MINUTES OF THE SPECIAL MEETING
MASSILLON CITY COUNCIL
HELD, MONDAY, DECEMBER 30, 2013
COUNCIL PRESIDENT TOWNSEND B This meeting was called by members of the Community Development Committee for the purpose to discuss and pass Ordinance N0. 163 – 2013.
1. ROLL CALL
Roll call for the evening found the following Council Members present: Milan Chovan, Sarita Cunningham-Hedderly, Nancy Halter. Quenessa Hampton, Ed Lewis, Paul Manson, Donnie Peters, Andrea Scassa and Larry Slagle
Thus giving a roll call vote of 9 present.
COUNCIL PRESIDENT TOWNSEND – Thank you, Madame Clerk, please read Ordinance No. 163.
ORDINANCE NO. 163 - 2013 BY: COMMUNITY DEVELOPMENT COMMITTEE
Declaring improvements to certain real property located within the City of Massillon, Ohio, to be a public purpose, describing the public infrastructure improvements to be made to directly benefit that real property, requiring the owner of the improvements on that real property to make service payments in lieu of taxes, and establishing a municipal public improvement tax increment equivalent fund for the deposit of such service payments, all pursuant to Ohio Revised Code Sections 5709.40, 5709.42 and 5709.43, and declaring an emergency.
COUNCIL PRESIDENT TOWNSEND – Councilman Manson?
COUNCILMAN MANSON – Yes, thank you, Mr. President. I hope you allow this to be somewhat loose. Don’t let it get out of control but I think there’s a lot that needs to be talked about here. And I’m just going to go first with the continuation of where Mr. Slagle had gone before. This is from some minutes Mr. Slagle asked almost the exact same questions back in 2009 that’s he’s asking today of the previous mayor. So it hasn’t been any it’s not a it’s not that he has favored or disfavored one mayor over the other mayor its legitimate questions. I think that we deserve legitimate answers. I think you know Mr. Peters referred to it Donnie’s referring to it I know its bothering Milan and what he’s saying and I really think this was a travesty in the way this has been mishandled at the end of the year with the lack of information we’ve been given. We’re still having trouble getting the information. But just something that I have to throw in here a little bit and I have some questions because Mr. Herncane from community development is here and I hope he can answer some of these questions and I’d like to see us in the end up agreeing on something here and keeping this thing moving. But I just have to put pardon?
COUNCIL PRESIDENT TOWNSEND – Would you like to call him up now?
COUNCILMAN MANSON – No, not yet I want to just something that in defense of what Mr. Slagle was saying this is what our current mayor said back awhile “unless we have a plan for the TIF dollars we should be voting no she said “shame on you guys for doing that to these people because there are quite a few people in this City of Massillon that benefit from these dollars including our own daughter”. I get I have a real problem when somebody starts making these bleeding heart issues I’m sorry sometimes they are serious things. But you know when it comes down to this kind of stuff we have to make the best decision for the community and that’s why from the very beginning I think if you go back I’ve never voted against a TIF. And it’s highly unlikely I will unless we have some that are just like maybe the Meadows or Market Place that are site specific and I disagree with how they’re being used. I may disagree then. But generally I believe when we have development if we can TIF that stuff we should do that to get the revenue for the infrastructure. I think its it was designed for that we are not taking any money away from the community we’re not letting you know sometimes I think people start running TIFs together with tax abatements. It’s not the same thing at all. It’s not the same thing our own mayor said that. It’s not the same thing tax abatements are an entirely different thing. They are going to be paying less taxes through these they pay the exact the same amount of money into the community as they would if they were just paying normal taxes. You know so I want everybody to understand that. Having said that we’ve never seen a map of this area and I asked Mr. Herncane if he would bring a map today to show us exactly what we’re talking about
. Maybe get a little more into this I have a few problems I understand why we’re looking at this stuff with Baker Hughes on a timetable I’ve talked to the county auditors and I know the timetable is there. But there’s a couple of parcels I believe that are part of this that are not Baker Hughes that are undeveloped that maybe don’t have to be part of this TIF today if we can just you know change it, amend it whatever and take care of the stuff with Baker Hughes and then look at the other stuff down the road when we get more information. But having said that I’ll turn it over to Ted to give us whatever explanation he has on it. I know I have some questions about this.
