Jeff Anderson's yo-yo property taxes - up, down, where next?

This past June the Cincinnati Enquirer reported the Hamilton County Board of Revisions gave developer Jeff Anderson a partial victory when he contested the county auditor’s $21.6 million assessment of the Rookwood Exchange properties. The panel “said the value should be whatever the properties would be worth if the residential neighborhood still existed.” That amount was likely to be $11 million, a far cry from $21.6 million.

Here's the story:
http://news.enquirer.com/apps/pbcs.dll/article?AID=/20060628/NEWS01/606280380/-1/back01

Our source at the Hamilton County Board of Revisions tells us the recent Supreme Court decision in the Norwood case rendered the panel’s June ruling null and void and that a new Board of Revisions hearing on Mr. Anderson’s case will have to be scheduled to determine a new assessment. The hearing date will be established in 7-10 days. Since Anderson cleared the land of all the improvements, is the property now worthless and close to the $3.2 million assessment he originally argued for? Or, with the Supreme Court injunction now lifted, will the value revert back closer to the sales price of $21.6 million?

Breaking news: Mayor has called two special council meetings

Mayor Tom Williams has called two special council meetings for Tuesday, 8/29, and Wednesday, 8/30, both at 6:00 p.m., for the second and third readings respectively of this ordinance:

A. Ordinance to change appropriations for the year 2006.

A motion to have all 3 readings of this ordinance at last week's council meeting failed because a super-majority of 6 yes votes was required in order to pass it. Mr. Gabbard was absent. The vote was 5 to 1, with Mr. Schneider dissenting.

The ordinance has two parts:

1.) put money into the special Police Academy Fund that was created at last Tuesday's meeting. An anonymous donor has contributed $25,000, and the money, as we understand it, is to be used for repairs.

2.) transfer $15,000 from the general fund for state audit fees, sometimes referred to as the "state examiners key," to the Safety Service Director's key to fund the newly created budget analyst position.

At the 8/22/06 meeting, Mr. Schneider explained in detail why he is opposed to the city hiring a budget analyst at this particular time and, therefore, why he voted against the motion for all 3 readings. See our post below, "Council may cut deputy auditor..." for one of his primary reasons.

8/30/06 UPDATE: With Ms. Kelly absent from last night's meeting, council had the second reading only of the appropriations ordianance. They're back tonight for the 3rd.

Council may cut deputy auditor to part time, but would this be good for Norwood?

Trying to decode some of Tuesday night’s council meeting is like reading tea leaves with sunglasses on in a dark room. We don’t work at City Hall, so we don’t know which personalities mesh and which don’t; but gauging from the discussion that was sparked by Councilman Schneider’s remarks about the need for the offices of the Treasurer, the Auditor and the Mayor to start cooperating in advance of a new budget analyst coming on board, something must be awry in the Personality Department at City Hall. Why else would this ordinance have appeared on the agenda:

A) Ordinance changing the deputy auditor position to a part-time hourly position without benefits, and declaring an emergency.

Here’s what is known, followed by our questions:

1. Uh oh, there’s that emergency clause again. That tells us the ordinance is ripe for motions for all 3 readings in one night and a vote to pass it immediately.

Question: What’s the rush to downgrade the position from full to part time?

2. Though the new budget analyst will report to the Safety/Service Director, s/he will interface with the Auditor’s office, and the deputy auditor will surely be called upon to spend substantial time, perhaps weeks, initially training the new employee.

Question: Again, what’s the rush to downgrade this key position to part time in view of the inevitable start-up training time and related activities that will involve the Auditor’s office?

3. Auditor Jones asked that the first reading be delayed until the next meeting when he could attend and address council about it. Council voted to remove it from the agenda.

Question: Since Auditor Jones obviously didn’t request an ordinance to cut his own deputy auditor to part time, which elected official or department head did?

4. The budget analyst position doesn’t need to be funded by cutting the deputy auditor’s hours. Council intends to take $15,000 from overage in the state examiners key to fund it this year.

