Hillsboro City Council repeals city's lodging tax; Roberts Lane, electricity aggregation resolutions approved

After years of being advised by state and county officials that the city’s lodging tax was improper, Hillsboro City Council members voted Thursday, June 15 to rescind both ordinances regarding the tax.

At the recommendation of city Law Director Randalyn Worley, council voted 7-0 to approve an emergency ordinance repealing sections 36.075 and 116.20 of the codified ordinances of the City of Hillsboro pertaining to the City’s lodging tax.

“Our current lodging tax does not comply with the Ohio Revised Code,” Worley told council. “That's why this needs to be passed as an emergency.

“This is pursuant to an opinion that County Prosecutor Anneka Collins was able to obtain from the Attorney General. We need to follow the law.”

As previously reported, in June 2015 the city voted to put a one-month moratorium on the lodging tax after then-state auditor Dave Yost issued an opinion stating the tax “should not have been levied.”

Highland County Prosecutor Anneka Collins also told the city of Hillsboro in August 2013 that the city tax was inappropriate since the county lodging tax pre-dated the city tax by several years. County commissioners enacted the county lodging tax in 1995, with Hillsboro council members approving the city’s lodging tax in 2005.

In an audit of the Highland County Convention and Visitors Bureau released May 7, 2015, Yost said: "It was brought to our attention that Highland County levied a hotel lodging excise tax beginning Jan. 1, 1996, and the City of Hillsboro levied a hotel lodging excise tax beginning Jan. 1, 2006. According to the Ohio Revised Code and Attorney Opinion 2013-010, the City hotel lodging excise tax should not have been levied.”

Then-Ohio Attorney General Mike DeWine also issued an opinion in 2013 stating that based on the Ohio Revised Code, a municipality’s lodging tax “may not be levied by ordinance or resolution if the municipal corporation or township is ‘wholly or partly located in a county that has in effect a resolution levying an excise tax.’”

In February 2020, council approved a modification to the city’s lodging tax code. Council president Tom Eichinger told council that then-city law director Fred Beery drafted the ordinance “to address an ongoing issue that has shown up in audit reports over the last number of years, I believe, where there was a conflict of understanding or wording in our ordinances as it relates to lodging tax, etc.” The changes were primarily about implementing “the maximum allowable” tax.

Other legislation on the meeting’s agenda included the following.

• Two resolutions related to the planned Roberts Lane extension were approved during Thursday.

Council voted 6-1, with council member Jason Brown dissenting, to approve a resolution authorizing the safety and service director to advertise, solicit bids and enter into a contract with the lowest and best bidder for the development of Roberts Lane. Council voted 7-0 to suspend the three-reading rule for that resolution.

“This legislation will allow the city to bid and accept the lowest and best bid for the Roberts Lane extension project,” Safety and Service Director Brianne Abbott said. “We are requesting suspension of the three-reading rule to comply with grant timeline requirements that have been received and the engineer’s timeline as well.”

As previously reported, council voted in January to approve an emergency resolution to enter into a contract with DLZ Ohio Inc. for the design of the Roberts Lane development. The city has purchased a 69-acre lot for the expansion and worked to acquire funding to cover some of the costs.

As discussed in March, current estimates show the Roberts Lane extension to be a $10.4 million project, according to city grant writer Kirby Ellison. The city has already secured $2.3 million from the State Controlling Board, while Ellison said that they have low-interest loan agreements from the state water pollution control revolving loan and water supply revolving loan in the amount of $3.7 million (for storm and sanitary sewers) and $1.2 million (for water). The city also committed over $700,000 in American Rescue Plan Act dollars toward the project, while the county has pledged $750,000.

Also on Thursday, council voted via resolution to enter into a grant agreement for said ARPA funding from the Highland County Board of Commissioners, as that was approved by a 7-0 vote.

As previously reported, commissioners approved the expenditure in April. The legislation approved by council Thursday “will allow the city to accept” those funds, according to Abbott.

“We're requesting suspension of the three-reading rule to accept the grant and to proceed with the funding project,” she said. “We don’t need it as an emergency.”

• Council approved an emergency ordinance approving a plan of operation and governance for the municipal electric aggregation program of the City of Hillsboro.

The ordinance was in response to the ballot issue on aggregation approved by voters in the May primary election.

Utilities committee chair and president pro tempore Greg Maurer noted that there have been two public hearings to discuss the aggregation proposal.

In January, council voted to suspend the three-reading rule and to approve an emergency ordinance to place an issue on the May 2 primary ballot for Hillsboro voters to consider an opt-out electric service aggregation program.

