Last Monday night's council meeting highlights one of my main frustrations.  I've been stating specific instances where we could be making better decisions, for instance Monday I pointed out that we are telling people, "pass the levy or we will have to cut police and fire", yet we've committed to opening the Music Center even though we haven't got one dime in the budget to advertise concerts, run concessions, pay security or hire bands.  Instead of presenting an example where the information has been presented properly or promising to do it soon, all we get are complaints that I say insulting things and spread misinformation.  So today's article was a pleasing read because it actually contained a couple issues that I can address.  As usual, I provide links to references I'm looking at so that anyone, friend or rival, can correct any misinformation.
 
The Chairman of the Recall committee is quoted as saying one of her concerns is, "McMasters' misunderstanding of tax increment financing".  Tax increment Financing or TIF, is a complicated issue that cannot be understood fully in one fifteen minute conversation or a brief article.  In fact, though I am comfortable I know as much or more as any council member, I'm still learning.  So in this article I'll write a little about what I've learned this week and then reminisce about TIF history.  One main point I hope you take away from this discussion --- TIF can be a useful tool and TIF can be detrimental.  You shouldn't rejoice, nor should you cringe just because you hear the term TIF.
 
Pass a School Levy, what happens in a TIF district?
 
This week I wondered, "what happens in a TIF district if a school levy passes?".  Does the school get all the money or does the city take part?  I asked this question to the Miami and Montgomery County Auditors both responded that the money is collected as TIF and how it gets divide between the city and the school depends on the TIF agreement.  The Miami County office provided a more complete answer which concluded, " Basically the bottom line with the new levy will mean additional tax dollars being paid starting in TY’14 which means additional allocations to the City of Huber Heights". 
 
Here is an opportunity for you to check my work.  When reading the ordinances below, it appears as if all new School Levies are divided up the same as the School Levies that were in place when the TIF was created.  That means if the city was getting 70% of the schools money before, when the new taxes come in the city will get 70% of the new money too.
 
The TIF agreements come first and then the city passes an Ordinance.  I haven't been provided the agreements but here are links to the Ordinances.
 

TIF	Ordinance Number	10 yr Split (City /  School)	Notes:
I-70 TIF	2003-O-1409	75 / 25 *	This ordinance is difficult to understand.  I get the split from reading the note on the first page of an audit that was done for the city.
Carriage Trails	2005-O-1589	0 / 100
Alcore	2012-O-2010	70 / 30
Huber Centre	2012-O-2009	70 / 30
Trimble TIF	2012-O-2008	70 /30

 
This is important to me for a couple of reasons.  For instance I refer to the Trimble TIF as a "good" TIF.  This TIF was created so that the road and sewers on Rt 202 could be improved.  This made those roads and sewers better for this new facility and was a key factor in allowing Trimble to build there.  I've heard a quote that says it cost about $600,000 for these improvements.  I give the city the benefit of the doubt that the TIF revenue that will be collected will be close to $600,000 plus interest when I call this a "good" TIF.  If it turns out that we collect a lot more (or a lot less) than $600,000 then I might not think it is such a good deal.  So if last year we were collecting the right amount and this year the school levy passes and we get more, then we may be collecting more than we need. 
 
The second reason is because the city hasn't ever gone on record as to whether future budgets depend on school's passing levies in order to for the city to pay for the Aquatic and Music Centers.  As anyone that has followed my position knows, I consider the Alcore and Huber Centre TIF's as "bad" TIF's because they were not created to help improve the roads and sewers in those areas but instead were created so the school's property taxes could be diverted to pay for the Music Center.  We need the city to give us accurate budget projections.  This would not only give us confidence in our ability to pay off the Aquatic and Music Center debt, but it may allow us to correct mistakes like the diverting of Alcore and Huber Centre taxes from the school to the city.
 
Reminiscing about old TIF decisions
 
This article is already longer than expected.  But as I've said before, you can't learn TIF in one 15 minute conversation.  But lets start back at the beginning as a start to the conversation.
 