Questions: Any chance the Auditor’s office pointed council in the direction of the extra money in the state examiners key? If so, doesn’t it seem like punishment if they turn around and cut his deputy auditor’s hours? If, as a result of this cut, financial information stops flowing smoothly to council and elsewhere, wouldn’t council members be punishing themselves and by extension the entire city?

So, there are really only two likely suspects here - either the Treasurer or the Administration wants this cut made. We accept we may never know which, though it’s hard to imagine the Treasurer having a motive to disrupt the operations of the Auditor’s Dept. That leaves…but then there’s this: maybe the warring parties will work out their differences soon, and this ordinance will die the natural death it should. There's way too much at stake for our city at this juncture for what has the look and feel of a misguided power play driven by a personality conflict.

This just in: Norwood Schools food news from the superintendent

Lunches will remain the same price as last year. Type ‘A” lunch will be as follows:
Elementary (K6) $1.75
Middle/High School $2.00
Reduced Lunch $ .40
Milk $ .40

Free Grab and Go Breakfast Program is offered to all elementary and middle school students at no cost. It is available in the student’s classrooms during morning announcements and daily routines.

New Lunch Program NutriKids
The Food Service Department will launch a new computerized lunch program called Nutrikids, this school year. This software program will enable us to protect the privacy of each student’s payment status
as it relates to free, paid and/or reduced lunch. It will also allow students and/or parents to establish a lunch account for prepaid lunches that can be tracked more systematically. This program will also help in menu development, as the department will be better able to determine favorable menu items based on itemized sales data. Please contact the Food Service Department if you have any questions 924-2885.

Also, the new district calendar is available to download for visitors and parents at www.norwoodschools.org.

Let there be salt...and two new trucks to spread it!

We can all rest a little easier knowing our streets will be salted this winter. Council passed an ordinance Tuesday night authorizing Safety/Service Director Geers to advertise and contract for roughly 2,000 tons of salt. But that’s not all - two of the four dump trucks the city owns need to be replaced, so council passed another ordinance authorizing Mr. Geers to contract for two new trucks under the state bid purchase program. The total price is not to exceed $170,000 plus interest, and they are to be purchased on a lease/purchase plan to keep the cash outlay at a minimum.

Performance Audit R2.2 recommends 5-year forecasting

This sounds an awful lot like what Councilman Moore and Mayor Williams, no fans of the Auditor of State and their performance audit, said during the 8/8/06 council meeting a $25 per hour budget analyst would do:

"The City Council, along with elected officials, should require the development and implementation of a five-year financial forecast that would project future revenues and expenditures and enable Norwood to identify financial trends as it considers the future consequences of current decisions. The forecast should be a dynamic document, revised periodically, as Norwood's economic environment changes and more relevant data becomes available. Effective use of long term forecasting will better enable the City to plan for the future, and anticipate the costs of programs and services for its citizens."


So, it appears this is one recommendation the City is taking seriously, and perhaps that is very wise, since Treasurer Molony's 5-year forecast before the 2004 14 mill levy vote was so hopelessly off the mark. According to his document, this is the year we're supposed to be $10.2 million in the hole. Instead, the reported 2006 deficit is a whopping $7.4 million less at just $2.8 million. That means that had the 14 mill levy passed, which would have generated $5.2 million per year starting last year, the city would have a surplus of $7.6 million this year!

Carl Lindner gives $100,000 gift to Norwood Service League

Today's Enquirer reports that Cincinnati financier Carl Lindner, born and raised in Norwood, recently gave the Norwood Service League $100,000 worth of stock in his company American Financial Group, Inc. The Norwood Service League provides a range of services to those in need, including job training, food, and rent payments. Lindner began working in his father's Norwood dairy store in 1940, and it evolved over time into United Dairy Farmers.