Council approved the ordinance “authorizing all actions necessary to effectuate an opt-out electric service aggregation program pursuant to section 4928.20 of the Ohio Revised Code and directing the City of Hillsboro to submit a ballot question to the electors.”

At their December meeting, Eichinger said the city received a letter from former Hillsboro Planning Commission member Charlie Guarino regarding an electricity aggregation program, “identifying the fact that there are ways for both the city and the citizens of the city of Hillsboro to benefit by potentially lower energy costs.”

According to Brown, the utilities committee voted 2-0 to recommend council move forward with legislation to place a “community choice aggregation program” on the ballot this year.

“The basics of the program are that by creating an aggregation it enables negotiating for the lowest rates,” Brown said. “There are no fees to the citizens, current billing statements and accounts do not change, and anyone can opt in or out at any time. This program would have to be placed on the ballot for a vote by the citizens, and again, if the voters approve this, anyone who doesn't want to participate can opt out.”

Eichinger added that if approved, the program may allow participants to have lower energy rates through AEP, as their rates are slated to increase this year.

“This legislation will allow the city to adopt a plan of operation for implementation of electric aggregation as voted for in the May election,” Abbott told council Thursday. “We are requesting the suspension of the three-reading rule and passage by emergency to allow the city sufficient time to apply for approval and certification from PUCO [the Public Utilities Commission of Ohio], select a supplier and start the aggregation program.”

The ordinance allows the city to “administer an opt-out governmental aggregation program that will automatically include all eligible electric accounts and will seek to aggregate the retail electric loads of consumers located in the City’s boundaries to negotiate the best rates for the supply of electric power,” according to the legislation.

“Participation in the program is voluntary. Every individual eligible customer will be given prior notice entitling them to affirmatively elect not to be part of the Program and to return to the local electric utility standard offer of service or to enter a power supply contract with any Competitive Retail Electric Service Supplier. The Program is designed to reduce the amount individuals within the City pay for electric service and to gain other favorable terms of service.”

Council voted 7-0 to suspend the three-reading rule and to approve the legislation.

• After their respective third readings, council voted 7-0 to approve three related resolutions for loans for the city’s planned Beech Street improvements.

Finance committee chair Mary Stanforth said that her committee reviewed the legislation for a final time May 24 and there “were no adjustments” from their previous discussions. The committee voted 3-0 to recommend its passage, she said.

Approved were a resolution authorizing the Safety and Service Director to apply for, accept and enter into a water pollution control loan fund agreement (WPCLF) on behalf of the City of Hillsboro for planning, design and/or construction of wastewater facilities and designating a dedicated repayment source for the loan; and a resolution authorizing the SSD to apply for, accept and enter into a water supply revolving loan account agreement (WSRLA) on behalf of the City of Hillsboro for planning, design and/or construction of water facilities and designating a dedicated repayment source for the loan; and a resolution authorizing the city to prepare and submit an application for the State of Ohio Department of Development Residential Public Infrastructure Grant for FY23.

The improvements are planned to include water, sewer, storm and streets (curbs, gutters and sidewalks) for the area of Beech, Railroad and McDowell streets and are estimated at close to $4 million ($3,946,991). As Ellison reported in March, the city is projected to have “more money” than needed to make the improvements.

• Council voted 7-0 to approve an ordinance declaring improvements to parcels of real property located in Hillsboro to be a public purpose under section 5709.40(B) of the Ohio Revised Code, exempting such improvements from real property taxation, declaring certain public improvements to be necessary for the further development of those parcels, establishing a tax increment equivalent fund and declaring an emergency.

“This legislation will allow the city to establish a TIF [Tax Increment Financing] for the Marshall’s department store project,” Abbott said.

The TIF, referred to as “the Careytown Road TIF,” designates two parcels as “exempt from real property taxation” for 10 years, and “such portion shall be 75 percent of the assessed value of the improvements.”

The property owners “shall be required to make annual service payments in lieu of taxes,” with service payments to be used to finance public infrastructure improvements that “directly benefit, or once made will directly benefit, the Careytown Road development.”

The legislation was requested to be passed as an emergency due to construction of the development being underway and the city needing to file the appropriate paperwork with the county and state.

• Approved as an emergency — due to the previous agreement having expired — was a resolution to enter into a mutual aid agreement for police services with the Village of Greenfield.

“This legislation will allow the city to enter into a three-year law enforcement mutual aid agreement with the Village of Greenfield,” Abbott said. “We are requesting suspension of the three-reading rule and passage by emergency to ensure mutual aid is in place with the Village of Greenfield.”

Stanforth asked if this was something that “has been done in the past.”

“Yes, we entered into an agreement in 2020 for a three-year duration, and it expired this past April,” Hillsboro Police Chief Eric Daniels said.

