The meeting began at 7:30 AM.
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Bob Haag: Today, Ruth Haag and I see our job as reporting status as we know it, not to give our opinions. This is the status from the last meeting.
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This is a status update, as of today’s meeting. Last time, Sandusky Cabinets was #1. That has dropped in priority, and has been replaced by Apex. $45,000 of our current assessment grant is going to Partners Environmental, who is working for Famous Supply. The City will work with Famous Supply to apply for a Clean Ohio Revitalization Fund (CORF) grant. This is probably going to be a $2 million grant, to make a redevelopment‐ready greenspace.
Part of the City’s role is to provide $45,000 out of its grant. The City has also applied to Ohio EPA for targeted Brownfield Assessment (TBA) support. They have asked EPA to do coring in the sediment offshore of APEX. With $45,000 of the assessment grant, and other money from Famous Supply, Partners will do a supplemental Phase II assessment. The City will become, sort of, in charge of the process. We presume that the City will be responsible for managing the grant funds, and the City will be responsible to administer the CORF work. Bob Haag says “we presume” because we are not in the heart of this, it is being run by John Hancock. The existing Phase I and II reports are not in the City’s hands yet, but they should wind up in the brownfield reading room.
For the Coal Tar plume, further investigation was to be funded by another USEPA assessment grant, that the City didn’t get. The current Coal Tar report is now final, and a copy is in the brownfield reading room. Arcadis acquired Malcolm Pirnie (M‐P), they were asked to suggest next steps. M‐P said that further investigation would need to be conducted on Sandusky International Inc. (SII) property to sample closer to the source. The City met with SII and provided SII with a copy of the report; Mark Harrington agreed that the meeting occurred and SII has the report.
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The City is seeking a new Coal Tar consultant to replace M‐P. This would be funded by the current assessment grant. Bob Haag estimates about $10,000 in work, to further evaluate the existing data. Bob supplied the City with a list of people who could do the work. Don Icsman added another consultant to the list: RMT, headquartered in Wisconsin, they have reportedly done a project similar to the one here in Sandusky. Todd Roth will put out a request for proposals, and the City will select a consultant to carry on.
Sandusky Cabinets is the victim of the raised priority of APEX, as the funds for a Cabinets RAP and CORF grant application will be transferred to the Apex work. For Cabinets, we were trying to set up a meeting with ODOD. That meeting has now “died on the vine.” Todd Roth told Bob and Ruth Haag that the meeting should still be set up.
Bob and Ruth assume that the Cabinets underground storage tank (UST) Tier I study is in progress, because they saw M‐P drilling there a few weeks ago. Bob left a message with Todd Roth to learn the report status, but has not heard back yet.
Regarding the TCE plume, nothing has happened, except that Partners/Hull submitted a No Further Action (NFA) letter for the entire Chesapeake‐Tricor‐Keller (C‐T‐K) site. The initial Ohio EPA comments on that NFA letter asked the City to prove that the TCE plume is not coming from the Keller building. Bob and Ruth heard from Allen Kacenjar, the City’s outside environmental counsel, that a City response has been sent to Ohio EPA, or will be sent very soon. There is a 60‐day period for response. If Ohio EPA doesn’t like the response, the City gets another 60 days. Allen Kacenjar indicated that he expects a positive submittal. This work is being overseen by John Hancock and George Poulus. Bob and Ruth believe that George is more working on the marina design and construction, and John Hancock is more involved with Partners/Hull.
Jumping down through the rest of the list to the Dixon site, the City intervened in a foreclosure lawsuit to not allow the owner to sell off the good part and leave the bad part. The judge ordered the City to be responsible to secure the property. The City can eventually recover costs from the owner or the bank. The owner, Joe Yost, is not allowed on the property. The bank is ordered to see if they can find a receiver for the property.