Performance Audit Recommendation R2.1

The two-year forecast shows the necessity for Norwood to make significant policy decisions regarding its operations. Facing an estimated cash deficit of $738,787 by 2006, Norwood should act promptly to address its financial stability, and immediately address recommendations contained in the report to help achieve a positive fund balance. Options for the City to consider are contained in this report and primarily focus on reducing expenditures, eliminating selected City services and increasing revenues. However, the City should also continue to independently identify means to reduce its operating expenses.

Part II of Susan's interview with Bert Gall of the Institute for Justice

Susan: Is Mr. Tranter justified in taking the justices to task for knocking out the “deteriorating” designation that he claims has been the law for 50 years?

Bert: Susan, the notion that "'deteriorating' has been the law for 50 years" is absurd; as the Court noted, it had never sanctioned that label's use as a basis for the use of eminent domain.

Susan: My last question is are there any ways in which the Ohio Supreme Court ruling left you wanting?

Bert: No, because the Court's decision was, as I have already described, both thorough and comprehensive. It addressed all the issues that were before it and put forth broad holdings that will serve as strong protections of Ohio home and business owners against the abuse of eminent domain for private gain. Just as importantly, the Court's decision provided a resounding reminder to cities across the state that courts and constitutions exist to stop their wrongful uses of power -- not, as Mr. Tranter would have it, to rubber-stamp them.

Part I of Susan's interview with attorney Bert Gall of the Institute for Justice

Susan: Bert, congratulations on the Norwood decision, and thank you for taking time for this interview. I want to get your reaction to attorney Richard Tranter’s critique of the Ohio Supreme Court’s decision in the Norwood case. As we all know, he is developer Jeff Anderson’s attorney. Here’s what he told the Cincinnati Enquirer on August 1, five days after the ruling was announced:

"I don’t think they (the Ohio Supreme Court justices) holistically went and addressed the issues. There’s a sense that the Norwood case solved all. It did not. It knocked out "deteriorating," which has been the law for 50 years. And then just when I thought the intellectual heavy lifting was going to start, they stopped the analysis."

Susan: First of all, Bert, do you think the justices failed to do the “intellectual heavy lifting?”

Bert: Mr. Tranter's comments couldn't be more off base: if he couldn't find "intellectual heavy-lifting," then he simply wasn't looking. Indeed, the Court's opinion is an intellectual tour de force that explains -- at great depth and length, and with citations to hundreds of sources -- the history of eminent domain, the constitutional limits on that power as delineated by it and other courts in the past, the legal (and even philosophical) grounding of those limits and the judiciary's necessary role in ensuring that eminent domain is not abused for private gain

Susan: Did the justices’ decision stop short of analysis as Mr. Tranter claims?

Bert: The Court's well-grounded understanding of these topics animates its analysis of the case and will provide solid guidance to lower courts that confront the issue of takings for private development. Mr. Tranter's assertion that the Court "stopped" at declaring private-use condemnations of so-called "deteriorating" areas unconstitutional -- by itself, a very important holding because it also means that vague "blight" laws cannot withstand judicial scrutiny -- is belied simply by glancing at the decision, which also held (1) that economic development is not a public use; (2) that courts must employ "heightened scrutiny" when reviewing uses of eminent domain, especially when property is being taken for another private party; and (3) that the Ohio law preventing property owners' from stopping the demolition of their homes and businesses on appeal is unconstitutional.

Part II of this interview Wednesday

City of Norwood Performance Audit Report

What do you know or think you know about Norwood’s finances? We’re broke, right? Well, of course, that is not right. As pointed out by Cincinnati Enquirer editorial writer Peter Bronson, our finances are mismanaged. You may have heard that we are in fiscal watch and the city will have to lay off 22 firemen and a bunch of police. The state auditor has made a bunch of recommendations for budget cuts, but according to at least one councilman, they are illegal.

