MINUTES OF MEETING OF
IRONTON CITY COUNCIL
September 24, 2020
6:00 p.m.
A regular meeting of Ironton City Council was held on Thursday, September 24, 2020, at 6:00 p.m. via video conference. Present was Vice Mayor Craig Harvey, who presided and members: Cleary, Haney, Hock, Kline, Pierce, Rist – seven.
All persons stood for a prayer given by Rev. Margaret Tyson of Quinn Chapel Church, and then the Pledge of Allegiance to the Flag.
APPROVAL OF MINUTES
The Minutes of the Finance Committee of August 27, 2020, the Regular Meeting of August 27, 2020, Finance Committee Meeting of September 3, 2020, Special Meeting of September 3, 2020, Regular Meeting of September 10, 2020, Finance Committee Meeting of September 15, 2020, Special Meeting of September 15, 2020, and Public Utilities Committee Meeting of September 15, 2020 stood approved as submitted.
AUDIENCE PARTICIPATION
Mr. Harvey said the Mayor left him a letter on his desk in Council Chambers from Timothy M. Dickens of 2312 Geswein Street, and he will submit this to the Clerk for Communications for the next meeting. He said the gist of the letter is that he is an investor in the Holiday Inn Express and is opposed to the additional room bed tax because of the impact on visitors and the impact on corporate and contract accounts that poses on the hotel/motel tax.
Mr. Kline said he has some questions concerning his vote to table that ordinance to increase the hotel tax. He said they heard from the hotel owner about the current economic climate for the hotel, and adding additional tax would be detrimental to their success in the hotels’ extremely competitive markets right now. He said he heard statements from different people that currently the County gets 6% of the hotel tax, and the City gets nothing and believe that current County elected officials should be voted out because of this. He said that is absolutely incorrect. He said of the 6% levied right now in the hotel tax, the Convention and Visitors Bureau gets 5%, and the City’s revenue is 1%. He said the County does not keep any of this revenue. He said they heard from representatives from the Convention and Visitors Bureau about what they do now in the City and their future plans for the developers in the City. He said he was really impressed when they came and how they plan to help facilitate this development in the Gateway area. He said those representatives were against this increase even though the Convention and Visitors Bureau would gain that 1% that the City currently collects, because it would present a financial hardship on the hotels and place obstacles in the way of progress. Finally, he said any revenue that is gained from the hotel tax, including the 1% we currently collect, should be reinvested in bringing people to our City and to those hotels. He said we currently use our 1% to develop growth in that area. He said he has heard no proposals at all as to how the possible future revenues would be invested, such as bonding for future developments, trails to Wayne National Forest or development of sports or recreation areas. As far as providing services to the hotel, that hotel pays water, sewer, trash, municipal fee, fire fee, income tax, just like any other business in town. And just like any other business in town, this is what provides those municipal services. He said it is not simple, making blanket statements like the County gets 6% and the City gets nothing. He said he believes progress is going to happen, and he believes progress happens by having good communication and multiple entities working together to accomplish common goals; and he hopes that the City and Council can do that in the future moving forward.
Mr. Haney said he had a few questions regarding that and would like to address some of those questions. One of the questions that they were asked is, would this raise the total hotel tax to 9%? He said he has done a little research, and according to 1980 legislature, it permits counties to levy a lodging tax of 3%, but only if no municipality located in the county has already enacted a tax under the same law. So basically, they wouldn’t be voting to increase this, they would be voting to gain their 3%, which would match what the County also gets. He said all the investors saying that this would increase the hotel tax to 9%, he doesn’t fully believe that because their legislation would basically repeal the County’s legislation, and they would just be receiving the full 3%, and the County would be receiving the full 3%. He said he also wanted to know what percentage of the current lodging tax does the County get? He said Ironton gets 1% of that, which is mandated by law. He said the County is required by law to give the municipality in which the hotel is located the 1%. He said the other 5% the County receives, which is all paid to the Director of LEDC in check form. He said another question he had was, what are the specific taxes does the County currently enact? He said there are two separate taxes that the County is currently enacting. He said one is the 1980 law passed that allows counties to levy a 3% tax, which requires the county to return 1/3 of that revenue to the municipality. He said the second seems to be either a 1988 law or a 2005 law that allows the levy of another 3%; and if it is a 2005 law, this is specifically for Appalachian counties with populations of less than 80,000 residents. He said they can implement that extra 3%, which would go toward the cost of constructing, equipping, operating a convention, entertainment or sports facility. He said the next thing that he was asked was, does the City receive sales tax on the rental rates for hotels located in the Ironton city limits? He said no, the sales tax is enacted by the County, and 100% of the sales tax revenue is received by the County. He said that is an additional 1.5% on top of the 5% that they are currently receiving. He said basically even if they were to enact this hotel lodging fee, the County still receives 4.5% of revenue generated either by sales tax or the lodging tax. The City would only receive 3%. He said from everything he has read, this is not going to harm the visitors coming in and staying at the hotels and motels. This is just going to allow the City to get what we are entitled to with these hotels located in the City of Ironton.
