Rasor for Stow

If you are interested in having your viewpoint heard about the Landlord Tax, your opportunity to speak will be on Thursday, March 4 at 5:30 p.m., when there will be a public hearing on the topic. That gives you more than a month to spread the word.

I proposed moving the meeting away from council chambers to accommodate more people, but apparently that is not allowed by charter.

Other happenings at the meeting today:

The mayor announced that the police unions gave up their uniform allowance of about $1,300 per officer, which amounts to about $58,000 in savings for the city. Kudos to the police officers for doing their part for the city.

The council clerk was made to read a letter from Stow Sunshiners who were so happy about the introduction of the new bus, which cost the city about $100,000 last summer. For as giddy as the mayor was for getting a concession from the police (and rightfully so, I guess), we could’ve saved almost twice that by extending the life of our old bus. If you’re tired of hearing about this bus, me too. That letter smacked of election retribution, and I just wanted to put that expenditure in context.

The Seasons Road interchange will have its grand opening on Friday, Feb. 26 at 2 p.m. From there, it should be interesting to see how the Northwest Quadrant (as it has come to be known) develops. I think city council has to be vigilant to pursue filling it with light industry and professional offices. We have enough of the big-box retail and chain store plazas.

There is nothing controversial on the agenda tonight. We will probably pass an amendment to the phone book ordinance that prevents the distributors from blocking doorways with the books. Also, we will vote on a sign variance for the plaza at the northeast corner of Graham and Fishcreek roads.

Check back tonight, when I will post the time and date of the public hearing on the Landlord Tax.

Tonight, the mayor and her personnel finished explaining the tax on vacant commercial buildings and on residential rental properties.

Tonight, we exposed it for what it is: A big, fat tax.

I’ll break down the residential side first:

The city will not hire additional personnel for this. In other words, we can ALREADY execute this monumental undertaking of about 2,200 inspections per year with the current staff. In other words, the city payroll is bloated. In other words, the $40 fee is unnecessary. By its very definition, this is a tax.

The mayor does not have a budget for how the $172,000 in projected revenue will be spent. Let me help you read behind the lines — the money will be put into the building department’s fund. This means the administration/council does not need to fund the building department as much. That means the $172,000 actually just sinks into the general fund, and there will be no special use by which we can gauge the effectiveness of such a tax. You might hear: “We will have more resources to improve housing, etc.” Not really. Without any idea for the allocation for the $172,000, we can safely presume it’s going to the general fund.

Here is the gist of what I said in front of council tonight:

Maybe it’s because I’m new, but I’m not comfortable with this presumption that the government needs to charge fees for anything it can, and that it should inspect anything it can. Maybe I’m too cynical, but this whole program seems pretextual. The real goal is making money. Why is it pretextual? Because most of the problems that this program aims to fix are already fixable on a complaint basis. Why is it pretextual? I read in the newspaper that we want to “know who these landlords are.” But you don’t need to charge $40 a unit to find out who they are. How about property tax records? How about a mandatory registration program that is free or done over the Internet? I just don’t see any upside in this legislation. Let’s call it what it is: a tax.

We keep hearing that, “Because this is a business, we have to regulate it.” Really? That perspective is why we need term limits across the board. These power-grabs are why need to cycle out council members a lot more frequently. The natural state of government is to expand. It’s these kind of ordinances that make it happen.

The commercial vacancy program:

There are two main fees. First, if you have a vacancy for more than 30 days, you must pay $150 and be subject to interior and exterior inspections. Second, if you have a new occupant, there is a $250 “change in occupancy” fee.

Unlike the residential plan, this actually has a benefit. First, the premises can be inspected for safety. Apparently, there are combustible items held in many properties. If unchecked, it could pose a risk to neighboring properties and also firefighters who subsequently are called. I have to take them at their word on that.

Also, this gives the city’s economic development coordinator, Mike Weddle, an chance to compile a database with which to promote vacancies in the city to prospective commercial tenants.

Having said that, I don’t believe the means justify the ends. Thirty days is nowhere near long enough for even the most aggressive and fortuitous landlord to find a new suitor. Matt Riehl has talked to many commercial landlords who say (and Weddle agrees with this) that it could take between 12 and 18 months to find a new tenant.

So essentially, we’re kicking these landlords when they’re down. In many cases, these are men and women who took a risk to invest in Stow, believing they could attract industry, retail and professionals to town. Of course, that generates income tax for the city.

