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Tuesday, January 25, 2011

IS NORTH CANTON CITY GOV'T IN NEED OF A KASICH ADMINISTRATION "BAILOUT?" IF KASICH DOESN'T PRODUCE, WILL NORTH CANTON BE IN FOR A $5 MILLION FINANCIAL HIT?


UPDATE & REVISED 01/26/2011 7:00 AM

On January 7, 2011 North Canton government got a "nasty-gram" from the Ohio Department of Development (ODOD) (while ODOD was under the control of the Democratic Strickland administration).

One that could signal that the ODOD is looking for North Canton to payback some $3 million in Job Ready Site (JRS) monies paid by Ohio to North Canton for the city's redevelopment work on the   former Hoover sweeper manufacturing site situated right smack dab in the center of North Canton.

A further consequence might be that North Canton will not be reimbursed for some $131,000 in outstanding redevelopment expenditures paid by the city and, moreover, it may not get the benefit of some $2 million remaining to be paid out by ODOD.

What specifically are the problems with the bidding procedures?  Here is what ODOD says:
  • "[I]t appears to us that bids may have been submitted that were not comparable in scope suggesting that bid specifications were not presented that were consistently to all potential bidders.
  • Bids for particular work were submitted over a period of time, weeks in some cases.
  • [W]e were unable to determine bid amounts to subcontract amounts reflected on the amounts from the general contractor; the invoices submitted by the general contractor appear to provide for subcontracts that in some cases exceed the bid amounts in the documents provided [by North Canton officials.]
Hmm?

Possible consequences?


The SCPR is told by a source that in addition to not getting waivers from ODOD for going out and raiding neighboring Stark County communities of businesses to bring to North Canton (e.g. Myers Industries which relocated from Massillon to North Canton) that there have been allegations made by Stark County-based unions that North Canton government was party to a scheme to circumvent Ohio's prevailing wage laws which appear to have been partially successful.

Here is a redacted statement by a union official on the prevailing wage (pw) matter, to wit:
NC totally ignored the prevailing wage laws in respects to this job site until the building trades inquired about it. 
... [A local official] of IRG [Industrial Realty Group, LLC - Stuart Lichter Founder, President and Senior Managing Partner] told us [the local union] in a meeting they were changing the grant money scope of work to put all of the $3 million for infrastructure from the grant into the Schroer space (60,000 sq ft) so the rest of the 1 million sq ft of unrenevated space wouldn't be "tainted" with pw. 
The grant was changed to accomadate their request and over $2 million was changed  in the scope of work as smart office. We asked them several times to break down the money designated as smart office but they never could do it.  There was nothing in the bid documents about this being a prevailing wage job, as a matter of fact If you look at the attchments the pw issues will present themselves. 
After we inquired about it The Department of Commerce stepped in and did a complete audit of the job.  ...  
It appears to the SCPR that unless a "political miracle" occurs, North Canton could be in some big financial crisis doo-doo.

At last night's North Canton City Council meeting, information came out that the City has obligations for about $1.2 million in accumulated sick pay and unused vacation time, but only has about $600,000 in funding.  Moreover, there about four employees (including Chief of Police Michael Grimes who is becoming North Canton's chief administrator)  who are owed about a quarter of a million dollars by North Canton as they exit city employment this year.  Grimes himself, according to North Canton records, is due $78,921.32.

North Canton reportedly carried over $272,000 from 2010 to 2011 (one councilman says the carryover is more like $53,000) which is probably the chief reason why Council refused to fund a deputy administrator position to assist Grimes as he assumes the duties of chief administrator.

The North Canton Hoover Campus Redevelopment Project (Hoover Project) is trumpeted by city officials as being on track to be a successful economic development coup for North Canton.

The SCPR trusts that these officials are correct, but is skeptical of the ballyhoo.  Heaven knows that Stark County and North Canton, in particular, is sorely in need of good economic development news.

The Report has learned that the developer of the Hoover Project is in the midst of litigation on several fronts, to wit:


As things stand now, North Cantonians apparently will have to put up with more potholes in their streets (not including Main Street which is being rehabbed by federal and state dollars).

Of greater concern has to be the possibility that North Canton could be out $5 million if the Ohio Department of Development concludes that city officials improperly handled its Jobs Ready Site grant.

For if it does, it appears that only Governor John Kasich can come to the rescue.  Kasich is in the process of privatizing ODOD which raises another interesting matter.

Because ODOD, as it stands, is a public entity; it is subject to Ohio's open records laws.  But if Kasich is successful in privatizing Ohio's economic development effort, how would citizens ever know about what appears to be North Canton's administrative debacle?

It is highly questionablel as to whether or not ODOD under the Democrats would really have followed through on reclaiming North Canton's JRS grant money.

For sure, the SCPR does not believe that the Republican Kasich administration will allow highly Republican North Canton to be held accountable for North Canton's governmental failings; if it turns out that the allegations of non-compliance with the laws of Ohio turns out to be true.

Such is politics, folks!

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