Highland County Probate Judge Kevin Greer (HCP Photo/Caitlin Forsha)
Highland County Probate Judge Kevin Greer (HCP Photo/Caitlin Forsha)
Highland County Probate Court Judge Kevin L. Greer has ruled that an over $800,000 gift in the late Jean Head’s estate, bequeathed to “the Hillsboro Fire Department,” will not be given to the city of Hillsboro or to the Paint Creek Joint EMS/Fire District “at this time.”

Greer wrote in his decision and judgment entry, filed Wednesday, May 16, that “there are simply too many unanswered questions at this time for the Court to make an informed and reasoned decision on the various issues presented by the parties to this action.”

 


As previously reported in The Highland County Press, the City of Hillsboro filed an application to acquire the funds to assist in retiring the bonded indebtedness on the North East Street firehouse, formerly occupied by the Hillsboro Fire Department and currently in use by the Paint Creek Joint EMS/Fire District. Counsel for Paint Creek agreed with the request, asking “that the trust proceeds may be used to retire the bond indebtedness incurred in the construction of the firehouse” or that the proceeds be given to the fire district under the doctrine of cy pres, according to court documents.

Greer denied the requests from both the city and Paint Creek in his judgment entry.

“The Court is of the opinion that unless and until Fire and EMS coverage for the City of Hillsboro is settled on a basis more permanent than currently exists, no funds from the Jean A. Head trust should be used to pay on the existing bonds,” Greer wrote. “Simply put, the City needs to decide if they are going to use Paint Creek for an extended period, and if so, are they going to sell or lease the firehouse.”

In the event the city of Hillsboro sells or leases the fire station on East Street to Paint Creek, “then the lease or sale proceeds should be sufficient to pay off what is owed by the City,” so “the Trust funds would not be needed,” Greer said.

Greer also wrote that he was concerned the city’s “end game” was to “use the trust dollars … for another purpose” after negotiations with Paint Creek are resolved.

“Is the end game of the City to pay off the firehouse with funds from the sale or lease to Paint Creek and then use the trust dollars transferred to the City as a result of this action for another purpose?” the judge wrote. “Would that not be an attempt to circumvent the intentions and directives of Jean A. Head?”

In response to Paint Creek’s cy pres argument, Greer said that is “not yet ripe for decision.”

“Cy Pres applies if a charitable purpose becomes unlawful, impracticable or impossible,” Greer wrote. “The charitable purpose of the Jean A. Head Trust to be used for the erection of a new building for the fire department and EMS squad for Hillsboro is not unlawful and not yet impracticable or impossible.

“The Court received testimony that it is still possible the City of Hillsboro could reinstitute their own Fire and EMS department. In addition, negotiations between Paint Creek and the City of Hillsboro to resolve Fire and EMS coverage is ongoing with the possibility of either a sale or lease of the current firehouse or even the possibility, no matter how remote, of forming a new Fire and EMS for the City.”

Head’s will, signed in January 2008, includes the following: “All the rest, residue and remainder of my estate I give to the Clinton County Foundation of Wilmington, located in County of Clinton, State of Ohio, to be held in trust for the purpose of building capital improvements for the Hillsboro Fire Department and Emergency Medical Services. Specifically, this bequest shall be used for the erection of a new building for the fire department and EMS squad for Hillsboro.”

Greer wrote that “it is the duty and obligation of this Court to ensure disposition of that property be carried out according to the directions of Jean A. Head.”

A hearing on the city’s request was held Thursday, May 3 in Probate Court. In his decision, Greer referenced “limited and conflicting evidence” presented by the city during the hearing and in an ensuing memorandum filed with the court.

On May 3, Greer told counsel that additional evidence on the bonded indebtedness could be submitted by May 11 at 4 p.m. According to Greer’s decision, the city of Hillsboro filed a memorandum May 9 “which included an affidavit from the City Auditor, a debt service schedule, a bond debt service schedule, an aggregate debt service schedule and memorandum dated Nov. 14, 2016 from the law firm of Dinsmore and Shohl to the City of Hillsboro outlining the option of leasing versus selling the Fire and EMS station.”

The judge said that the court “has been provided three different percentages by the city” regarding the fire station’s bonded indebtedness. During the May 3 hearing, city law director Fred Beery said it was “roughly 60 percent” of the figure presented to the court.

“On review of the May 9, 2018 memorandum, the Court notes the City Auditor is of the opinion 69.97 percent of the bond indebtedness is attributable to the fire station,” Greer said. “However, the bond debt service schedule attached to the May 9 memorandum of the City states 62.5 percent of the debt service is attributable to the fire station.

“It is noted the Court has been provided three different percentages by the City. The testimony of the Safety & Service Director of 60 percent, the affidavit of the City Auditor of 69.97 percent and the bond debt service schedule provided by the City of 62.5 percent. Although not a major issue in deciding this action, the same does speak to the concern the Court has as to the manner in which the evidence has been presented by the City.”

Greer also said in his decision that the exhibit presented by Beery at the May 3 hearing “purported to establish the annual bond payment for the fire station to be 60 percent of $28,831.25 or $17,299 per year.”

“However, within the memorandum of the City filed May 9, 2018, the annual payment for 2018 appears to be $59,002.50,” Greer wrote. “Should the Court apply 60 percent or 69.97 percent or 62.5 percent to $59,022.50 or $28,831.25 as the annual payment for the firehouse?”

Also during the May 3 hearing, Hillsboro safety and service director Mel McKenzie told Greer, “I believe the bond says you can’t pay it off early.” Greer wrote in his decision that the letter from Dinsmore and Shohl supports McKenzie’s testimony.

“That document opines if the fire station is leased by the City of Hillsboro to Paint Creek, the rental value of the fire station could either be subtracted from the annual amount paid by the City for Fire and EMS Services or placed in a bond retirement fund for payment on the bond debt service for the 2010 and 2016 Bonds,” the judge wrote. “If the City elects to sell the fire station for an amount sufficient to pay off the bonds on said building, the City will not be permitted to pay the 2010 bond off until June 1, 2020 and the 2016 bond December 1, 2022.

“Either way, lease or sell, it appears sufficient public funds will be available to make the annual payment on both bonds until redeemed as well as the principal balance when the same can be paid in full.”

On May 3, Greer referenced a clause in Head’s will that says that the funds designated for the Hillsboro Fire Department “shall not be utilized in any manner that would hinder the use of any grants or additional public funds.” When the judge asked McKenzie if other grants or public funds could be used to pay for the bonds, McKenzie said, “I don’t know.” However, Greer said that Hillsboro city auditor Gary Lewis "appears to have answered that question" in the city's memorandum filed May 9.

“The City Auditor appears to have answered that question for the Court in paragraph #7 of his affidavit when he states No,” Greer wrote. “However, the City Auditor went on to state the general obligation municipal bond of the nature used for the construction of the firehouse ‘virtually disqualifies’ grant funding. Virtually disqualifies obviously does not mean no grants were available.

“The Court is still unclear whether or not grants were originally available to fund the firehouse. The Auditor in his affidavit attempts to speak for prior administrations, but that evidence needs to come from them and not the current administration.”

According to the judge’s decision, the Clinton County Foundation will continue to “hold and invest the funds until such time a decision is made on a sale/lease of the firehouse to Paint Creek.”