Council member Don Storer asked how the agreement “worked out” for the agencies.

“It’s invaluable,” Daniels said.

• A resolution approving an emergency “then and now” certification by the City Auditor for the payment of Ohio Public Works Commission (OPWC) debt passed 7-0 after suspension of the three-reading rule.

The resolution is for a $24,769.46 payment to the OPWC for a loan for the second phase of the North East Street reconstruction project.

“The last statement we made for this was supposedly the last payment,”city auditor Dawson Barreras said. “Unfortunately, we didn't know that during COVID, that payment didn't get taken out during that year, like many things — like student loan debts didn't get taken out during COVID. So, unfortunately, that payment got missed, and we are asking to get this payment approved by July 1.”

Also approved for the auditor’s office was an ordinance making appropriations transfers in the amount of $24,769.46 for the aforementioned loan payment.

• Council voted 7-0 to suspend the three-reading rule and to approve via emergency an ordinance to adopt the 2022 version of the City of Hillsboro Civil Service Manual.
Committee chair Dan Baucher said that the civil service and employee relations committee hosted a public hearing prior to Thursday night’s meeting to discuss the proposed changes to the civil service manual.

The updated manual will replace the one last adopted in 1986, with its passage by emergency recommended “to take immediate action to utilize [the] updated Civil Service Manual immediately,” the ordinance says.

• Barreras introduced a resolution adopting a new fixed asset policy for the City of Hillsboro, which had its first reading.

The resolution will repeal a resolution approved in 2008 and implement a $5,000 threshold instead of $1,000, the auditor said.

“Our fixed asset policy as it stands is anything over $1,000 must be labeled as a fixed asset, which is kind of ridiculous,” Barreras said. “Any industry standard is a minimum of $5,000.

“For example, we bought a laptop for I think the police department for $1,024. Now that's got to get formed out as a fixed asset, which we don't handle in house. This will cut down on paperwork and time, and fixed assets are supposed to be like land we own, buildings, things of that nature, not computers.”

Brown asked how the change in policy will affect selling “used equipment, like the skid steer we auctioned off two or three months ago.” Barreras said the equipment would still be “considered a fixed asset.”

• Worley discussed an ordinance amending section 36.056 and repealing section 36.052 of the codified ordinances of the City of Hillsboro pertaining to petty cash and change funds, which had its first reading Thursday.

“This is by recommendation of the state auditor,” Worley said. “There was a discrepancy that's yet to be reconciled from years ago — I think 2018 or ’19 — so we just want to make sure that we're complying with the recommendations of the state auditor.”

If approved, the ordinance will “effectuate a city-wide cash handling policy to ensure adequate controls to account for the handling of the City’s municipal cash.” It will include procedures (such as written documentation of authority and “random drawer audits”); delegation of authority; record-keeping measures; responsibility and accountability for fund collections; duties of city personnel; liability for loss; establishment/increase of cash funds; termination of cash funds; security of cash funds; cash drawer guidelines and procedures; tracking overages and shortages; regulation of petty cash; establishment and/or closing of petty cash funds; and petty cash procedures.

Council heard the second reading of the following legislation:

• A resolution authorizing the safety and service director to enter into an easement agreement with AEP on real property owned by the City of Hillsboro.

According to the resolution, “AEP desires an easement for electric and other current/future energy or communication purposes, overhead and underground, in, on, over, through and across” land owned by the city on West Street. AEP is to pay the city $3,610 for the easement, the legislation says.  

• An ordinance to amend section 39.35 of the codified ordinances of the City of Hillsboro pertaining to the disposition of human remains, “to be compatible with the Ohio Revised Code,” according to Abbott. The legislation is to “mirror” Section 9.15 of the ORC regarding “burial or cremation of [a] body at [the] expense of [a] township or municipal corporation.”

• A resolution authorizing the safety and service director to purchase a Caterpillar Model 308 07 mini hydraulic excavator, through the State of Ohio Cooperative Purchasing Program. The quote for the excavator, as of May 9, was $143,957, according to the council packet.

• Also approved during the June 15 meeting was an ordinance creating a Designated Outdoor Refreshment Area (DORA) in uptown Hillsboro. Read more about that legislation, and about committee reports, at: https://highlandcountypress.com/hillsboro-city-council-approves-designa….

In other action, at the start of the meeting, council voted 7-0 to excuse the absence of Eichinger. Maurer presided over the meeting for a second straight month.

Nearly half of the June 15 Hillsboro City Council meeting was devoted to citizens’ comments, as a recent “Hillsboro Pride in the Park” event prompted a discussion among several area residents. Read about that portion of the meeting at: https://highlandcountypress.com/hillsboro-pride-event-liberty-park-prom….