County moves ahead on selling stations
Published 11:09 pm Saturday, October 17, 2009
Not quite two weeks ago, the Lawrence County Commission unanimously agreed to sell its five ambulance stations to the Lawrence County Port Authority for $589,000 and then lease the buildings back from the port authority in an agreement not yet approved.
The commission would then use the profit to keep government offices afloat through the end of the year and pay off bills that have piled up in the wake of decreasing county revenues.
“This allows us to get caught up on bills, things that have been nagging at us a long time,” Lawrence County Commissioner Jason Stephens said. “It allows us to start 2010 with a cleaner slate.”
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Commissioner Les Boggs said he supported the original idea of selling the buildings for a variety of reasons.
These included the fact the county needs the funds to makeup for more than a half million dollars in revenue shortfalls, to ensure that all bills are paid before moving into next year and also because the buildings are getting older and repair costs could escalate.
Why and wherefores
The lease, not officially approved yet by the commission and the port authority, calls for the county to pay $4,750 monthly to the port authority.
Can the county afford a new $4,750 monthly bill? Stephens said yes. For one thing, the county recently raised its ambulance service rates. This increase will decrease the burden on the county’s general fund which had been used in the past to subsidize the ambulance service.
Another area in which the commission hopes to save money in the coming year is worker’s compensation. Starting next year, each county office will pay 100 percent of the cost of its worker’s comp premiums.
In the past, the county’s entire premium was paid out of the general fund.
But two years ago the commission began requiring each office to pay its share of the county’s premium, with the idea being that if each officeholder had to pay their own share of premiums, which are based on claims, they would more closely scrutinize worker’s comp claims made by their staffers.
And Stephens said the change is working.
Only a few years ago, claims amounted $400,000 which resulted in premiums of more than $600,000. Last year the county’s claims amounted to $36,000. This year-to-date claims have amounted to just under $10,000, with premiums dropping accordingly.
“We will save more on worker’s comp alone to more than pay the rent on those buildings,” Stephens said.
Another change made within the last year to save money: Working to achieve 4-E status at the group and shelter home and in the juvenile court, which allows for greater reimbursement from the federal government.
“We’ve always had a tight budget,” Stephens said. “Between meeting the costs associated with crime and unfunded mandates sent down by the state, it gets complicated sometimes. Then when we have revenue estimates that are under by $500,000, $600,000.”
The agreement to sell the EMS buildings was presented to the commissioners at their Oct. 1 meeting; the actual lease agreement was presented at this past Thursday’s meeting and it left Boggs with some concerns.
“I’m OK with selling these buildings in concept,” he said. “I’m not OK with some of the details.”
For one thing, if the port authority had to pay taxes on the property, the county would be responsible for the reimbursement of this money, Boggs said.
Currently, the county is exempt from property taxes but the port authority may not be in every situation.
The county would also to pay to keep fire and liability insurance on the buildings. And the county would be responsible for all repairs on those buildings.
“These things would be a deal breaker to me,” he said. Boggs said he hopes to meet with port authority reps next week and discuss these issues.
“I have some concerns about the contract I received. I am currently reviewing it and will make a decision next week.”
Stephens likened the sale as the transfer of an asset from one governmental entity to another.
“The port authority has no assets. We’ve never given them a dime. Five years down the road, say a company wants to come in, they need a building.
“The port authority can use the equity (in the EMS buildings) to build a shell building,” Stephens said.
“The commission itself is not by law set up to do these things but we have other tools we can use,” Stephens said.
Stephens said the county has considered taking out a mortgage and then opted instead to sell the facilities to the port authority to allow that entity to get maximum use of the equity in them.
Stephens said while it may sound like an outright sale, the EMS matter is really the transfer of property from the governing entity of the county to the business development entity of the county.
According to the terms of the sale, the commission may repurchase the property back from the port authority within the next five years at the original purchase price plus any additional capital costs and unreimbursed expenses related to the property.
In the past, the county has sold unused property, such as the Child Support Enforcement Agency building after that agency combined office space with the Lawrence County Job and Family Services.
A tight fix
In the resolution to sell the EMS stations, commissioners stressed the county’s budget has taken several hits within the last two years that have, officials said, created huge headaches.
Local Government Funds from the state to all counties has decreased regularly the last several years and within the past year by $200,000.
In the past, Lawrence County has counted on interest income from its investments to patch holes in its budget; this year, with the national economy dragging interest rates with it, the county’s interest income is $300,000 less that was certified earlier this year.
Lawrence County has also seen a decrease in its sales tax revenues— one of the biggest contributors to the county general fund.
This comes at a time when county expenses keep escalating, particularly as it pertains to law enforcement and crime.
What won’t happen
Commissioners reiterated what Lawrence County Port Authority member Ralph Kline said two weeks ago: There are no plans to boot Southeast Ohio Emergency Medical Services from maintaining ambulance service in the county.
“This has nothing to do with SEOEMS or the service of SEOEMS. This would be an asset sale,” Boggs said.
Aid Township Volunteer Fire Department, the only fire department that is physically attached to an EMS station, will not be impacted by the sale, Stephens said. Aid will not have to pay rent or lease on their side of the building.