City Council Special Meeting

SPECIAL MEETING in Council Chambers @ 5:15 p.m. March 13, 17 1. CALL TO ORDER: Vice President of Council Kilway called the Special Council meeting of Monday, March 13, 2017 to order at 5:15 p.m. PLEDGE OF ALLEGIANCE. 2. ROLL CALL: Mr. Rensel, Mrs. Ray, Mr. Sisak, Ms. Tricaso – present. Also present were Mayor Kline, Dir. of Pub. Service Esler, Dir. of Law Raber, Dir. of Finance Gilbride, and Clerk of Council Burton. Mr. Stalnaker was excused and Pres. of Council Donovan was a few minutes late. 3. COMMUNITY INPUT: Vice Pres. of Council: We will have none tonight because we have no community tonight. OK, we are discussing one ordinance and one resolution tonight. Ordinance 34-2017 is at 3rd Reading. 4. Ordinance 34-2017 At 3rd Reading. FINANCE Authorizing the Mayor to enter into an agreement with Tallmadge Grow, Inc., a community improvement corporation for the assignment of the lease for 12, 16, and 22 Southwest Avenue and authorizing the leasing and subleasing therefor and pro- viding for immediate enactment. Mr. Sisak moved for the adoption of Ord. 34-2017. Seconded Mrs. Ray. Vice Pres. of Council: We have a motion and a second to adopt Ord. 34-2017. Is there any discussion? Mr. Rensel: Yes. Thank you. In reading over the lease or at least the stipulations involving the third party, which is the CIC; who actually follows up to assure that the tenants are doing what they are supposed to be doing and the CIC is following that and how payments are made and so forth? Dir. of Law: It will be a little bit of both the City and the CIC. The CIC will be the landlord and the CIC will be responsible for day to day maintenance responsibilities and things like that, but the payments will come into . . . well, actually they will come into the CIC and the billing for the utilities will be done through the Finance Department so that we can make sure that everything is being accounted for in a timely fashion and then billed back to the CIC on a quarterly basis. The reason for that is because the CIC is also made up of all volunteers and to have multiple monthly bills to keep track of, we just thought it would be a bit cumbersome for volunteer treasurers to keep track of all that sort of thing. Mr. Rensel: Sure. So for example; who would follow up to see that the tenant has insurance on the property? Dir. of Law: The CIC would be responsible for those types of matters. So, the CIC has to take some responsibility of the landlord and we, as the owner of the property, the City maintains the underlying insurance for the property. We keep it as the owner of the property and then as with any landlord/tenant situation, the tenant would be responsible for any items inside. They have to get their own renter’s insurance essentially. Mr. Rensel: OK. Thank you. I was just curious. Thank you. Mayor: Madame Chair; the CIC . . . we actually have a committee that is put together to oversee the leases just like with Jim Evan’s lease up here. Don Pavlek, who is the Treasurer and then other members of the community are part of the team to oversee that and then they will report back to the CIC. So we go through the lease and then they go out and negotiate it. We did make the motion at the CIC to take over these properties subject to Council’s authorization through an ordinance. Vice Pres. of Council: OK. Very good. Is there anything else from Council? No one responded. Roll Call: Mrs. Kilway, Mrs. Ray, Mr. Rensel, Mr. Sisak, Ms. Tricaso – unanimous. Ord. 34-2017 is adopted by a vote 5-0. 5. Resolution 3-2017 At 2nd Reading. FINANCE Strongly opposing the State of Ohio Gove- nor’s proposed 2017-2018 Budget, which proposes centralized collection of net profit tax returns and other provisions related to the municipal income tax which will cause substantial loss of revenue needed to sup- port the health, safety, welfare and econo- nomic development efforts of Ohio municipalities, and declaring an emergency. Mrs. Ray moved for the adoption of Res. 3-2017. Seconded Ms. Tricaso. Vice Pres. of Council: We have a motion and a second to adopt Res. 3-2017. Is there any further discussion? Mr. Rensel: Yes. Go ahead. Ms. Kim has a question too.  SPECIAL MEETING in Council Chambers @ 5:15 p.m. March 13, 17 Mrs. Ray: So I guess I’m a little confused as to the wording of the resolution. How will a centralized collection of the tax returns cause a substantial loss of revenue? Is the State charging a certain percentage or holding back a certain percentage? I thought that the State was just going to be a collection agency like R.I.T.A. Dir. of Finance: No. They are charging a 1% collection fee. Mrs. Ray: Just like R.I.T.A. would; right? Dir. of Finance: Yes. They would charge a collection fee just like R.I.T.A. would but we would also have . . . based on the information . . . I think I sent you our collection from R.I.T.A. on the net profit returns and there was a calculation and it is actually under 1% based on our overall collections. In addition is our loss of control over auditing those returns and insuring that we are getting all the proper filings that we are supposed to be getting for those net profit returns. Mrs. Ray: Wouldn’t that be the State’s responsibility to do that? Dir. of Finance: It would be the State’s responsibility to do that, but the question becomes; will they do that and what will their efforts be. I doubt that collecting for every municipality in the State that they (the State) are going to be putting the same amount of effort in as we would at the local level. Mrs. Ray: OK. Thank you. Vice Pres. of Council: Point of order. Mr. Donovan has arrived at 5:21 p.m. and will be taking over the Council meeting. Mr. Rensel: Yes. So, wouldn’t we want to ask these questions or have a letter to the State saying that we are objecting on these grounds? Can you explain or elaborate who is going to do the follow up and who is going to do the auditing? Dir. of Finance: There are debates that are happening about that right now and I just received an e- mail this morning from the Ohio Municipal League stating that starting tomorrow and Wednesday and Thursday; that is all being discussed in the Legislature and so I can’t . . . I provided