Rather than asking these people, “How do we make it easier for you to fill vacancies?”, the mayor assumes she has the answers and hammers them with a monster tax (consider the landlords with 100 or more units). Riehl suggested consulting these stakeholders when the legislation was being drafted, and the mayor disagreed.

This $250 tax is brand new, and no one even asked about it until Riehl said something. Now we are directly punishing people for opening a business here. For a new small business, $250 can be a huge burden on cash flow. We can gather around a fire and chant “economic development, economic development, economic development!” or we can actually make decisions with that policy in mind. I can’t imagine the self-professed czar of economic development and Republican, Sara Drew, would stand for this tax increase. I know I’m against it.

In conclusion, I’m against the present state of this legislation, but I can see some bits of gold sprinkled in with the dirt. If we can get commercial real estate gurus to break this down at the public hearing, I think it would really help. Unfortunately, the mayor believes it wasn’t worth doing in the first place.

What’s next:

On Thursday, we will set a date for a public hearing on this matter. It will be thoroughly advertised, and every person will be permitted to speak. I will keep you updated.

The Public Improvements committee will meet tonight at 5:30. We will hear the mayor’s plan for taxing landlords of vacant commercial property.

Here is the jist of it: If you own a commercial building and any part of it is vacant for at least 30 days, then you owe the city a “registration fee” of $150. Then, if you happen to fill the vacancy, you owe the city another $250 for a “change in occupancy fee.”

You know, the city of Stow likes to talk about having a business-friendly environment. You’ve got to be kidding me? Here is the message that the mayor is communicating: “If you want to add to Stow’s infrastructure, you better seamlessly execute it. If you have a unit go unrented for 31 days, then you get dinged. And once you fill it, you get dinged again.”

Is this any way to treat our business community? John Pribonic, chairman of the Public Improvements Committee, said that he will not allow comments from the audience tonight. If you own commercial property, I still think you should come and let yourself be heard before and after the meeting.

I have been receiving several phone calls a day from Stow residents and landlords concerned about this new tax on their rental properties.

Believe me; I am listening. Your concerns are important to me, and I assure you that I will voice them whenever appropriate. But you already have my support. I urge you to let my colleagues know how you feel. This Web site gives their phone numbers and e-mails.

You should also let the mayor know, because she is the originator of this tax. Her contact information can be found here.

You might also want to let readers of the Stow Sentry know how you feel. You can send a letter to the editor by mailing it to: 1619 Commerce Drive, Stow, Ohio 44224.

The second-worst thing that can happen is this legislation passing. The worst thing, however, is this passing without stake-holders having their voices heard.

It appears Stow will lose even more revenue in 2010. The finance committee met last night and heard convincing information that, while revenue might not drop by the $981,000 it did in 2009, it is unlikely to rebound.

The good news: The rate of decline should not be so sharp as last year. Also, one source of revenue, from the tax-sharing plan with Akron, went up in 2009. This money comes from a district in the northwest quadrant of the city, in which Stow trades to Akron a portion of the income tax for a break on water rates.

Still, the city ran a $590,000 deficit in 2009. That is after the municipal court bailed us out with one-time money. That is after refusing to fund the road-paving program.

The city has an ordinance requiring it to maintain a 60-40 delineation between operating budget and capital budget. Without funding the road-paving program (a capital cost), the ratio was 70-30.

While it’s true the city cut spending between $1.5 and $1 million in 2009, it was the bad kind of cuts: capital cuts, which eventually catch up with you. This is because you’re forced to make even larger investments when the roads deteriorate beyond the surface level. Also, you have to lease equipment, rather than buy it, which results in no equity.

Revenue is something we cannot directly control. Spending is. I applaud the voluntary separation program, which is mostly to credit for the city having an estimated 23 to 26 vacancies by April. I also applaud cuts to overtime costs. Still, we’re in a serious hole.

Here is how I propose crafting the budget. I think we must pursue a primary goal of not allowing our infrastructure and equipment to deteriorate past the current level — which is already too far. After we establish the proper capital amount, we find the proper operating budget that will establish a 60-40 ratio.

For example: If it takes $4 million to maintain the roads and equipment (and not lose further ground), then the operating budget would be $6 million — giving us a 60-40 ratio. These are round numbers, and I have no idea whether they are near the actual totals.

The Efficiency Committee met last night. We analyzed my proposal for a massive employee questionnaire on government spending, employees and equipment. I was pleased with our discussion and progress.