Mr. Hock said he also had a lot of people contact him about this tabled ordinance. He said one of the questions that stood out to him which hasn’t been addressed is asking why the City didn’t levy a tax back in 2014 when the Holiday Inn was opened? He said he has no answer for that. He said he did contact the County Auditor to get an idea of how much revenue has been generated over the years, and he discovered the following: From December 2014 to December 2019, that 6% tax netted $668,275.04. $529,051.07 went to the CVB. $105,810.25 went to Ironton. He surmised that if Ironton had levied its own 3% tax in 2014, they would have seen $334,137.52 over those 5 years, which is a net difference of $228,327.27. He said he is not sure what future years look like, but he feels like with the new hotel opening in 2021, those numbers stand to increase. So he feels like it is worth considering this ordinance that they have tabled.
Mr. Kline said he is going to ask Brigham for a legal opinion based on what Mr. Haney said, as far as if this City would introduce that, the 3% wouldn’t increase the total tax amount. Mr. Anderson said off the top of his head, he doesn’t know, but he will give them an opinion. He said he is reading the statute now, and it does appear that 50% of what a municipal corporation receives must be put into a separate fund to be paid to the Visitors and Convention Bureau, which is where, he understands from Nate, the 5% is going. He thinks based upon the statute, even if the City was to enact the 3%, 50% of that has to go to the Convention Bureau in the County as part of the statute. He said he will get them an opinion in writing. He said he thinks the question that Chris had was, would it increase it to 9% or would it simply reduce the County’s 6%? Mr. Kline said that was his question.
Mr. Harvey said he thinks that is an important piece of information. He said he had some people contact him about the bed tax, both for and against, this week. But some of the people who contacted him and thanked him for voting no to table the ordinance mistook why he voted no to table the ordinance, and it was because he thought the ordinance needed continued discussion like they are having now. He said he doesn’t feel completely equipped with all the information as to how that affects not only the stakeholders in the hotels, but the residents and the Bureau. He thought it was a good suggestion last time that instead of putting that money into the General Fund, that it be designated to a fund like the Community Development Fund, and they have a plan moving forward as to what to do with that money. He said he voted no last week on tabling that ordinance because he wanted them to continue to have these kinds of discussions as to what their plan is with that money and does this impact them short term and long term. Mr. Haney said the tax that they would be implementing is the 1967 tax. He said the lodging tax was authorized in 1967, and this has nothing to do with any of the amendments or the separate laws passed. He said that goes directly to the municipality or the township, and can be put into whatever fund need be. He said this has nothing to do with the 1980 or 1988 lodging tax amendments. He said the 3% that they have proposed is under the lodging tax authorized in 1967. Mr. Anderson asked him what the code section was. Mr. Haney said he got all this information from Tax.Ohio.gov. He said what he found is the General Assembly in 1967 authorized municipalities or townships to levy a lodging tax of up to 3%.