We at Citizens for a Better Norwood, in keeping with our mission, have researched the issue, and what we are all hearing at council meetings and on the streets is more of a smoke screen than truth. The good news is we do not have to lay off 22 firemen to become fiscally sound. The bad news is our city officials don’t want you to know that. So that you are better informed, we are going to publish recommendations for the city from the Auditor of State’s performance audit several times each week. Then you can decide if the State wants the City to do illegal things or if the recommendations are just common sense that any efficiently run city would have done years ago. Please feel free to comment on the recommendations on this blog and discuss them with your friends, neighbors and family members. Norwood’s motto will either be "Do More for Less" or "Do Less for More". If you are for the second motto, then you need to vote for the tax levy the mayor said is coming.

JUST IN: The Auditor of State's reply to Mr. Moore

At Tuesday night's council meeting, Councilman Moore replied to this question we had posed earlier in a letter read by Susan Knox:

Is it expected that a budget analyst will offer advice superior to the free advice and technical services the Auditor of State provides under the terms of “fiscal watch?”

Mr. Moore's response: "That's an unqualified "yes." There's no question about it. ...A budget analyst will not make suggestions that are patently illegal or essentially not practical to actually carry out. There's no practical way the city is going to lay off 22 firefighters. That's just not a realistic, viable option, and that's what the state recommended as their biggest financial savings."

Since no one from the Auditor of State was present to defend against Mr. Moore’s assertions, we thought it only fair to provide the opportunity for a published response. Here is the official AOS reply:

"The city of Norwood is in a fiscal crisis and will be making tough decisions in order to recover. The performance audit was done to provide the city with savings and revenue enhancement opportunities. These are options. Our recommendations speak for themselves, and our audits go through a legal review process. We stand by our recommendations. We understand our recommendations are based on contract negotiations and that time may have to go by before all or any one of them can be implemented."

There it is in black and white, "legal review process." You see, the Auditor of State has a legal department, and nothing much gets published without their lawyers’ careful scrutiny. Now, we all know attorneys can make mistakes and give advice that’s illegal, a painful lesson our city just learned by taking Mr. Burke’s advice in the now lost Supreme Court decision on eminent domain. But that aside, it strikes us as odd that Mr. Moore, an attorney, has unqualified confidence that a new budget analyst can’t make some legal missteps. Or will s/he be an attorney, too? Will s/he be willing to work for a mere $25 per hour?

And one more thing we already know we’re going to tire of correcting every time we catch it: let’s all look on page 1-8 of the performance audit where it says, "Reduce Fire Department personnel levels by UP TO 22 full-time equivalent employees, thereby achieving staffing levels and costs comparable to peers and national benchmarks." The performance audit doesn't recommend Norwood lay off 22 firefighters. Period.

Can a budget analyst make them do it?

Tuesday night we watched city council vote 6-1 to create a part time budget analyst position. What? No job description? A new job with no description created in the midst of a wage freeze …. as Mr. Schneider pointed out and later emphasized with the only "no" vote. But wait…there’s more! The Mayor said he already has someone in mind! Like he did for the audit committee a few months ago? The audit committee no one would serve on? Is Norwood the only place people willing to serve aren’t asked, and the ones who’re asked won’t serve? But we digress… So who is this mystery jack-of-all trades, $25 per hour, part time, forget-the-benefits professional who will be the panacea for all that ails the budget and our overworked part time elected? Oh, Mr. Gabbard, ye of so little faith… for you to doubt a Superperson is ready in the wings, though the Mayor did nothing behind closed doors, of course.

The Enquirer’s headline proclaims, "part time position responsible for long-range planning." So THERE'S the job description - "long-range planning," and one new paid part timer will do what our 10 elected ones can’t - lead us out of Fiscal Watch to the promise land of Financial Recovery. Well, the deal is done; and, frankly, we hope it works.