Back in 2003 the city created the I-70 TIF in order to improve the highway interchanges at Rt 201 and Rt 202 (good TIF).  This made it possible to attract businesses like Meijer to their location.  About 2010 the city realized they had about enough money in the bank to pay off the remaining debt for the interchanges.  If this had happened and they paid off the debt, according to Ohio Law and Section 4 of the I-70 TIF ordinance 2003-O-1409 , they would have had to dissolve the TIF.  This would have meant that the schools would have begun to receive their normal property taxes.  Knowing this the city decided to start building the Aquatic Center which meant they wouldn't have to return the money to the schools.  A main reason I have an issue with this is because in every public discussion city officials and their partners tried to hide the relationship between TIF payments and School property taxes.  For instance they would say, Hey we need to use these funds or lose them to other taxing agencies, instead of saying --  hey we need to use these funds or return them to the schools.  Read the April 12th, 2011 Planning Commission Minutes;  Item VIII is the Pre-Application Review Huber Heights Recreation Activity Center I recommend reading all of Mr. Stanely's remarks starting on at the bottom of page 4 and going through to the end of page 7.  In case you don't read them all, here are a couple excerpts:
 
 "Ms. LaGrone asked about the phrase “use it or lose it.”  She stated that she understood the use it portion, but was not sure if she understood the lose it part, if it was generating revenue. She asked how the funds would be lost.
 
Mr. Stanley stated it was complicated. In TIFs, they freeze the value of a property at its pre-improvement level. Then, improvements that occur, including increases in the value of the underlying ground one built on, were not taxed as ordinary income. Improvements increase the value of the property, and payments in lieu of taxes are made by the developer or owner of the property. Such revenue is not generated as regular property tax. The other taxing districts that might ordinarily be receiving the benefit of the improvement of such properties, do not receive the revenue."
 
And
 
"At the time the legislation was passed, no one knew how much would be needed for the interchange projects, but reserved as a first call on the monies financing the debt service to upgrade the improvements. Subsequently, there is more debt service capacity and income is being generated beyond what was needed. He recommends that the City or any government engaged in TIF legislation could hold on to the monies and continue to accumulate revenue that could only be used for one thing, but these were tight economic times. Therefore, this was not a good scenario. He feels there will be tighter and tighter budgets throughout Ohio, and other taxing districts would look and say some of that money is not going to them and why is it not being used in a productive way for the community."
 
Again, the main issue with council's behavior in this situation is they purposely phrased things so that the public wouldn't know important information that would help them understand the choices council was making.
 
This brings me the comments a former City Manager made in the DDN article.
 
The main job of council and the mayor is not salesman. 
 
In the DDN article the former City Manager is quoted as saying that the focus of the Mayor's job "is to be the master communicator on behalf of council and the city government.” When is fact the job is to be both a representative of the people to city staff and a representative of the staff to the people.  The way I look at the position is that in order to represent the people to the staff, I need to know what people are thinking.    
 
If you look at how council treated the public with the way they explained the "use or lose" choice above, or the decisions such as whether the aquatic center would be indoor or outdoor its hard to come to any other conclusion that council can improve their performance when it comes to being a liaison for the public.
 
Nothing could highlight this more than the Levy campaign.  I remember the first Administration Committee meeting after the election as the first time in more than a year and a half that Council indicated a tax levy would be necessary.  After listening to the presentation I concluded this was a well coordinated effort trying to get everyone in the room on board with the already decided tactic of selling the public the idea that police and fire are bankrupting the city.   You can look at the administration committee meeting minutes and see that there is nothing captured there at all about the need for a tax levy. In fact the minutes are so incomplete that they don't even mention the charge by council go out and find "A Consultant(s) To Assist And Advise The City With Regard To The Impacts And Effects Of The Economic Forecasting Of The City Over The Next Several Years".  This was something council did decide was necessary and was approved during the 25 November 2013 council meeting. Admittedly because I had just been elected I choose not to call out council's behavior knowing that cooperation is typically more productive.  Still you can tell some of my concerns in my Nov 20th, 2013 and Dec 1st, 2013 posts.
 
