'Issue 24' Passes-Citizen's Petition Amends Charter in Twinsburg

A coalition of concerned citizens in the City of Twinsburg, led by resident Sue Clark, succeeded in winning a majority of the votes on ‘Issue 24’ at the November 3, 2020 General Election amending the City Charter!

The coalition circulated petitions during a pandemic with organized opposition from Mayor Yates, City Council members, and the public safety/service employees (including their Union’s). Facing major obstacles the coalition obtained more than the required 10% of registered voters required to successfully place an amendment to City Charter – Section 6.01 (see below) last amended in 1972 that reduces from 7.0 mills to 2.0 mills the property taxes which City Council could levy ‘without a vote of the people’.

SECTION 6.01 LIMITATION ON RATE OF TAXATION.

The power of Council to levy taxes shall be subject to the limitations, requirements and allowances provided by the Constitution and the laws of the State of Ohio, but shall include the right to levy taxes for all purposes of the Municipality without a vote of the people which shall not exceed or accumulate beyond a maximum of seven (7) mills in any one year, and which shall include the right to levy taxes upon such other subjects and for such other purposes that are lawful under the Constitution and laws of the State of Ohio, becoming effective January 1, 1973.

(Amended November 7, 1972)

The November 3rd General Election saw one of the largest or perhaps the largest voter turnout in the history of Twinsburg, where voters cast 5,296 YES votes (51.02%) of the 10,381 total votes cast (see unofficial results below).

SUMMARY REPT-GROUP DETAIL SUMMIT COUNTY, OHIO Final Unofficial Results BOARD OF ELECTIONS 11/03/20 GENERAL ELECTIONRUN DATE:11/04/20 12:38 AM

TOTAL VOTES % Abs Mail Abs Walk-In Polls

#24 Twinsburg Charter Amend, Limit City Council Revenue

Vote for not more than 1

(WITH 15 OF 15 PRECINCTS COUNTED)

YES . . . . . . . . . . . . 5,296 51.02 2,770 488 2,038

NO. . . . . . . . . . . . . 5,085 48.98 2,481 423 2,181

Source: Summit County Board of Elections (https://www.summitcountyboe.gov/ElectionResults/Results/elect110320G.htm)

The citizen coalition began the petition process after City Council by a 4 to 3 vote (Council members: Barr, Furey, Bellan, and McFearin voting in favor - with Council members: Scaffide, Stauffer, and Walker voting in opposition) approved levying 2.4 mills on property taxes’ without a vote of the people’. The arguments to ‘let the people vote’ on increasing taxes, lead by Sue Clark with a coalition of concerned residents, apparently persuaded at least three council members to vote no on increasing taxes ‘without a vote of the people’. Then, after voting against the original legislation, these same 3 Council members, apparently succumbed to the political pressures from Mayor Yates, public safety/service employees, and their unions that encouraged residents to vote No on ‘Issue 24’ unsuccessfully.

The majority of voters, after considerable social media debates on Issue 24, ultimately disagreed with their elected representatives and public employees that organized and funded the vote ‘NO’ campaign. This unusual initiation of a Mayor to impose opposition to a citizen initiative petition was confusing to many. Mayor Yates began garnering the unionized public employees by contending that ‘Issue 24’ would reduce financial support for police and fire pensions and purchasing of public safety equipment. A position that many in the community found misleading as ‘Issue 24’ was about City Council’s right to levy property taxes ‘without a vote of the people’ which is the means of levying taxes for any government purposes which Mayor Yates obviously confused with the ‘referendum petition’ that was also approved by voter which will not be on the ballot until the General Election in 2021 due to the timing of when City Council passed legislation to increase property tax levies.

Mayor Yates and Council can consider passing legislation for increasing property taxes for funding of the police and fire pension or capital equipment purchases at any election in accordance with the Law, however, after the passage of the Amendment to Section 6.01 of the Charter by voters on November 3rd, any increase in property taxes that exceeds 2.0 mills will require approval of voters.