Mr. Cleary said he is glad that they tabled the ordinance so they can get more information. He said he thinks Mr. Haney did a wonderful job of reviewing that and researching it, and said Mr. Hock did, too. He said he thinks they all came in listening to the speakers from LEDC and the developers; but if what Mr. Haney says is true, after Brigham gets them a legal opinion, he thinks it may change a lot of their ideas and votes. He thinks they have been shortchanged for years, and the question was asked, why we didn’t do it, and it’s because back then it was given to them about how much income the City was going to get by registered guests and by people shopping and buying gas, having meetings, etc. He said he thinks they just didn’t really know about the bed tax, they just knew the other feature that they were going to get from the hotel being here; and they were just totally supportive. Mr. Kline said if whatever passes and half goes to the CVB, are they going to run their own Convention and Visitors Bureau or are they going to develop the Gateway project themselves as a City? What is the plan? Mr. Haney said it depends on if it is the 1988 General Assembly Convention Facilities or the 2005 Convention Facilities Authority. He said all of that money should be going to the CVB anyway. The 3% that was originally imposed, they can do whatever they want with that 2%, and we get 1% of that; but that 3% that they are getting either through the 1988 amendment or the 2005 amendment is perfectly fine with him. He said the 3% that he is going after is the original 1967 3% that would go specifically to Ironton. He said the County can spend that 2% that they are receiving on that anywhere in the County—we have no jurisdiction over where that 2% of the original 3% hotel lodging fee is spent. He said the City would have authority over where that 2% is being spent if this passes. Mr. Kline said, so we’re going to tell them that they are going to take away their revenue source, but we want them to continue to develop the Gateway Phase 3? Mr. Haney said they are getting an additional 1 ½% from the sales tax on it, so he doesn’t think receiving another 2% is that big of a deal. Mr. Kline said he doesn’t think the CVB receives sales tax dollars—he thinks that goes to the County. Mr. Haney said the County has no problem throwing 5% at them, what’s another percent and a half? He said they are not located in Ironton, and he is ok with them receiving 3% and the sales tax on them. He said if the County wants to enact another 3%, which they are legally allowed to do, but he doesn’t want the perception to be that Council raised this because it’s not Council that’s raising it. He said if they choose to enact another 3%, that would be on the County, not on the City. The City is just wanting a split of what is currently being enacted. Mr. Haney said he is not trying to solve the County’s problems– he is trying to solve the City’s problems. He said this would be a huge bump in their revenue stream. Mr. Kline said he is not sure what Mr. Haney means by that because the County doesn’t profit by that. Mr. Haney said that is right, it goes to LEDC. Mr. Kline said he said he is not looking out for the County, but they give the money to the CVB, who’s working on the development. Mr. Haney said he is not opposed to continuing to throw that at them, but once the Convention Bureau or Welcome Center is built, it should be up to the City of Ironton to determine what we’re doing with that 2%. He has no problem helping the Convention Bureau complete projects with that extra revenue, but he thinks the City should have a say-so in where it goes. He is not for that 2% going to complete a project in Proctorville—that does the citizens of Ironton no good. Mr. Kline said what he took out of it is that they were taking those dollars and using that for operations of that facility, so if they are not going to operate it, are we going to operate it? Mr. Haney said it basically pays for itself once the restaurants go in there. He said if you’re going to throw a Convention Center with multiple restaurants in it, that is a self-sustained building. Mr. Kline said he disagrees with that. He said there are utilities, overhead, personnel, etc. Mr. Haney said he respects Mr. Kline’s opinion, but he thinks they’re going to have to agree to disagree, and he is ok with that.
Mr. Harvey said he is going to have to let Mr. Kline Chair the rest of the meeting because he has an event with his daughter he needs to attend.
COMMUNICATIONS
REPORTS – None
ORDINANCES
ORDINANCE NO. 20-61 – AMENDING THE PERMANENT BUDGET FOR THE CITY OF IRONTON, STATE OF OHIO, FOR THE FISCAL YEAR ENDING DECEMBER 31, 2020, AND DECLARING AN EMERGENCY was given first reading.
Mr. Harvey said Ordinance No. 20-61 was given an unfavorable recommendation in Finance this evening.
Mr. Haney moved, seconded by Mr. Hock, to bring Ordinance No. 20-58 off the table. Ayes: Haney, Harvey, Hock – three. Nays: Cleary, Kline, Pierce, Rist – four.