Sharon Johnson asked: At APEX, who is going to pay to demolish the buildings? Bob Haag: The goal is to pay for this with a $2 million CORF grant to the City. Sharon: Is this private property? Bob: Yes, it is just like Chesapeake‐Tricor‐Keller, where there was a private developer (Bob Davis) involved. Lance Warner: They will enter into a development agreement. Sharon: Who has that? Bob and Ruth Haag: Allen Kacenjar and Don Icsman’s
office might have a copy. Sharon: Why didn’t it happen publicly?
Lance: Thinking that Sharon meant the Chesapeake, Lance noted that it went on for months. It was in the paper 5‐7 years ago, prior to anything being done.
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Lance: A development agreement for Apex would go in with the application for the CORF grant. Wes Poole asked: Who is responsible for the Dixon security process at the city? Bob Haag: Fire Chief Paul Ricci is the person who testified on behalf of the City. Wes: Is the security issue with fire? Bob Haag: Both local residents and fire personnel, if there is a fire. The effort involves making sure the fence is secure, and that holes are filled.
Sharon Johnson asked: The City met with SII; did they agree to let the coal tar sampling happen? Mark Harrington (of SII): All he can say is no decision has been made.
Sharon Johnson asked: Is the Municipal Court looking at Sandusky Cabinets [for a new court facility] a dead issue? Bob Haag: We can’t assume it is a dead issue. The judge has to negotiate with the City about space. Sharon: We have to get it cleaned up. Bob Haag: The judge could acquire it from the city if he wants it. Probably, the judge could apply for a CORF grant.
Bob Haag: Based on talking with Todd Roth, Bob thinks the city will figure out how to do a remedial action plan (RAP) and then how to apply for a CORF grant, and do those things without USEPA assessment money.
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This repeats the bad grant news that we just looked at. We still don’t have the bad news on the GLRI grant, but that was a long shot. [Note: The City was notified that it did not receive the GLRI grant on Wednesday, June 8.]
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Bob Haag reviewed the following funding options: Karla Auker of USEPA says try again next year for USEPA grants, and Bob imagines the City will. HUD has money, and HUD’s Community Development Block Grant (CDBG) money can be used for Brownfields, in fact it is encouraged.
In addition to CORF and COAF, the Ohio Department of Development (ODOD) has a USEPA revolving loan fund grant, and they can distribute money to the City from that fund. In the Targeted Brownfield Assessment (TBA) program, the Ohio EPA has money to come and drill holes on City projects, as it has done in the Deepwater marina.
Foundations are both local and nationwide; each has its own mission.
TIFs like the one on the Chesapeake‐Tricor‐Keller (C‐T‐K) site can be set up for other districts. You can set up a TIF to fund brownfield work.
If the City is serious about doing brownfield work, the City could choose to spend its own money, essentially from the General Fund. Lance Warner asked: In Ohio is the TIF money restricted to publicly owned property? Sharon Johnson: In the beginning, it was just for infrastructure, now it can be used for 7
other things. All agreed that the property receiving TIF money has to be owned by the public.
Sharon Johnson: The C‐T‐K TIF runs for 30 years; if a surplus has accumulated after 30 years, it can roll over into the City’s General Fund. Bob Haag: The C‐T‐K TIF has some words that Ruth Haag and I think say the money can be used other places in the City. Don Icsman doesn’t agree, and he is the higher authority on this particular issue.
Bob Haag: City Finance Director Hank Solowiej has said that the projects that the C‐T‐K TIF is funding are nearly done; Hank implied thereby that the C‐T‐K TIF is nearly done. Bob noted that there is a difference between what is allowed, and what people want to do. In Hank’s mind, it seems to Bob, we have to have defined projects in order for a TIF to work. So, we should have defined projects.
Sharon Johnson: There is still a lot of work to do in that area.
Joe Hayberger asked: Is ODOD still in existence? Bob Haag: I checked with Shane Mathey at ODOD, and Shane said that this part is still in existence, by law, for two more years.
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Bob Haag: CDBG funding must address any one of three requirements. Low to moderate income – that is most of the City of Sandusky. Slum and Blight, is easy to find in Sandusky. Finally, if there is immediate threat and there is no other funding, CDBG funds can be used.