There are many citizens that believed Mayor Yates and City Council had abused Section 6.01 of the Charter to collateralize the issuance of $7.138 million in bonds for the Golf Clubhouse which has and most likely will be a drain on General Fund resources for the next 25 years! In the private sector business world, if a chief executive officer orchestrated the borrowing of $7.138 million and then invested it in any venture which resulted in the loss of $500K to $750,000 annually for 25 years, wouldn’t that CEO be fired! In local governments in Ohio, the citizens can only ‘fire’ local elected officials by re-call petition(s) at the ballot box. Twinsburg residents have not indicated they are moving ahead with any formal re-call petitions at this time, however, several of the strong supporters on City Council encouraging the failed vote ‘No’ campaign will be up for re- election during the General Election in November 2021.

Citizen Auditor Sengstock has reminded residents on many occasions that Mayor Yates was not alone in the creation of the ‘financial boondoggle’ that resulted from borrowing $7.138 million for 25 years; Twinsburg City Council authorized and supported the Golf Clubhouse project. The underlying concept of using tax dollars to directly compete with private businesses is financially reckless and an abuse of the taxpayers trusts. Mr. Sengstock stated the resident/taxpayers of Twinsburg’s will be reminded of this ‘financial boondoggle’ while paying the long-term debt and operational losses that are estimated to be a $13.75-$16.25 million dollar drain on their General Fund over the next 25 years. The ‘frosting on the cake’ as my old Dad would say, is the City of Twinsburg cannot even sell the ‘financial boondoggle’ they created because the Golf Course property is under restrictions from the original agreements with the Ethan’s Green homeowner association.

Mr. Sengstock has stated that the financial drain on General Fund resources now and well into the future could have been avoided, if Mayor Yates and City Council would have simply gone to the voters with the proposed Golf Clubhouse and asked voters to fund it with a property tax levy for 20-25 years (just like the city did when purchasing – Liberty Park). Mayor Yates and Council would have risked the voters saying ‘NO’ of course; had voters supported the project and voted ‘YES’, however, the city would have had the debt principal and interest repayments guaranteed leaving the General Fund unaffected and available for other programs like police and fire pensions and public safety equipment. Voting on major projects requiring long-term debt commitments is common occurrence in local governments but fiscal prudence and practice is ask the people whom are expected to pay for it ‘do they want to pay for the project’ at the ballot box. The taxpayers in Twinsburg have a history of supporting their elected government leadership and have never turned down tax levies in the past. Mayor Yates and City Council along with those whom succeed them will have 25 years to re-think why they did not ask for voter approval? Issue 24 and how it was handled by Mayor Yates, City Council, and public employees will have repercussions and hurt feelings that will be a long time in the healing process; all because politicians made poor political choices.

The Ohio Constitution provides for the seeking of virtually unlimited property taxes; subject to the ‘vote of the people’. Nothing in ‘Issue 24’ stops the Mayor and Council from asking the voters for additional/increased property taxes, income taxes, or other lawful means of funding the public safety or public services provided to residents of Twinsburg. This was a purely political maneuver by a politically motivated Mayor and Council which mislead many Twinsburg voters in an attempt to avoid the real reason(s) for the city’s financial crisis: Mayor Yates inability to balance a single annual General Fund budget since taking office in 2016 which resulted in the city’s General Fund cash reserves/savings depletion from $19 to $8 million dollars at the end of 2019; and the issuing of $7.138 million in bonds for 25 years to fund a non-essential Golf Clubhouse project ‘without a vote of the people’. Americans prefer to vote, we go to the polls at least twice a year and in some years even more often for ‘Special Elections’; the will and voice of the people is guaranteed in our right to vote! Mr. Sengstock believes that the Golf Course Clubhouse is a project that certainly is an example of why in governing with other people’s money it is ‘Better to seek permission from voters; rather than their forgiveness’.

