canton to Risks and Is Unfair to Citizens
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 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
Monday, April 26, 2010
North Canton Should Rethink City’s Water Policy and Restructure Water Rates
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
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
Monday, April 12, 2010
Economy Provides North Canton Opportunity to Undo Inequities of Aqua Ohio Water Agreement
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 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
Monday, March 22, 2010
North Canton Water Study Highlights Failures of City’s Water Agreement with Aqua Ohio
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 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
Monday, February 08, 2010
North Canton Variance Request Mired in Politics & Mistakes
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
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
Monday, November 23, 2009
Continued Dumping Practices by North Canton Defies Logic and the Law
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.
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.
Monday, September 14, 2009
Financial Losses From Failures of City Officials Must Be Investigated
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
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
Monday, August 24, 2009
Shortcomings of Arrowhead Lease Adds to North Canton’s Financial Distress
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
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
Monday, June 22, 2009
Construction Management Agreement with Developer Not a Public Emergency
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 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
Monday, April 13, 2009
North Canton Continues to Gratuitously Provide Tax Abatements to Able Corporations
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 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
Monday, February 09, 2009
North Canton's On Again Off Again Annexation Policy Hinders City's Future
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
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
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