Even today, council tells us either vote for the levy because the only thing to cut if it doesn't pass are police, fire, parks and seniors and all the while they add hundreds of thousands of dollars into next year's budget to run the Music Center. Technically, its true.  Either vote for the levy or lose the services you want because they aren't going to give you the option of cutting costs anywhere else.
 
In conclusion, yes, the mayor and council do communicate to the public council and staff's recommendations, however, these aren't sales jobs.  There is an underlying requirement to hear the public first and then provide relevant information so that the public has the opportunity to understand the issues and help council make sound decisions. 
 
Attaching Memo's and not signing legislation
 
The argument that says it was wrong that I attached a memo to the city manager's contract would hold more weight if the city attorney would have said so before council told him he had to declare it was wrong.  It would also hold more weight if those city employees involved in the decision had not concurred this was the best alternative to my original plan.  Even though I did not consult with the City Attorney specifically on the legality of  the memo, I believe he was aware within hours of the entire situation.  Who knows how I would have reacted if he had told me within a couple days there was a problem.  But if I had gotten timely advice and chosen to take it, we could have administratively replaced the defective contracts with the clean versions, just like we do anytime we find errors.  Instead even, weeks later, when I inquired informally if there was a problem, I was told there wasn't an issue.  It will be interesting to see them claim that the legal issues were so complex that it evaded our legal department for weeks but they were so obvious that I should have know them.    
 
I've not signed legislation a number of times since taking office and resigned a couple because of typos found after the fact.  In most instances it has been because the legislation wasn't ready to be signed.  Of course, there is no issue with those instances.  There are two that made council sweat.  The first occurred right after I took office.  When I was checking the legislation, I read something I didn't remember from the committee meeting discussion and decided I would go back and check my notes before signing.  I told the assistant clerk of council the situation and committed to signing the legislation after reviewing.  When I heard council was up in arms I asked the City Manager if there was a time constraint.  He said that it needed to be signed before the paper work could be submitted to the other agency but that paperwork wasn't done yet and probably wouldn't be for a few days.  I signed the legislation the week it was passed.  Staff completed the paperwork the next week and submitted on a normal schedule.
 
The other time I purposely didn't sign legislation was with the Thomas Cloud Concession stand.  For two years every council discussion involving locating the concession stand in the middle of the baseball fields said we weren't going to do this unless the donation was given first.  My not signing this legislation helped ensure council's wish was achieved.  I know some people will argue that the entire purpose of my signing the legislation is to show the vote count.  I argue that is why the clerk of the council signs the legislation.  The mayor has a bigger role in helping to make sure the entire process is followed.  Just so you know, I understand the difference between certifying a process versus vetoing legislation.  For instance I totally disagree the Music Center Management contract is in the best interest of the City but I understand council has the authority to make bad decisions.  However, if someday a company is able to convince council they can buy the Brooklyn bridge, and after they pass the legislation, but before I sign it, staff discovers the deed is forged, I'm not going to sign that legislation.
 
I addressed the City Manage Contract and the not signing of legislation.  In reality you are hearing about these because council wants you distracted from the real issues.  So let me get you back on task by copying and pasting the first paragraph again.
 
Last Monday night's council meeting highlights one of my main frustrations.  I've been stating specific instances where we could be making better decisions, for instance Monday I pointed out that we are telling people, "pass the levy or we will have to cut police and fire", yet we've committed to opening the Music Center even though we haven't got one dime in the budget to advertise concerts, run concessions, pay security or hire bands.  Instead of presenting an example where the information has been presented properly or promising to do it soon, all we get are complaints that I say insulting things and spread misinformation.  So today's DDN article was a pleasing read because it actually contained a couple issues that I can address.  As usual, I provide links to references I'm looking so that anyone, friend or rival, can correct any misinformation.