COMMUNITY DEVELOPMENT DIRECTOR HERNCANE – Mr. President, members of council, Mr. Manson.
COUNCILMAN MANSON – I guess here’s what my question is this would only be one part of it because I intend to recommend we do something tonight. We have the Baker Hughes site we understand that’s something that was on a timetable that the development if we do not pass this TIF in 2013 that when we go into 2014 the appraisal on the taxes will be based on what’s already in place there and that we would not gain from the new construction.
COMMUNITY DEVELOPMENT DIRECTOR HERNCANE – Correct.
COUNCILMAN MANSON – So would you like to expand a little bit on that?
COMMUNITY DEVELOPMENT DIRECTOR HERNCANE – Sure the project of Baker Hughes when it originally started was a very high number of jobs and a very high dollar amount for investment. Over the last two years that project seemed to be a moving target right around February or March of 2012 as some changes in the industry’s pricing occurred and some stock went down for the company the project was scaled back severely. It wasn’t until just maybe this summer that there was an actual decision by the company on what they were going to do to get started with the project. It was far lower than what the original expectations were but it still a very good project for the city and it’s something that was going to benefit the city and the residents here. The purpose of the TIF and if you look at the map there’s three parcels of property that are included in the TIF. There’s the Baker Hughes parcel, there’s the MDF parcel that looks kind of like a boot in the middle and then there’s the Massillon Development Foundation parcel which is on the far east side and kind of wraps around all the way to the west there at the north. As you look at Millennium Road the purpose for the TIF is to primarily extend Millennium Road or Millennium Drive which ends at the southern most part of the property up through to connect to Route 30 which is a very important piece of this whole area. The reason to include the Miller Land and the MDF piece were if we’re going to do a TIF and we’re going to create an ordinance primarily to build this road these two parcels are going to benefit from that road greatly. Why not include them now and get it done all in one shot. Those two pieces which roughly equal 130 or 135 acres I feel will be highly marketable once the road is complete. I do not have firsthand knowledge of anyone that is looking at that parcels but I do feel that if that road is completed and the improvements through the infrastructure are made due to the TIF proceeds that those pieces will be very valuable and lead to further development in the area. Right now at the end of 2013 Baker Hughes will have invested approximately $10 million dollars of a $14 million dollar project. Come January 1st all the investments that they have made so far will hit the tax bill which is the reason why the TIF ordinance if its passed after December 31st the lock in date would be once those improvements are made so then we would really we get into a situation with Menards where we would only be able to realize $4 millions of the whole project. Of course this is all based on the Stark County Auditor’s appraisal of the property. The two pieces to the east MDF and Miller Land are vacant undeveloped parcels. The auditor has appraised the land at whatever you see on the internet it is what it is. With Baker Hughes even though they’ve spent $10 million dollars worth of stuff by the end of this year in buildings and improvements means the auditor could appraise at half of that could appraise it at more than that. When you’re talking about a TIF as Mr. Manson explained the difference between a tax abatement project that we would do either with the enterprise zone or the CRA there are concrete dollars to work with but they’re still based on the same appraisal. I mean these could be very, very expensive low appraised buildings I don’t think that’s going to happen. But you know there is some uncertainty as to how much money it’s going to generate through the appraised value from the auditor. I guess we’ll start with that.
COUNCIL PRESIDENT TOWNSEND – Councilman Slagle?
COUNCILMAN SLAGLE – Yeah, Mr. Herncane, since, since there were at least five members of council that probably have never voted on a TIF prior to this why what was the delay in getting this set up and presented to the council?