A CDBG administrator at the state level said to Ruth and Bob Haag that they want the CDBG money to be spent, and they encourage it to be used on Brownfields.
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Bob Haag: Gary Guendlesberger and Sharon Johnson have had some experience, and found that it is not easy to get projects on the CDBG list. If folks want something like brownfields to get on the CDBG list, they have to lobby. It is very much allowed, but is has to be sold to the City staff members who administer the funds.
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Bob Haag: BEDI is a grant process that is paired with a HUD 108 loan. Lance Warner: Land write down means reducing the cost of the land; can be done with a low‐interest loan.
Bob Haag: The rest of the uses appear to mean that the City can get a grant to back up a low‐interest loan.
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CORF is competitive and there is a schedule.
City needs to pay about $30,000 for a RAP which becomes the core of the proposal. They City has to put up a minimum of 25%.
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Bob Haag: You hammer these things out through a meeting with ODOD, which is what we were trying to set up for Sandusky Cabinets. You talk over your plans with them, and then you apply as they recommend.
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Bob Haag: This is another thing that we can talk about when we meet with ODOD; if we meet with ODOD.
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Bob Haag: OEPA does TBA work with its own staff.
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Bob Haag: Assume foundations will support $5,000 to $25,000 projects. You find a foundation that is intending to support this type of work, and then you apply to it with your project(s).
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Bob Haag: TIF money is often focused in a neighborhood. Wes Poole wants to have some input in what they do with the money, because it didn’t go into his neighborhood.
School Board has to agree. City Finance Director Hank Solowiej is looking to have concrete projects.
Lance Warner: There is an anomaly. At the senior high rise on the bay they put $7 million into it, but the auditor didn’t think it changed the value. So, in a TIF situation, it would not generate any funds, because there was no tax increment. The Chesapeake project, however, did generate TIF funds.
Bob Haag expanded on Lance’s point, noting that the TIF is on the new taxes created, by the increased value of the property.
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Bob Haag: Based on the examples that we have discussed, to create a TIF we need to do the steps listed here. Ruth Haag: Bonds were part of the C‐T‐K TIF, but not an aspect of the Battery Park TIF, which could be used to pay directly.
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Bob Haag: The City Commission held Strategic Planning sessions, in which they listed projects to be considered in 2011. The projects listed here were at the low end the scoring. Sharon Johnson: It seems that, in what the City is now doing, the bottom worked its way to top and top‐listed projects are on the bottom. For example, there is City staff time going into the Sports Complex, even though it is third from the bottom.
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Bob Haag: Funding Brownfields is the 11th‐ranked project. Commissioner Diedre Cole: The Commission thought there was alternative funding [implying that it might have scored higher if that funding were not thought to be available].
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Bob Haag: How might the City pay for brownfields, out of its own funds? In 2008, Ruth and Bob Haag were commissioned to review the City’s budget to see if they could cut costs by reducing its use of energy.
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Bob Haag: At the time of our budget study, we discovered that the City approves ¾ of its budget initially, and approves the rest two time during the year. In 2008, the total city budget was about $60 million after the two additions.
In 2010, the total City budget was 65.6 million after the two additions. In 2010, the additional portion was only 17% of the total, so it was a better job of approving the budget at the beginning of the year. In order to understand the budget you have to took at all three of the approvals, and/or at all of the expenditures made during the year.
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Bob Haag: Based on the 2010 numbers, the General Fund was about ¼ of the total budget of $65.6 million. The argument made against funding brownfields from the General Fund is that, if you support brownfields, it will be at the cost of a firefighter and/or a police officer. Ruth and Bob Haag have been in budget discussions with Interim Manager Don Icsman, Finance Director Hank Solowiej and Planning/Development/Engineering Director Todd Roth; Bob and Ruth said, “Put it in front of Commission and let them decide whether they want to fund brownfields out of the General Fund.”
