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Monroe Schools-City $1 Million TIFF Advance Minutes
Friday, April 06, 2012 2:50:04 PM - Monroe Ohio

by Angela Wasson

Ordinance No. 2012-04. An Ordinance authorizing and directing the City Manager to enter into an amended Tax Incentive Agreement by and between the City of Monroe and the Monroe Local School District to provide for an alternate schedule for payment of the TIF Compensation for commercial and industrial zoned real property.

Mr. Brock stated that the next several ordinances represent an amendment to our current agreements as they relate to TIF financing districts and residential incentive districts. We are asking Council to amend those agreements to allow for payment upon motion of Council of the entire amount within our budget year after the first settlement is received with an estimated amount from the second settlement. These amendments are necessary to the agreement to move forward on a proposal this year to forward those funds to the School District.
Mr. Kelley asked if these amendments are for this year only or a permanent adjustment to the language. Mr. Brock responded that it is permanent to allow those motions to be made. The way it is written, each year a motion would have to be made. Mr. Black clarified this is an ordinance to allow the motion not the motion itself. Mr. Callahan, all this legislation does is amend the agreements and enables the Council, if the Council so chooses, by motion to change the schedule of the payments to be made. Mrs. Hale asked if it is to pay sooner than later.

Mr. Brock advised that currently the majority of the agreements read we are to make the payments within a certain time period after the final settlement of the year which is second half taxes and it did not allow for earlier payment of those revenues. This would allow for earlier payments in the year if Council so chooses. Mrs. Rubin explained that the City’s budget is from January to January and the School's is from July to July so, whether we make two payments during the year or one, it is the same. This makes a difference in the School’s year end. It is a way we can help the school without a difference in our budget.


Mr. Hickman asked where this money is coming from. Mr. Brock stated it would come from TIF or RID revenues and we have it set up in the budget to make these payments. Mr. Hickman asked if there is enough money in there now to cover the whole year. Mr. Brock responded there is not and we would have to borrow from the General Fund to make the earlier payments.

Mrs. Rubin noted it would go right back in the General Fund when we received the funds.

Mr. Hickman asked when would that be reimbursed and Mr. Brock replied with second half taxes received in September.

Mr. Black asked what account are those funds sitting in and if it is an interest bearing account. Mrs. Waggaman informed him it is with our pooled cash and some is in an investment account and some in the bank account. Mr. Black asked what we are looking at for a loss in interest for that money. Mrs. Waggaman has not calculated that. Mr. Black made mention of the final settlement based on whatever the agreement is with the School after the second half of the TIF money is settled, but if we are over on our payment that the School is obligated to reimburse us. Mr. Brock advised that Mrs. Waggaman works with the School on the amounts and if there was an overpayment on the first half we would work with the School District.

Mrs. Waggaman noted we have had to adjust the reimbursements and we usually just take it out of the next payment.

Mr. Hickman asked what the estimated amount would be. Mrs. Waggaman stated we usually pay $500,000 for the first half payment and the total for the year is between 1.2 and 1.5 million so, the advance would be $1 million. Mr. Hickman is concerned as we talked about cell phones, gas, and a hiring freeze and wonder what the perception is from the City employees when we take money out of the General Fund and they are arguing about insurance.

Mayor Routson did not think it would affect that relationship as we are not giving money away we are just giving them an early payment and it is what we would already be giving them.
Mr. Hickman asked how many grievances we have on the insurance. Mr. Brock indicated four.

Mr. Black asked what the interest rate is on our cash accounts. Mrs. Waggaman said a total for the year is around $200,000. Mr. Black estimated the interest being $7,500 for half a year. Mrs. Rubin said it would be less than that as we are only talking four or five months.

Mrs. Stillman asked if this is within acceptable accounting practices and what the auditors would deem as acceptable. Mrs. Waggaman the state would not have an issue as they would just defer that it is a policy issue of the Council.

Mr. Kelley pointed out there are some members of the School District that may want to speak.



Dr. Elizabeth Lolli, Superintendent, advised Council that the School has taken numerous steps to correct the issues that we have been facing. Multiple audits have been finished or are continuing to occur. We have a state financial audit and we will get the results in two weeks. That will indicate what actually occurred in the accounting process in the School District, so that will clarify for everyone what actually occurred. We are in the process of a deficit audit which will declare what our deficit actually is. We have two different things occurring at this time. We have a bond retirement fund issue and we have an operating deficit. The operating deficit amounts to the cash flow borrowed last fall. The large deficit we face is the 3.1 million dollars that was inappropriately spent out of the bond retirement fund and we have worked with the state department, state auditor’s office, and the state attorney general’s office and we are waiting on a judgment of whether or not we can pay that back over time. That started in 2005 and continued through last year. That is a debt that was incurred over a number of years that we hope we have some time to pay back. With your support with this ordinance you are talking about we hope to avoid fiscal emergency which would help with the 2.2 million dollars worth of cuts we made over the next school year and we can start to recoup some of the money that we have lost through the deficit spending. We also have a performance audit occurring that will be done over a month’s time. That will tell the School District in all the areas, human resources, finances, transportations, and facilities if it is comparable to three different school districts. That will give us some idea for decisions that we may need to make to tightening up. We have made numerous changes in the policies and procedures for the Treasurer’s office and the Treasurer. The Treasurer is now required to report bond retirement funds directly to the Board once per month. The Treasurer is required to use the state’s software, not generated reports so that is clearly from the budgetary side. Finance meetings are occurring monthly between a Board Committee and the Treasurer. Bank statements are balanced monthly. This was never done and all accounting practices have become best practices in accounting. You spoke about the audit information and that is the same thing that is occurring in the School District. The best part about this is we now have a CPA as the Treasurer. She was hired by the Board of Education. She was an auditor for the State of Ohio and a treasurer for 12 years, so her financial background is stellar and we are excited about that. All spending has been frozen. We only buy paper and we don’t even buy pens anymore. The District is pursuing every legal avenue we can to help us out. A misconduct letter was sent to the Department of Education about the former treasurer’s action by the Board of Education. School has been restructured as far as teachers and our bus routes and our second grade is moving back to the Yankee Road building, so all modular units will be removed so that will be a maintenance and utility savings for the District. I have already spoken about the cuts that have been made. 24 positions eliminated as well as athletic cuts and athletic bussing cuts.

