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Tug-of-war over funds divides commissioners, elected officials

Montgomery County Administrator Deborah Feldman cannot tap $9.4 million sitting in county treasurer and prosecutor coffers. That money, accumulated from delinquent property tax payments, can only be used to collect additional late taxes. But neither office can get it all spent.

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By Lynn Hulsey, Staff Writer Updated 2:16 PM Sunday, May 24, 2009

DAYTON — When Montgomery County Administrator Deborah Feldman surveys the county’s dismal financial picture, she can’t help but notice the $9.4 million sitting in county treasurer and prosecutor coffers.

That money, accumulated from delinquent property tax payments, can only be used to collect additional late taxes. But neither office can get it all spent. So it just sits there collecting interest, even as county commissioners dip into reserves and require a second round of across-the-board budget cuts to offset this year’s projected $7.6 million General Fund shortfall.

The county’s approximately $7.4 million in across-the-board-cuts — first in December and now in progress for mid-year — have led to layoffs in the sheriff’s office and clerk of courts, the planned closure of Memorial Hall and elimination of parks and recreation programs. More layoffs are likely.

State law keeps Feldman from tapping the $9.4 million held by the treasurer and prosecutor. The law allows those offices to keep and divide evenly 5 percent of delinquent tax collections. Had the taxes been paid on time the money would have gone to schools, the human services levy, Sinclair Community College, the Dayton Metro Library and other property tax recipients.

The delinquent tax funds are just two of 33 special purpose funds totaling $19.4 million controlled by elected officials other than Montgomery County Commissioners.

County Prosecutor Mathias H. Heck Jr. has the largest pot of special fund money, with nearly $5.8 million accumulated in his delinquent tax fund. County Treasurer Carolyn Rice has the second largest: $3.6 million in her delinquent tax fund. Money coming into those funds — about $935,000 for each office last year — far exceeds the amount that each office spends collecting delinquent taxes.

“It appears that we are consistently collecting more than has been needed to perform the function,” Feldman said. “(That) fund has had me concerned for a very long time.”

Rice and Heck defend the funds, saying they are using the money to aggressively seek past due taxes. This year Rice plans to spend $783,440 of the money and Heck will spend about $500,000. Both say they may need the balances in the future, particularly if the state loosens the rules to allow them to spend the money more broadly.

Rice would like to use the money to help with the home foreclosure crisis, or as seed money for a land-banking program to redevelop foreclosed property. She supports changing state law to permit that.

Other area counties also have millions accumulating in dozens of special purpose funds. Warren County has about $2.7 million. Greene has approximately $1.8 million and Miami has about $2 million.

Many of the funds are controlled by the courts and supported through fees charged to users, typically to pay for computers and equipment or legal research. The sheriff’s office has funds from seized assets in drug cases, and also uses license fees to administer concealed carry laws. Several elected officials have special project funds, such as the nearly $500,000 Montgomery County Court Administrative Judge James Manning said he’s saving in case the Ohio Legislature allows the court to convert to full-time operations.

“I have plans for it,” Manning said. “It would be frustrating if the county came around and grabbed money we’ve been saving.”

The County Commissioners’ Association of Ohio wants the legislature to give commissioners access to elected officials’ special funds during times of fiscal stress. The proposal would require public hearings and prohibit commissioners from draining the funds.

“We are trying to be introspective at the county level as to how we can become more efficient and maximize taxpayer dollars and resources,” said Cheryl Subler, managing director of policy for the CCAO.

Area elected officials and statewide associations representing elected officials are lining up in opposition to the proposal, although many want additional flexibility for the officials who now control the funds.

“I think its completely wrong,” said Montgomery County Recorder Willis Blackshear. “It limits our ability to do our job.”

Greene County Sheriff Eugene Fischer said he’s building up his $485,000 seized-asset fund for computer systems in deputies’ cars. He said he understands times are tight, and he’s lost sleep over having to lay off 10 corrections employees. But he said commissioners should leave his special funds alone.

“It’s just like getting kicked when you’re down,” Fischer said. “And you’re getting kicked by fellow elected officials that are supposed to be doing what’s best for the entire county.”

But Warren County Commissioner Pat South said counties need flexibility during times of fiscal crisis.

“I think that what the CCAO is proposing is good, but it certainly does need to have a definition as to what constitutes a financial emergency due to an economic condition, as opposed to a self-imposed financial emergency because of poor management,” South said.

Montgomery County Commission President Dan Foley and Feldman also support the idea, which has yet to gain traction in the legislature.

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