Here is an article written by the Beacon Journal’s Gina Mace about the landlord-tenant legislation.

In the article, John Pribonic said the legislation is not for generating revenue. That is untrue. The administration believes it will net the city about $172,000 per year. (Another small correction is that I did not knock on 20,000 doors (those are Josh Mandel-type numbers). I knocked on 2,800.)

Revenue generation, in my opinion, is also the underlying purpose for this tax. The mayor said she wants to be able to reach the landlord, should a problem arise. That is a joke. You can 1) ask the tenant, 2) check property records, or 3) require registration without the fee.

I am considering a proposal of competing legislation that will register rental properties — at no cost to the landlords or tenants. Then, we will see if the mayor’s primary motive is to gain information or to raise taxes.

I have been fielding almost nonstop e-mails and phone calls with residents who are angry about comments from the mayor and Sara Drew on Thursday.

Here are some thoughts…

First, with Sara… I’m going to give her the benefit of the doubt. Her diatribe didn’t make much sense to me, either. And that’s why I didn’t bother to respond at the meeting. But I want to see if she truly opposes the goals of this committee before I say anything else.

Second, with the mayor, who said this:

”As we start a new year, it should be kept in mind that campaigning, while very important, is not the same as governing. Once in office, our elected officeholders are no longer candidates, but instead are sworn public officials who have a duty to work for progress and improvement in our city government.”

I agree with the black letter of what she said but — like many of you — I disagree with the underlying message. My campaign consisted of telling people clearly where I stand, talking to thousands of residents to hear what they think and explaining what is REALLY going on at city hall.

It’s true, I’m not campaigning toward an election anymore, but I won’t stop telling people what’s really going on, and listening for their feedback. Politicians need to remember what their true task is: Listening, learning and deciding. There is no listening without an informed electorate. And there are certain promises that got me elected that I will not forget, either.

A lot of residents complained to me that they only heard from their city council people when it was election time. That won’t fly with me. You will hear plenty from me. The campaign will not stop.

Tonight’s council meeting had two main news items:

1) Janet D’Antonio created my Efficiency Committee. It is created on an ad hoc basis, which means it is not a full committee. It will consist of three members (me, John Pribonic and Jim Costello), but anyone else can come, such as other council members and city officials who desire to attend. Law director Brian Reali will be present in order to give us guidance about what we can and cannot do. For example, administrative actions are the mayor’s prerogative, not council’s.

With that said, I would love for you to send me your suggestions, first, in what sort of activities our committee can engage, and second, what money-saving suggestions you have. You can send me a message here. Or e-mail my city account: mrasor@stow.oh.us

If you were listening on Channel 15 (which is apparently really popular), then you probably heard Sara Drew asking if I had an “agenda.” Yes, I do. It is to save taxpayers money. Period.

2) The second notable action from council tonight was the adoption of an agreement between the Community Improvement Corporation (CIC) and the city. Why was this necessary? Because the state requires a plan before it gives a loan to our CIC. In the coming weeks, the state will provide a non-recourse loan of $1.7 million to the CIC for the purpose of buying equipment from Wrayco, a Stow manufacturer. The CIC will then lease the equipment back to Wrayco. The state will not come after the CIC for this money. Nor will this cost the city of Stow any money.

I received a lot of negative feedback about this legislation. Folks are concerned that the CIC is usurping too much power. They are worried that this is just another bailout. But I still voted to suspend the rules, and then I voted “yes.” Why? Because we have a chance to potentially spare 300 jobs in our city. Because I voted with my conscience. It’s easy to sit on the sidelines and say, “Stand on principle.” But until you have to make a decision that could cost a bunch of hard-working Stowites their job… It’s different.

Let me clarify a couple things, though. I spent several hours this afternoon agonizing over this decision. I researched Ohio statutes, Ohio attorney general opinions and called people “in the know.” Walking into the meeting, I still didn’t know what to do.

Elgie Underwood is one person I called to ask his opinion on the legislation, and he gave me the best advice. He said, “Pray about it.” So I did, and that’s the conclusion I reached.

I really believe this pending legislation is one of the most radically liberal to come through city council in quite some time. There will be a lot of people affected and taxed.

Below are Excel spreadsheets of landlords and commercial property owners:

Rental property owners
Commercial property owners

If you, your company, your friends, your neighbors or your family is on either list, I urge you to examine the proposed ordinance, spread the word and be prepared to stand up against it when the time comes.