COMMUNITY DEVELOPMENT DIRECTOR HERNCANE – Well, I didn’t write the legislation so I’ll give you my best answer okay? As I alluded to it wasn’t until recently that we knew kind of what the project was going to be. I mean when they started with a 10’s of million dollars worth of project 1,500 jobs if we would have brought a TIF to you beginning of last year and the project you know decreased I’m sure there would have been some questions as to why we were doing it too soon. Once we felt comfortable and in conversations with the company saying this is what we’re going to go forward with right now. Now obviously if the natural gas prices go up and the industry takes off like everyone hopes it does then they’re project is going to increase and they’re investment will increase and the jobs will increase. I would say that having worked in the other building everyday for the last two years over the last several months with projects like Heinz and I know the mayor has been very busy lately with her with getting the fiscal commission and the recovery package in order I know that her time has been maybe focused more on those types of things over the last several months. As we kind of looked at the calendar and say “hey, it’s December if we’re going to move on this we need to do it now”. You know I don’t know how what more to say than that I understand it is a time crunch for you all it’s a time crunch for me. But I guess I would ask that if maybe if we just keep some of the bigger picture things here and maybe not play little reindeer games Christmas is over with things like that.
COUNCILMAN SLAGLE – Okay, thank you.
COUNCIL PRESIDENT TOWNSEND – Councilman Chovan?
COUNCILMAN CHOVAN – Thank you, I want to address the issue about and call it bleeding heart if you want but I’m a republican so we’re normally bleeding hearts. But I’m looking for you know I’m looking out for these different organizations that will be affected by this its true that we’re not going to take any money away from any different agencies that are currently receiving money. That’s very true. However, they’re expenses are going to go up dramatically over the next few years due to inflation so the overall benefit that they’re getting from the share of the taxes even at the level that it is now is going to decrease. You know I mean if there was some way to that the tax base that their money is based on could be adjusted for inflation to keep them whole I guess I would feel better about it. Is the first issue. Second issue I still feel that we should have had estimates on these different improvements just because we can do a TIF for 30 years we can also end the TIF when enough money has been brought in to pay for the projects you’re talking about. So in my mind the extra money you’re just it’s another source of money that by the way can flow into the General Fund to be used anywhere you want it to. Once the project is done if there’s money left according to what I read in the Ohio Revised Code today any money left in these funds that are not specifically used for projects can go into the General Fund. So because we can’t generate money on the other way doing this can be used for other than what you’re alluding to just for these projects down at Baker Hughes. Next issue property taxes for other property owners in the area can and will go up by doing this. The way your tax rate is figured for the county it is every agency that benefits from property tax dollars figures out what part of their annual operating budget comes from those dollars. The county then adds all those up to come up with what’s called a tax levy. Not a levy in the sense that we’re going to create a levy but that’s the total dollars that are needed from property taxes to fund and it could well here its on this list from Menards I mean it could be MRDD, Mental Health, 911 System, Children Services, Police Pension, Fire Pension, Museum, Stark County Parks, Massillon Library, all of the money that they need comes from property taxes is put together and come up with a tax levy. Then you have all of the property that’s affected in that area that has an assessed value and that’s your tax base. So when you have what your tax levy is and you divide that by the tax base it comes up with a tax rate. That rate is what everybody’s charged on their property taxes. If we’re taking and limiting part of this tax base then the rate changes. So other property owners in town they’re property taxes can increase. So to benefit these three pieces of property you could theoretically being raising the property tax rate from every property owner in town. Now I’m having said that I’ve got to tell you I’m not against TIFs I think they can be a great financing vehicle for the growth of a city but I think that we I would like to have seen if we’d had more time to discuss this and put it together I would like to have seen cost estimates for these projects so that we and also then the anticipated revenue to come from the increment and see how many years we’re talking about. Maybe we don’t need the 30 years. And it bothers me that money that is left at the end of this project period that’s left after we do these projects can go into the General Fund. It’s a way that we can increase property taxes on the people that own property in the city and have it kicked back to the General Fund to pay the other operating expenses. We didn’t approve the reduction of the income tax increase to do that and the citizens turned down a tax levy so as far as I’m concerned this is just another way that once the projects are done that we can funnel money back into the General Fund for operations. You know if I’m wrong if I’m not looking at this the right way maybe I did need a lot more time to consider this. I mean three weeks to somebody like me who’s never even looked at a TIF before and asking somebody like me to vote and approve this I don’t feel comfortable doing it and if we insist on taking the vote tonight I’ll vote no for that reason.