to you all of the information of how the law is written and how R.I.T.A. interprets all that to be, which the way the law is written, that would be the State’s responsibility. We at the local level would not control that tax collection anymore and so the questions that are being asked by the Legislature right now to the Governor and the Tax Commissioner and those are the answers that people are trying to get. This is us saying we also, as a municipality, think those items need to be addressed and that if they are not, taking away our own local control of those items. Mr. Rensel: So, it is sort of like the cart before the horse. What I’m concerned about is that our City does a good job; the Administration and the collection and the prosecution of the City’s duties. To send a resolution to the State saying that we strongly oppose this before we know all of the facts kind of makes us like gee . . . you know, we are just doing it . . . it may be political; I don’t think so, but I understand what our position is, but we are in a good position as far as how we manage ourselves and maybe unlike a number of other communities who don’t and the cities are looking to correct that. Should we wait until we have further information from the debates before we decide? Dir. of Finance: But the debates are only going to . . . the debate is if the language needs changed or not. The way that the legislation is written now is that we will not control the collection of those dollars. That will be completely under the discretion of the Tax Commissioner of the State of Ohio. They are actually even moving this section of the tax collection out of the section of the Ohio Revised Code that deals with municipal income tax and have actually renumbered it and moved it into the State Tax section and so that kind of just gives you some . . . they are not just talking about changing the Municipal Income Tax Code. We went through the whole process a couple of years ago where they were looking to make this process uniform, which they did and now they are . . . there was a debate during that time about centralizing collection and making the Municipal Income Tax be collected by the State of Ohio. That was removed and so now they are like piece milling different pieces out because they didn’t get that into that original bill. Mr. Rensel: So, if this is passed, then R.I.T.A. is cut out of this; is that the bottom line? Dir. of Finance: Yes. R.I.T.A. will not be allowed to collect our net profit taxes. Each business in the State of Ohio will be required, by the State of Ohio, to file their net profit tax returns through the Ohio Business Gateway electronically and it will be collected by the State of Ohio and the State of Ohio will charge a 1% fee and it will be distributed to municipalities quarterly. Mr. Rensel: Are there any shenanigans that can be played by . . . for example, handing this money over to R.I.T.A. and R.I.T.A., and I’m not accusing them of anything, but actually covering or hiding some of the money or the net profits and then dripping some to the State? Dir. of Finance: No. Mr. Rensel: It is all open book; right? Dir. of Finance: Correct; correct. Actually if it goes this way, R.I.T.A. will never see the money. It will all go through the Ohio Business Gateway and be distributed to us by the State of Ohio. Mr. Rensel: Thank you. Thank you Mr. President. Mrs. Ray: The Ohio Business Gateway in my experience is the biggest cluster the State ever came up with. Mayor: Businesses today, Mr. Chairman, thank you; if businesses wanted to do it now, they have that ability to do it. But, none of the businesses are doing that right now. Everyone in the Summit County Mayor’s Association are passing legislation such as this for the purpose of the meetings that are starting tomorrow. That is why we added it to a Special Meeting to be able to send the message that the City of Tallmadge is not in favor of the State collecting since we are doing such a great job of 2  SPECIAL MEETING in Council Chambers @ 5:15 p.m. March 13, 17 Mayor (Cont’d.) it right now. So why give it up. This is a gateway into doing future collections and that is the biggest fear that we all have. They have the ability to do the Gateway now if they wanted to, but in the future, it could be devastating if they started collecting all of our income tax. Mrs. Kilway: Yes, just as somebody who uses R.I.T.A. on the business end and unfortunately I have to use Ohio Business Gateway for a couple taxes, but there is no accountability when you use the Ohio Business Gateway as to how much you know you are paying for your taxes. You could say I only owe you $10 and they wouldn’t know until the end of the year. So there really isn’t a lot of accountability and with R.I.T.A. we have a lot of accountability up front as you are filing and it is a much better service for businesses. Dir. of Finance: Just to add in addition, and I realize people might say that you already outsource your income tax collections; what do you care if it is the State of Ohio or R.I.T.A.? But, with R.I.T.A. I have specific people that I contact when I have issues with a business and they have a Member’s Services Department that I call and they can take care of any issues that I am having with a tax payer or if a tax payer calls me, immediately I can look into it and I can resolve issues with businesses because I can see their tax records and identify problems that are going on. I can call R.I.T.A. when I think there is a business not being compliant and it is just not clear that we are going to have that kind of ability in dealing with the State of Ohio. Mrs. Kilway: I think we are done with discussion. Pres. of Council: Is there any further discussion? No one responded. Roll Call: Mrs. Ray, Mr. Rensel, Mr. Sisak, Ms. Tricaso, Mr. Donovan, Mrs. Kilway – unanimous. Res. 3-2017 is adopted by a vote of 6-0. 6. ADDITIONAL ITEMS: None. 7. ADJOURNMENT: Mr. Rensel moved to adjourn. Seconded Mrs. Kilway. Voice vote 6-0. The Special Council meeting of 3-13-17 adjourned at 5:32 p.m. sb Approved: _____________________________________ __________________________________ Susan E. Burton James A. Donovan Clerk of Council President of Council 3