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20060809/NEWS01/608090379/1056

Where'd the Enquirer's Pete Bronson get the idea Norwood is mismanaged? Could this be true?

http://news.enquirer.com/apps/pbcs.dll/article?AID=/20060808/COL05/608080385

From the Cincinnati Enquirer:

According to Hamilton County Common Pleas Court records, the Burtons have withdrawn $174,912 from their $500,000 escrow account. The Gambles allowed $13,147 to be withdrawn from their $280,000 account to pay legal fees for the property valuation phase of the eminent-domain case. The Chase Manhattan Mortgage Corp. had $85,484 withdrawn from Horney's $233,000 account to cover the mortgage on his two-family rental house. http://news.enquirer.com/apps/pbcs.dll/article?AID=/20060804/NEWS01/608040396/-1/back01

The amounts were approved by the court and taken out by court order. This does bring up some interesting questions. Who should pay back the escrow? Should Mr. Horney be forced to make mortgage payments on property that he was forced to hand over to Anderson? His tenants were forced to move and he was unable to collect the rent. Should the Gables be forced to pay for the legal fees on the property valuation issue? Likewise should Anderson be responsible? He placed the money in escrow to purchase the property. Should he expect a full refund of his money if he is not permitted to purchase the property? Is the City of Norwood liable?

Anyone have an opinion on this?

The "Please do your homework...or else" letter from Betty Montgomery

July 18, 2006

The Honorable Thomas Williams
Mayor, City of Norwood
4645 Montgomery Road
Norwood, OH 45212

Re: Financial Recovery Plan

Dear Mayor Williams:

As you are aware, the Auditor of State’s Office (AOS) declared the City of Norwood in a state of fiscal watch on October 7, 2004. Guidelines for local governments in fiscal watch are outlined in Chapter 118 of the Ohio Revised Code. These guidelines indicate that the Auditor of State shall provide such technical and support services to the municipal corporation after a fiscal watch has been declared to exist as the Auditor of State considers necessary. We believe that we have provided the necessary technical assistance to enable you to complete a financial recovery plan and perform other formal planning that would facilitate the City’s removal from fiscal watch status.

First, staff from our Local Government Services (LGS) Section has worked with City officials in a number of capacities to improve the City’s fiscal condition. In fact, as early as November 12, 2004, LGS staff met with you and other City officials to discuss the progress of your financial recovery plan as well as cash flow issues facing the City for the remainder of 2004 and 2005. We also received a letter from the Chairman of Norwood City Council on July 11, 2005, requesting our assistance in gathering information for various assumptions that Council was considering adding to the recovery plan. In response to this request, we provided detailed reports in the assumption areas outlined by Council. Further, on several occasions, we encouraged the preparation of planning documents, such as a formal financial recovery plan and cash flow analysis. Most recently, on April 4, 2006, LGS staff attended a Council meeting to ensure that everyone was aware of the potential for cash flow problems during 2006. We once again reinforced the need for a cash flow analysis and the importance of completing the recovery plan.
Second, we conducted a comprehensive performance audit that was specifically designed to assist the City in several operations areas where savings and revenue enhancements could be realized. In fact, the audit which as issued on February 23, 2006, identified over $5.7 million in annual savings and/or revenue enhancements. Granted that many of the recommendations included in the performance audit would require negotiation with collective bargaining units, these recommendations, if implemented, would certainly help the City improve its financial position. Further, many of the analyses and recommendations from the performance audit could be used as part of the City’s formal financial recovery plan.

Overall, the OAS has absorbed hundreds of hours in personnel time to provide the necessary assistance for the city to begin its financial recovery. Despite all of the efforts and costs, however, we have not seen a final draft of any financial recovery plan, cash flow analysis, or any financial planning document. The City continues to suffer financially, and a formal financial plan must be implemented. We understand officials have made some efforts in certain areas, but we remain steadfast that there must be formal planning.

Therefore, given the City’s reluctance to conduct formal planning and the guidelines of Chapter 118 of the Ohio Revised Code, we will offer these last services. If the City prepares a financial forecast for FY 2006, we will examine that forecast as to its reasonableness. We will also assist the City in the preparation of its OCBOA reports for fiscal years 2004 and 2005. Once the forecast examination and OCBOA reports have been completed, we will cease to provide services to the city until a recovery plan has been adopted by Council. The plan should outline actions that the City plans on taking to eliminate deficits and when those actions will take plane. The plan should quantify cost savings or revenue enhancements for each action for the remainder of fiscal year 2006 and should identify the extent of the recovery expected by year end. It should be very clear that the responsibility for this plan and the ultimate financial health of the City rests with the City and its elected officials and not the Auditor’s Office.