COUNCIL PRESIDENT TOWNSEND – Okay, is that it for Mr. Herncane?
COUNCILMAN MANSON – No, we may need him some more.
COUNCIL PRESIDENT TOWNSEND – Okay, Councilman Manson?
COUNCILMAN MANSON – Yes, first of all, on your comments on the length of time we actually got this on the 16th so we’ve only had it 15 days so that is an awfully short time to be hit with all this stuff. Just some information that I’ve pulled out there’s one thing from our former bond counsel that they said this is a letter from them back a ways in 2011 so its not that far back this direct benefit requirement has been interpreted fairly broadly at times to include infrastructure improvements such as sanitary sewer, treatment plant extension where its shown that increase capacity is necessary to service a new development. So physical proximity of the infrastructure improvements to the development is not a prerequisite. So you know my comment on that is that there is no way that I can say other than if we had a piece of property and we said this is a TIF that’s just related to this piece of property and nothing else and this is our agreement which we could still do that today. They’re all general and they’ll all be fought about by the future administrations and the councils. How they’re spent where they’re spent. You know they maybe spent on streets and bridges and they maybe spent on a new fire house or something or pieces of it. So you know its they are interpreting them more broadly and I think that’s kind of a benefit to us. Having said that I still think its worth considering just TIFing and passing right now the Baker Hughes property and let the others be looked at down the road. And we have more discussion, more education ourselves and then take a look at these things in the future. I have to ask our law director if it would be possible to divide that up like that.
COUNCILMAN PETERS – Separate the question.
COUNCILMAN MANSON – And I also ask for some more comment to see how the rest of you people feel about that.
COUNCIL PRESIDENT TOWNSEND – Councilman Manson, are you calling him up?
COUNCILMAN MANSON – Yes, I am.
COUNCIL PRESIDENT TOWNSEND – Would you come up Mr. Stergios?
LAW DIRECTOR STERGIOS – Mr. President, ladies and gentlemen, Mr. Manson?
COUNCILMAN MANSON – Yeah, I’ll restate the question then. I’d like to know if it would be possible having looked at these maps of these areas that are being talked about for TIFs to just separate the Baker Hughes because that seems to be the problem as far as timeliness and then take a look at the others in the future. Or does everybody do we have a censuses of people here that kind of what to push this whole thing forward exactly as it is.
LAW DIRECTOR STERGIOS – The notices that went to the school district I believe contained notice that it would be these three parcels. You can amend it and delete the MDF and Miller Land development parcels and I believe the notice would still be effective. I honestly don’t know because I didn’t have any Squire Sanders did all this work not me and I’m not the TIF guru. That being said I think you can amend it delete two parcels but then you go back first reading you’ve got to suspend the rules and same as issue as to the timeframe. If you don’t pass it tonight based on what Mr. Herncane said we lose the assessed valuation that went into effect this calendar year. But that’s a different issue but…
COUNCIL PRESIDENT TOWNSEND – Are you done Councilman Manson?
COUNCILMAN MANSON – For right now yeah.
COUNCIL PRESIDENT TOWNSEND – Before I call on you Mr. Peters can we call up Mr. Herncane he raised his hand.
