Thursday’s council meeting

Here are my notes from Thursday evening’s meetings:

School district lease – This was the big topic. The city and school district have preliminarily negotiated a lease of one wing of City Hall to the Stow-Munroe Falls School District, consisting of 2,627 sq. ft., plus common areas of 5,827 sq. ft., which includes all meeting rooms. Annual rent will increase from $34K to $59K over the course of the 20-year term. We will pay for the first $20K of the district’s cost in building out the space, which will include installation of a security system. But the district will contribute to 10 years of capital improvements at City Hall, with payments of $50K and $75K over the next two years. Thereafter, capital projects at City Hall (such as a new roof) will be prorated on a 88% (city) to 12% (school district) ratio. That same ratio will be used to apportion utility costs to the tenant. I have some concerns, but we are addressing them internally. Overall, as a real estate attorney, I can tell you it is a commercial-style lease with market terms. Next steps: The school board will simultaneously consider the proposal. Naturally, both the board and city council must approve.

Service building project – The Service Department asked council to spend $170K to enclose a garage and add some facilities at the Service Building. The facilities would be used by employees in the water department. I toured the facility, and the project can be justified. However, we are planing to run a budget deficit in 2016, so every expenditure comes with added scrutiny (at least from my perspective). I voted in favor of Brian Lowdermilk’s successful amendment, which reduced the project cost by $40K by eliminating the employee facility. I also made my own motion to ensure that the $130K in funds would not come from our Capital Improvements (i.e., roads) Fund. My amendment also passed. The limited project was then approved by a 5-2 vote (Lowdermilk, Adaska voted “no”).

Council will meet next on May 26. I plan to add an exciting new element to my blog post for that meeting, so stay tuned!


Last night’s council meeting

Here are my notes from last night’s meeting:

Speech & Debate team – We honored Stow’s speech and debate team last night, after they placed 5th at states. Plus, six individuals qualified for the national tournament on June 11 in Utah. But the team needs $10K for travel expenses. Donations can be sent c/o the Speech and Debate Team to the High School. (I’m looking for their GoFundMe page, but haven’t found it. Can someone send me a link?)

SKiP Playground – Brian Lowdermilk proposed legislation to hire Leathers & Associates to perform an analysis on what needs to be done to bring SKiP Playground back to life. Ironically, the mayor had already asked this same consultant to perform this study. The consultant preliminarily believes an investment of $200K-$220K is required. How we fund the project is another story.

Police / Fire Memorial – Matt Riehl announced that the community would be raising money for a police and fire memorial near City Hall. City Council approved $1,000 to get it started, but the idea is to fund the rest through private donations.

Tax Incentives – Sometimes I provide long-winded explanations of certain topics before explaining a piece of news. This is one of those times…

The city commonly offers tax abatements for developers or businesses who will invest a large amount of money into real estate, when that investment results in new jobs (and consequently, additional tax revenue). So what is abated? It’s the taxes that would be owed on the new property value, not the pre-investment value. For example, say you want to build an $8MM industrial plant on a piece of land currently valued for property tax purposes at $2MM. If we abate your taxes, you will continue to pay taxes on the $2MM value, but taxes on the additional $8MM of value may be abated for a period of 5 to 15 years.

The question is: How do we determine the proper abatement time period? There is a formula. It depends on the amount of  jobs that will be created, the amount of new taxes, and the amount of jobs that would be retained, among other things. There is also a category for “discretionary points.”

As you may be aware, there is a new commercial building at the corner of Seasons Road and Route 8. The same developer desires to construct another building just like it. Under the formula, he would be entitled to 13 years of abatements. The administration gave him “discretionary points” in order that the proposal would merit a full 15 years of abatements.

Two weeks ago, I objected to this use of “discretionary points.” My basis? We need to be good stewards of your money. Where there is “discretion” involved in giving away tax dollars, I get concerned. What’s to stop someone from giving “discretionary points” to a friend? Nothing. (Although that isn’t what happened here.) Council agreed, and we revised the tax abatement to 13 years.

After that meeting, I sat down with the mayor, our economic development coordinator and others. We discussed the formula, and how it could be improved. To be specific, there are some disincentives baked into the formula that make no sense–and that, in fact, disincentivize new employers and disincentivize larger projects. Also, discretion is not appropriate in these calculations.

So, last night, I agreed to make a motion to extend the abatement period back to 15 years, and the administration agreed to work with me to correct the formula–in a way the eliminates the strange results and eliminates discretionary points. I look forward to that project.

Council will meet next on May 12.



Meeting Notes

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