The First District Court of Appeals sounded the alarm on fees charged residents and businesses for registration of security equipment services and false alarms in its ruling November 15th against the City of Cincinnati. The court sent the case back to the trial court, Judge Ghiz, to ascertain how much money the City of Cincinnati owes its residents for charging an illegal tax. Colerain Township has the same program and needs to pony up the cash to return to their residents, as well.
The Appellate Court found that the fees were an illegal tax that discouraged residents from protecting their property by penalizing them for false alarms and making them pay a fee to register their systems. If a resident or business owner does not register their security system and pay the fee, the fees imposed for false alarms are doubled. It is estimated that the city owes its residents over $400K in refunds.
There are no reports on Colerain Township's transparency page to determine if, and how much, the administration may have illegally charged Colerain residents and businesses. (The Cincinnati Post attempted to contact township officials to no avail.) However, the township's program only started about 2 1/2 years ago.
In July 2018, two volunteers, Kathy Mohr and Stephanie Wright began working on the issue of false alarms. Wright anticipated the program would encourage business owners to better tend to their security equipment and generate funds to offset the costs incurred by taxpayers when officers are serving false alarms, per the meeting minutes of July 24, 2018:
Mrs. Wright said Mrs.Mohr and she have had the opportunity to work with Chief Denney, volunteeringhandling false alarm calls. She said they are looking forward to being profitable to cite these business owners.
Chief Denney did little to support their efforts and meet the needs of volunteers intent on fixing the problem. Denney instead decided to contract out the services to a private firm at a cost of 45% of all fees generated.
In 2019, Colerain Township passed a resolution to charge residential and business entities fees for false alarms because the police department claimed they were wasting significant man-hours chasing false alarms. That's certainly true and problem shared in many jurisdictions. The new policy went into effect in late 2019 or early 2020 (public records do not clarify the exact date) that allowed the township to charge residents and businesses annual registration fees for certain alarm systems and if those alarm systems malfunctioned more than 3 times in a year, the township would bill them between $25 and $75 per false alarm. The registration fee was $100. If the registration fee was not paid, then the fees would be double.
In early 2020, the township entered into a contract with a Texas company, PMAM, to process the registrations and fees.
There was significant opposition to the contract at the trustee meeting:
1) a significant number of residential false alarms are at the homes of the elderly,
2) the contractor was not local,
2) for the sums paid, the township could hire a full-time employee, and
3) two residents were already providing the same services to the township for free.
Another significant issue was raised about the legality of the fees being split with a contractor. The founder of the Greater Colerain Community Group, who serves as director of Child Advocacy for Rights & Equity, Inc, (C.A.R.E.) an organization that "conducts legal research on governmental entities' compliance with state and federal law and policy and procedure," warned the township about using the revenues to pay a contractor. Turns out, the township should have listened. Per the Appellate Court, the disposition of those funds is critical. The ORC 505.511 states, the funds:
shall be collected as other taxes and returned to the township treasury to be earmarked for use for police services.
Having volunteers performing this service, or township staff, is legal, but given the decision of the Appellate Court, it is highly questionable for Chief Denney to share those fees with any other person, contractor, or program. Per the court decision, the funds must all be used for policing activities. (The Appellate Court has not yet released the full decision.) As C.A.R.E. asserted, none of the funds can be used to compensate a contractor for performing the services.
The township entered into a contract with PMAM of Texas for Township Alarm Program Administration and Collection Services. The contract was woefully out of balance from the get go. Under the contract, PMAM gets 45% of all fees collected plus certain expenses such as postage or "processing fees" (which are unspecified). If the courts uphold any appeal of the City of Cincinnati case and Colerain Township is then determined to also be operating in violation of law, Colerain will go deep into a hole. If required to repay residents and businesses all funds collected, the township will have to pay the share retained by the contractor for providing services.
This would double the amount the township even received from the program. Once we get into this category, it may become a fiscal impropriety such as misappropriation of funds by Chief Denney's program.
Clearly, Colerain Township would have been better served if they had listened to the residents who spoke out against this contract and made an effort to support the 2 volunteers who sacrificed their own time in service to their community. Often times, residents attend meetings and provide input, but, routinely, that input is disregarded. At the same time as this contract was proceeding, former trustee Greg Insco was asked by residents to recuse himself for voting on a mall policing contract. The Law Director, Larry Barbeirri, assured Insco and residents that Insco had no conflict of interest. Later, the Auditor of State issued a legal opinion deeming that Insco did have a conflict of interest, benefitted from the contract because he was a tenant at the mall, and his voting on the mall police contract was contrary to law. Still, the other police department contract posed by Chief Denney should have been declared null and void due to the illegal vote. However, Colerain administration disregards the State Auditor's legal opinions, as well as, those of citizens.
That contract continues.
In addition to the illegality of collecting fees from residents and businesses, Judge Marilyn Zayas wrote in her concurring opinion:
Instead of promoting the public health and welfare, the assessments, as currently written, may have a chilling effect in that it deters citizens from utilizing alarm systems to protect themselves, their homes, and their property.