COMMUNITY DEVELOPMENT DIRECTOR HERNCANE – Can I ask a question of the law director? If its amended and it proceeds with just the Baker Hughes parcel when we noticed the school districts the Perry Local Schools and RG Drage it included the amended the ordinance draft that had all three of the parcels together. Does that notification affect anything? I guess I can see if you start with one…
LAW DIRECTOR STERGIOS –I guess my only If we added a new parcel I would say the notice might be defected but considering they already got the notice whether it’s one or three I think we’d be okay.
COMMUNITY DEVELOPMENT DIRECTOR HERNCANE – And their consent or approval is not required in this matter because it’s a non school issue.
LAW DIRECTOR STERGIOS – Right.
COMMUNITY DEVELOPMENT DIRECTOR HERNCANE – Alright.
COUNCIL PRESIDENT TOWNSEND – Councilman Peters?
COUNCILMAN PETERS – Mr. Stergios, I know I went to this class and you probably didn’t so why can’t we just separate the question? Vote on both of them turn down the one and vote for the other one if that’s the way council decides to vote. But that way I mean the notice can’t have any effect because council voted no on those two parcels and voted yes on the other parcel. So I mean really the notice wouldn’t even come into effect. Correct? And you wouldn’t have to amend.
LAW DIRECTOR STERGIOS – But you have to amend the ordinance because the ordinance specifies all three parcels. There’s no question to divide the ordinance is drafted its not like deleting an appropriation or something I mean they’re all three in there. We have to change the ordinance and amend it which we can do but it’s somewhat cumbersome. I don’t even have the ordinance in front of me I don’t have paper to print it on.
COUNCILMAN PETERS – Well and my questions are done with you but while I’ve got the floor I’ll direct my comment to Mr. Manson I’m just I’d just assume vote for the whole thing the way it is and if it passes it passes and if it doesn’t it doesn’t.
LAW DIRECTOR STERGIOS – I don’t vote but don’t I would agree with you because we’re just trying to reinvent the wheel at the last minute on something that we don’t
COUNCILMAN PETERS – That we got at the last minute. (Yeah) Yeah.
COUNCIL PRESIDENT TOWNSEND – Councilman Slagle?
COUNCILMAN SLAGLE – This would be like any other piece of legislation though if ten years down the road we determine that there’s enough money in that particular TIF we could negate it can’t we like any other legislation?
LAW DIRECTOR STERGIOS – I don’t know.
COUNCILMAN MANSON – They’re renegotiable they do renegotiate TIFs.
COUNCILMAN SLAGLE – Okay.
COUNCILMAN MANSON – I hate to speak out I hate to speak out but I’m sure that TIFs can be renegotiated I don’t know if you can get any help there from Mr. Herncane or not.
COMMUNITY DEVELOPMENT DIRECTOR HERNCANE – I believe that’s correct the max years term is 30 years I believe that since its created by ordinance I believe city council has the authority to terminate it if they so desire. You know if the improvements take you know if it takes ten years to pay back whatever improvements were done then that’s council’s prerogative. But I do believe Mr. Manson is correct in that respect.
COUNCIL PRESIDENT TOWNSEND – Okay, is that for Mr. Stergios?
COUNCILWOMAN HALTER – No, I was just going to say that if we could take a break now for this because we’re supposed to have swearing at 7pm and maybe some of the family members would like to leave.
COUNCIL PRESIDENT TOWNSEND – Yeah, I think we need to get this out of the way we’ve been hanging on this for what two weeks?
COUNCILWOMAN HALTER – Well that was the original agreement.
COUNCIL PRESIDENT TOWNSEND – Yeah.
COUNCILMAN MANSON – Yeah, I don’t like delaying the others but I think we need to finish this off right now.
COUNCIL PRESIDENT TOWNSEND – Okay, we have no questions for the law director. Do we have any more questions for Mr. Herncane? Okay, back to you Councilman Manson?
