June 30, 2016

Mostly clear

County officials challenge state over demolition costs

Medina County officials are questioning an Ohio attorney general’s ruling limiting how much the state will pay to demolish blighted housing.

The May ruling by Attorney General Mike DeWine means some property owners could be on the hook to pay consulting fees that county officials expected to be covered under a contract DeWine’s office signed last year.

This unfinished house, at 5588 Bilney Court, stands out like a sore thumb among the upscale homes in the Dover Heights neighborhood of Lafayette Township. Work on the house was halted because of the 2008 real estate crash. It is one of the 33 Medina County structures slated to be demolished with money from the Moving Ohio Forward Grant. (GAZETTE PHOTO BY DAN POMPILI)

If the ruling isn’t reversed, some of the owners of the condemned properties will have to pay a $750-per-house consultant fee, county officials say.

County Planning Services Director Rob Henwood argued DeWine’s ruling — that roughly $9,000 in consulting fees will not be reimbursed — violates the Moving Ohio Forward demolition program agreement.

“We structured this project based on what they told us and they pulled the rug out from under us,” Henwood said.

The county received $500,000 in a state grant in fall 2012. Henwood said the money was budgeted to demolish 33 of the county’s roughly 60 blighted homes by the end of the year — the deadline for the program.

Because the county does not have the personnel to effectively oversee the program, county commissioners hired CT Consultants, which has an office in Akron, at a cost of no more than $24,750.

County officials say the contract they signed with DeWine says consultant fees and other “soft costs” should be reimbursed completely. But DeWine’s office now says it only will cover consulting and other administrative costs up to 5 percent of the total cost of the work.

That’s not enough, county Administrator Chris Jakab said.

Jakab said the administrative costs include more than the consulting contract. Also included was a portion of Henwood’s salary as well as the cost of advertising for bids for the demolition work and document reproduction costs.

Jakab estimated that the total administrative costs would exceed DeWine’s limit by $8,750.

That would mean the owners of 11 of the properties would be billed for the $750 consulting fee.

Jakab predicted some of those owners couldn’t pay the fee. As a result, not all the homes would be demolished.

Henwood said some communities, including Hinckley and Sharon townships, may be willing to assist property owners who can’t afford to pay the fee.

But he argued the full cost of the consulting contract should be covered by the grant.

Henwood said the county’s contract with DeWine’s office stated that “architectural/engineering fees, including cost estimates, bid specifications and job progress inspections,” were among the reimbursable “demolition soft costs.”

Henwood said that describes exactly what CT Consultants was hired for.

“We said, ‘perfect, that’s exactly what we want CT to do,’ ” he said.

The attorney general’s office said the 5 percent cap on administrative costs is to ensure the money is used only for the intended purpose.

“It’s designed to maximize the impact of the demolition program,” said Dan Tierney, a spokesman for DeWine.

Henwood said the county learned about the ruling in May when CT Consultants forwarded an email sent from DeWine’s office to Jefferson County, one of CT’s other clients getting Moving Ohio Forward grant money.

That email, a reply to Jefferson’s first reimbursement request, said “it is rare a county has sought this type of reimbursement and even more rare that it is appropriate in a residential demolition.”

But the Jefferson reply named nine counties and nine cities across the state that have received full reimbursement for consulting services through the Neighborhood Stabilization Program and Community Development Block Grant demolition programs.

Henwood said the county sent DeWine an email asking that the ruling be reconsidered.

DeWine didn’t budge.

Henwood said he’s not sure what the county’s next step might be.

“The only way we could force this would be to sue,” Henwood said. But he added that the cost of litigation likely would be more than the county could hope to recover.

“That may be a case of the medicine being worse than the illness,” he said.

Contact reporter Dan Pompili at (330) 721-4012 or dpompili@medina-gazette.com.