Friday, October 17, 2008

The Two Centers Scam

Harold Daub testifying before Ohio Elections Commission


     On Thursday, October 16, 2008, in Columbus, Ohio, in a face-off between Harold Daub, representing the reform-minded citizens of Portsmouth, and Austin Keyser,  representing the Progress Portsmouth Campaign Action Committee (PPCAC), the Ohio Elections Commission voted unanimously in a preliminary hearing that Daub had just cause, which is to say he was justified  in charging that the  Progress Portsmouth is not telling the truth in ads that claim  that the $12 million dollar cost of the City Center and Justice Center (the “Two Centers I will call them) will not require an increase in property  taxes.


     Those claims by Progress Portsmouth, made in mailings  and in numerous radio ads, are  gross distortions, if not outright lies. In a scheme that could only have been concocted by a couple of cleverly crooked Portsmouth lawyers, the Portsmouth City Council has  increased city property taxes for next year, 2009,  from the current .7 mills to 3.8 mills, a 440% boost. That increase is  to pay for a fire truck and other improvements in the Portsmouth Fire Dept. While a worthwhile acquisition, the  fire truck, in my opinion, is a stalking horse, or maybe  I should say a Trojan horse, because what the crooked lawyers have got  the city council to  do is to promise to extend  that one-time, one-year, 3.8 mills  Fire Dept.  property tax for 30 years to  pay for the Two Centers project,  provided the voters approve that project  on the Nov. 4 ballot.


      If the voters of Portsmouth don’t approve the “Two Centers,”   the tax rate will remain at .7 mills. So for Progress Portsmouth to say that the voters’ approval of  Two Centers will not result in an increase in taxes is a dishonest campaign claim. The 3.8 mills that will be in effect  during 2009 is not the base mark Progress Portsmouth, or the city council  should use. That 3.8 mill is a one-time extraordinary tax that would automatically expire at the end of 2009. The base line Progress Portsmouth and the city council  should use is .7 mills, not 3.8 mills.


     In addition to finding probable cause at the Oct. 16 preliminary hearing, the Elections Commission called for an expedited  full Commission hearing of the case, so that it may issue a formal public decision before the Nov. 4 election. The reason for the full Commission hearing is that the preliminary hearing uncovered several puzzling claims and inconsistencies in a formal statement Portsmouth City Auditor Trent Williams had issued on October 13. What follows is the relevant paragraph from the Auditor’s memo:


Earlier this year, the City incurred debt to pay for much needed fire safety equipment and included retirement of this debt in its 2009 tax budget with the allocation of approximately 3.1 mills with the Bond Retirement Debt Service fund. This existing millage will be collected from property taxes regardless of whether or not there is a Justice Center/City Center project. However, this millage will be reallocated, continued and used to retire bonded debt that will be issued to fund the cost of the Justice Center/City Center project if it is approved or will be used for the construction of an alternate facility if the proposed project is not approved (emphasis added).”


     It is not clear what legal authority  the city government would have  to continue the 3.8 millage and  to construct  an “alternate facility” if the Twin Centers are turned down by the voters.  Nor is it clear by what authority the Auditor says, in the same Oct. 13 memo, “If the Justice Center/City Center project is not approved, at this point, I cannot confirm that any alternate project would not require an increase in property tax rates.” So the Auditor claims the city has the authority to use the 440% tax increase for another building project, if the Two Centers is not approved by the voters, and, furthermore, that the new building project might require more than a 440% tax increase!


     The tone and point of view of Auditor Williams in his Oct. 13 memo makes him sound like the chief executive officer of the city, like the mayor, or even like the mayor on steroids. Knowing Auditor Williams to the limited extent I do, and being familiar with his prose style, I suspect he did not write this memo, or if he did that  it was dictated to him by someone else. Who might that someone else be? It was not the mayor. No, I believe it was written  by a lawyer, but not by the only lawyer in the city government, namely City Solicitor Jones. The lawyer who wrote or dictated the memo  was more likely a “Philadelphia lawyer,” that is a lawyer more clever by half than anyone currently in city government.


     Why the memo was written, if not by whom, is clear. As the opening sentence says,  “Over the past several weeks I have had several questions from citizens concerning the financing plan of the proposed Justice Center/City Center and its tax consequences.” But the memo was written  not just for clarification purposes; it was written to respond to mounting criticism of the murky financing of the Two Centers project. So the memo had a political objective, which was to  provide the Progress Portsmouth Political Action Committee with a legal argument when its representative, Austin Keyser,  appeared before the Ohio Elections Commission preliminary hearing on  October 16. At least several times at the Elections Commission preliminary meeting,  Keyser  in defending Progress Portsmouth’s claim that no tax increase was involved, had  referred to the Auditor’s Oct. 13 memo. In an attempt to pass the buck, he said it was not Progress Portsmouth  but the Auditor who first asserted that the  $12 million dollars that was going to be paid for the Two Centers project did not require an increase in taxes.


     But those Progress Portsmouth ads were written, broadcast, mailed, and published weeks before the Auditor released the Oct. 13 “clarification” memo. How could a document written after  the Progress Portsmouth ads  be the justification or legal basis for those ads? Whether the Auditor realizes it or not, it appears he is being thrown to the wolves. Now that the Elections Commission has found probable cause, Williams may be left holding the bag. If the "clarification" the Auditor signed his name to in the Oct. 13 memo is contradictory, murky, or deliberately misleading, it is he who will be held responsible by the people and possibly by the courts. Auditor Williams will have some explaining to do after he receives a subpoena to appear before the Elections Commission.

Auditor Trent Williams: 
Will he be left holding the bag for the lies of Progress Portsmouth?