Mr. Harvey asked Brigham, is it correct that Ordinance No. 20-58 after tonight can no longer be brought off the table? Mr. Anderson said that is correct—it was just voted not to be brought off the table. He said it could be reintroduced. Mr. Harvey said after they get the Solicitor’s opinion on the split of the tax as Councilman Haney presented to them, they will have to redraft the legislation regarding that so everyone is on the same page, because they can’t bring that off the table again after tonight. He said they will need sponsors for that.
RESOLUTIONS
RESOLUTION NO. 20-62 – ADOPTING THE ALTERNATIVE TAX BUDGET FOR THE CITY OF IRONTON, OHIO, FOR THE FISCAL YEAR BEGINNING JANUARY 1, 2021 AND SUBMITTING THE SAME TO THE COUNTY AUDITOR OF LAWRENCE COUNTY AND DECLARING AN EMERGENCY was read.
MISCELLANEOUS
Chief Wagner said they had passed the UTV ordinance a couple of weeks ago, and that money goes into their Fund 26. She said she would like Council to consider possibly putting the golf cart funds as well in Fund 26. She said they have some expense already with the UTV ordinance, such as paperwork copies and things they need to send to the printers. She said that is the same expense that they have with the golf cart ordinance. She said it is not a windfall of money—she said they get about $400-$600 a year on average. She would like for Council to consider possibly moving the golf cart money to that fund as well. She said all the expense for that printing, manpower, etc. does come out of the Police Department. She said at least they could reimburse themselves for that cost and move forward with a little bit of money on it. Ms. Rist and Mr. Kline said they would sponsor that. Mr. Kline said he would like to have it noted that Chief Wagner said in the Finance meeting that the Police Department received a grant from the Heroes Fund, and he would like to congratulate her on that. He asked her if there is an additional fund that needs to be established to process that? Chief Wagner said that Capt. Johnson has been spearheading their whole grant process through the last couple of years. She said he and Mark Dickess have worked closely on this grant, along with the Mayor’s Office and Mr. Elam’s office. She said they received some information today, but she hasn’t been able to get with Mr. Elam yet. She said as far as she knows, some of it has to do with salaries, and some of it has to do with some other things, and she doesn’t know if there are going to have to be additional line items in certain funds or not. She said they are just now getting to that and getting more information from their contact person and the State. She said she would like to give kudos to Capt. Johnson because he has worked diligently over the last couple of years. She said they have received several grants, and they have a couple more grants coming for some additional body armor for new officers and got some money for Tasers earlier in the year before COVID struck. She said they are going to continue to pursue grant funding wherever it may be available.
Mayor Cramblit said they had received some guidance on Halloween, and they are working on a plan right now.
Mr. Elam said he had submitted financials for August. He said he also had an update on Ohio Checkbook. He said they have submitted information to them, and they have turned it over. He said he is going to be reviewing it sometime next week. He said it will be ready for Council to be able to see it on the 8th. He said they will need to call a Finance Committee meeting on October 8th probably for 5:00 p.m. He said this will be given to them hopefully before then, but if not, they will see it on the 8th to be able to look at it and ask questions. He said from what he saw on the preliminary presentation; he is very impressed with what the State of Ohio has provided. Mr. Kline said he appreciates Mr. Elam following up on this, and he is anxious to see what that looks like.
Mr. Kline said he would entertain a motion to receive the August financials. Mr. Cleary moved, seconded by Mr. Haney, to receive, file and make a part of the minutes the August 2020 financials. Motion passed unanimously.
Mr. Kline said Mr. Harvey had left him a note that Dr. Dave Lucas would like to speak with Council regarding contracts. Mr. Haney moved, seconded by Mr. Pierce, to go into Executive Session with Council, the Mayor, Finance Director, Brigham Anderson and Dave Lucas to discuss contracts, with no action to follow. Motion passed unanimously.
Minutes were taken by Marta Leach, Clerk.
In attendance: John Elam, Finance Director, Mayor Cramblit and Brigham Anderson.