Some of the back story for those readers not familiar with the social media website (Twinsburg Roundtable on Facebook) or whom live in Twinsburg is that during the mid-summer of 2020; Mayor Yates and City Council members were considering increasing property taxes by 4.9 mills during the ‘Annual Tax Budget’ process. During this process, Sue Clark and residents began discussing the pro’s and con’s of Section 6.01 of the Charter and questioning the reasons for not ‘letting the people vote’ on the increase of property taxes for funding the long-term issue(s) of Police and Fire Pensions along with public safety equipment. During several heated City Council meetings, the coalition of concerned residents convinced three Council members that ‘voting on the increase of property taxes’ would be the best means to determine public support and provide an opportunity for taxpayers to have their voices heard. The coalition had heard many senior citizens concerns over increasing their tax burden, especially during the pandemic, as there were alternative revenue sources to consider; like decreasing the income tax credit from 100% to say 75%, or increasing the income tax rate by .25% which had previously been approved by voters then repealed by voters with approval of City Council. It was argued that seniors could be spared the additional tax burden if income taxes were the revenue source rather than property taxes. The City of Twinsburg and the School District had for many years had an unwritten understanding that ‘income taxes’ would be used by the City and ‘property taxes’ would be used by the Schools to fund operations of each entity. City Council members argued that although years earlier the City may have reduced property taxes in favor of increasing income taxes, the current Mayor and Council chose to invoke the rights to levy property taxes ‘without a vote of people’ per Section 6.01 of the City Charter. The Mayor and a majority of Council apparently lacked confidence that they would have voter support to pass a levy at the ballot box; the question that remains to this day.

Many residents expressed different reasons for the cities ‘financial crisis’ while the Mayor and Council insisted it was due to police and fire pension financial issues; a theory which many citizens voiced seemed disingenuous, the citizen coalition folks stated that the substantial and continual drain on the General Fund cash reserves were the results of unbalanced budget resulting from constant deficit spending and the $7.138 million in long-term debt borrowed by the city for the Gleneagles Golf Course Clubhouse: that included a full service restaurant, bar, and banquet facility which was never allowed to be voted on by the taxpayers/citizens. That an abuse of power resulted when Mayor Yates and City Council borrowed the $7.138 million in debt and collateralized repayment of the debt with approximately 1.7 mills of property taxes using Section 6.01 of the City Charter ‘without a vote of the people’, if unpaid from the General Fund.

Citizen Auditor, Loren Sengstock has written articles on the Twinsburg Patch regarding the ‘financial boondoggle’ created by borrowing the $7.138 million in debt without securing the long-term commitment of voters to provide a secure and long-term funding source; either property taxes or income taxes. According to Mr. Sengstock, the General Fund has been subsidizing the Golf Course Fund with an average annual transfer from the General Fund of $350,000 prior to the addition in 2017-2018 of the Clubhouse facility which has resulted not in a breakeven financial performance as touted by Mayor Yates but resulted in an annual average subsidy from the General Fund of $1.4 million from 2016-2018. In addition, Mr. Sengstock has estimated that when the city commences repaying the $7.138 million in debt (beginning in 2021) that the annual drain on the General Fund will be $900K - $1 million annually ($350,000 for Golf Course operations & $550K-$650K for Clubhouse maintenance/operations and eventually property taxes estimated to be $250,000 annually alone). The Gleneagles Clubhouse project alone will cost taxpayers an estimated $13.75 - $16.25 million dollars over the next 25 years to cover the debt principal, interest, property taxes, building and other maintenance items; that will result in financial pressure on the city’s General Fund.

An article further detailing the borrowing of $7.138 million in long-term debt can be viewed at the Twinsburg Patch website link: https://patch.com/users/cindy-sengstock04c0def64d2fde920b1bda8cdde143f08e5b5e92e65a2c7d59cd9e98080b8e90/articles . Mr. Sengstock has also provided some historical financial analysis’s of the Golf Course, Fitness Center, and overall Government Operations for the City of Twinsburg on the ACT (Active Citizens of Twinsburg) website. Here a link to those reports: https://activecitizensoftwinsburg.com/ . The ACT website is contains the most extensive listing of historical financial reports for the City of Twinsburg available on the internet and provides other historical zoning, land use planning, and other legal actions required to secure the ‘people’s right to vote’ guaranteed in the City Charter; for more than 20 plus years Sally Gaydosh, ACT Statutory Agent has diligently guarded the City Charter.