The school officials have met with the state auditors and we are waiting for their report and facilitated community groups to offset the deficit. We continue to search for ways to save money and thank you for considering this. I work in the operating side and the Treasurer works on the operating side. My administrative team spent the budgets we were given and we take responsibility for that. We now realize we were probably overspending since 2005 by about 1.2 million. Dr. Lolli thanked Council for their time and offered to answer any questions.

Mrs. Stillman commented that having been with the City during our fiscal emergency she is sorry the School is on the verge of that and enjoyed hearing Mrs. Rubin’s idea of fast forwarding that payment as we do not want our school to have to go through what the City did. Good luck to you and I really enjoyed the Treasurer’s comments and explanation in The Observer. Probably the best explanation she has heard. Sounds like you have a good treasurer that will help you get through this.

Mr. Kelley referenced a time constraint with the State and asked what it is. Dr. Lolli stated we are required to submit a recovery plan by April 2nd, but she has requested a 30-day extension of that requirement because we have not heard back from the state auditor’s office about the repayment plan. They will either grant a 15-day or 30-day leeway. If we know we are going to have some cash coming in, we can put that in the plan. If we are not, we will have to go ahead and adopt the resolution for the emergency. The time we would need to have the actual cash would be about the middle of June. We cannot show a deficit by June 30th.

Mrs. Hale commented that she was at a traffic light and as one of the busses were exiting there was one child on that bus and asked if she has looked at that so you are not using a bus to transport one child. Dr. Lolli informed her that they are required by law to provide transportation for our special needs preschool children and we have been working with the Petermann Company and trying to reduce our costs to about 300,000 less to what we are currently paying. In addition they are doing a study on how many students are on the bus to make sure we are getting the best out of our routing.

Mr. Black asked when Council can expect to see the resolutions that are affected by these ordinances to approve forwarding the second half. Mr. Brock advised those would be motions made by Council. Once you allow yourself to make that motion you can make that motion.
Mrs. Rubin: there is a timing issue so we wouldn’t be able to make the motion until after 30 days following passage. The Mayor indicated that we could also make these emergency legislation. Mr. Callahan: as they are now they would be effective approximately May 10th and the School needs to adopt legislation as well approving the amended agreement.
The Mayor pointed out we can adopt them as an emergency on the second reading. Mr. Callahan stated at the next meeting you can amend this legislation to include emergency language. At that point in time if they are adopted, depending on what the School Board has done, you could make a motion that night.

Mr. Kelley moved to approve the first reading of Ordinance No. 2012-04 and have it read by title only; seconded by Mrs. Hale. Voice vote. Motion carried.
The Clerk of Council read Ordinance No. 2012-04 by title only.

Ordinance No. 2012-05. An Ordinance authorizing and directing the City Manager to enter into an Amended Tax Increment Financing District Revenue Sharing Agreement by and between the City of Monroe and the Monroe Local District to provide for an alternate schedule for payment of the TIF compensation for residential zoned real property.

Mr. Kelley moved to approve the first reading of Ordinance No. 2012-05 and have it read by title only; seconded by Mr. Black. Voice vote. Motion carried.
The Clerk of Council read Ordinance No. 2012-05 by title only.

Mr. Kelly moved to consider this the first reading of Ordinance No. 2012-05; seconded by Mrs. Rubin. Roll call vote: seven ayes. Motion carried.
Ordinance No. 2012-06. An Ordinance authorizing and directing the City Manager to enter into an amended Tax Incentive Agreement by and between the City of Monroe and the Monroe Local School District to provide for an alternate schedule for payment of the TIF Compensation for the project site containing 429.613 acres.
Mr. Kelley moved to approve the first reading of Ordinance No. 2012-06 and have it read by title only; seconded by Mr. Black. Voice vote. Motion carried.

The Clerk of Council read Ordinance No. 2012-06 by title only.

Mr. Kelley moved to consider this the first reading of Ordinance No. 2012-06; seconded by Mrs. Rubin. Roll call vote: seven ayes. Motion carried.
Ordinance No. 2012-07. An Ordinance authorizing and directing the City Manager to enter into an Amended Tax Incentive Agreement by and between the City of Monroe and the Monroe Local School District to provide for an alternate schedule for payment of the TIF Compensation for the project site containing 117.519 acres.

Mr. Kelley moved to approve the first reading of Ordinance No. 2012-07 and have it read by title only; seconded by Mrs. Hale. Voice vote. Motion carried.
The Clerk of Council read Ordinance No. 2012-07 by title only.

Mr. Kelley moved to consider this the first reading of Ordinance No. 2012-07; seconded by Mrs. Rubin. Roll call vote: seven ayes. Motion carried.
Mr. Kelley moved to consider this the first reading of Ordinance No. 2012-04; seconded by Mrs. Rubin. Roll call vote: seven ayes. Motion carried.

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