Bob Haag: Let’s look at the relative size of the brownfields effort in the General Fund. Police make up slightly over a quarter, as does Fire. Many other things make up nearly half of the General Fund.
Bob and Ruth previously budgeted out their proposed brownfields effort for Todd Roth, and estimated that it would be $130,000 per year based on past experience.
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Bob Haag: On this graphic, the slice shown for Administrative services would be about the same as the proposed brownfields budget. That brownfields slice, added in, is shown on the next slide.
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Bob Haag: The addition shown here represents the effect of adding brownfields oversight and planning expenditures to the General Fund.
Diedre Cole said that she has questions. Could Ruth and Bob e‐mail her a copy of this presentation, ASAP?
Diedre asked if Bob and Ruth had a breakdown for the $130,000? If so, she would like to see that immediately, as well. Diedre said that she is all for funding brownfields.
Bob Haag: It does not have to be all about what Ruth and Bob Haag do. For example, the Tricor Marina is a brownfields project, being overseen by John Hancock and George Poulos.
Sharon Johnson asked: Is that over and above the $130,000? Where is the money coming from? Bob Haag: Sometimes it comes out of capital projects.
Lance Warner: Water and sewer costs need to be in the pie chart. Bob Haag: Yes, in the General Fund graphic above, we are looking at only ¼ of the $65 million budget. When you look at the total $65 million, water and sewer are a large portion of the chart.
Lance: It is hard to attract industries here because our water costs more than Michigan water. It is an economic development challenge. The City sets the water costs. Bob Haag: 25
Yes this is how we run our city. The Commission only looks at the general fund, no‐one looks at water and sewer, at least no‐one looks at it hard. It is a huge part of the budget responsibility that we do not scrutinize. Diedre Cole: Disagrees.
Lance: This is also about brownfields, because of how we move the funds around. Bob Haag: Yes, it is very difficult for anyone, including Commissioners, to understand how the City moves its funds.
Mark Harrington: We are basing this on the 2010 budget. Are we reducing the budget based on what the State is going to be cutting? Ruth Haag explained: This is the outflow of funds, not the inflow. And the state cuts are a very small percentage of the entire city budget. Bob Haag: This is just a look at where there is money to fund what the City wants to do. These are the funding‐source candidates, if the City really wants to do brownfields.
Lance: A TIF is a developer/City partnership, and would need a development agreement. Bob Haag: Step one is that the City has to decide that it wants to use an additional TIF to fund brownfields. Then the City can create the district and put the legal parts in place. Then the City must woo the developers by some means, as it did with Bob Davis in the Paper District. Bob Haag: If we want to do brownfields, we have to lobby people to get the money. That’s what Mike Will and Gary Packan did. They decided to do brownfields, then they re‐arranged things and found the money.
Lance said that the property owner has to start it. Most felt this was not true.
Mark Harrington said that the City uses TIFs, citing the C‐T‐K TIF and the Battery Park TIF. So we shouldn’t imply that the City doesn’t want to do this. Bob Haag: We are simply identifying what mechanisms are available, and what we have to do, if we want to fund brownfields.
Sharon Johnson: If we are going to do TIFs, we should look at 50% or 75%; no more 100% TIFs. Joe Hayberger: The City schools agreed to the 100%. Sharon: At 50‐75%, some of the incremental money goes back into the schools.
Wes Poole: With the money spent from the Battery Park TIF, he doesn’t see any physical improvements to the Battery Park area. Bob Haag: That TIF was for economic development, anywhere in the City. It generates about $20,000 a year. It had accumulated about $117,000. The combined project efforts of John Hancock and HaagEnviro drained that accumulation. Wes: The point is, money is moving around and no one can tell if there is a measurable gain. The City spends lots of money on lots of things and no one is saying at the end, “Hey folks, 25
here are all of the wonderful things that we did with your money.” Citizens need to figure out what are trying to accomplish and measure what has happened.
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The meeting ended at 8:30AM.
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