According to a recent article in the Twinsburg Bulletin; here is the link: https://www.mytownneo.com/story/news/2020/11/06/twinsburg-ballot-initiative-lowering-unvoted-millage-passed-voters/6171630002/ , it is clear that Mayor Yates is insistent the citizens coalition is responsible for the financial impact the reduction of $2 million in estimated revenues will have on the financial operations of the city. That appears a political response, since Mayor Yates began as Mayor in 2016 with $19 million cash savings/reserves in the General Fund and ended December 31, 2019 with $8 million in cash. A substantial amount of this $11 million depletion in General Fund savings/reserves directly subsidized the operational losses from the Gleneagles Clubhouse. Who is responsible for the $11 million in lost cash savings/reserves of the General Fund? According to the City Charter, the Mayor is responsible for financial budgeting and City Council is responsible for appropriating each dime of the Mayor’s budget! You folks reading this article will have to make your own judgments’ on who is responsible; in college my professors always taught us that ‘those with the authority to make the decisions are directly responsible for the outcome of the decisions’, they were not politicians though.

Is it believable to anyone that the ‘financial crisis’ Twinsburg now finds itself in was created by anyone other than Mayor Yates and City Council? Isn’t it their responsibility under the City Charter to prepare the budgets and appropriate the funds? Of course it is. So are 5,296 voters or Sue Clark to blame because they demanded the right to vote on their own property taxes? Mr. Sengstock, having spent his career in government finance, has another theory of responsibility in this matter. An elected Chief Executive Officer/Administrator such as a Mayor is suppose to administer the financial operations of the city with his appointed department heads and do so with a balanced budget; it is called living within your means. In my career, if additional funding by taxpayers is required for major long-term projects or because of any fiscal imbalances that exist, a responsible Mayor and Finance Director would provide City Council with all the options available along with needs for the additional funding (tax increases). A fiscally responsible Mayor and Council would inform the public of those needs well enough in advance and seek voter approval; that would be prudent. After all ‘taxpayers’ pay the bills don’t they? Did police and fire pension requirements or capital equipment needs just appear one day? We think not. So the question remains: Why not tell the public what financial issue(s) the city is facing and seek support from voters rather than use an annual temporary method of funding a long-term financial need, especially without voter approval? Just because the law may authorize a city to borrow millions of dollars, does not mean you should borrow millions of dollars! The ability to levy taxes without a vote of the people is a privilege that only few cities are offered in their Charter’s. They are generally reserved for emergencies or unseen natural disasters; that is why they often require annual review and authorization.

It is always easier to blame someone else (especially for politicians these days), or point fingers, than to face responsibility for our mistakes and Mayor’s are just people; but they are elected people that have great authority and great responsibilities to be accountable for their financial missteps and ‘financial boondoggles’ they create. Are we to believe that Sue Clark or a coalition of citizens is responsible for depleting the General Fund cash reserves, borrowing $7.138 million in debt to fund a Golf Clubhouse without a vote of the people. Did the coalition of residents have authority to secure voter approval for a tax levy for repaying the debt, or for balancing the budget? Surely Mayor Yates does not believe that 5,296 voters should be ignored or blamed for his administrations financial mismanagement, or maybe he does.

Mayor Yates has been quick to point out that levying taxes without a vote of the people is available to the majority of municipalities, however, in Summit County, Ohio that is simply not true. There are 13 cities and only four have a Charter provision for levying property taxes without a vote of the people and they are Akron, Cuyahoga Heights, Stow, and Twinsburg; the remaining 9 cities only allow property taxes to be increased ‘with a vote of the people’. Mayor Yates and City Council now know: The voters in Twinsburg want a voice by voting on how much their property taxes are going to be increased! Just as a point of information, in Ohio, all income tax increases above 1% ‘must be voted on by the people’, however, the income tax credit allowed those whom work outside Twinsburg is controlled by City Council, without a vote of the people, and can be implemented by Council legislative action much quicker than levying property taxes.