We understand that the City will have to make difficult decisions to achieve fiscal recovery, including potential staffing reductions; nevertheless, we feel strongly that the city should already have in place a draft recovery plan or other financial planning documents.
If you have any questions, please don’t hesitate to contact me at (800) 282-0370) or directly at (614) 728-7108.

Sincerely,

Betty Montgomery
Auditor of State

Robert R. Hinkle
Chief Auditor of State

RRH/jc

Congrats to Nicholas A. Clark, Norwood's National Merit Scholarship Winner!

Nicholas was one of 102 Greater Cincinnati students awarded The National Merit Scholarship this year. His Preliminary Scholastic Aptitude Test score qualified him as a semifinalist in the competition.
To become a finalist eligible for the scholarship, he had to to have an outstanding academic record, be recommended by his principal, write an essay, and earn a score on the SAT confirming his qualifying test performance.

A round of Norwood applause for our very own Nicholas Clark!

Welcome to Citizens for a Better Norwood’s web log!

Welcome to Citizens for a Better Norwood’s web log! Yep, we wanna be bloggers now…or maybe, more accurately, we’re wannabe bloggers. We encourage you to jump in and share your views, too, anonymously or not, in our comments section. We will feature guest blogs from time to time, so feel free to submit yours if the spirit moves you. You can do this under your own name, a handle, or as an anonymous guest blogger. Local events will also be featured here, so let us know of any events that need promotion.

We will rely on the public record for much of our reporting and commentary, and we hope to figure out one day soon how to post video clips from public meetings. Our goal is one topic or news item per day, but reaching that goal will depend on how much time is left over from living our lives away from this endeavor...as well as how much news there is. If we miss any local news items, you can email them to us at betternorwood@aol.com.

Rick Hursh, Co-Chair

Carmen McKeehan, Co-Chair

Susan Knox, Secretary

Government “Renting Out” Power of Eminent Domain?

By Carmen McKeehan

During arguments before the Ohio Supreme Court, Justice Judith Ann Lanzinger asked, “Does it make any difference that it appears that the private developer was the one that started this ball rolling? Should it be of concern when we’re talking about whether this is truly public use, or if it’s private use with public incidental benefit?”. That leaves the question - did the city simply “rent out” its power of eminent domain to the developer?

When this project was first introduced, the City of Norwood had no plans for change to the neighborhood in question. There had been no discussion on council floor about the neighborhood being a slum, blighted or deteriorated and no plan had been adopted or discussed. The plan adopted by Council was a direct product of the developer’s wishes, not in response to a master plan by the city.

In order to use eminent domain, the City needed to show the property in question was “a slum, blighted or deteriorated”. A study was approved by the City and funded by the developer. The standards used in the study were vague and could be applied to any neighborhood in Norwood. Eventually, the criteria in the study was declared by all courts to be standardless.

The City of Norwood has an elected Law Director and a full time Assistant Law Director. But the city was represented by Tim Burke whose legal fees were also paid by the developer through the city.

But what about the “economic” argument that the city needed the development for the increased revenue? The City granted the developer a TIF which effectively means no new property tax revenue for 20 to 30 years on that property. The only “public use” is a parking garage that services the development. The possible additional earnings tax revenue seems to be the only benefit to the city. Since the developer is the one providing the value figure for the benefit, without consideration for increased services, we are left to wonder how much it is truly worth.

With the developer picking up the tab and calling the shots while the City was going along for the ride, this project was nothing more than private use with public incidental benefit. Was Norwood renting out its powers of eminent domain, or as one now famous local yard sign put it, was the “City for Sale by Council"?