COUNCILMAN MANSON – Well, I don’t know Mr. Peters would like to see the whole thing go forward. Pardon? We’ve got a question here.
COUNCILMAN SLAGLE – Well as I understand it though if we don’t if we vote this down today then we’re going to lose the main reason for doing a TIF on this property. So I think in the best interest of the city we have despite the delay despite that it was a last minute thing I think a vote to approve this TIF is essential.
COUNCIL PRESIDENT TOWNSEND – Councilwoman Scassa?
COUNCILWOMAN SCASSA – Thank you, Mr. President, my comment is I agree with a lot of different things that were said I don’t like getting this at the last minute. I do think that it’s something that we even though we’re giving it three readings it’s a very quick three readings. Not at regular sessions where maybe people would of came out spoke out for or against it who knows. They very well might not have. But I do think that regardless of the manner of which we received the ordinance which I don’t think any of us are necessarily thrilled about I think the bigger picture as Larry just said is what are we going to lose out on come January 1. And you know although the auditor may come in and as Ted said you know appraise expensive buildings very cheaply I mean there’s still that possibility. And I guess that’s my fear of losing out on that money that could be used for that infrastructure that if we are going develop and you know knock on wood the city has had a good year with some development projects coming through and if we can keep that going and although Baker Hughes isn’t as big as maybe they once thought they were going be it still sounds like it’s a pretty good project for the city. So I guess I would just like to say that you know it didn’t come to us in the ideal manner but I think the bigger picture of what are we going to be losing on it. And that’s my feelings and not that I’m an expert on TIFs but I’ve tried to educate myself I appreciate the emails that were sent out with some informational stuff today. Like I said I’ve tried to educate myself on it and that’s my feeling on it I guess being part of the Community Development Committee.
COUNCIL PRESIDENT TOWNSEND – Alright are there anymore questions from any council members. Councilman Lewis?
COUNCILMAN LEWIS – I just want to make a statement again on the record that due to my employment with Stark County Board of Developmental Disabilities I’ll be abstaining from the vote this evening.
COUNCILMAN MANSON – I have to approve that I believe.
COUNCIL PRESIDENT TOWNSEND – Yes. Okay, wait lets go back to Councilman Manson.
COUNCILMAN MANSON – Okay, having heard that I do think this is something that we really need to dig into a little more in the future. We need there’s been a real lack of communications here and like I said our past mayor I can go on reading from these things here how much how upset she was that she didn’t have a lot of the information and stuff at the time…
COUNCIL PRESIDENT TOWNSEND – Councilman Manson, that…
COUNCILMAN MANSON – Okay, but I think that’s an important part of this it is an important part of this and I think that should be out there. If somebody had the right to ask the question in 2009 like Mr. Slagle did and he’s asking the same question today then I think that’s a pretty reasonable thing. What Mr. Slagle is doing there. I don’t think there’s any on our part any political motivations here but I personally am not happy with the way this thing came forward. Having said that I recommend that we pass it and I’m bringing it forward for third reading.
COUNCIL PRESIDENT TOWNSEND – Okay and before we get into roll call I believe we need a roll call to accept Councilman Ed Lewis decision to abstain from voting due to employment conflict. Roll call please.
Roll call vote of 9 yes for Councilman Lewis to abstain from voting on Ordinance No. 163 – 2013.
COUNCIL PRESIDENT TOWNSEND – Okay, Councilman Manson back to you again.
COUNCILMAN MANSON moved to bring Ordinance No. 163 – 2013 forward for passage, seconded by Councilman Peters.
ORDINANCE NO. 163 – 2013 PASSED BY A ROLL CALL VOTE OF 6 YES, 2 NO. CHOVAN AND HAMPTON VOTED NO.
COUNCIL PRESIDENT TOWNSEND – Ordinance No. 163 has passed and the special meeting is adjourned.
MARY BETH BAILEY, CLERK,
TONY M. TOWNSEND, PRESIDENT