City Charters are created, approved by, and amended by voters in Ohio as prescribed by the Ohio Constitution and the Ohio Revised Code. In Ohio, voters elect representatives and provide authority in their City Charters as to what their representatives can and cannot do under the Law. Those same voters have the right to petition and vote on all matters and issues pertaining to their City Charters, whether determined by Charter Review Commissions every five years or by petition of registered voters called a voter ‘initiative’ and to have those issues placed upon a ballot for their voices by voting to be heard. In Ohio, we the people have all authority to determine what our elected representatives do; and in my career in government finance, when the ‘people speak’ Mayors and City Council’s get down to the business of seeing that the people’s business is conducted in accordance with the people’s wishes. In my career, it is more common for Mayor’s, Council’s, and public employees and their unions to support specific ‘levy issues’, i.e. 1.9 mills for fire services, however, I never witnessed a Mayor, City Council, or public employees/unions decide to oppose a City Charter issue that was for the purpose of allowing the people to vote on property tax levy increases. The voters should be commended for seeing past the political posturing of Mayor Yates and the attempts to mislead the public as to what the real issue was: The right of City Council to levy 2.0 rather than 7.0 mills on property taxes ‘without a vote of the people’.

Using the police and fire pension funds and safety equipment needs was political posturing since the real issue was ‘voting’ on the increasing of property taxes for any governmental purposes. Mayor Yates should be fully aware that he and/or his Finance Director should have informed City Council that there are multiple methods and means of increasing revenues for any city in Ohio. Here are few examples: (1) If you need to fund police and fire pension, a long-term funding issue, then seek voter approval for the prescribed millage and then by Law it is restricted for that purpose; (2) Decrease the income tax credit from 100% to say 75%, which can be done by City Council without a vote of the people, since they seem to like that method, and let those taxpayers whom live in Twinsburg and work in Hudson, Macedonia, Cleveland, etc pay a little more, since they pay relatively nothing toward Twinsburg public safety and services, not even for their garbage pickup; other resident taxpayers pick that cost up; (3) Increase the income tax rate from 2% to 2 ¼ %, you did it once before and repealed it, so that senior’s would not have to pay it (if you elect this method, please do not give a tax credit on the increase, so that those working in other communities can contribute something); (4) The people have determined they will provide up to 2.0 mills of property taxes on top of the 10 mill-limit, but I would advise you to keep those for ‘emergency’ issues or short term financial issues not long-term needs like pensions); (5) User Charges – Raise the fees for golfing, renting golf carts, and subsidizing the Clubhouse restaurant/bar/banquet facilities so you can reduce the annual transfers from the General Fund.

This is more of an investigative article and everyone knows Mr. Sengstock tends to be long-winded; but Citizen Auditors whom lived 13 years of their life in a community tend to become uniquely educated as to the political power structure. He has over 30 plus years in government finance and public funding accounting experience, Mr. Sengstock knows under which shell to look for the peas! The voters have spoken; my best advice for Mayor Yates and City Council is to listen to the will of the people, work harder at controlling costs and earn back some of the taxpayer credibility that you have lost in playing politician’s; get back to the business of providing cost effective services to Twinsburg taxpayers and face your responsibilities with dignity, integrity, and transparency. Just do the job you were elected to do; everyone will appreciate it. Americans are a pretty tough lot, we have won two world wars, defended democracy/freedom around the globe with our best and bravest, invented air travel, space travel, modern computer technology, survived multiple economic crashes, and pandemics – the people are tougher than you give them credit.

Remember what the late Steve Jobs said ‘There is not one of us in this room today that is as smart as all of us in this room today’. Make the people of Twinsburg members of your team, stop treating them like ‘mushrooms’, they will be much better allies than opponents and Twinsburg will be better for it.

Loren Sengstock, Citizen Auditor’s of Ohio

November 10, 2020