The board that oversees finances for the $350 million mixed use Liberty Center project is working to determine “who is going to pay back what and when” after a bond payments fund shortfall was covered using county funds.
The bond trustee responsible for paying the bonds for Liberty Community Authority, U.S. Bank, found funds short by approximately $140,040 on LCA’s Dec. 1 bond payment and about $211,459 short on its June 1 bond payment, according to LCA, which collects revenue from tenants and property owners at Liberty Center.
Because those two funding streams did not provide enough to cover the bond payment, a Butler County tax increment financing fund was used to make up for each shortfall.
LCA Chairman Phil Morrical said he learned about the shortage from the Butler County commissioners office, not JLL, the Chicago-based professional services and investment management company that took over last fall from Columbus-based Steiner + Associates.
“The developers think the $211,000 and maybe the $140,000 was in excess of what was needed, so we need to drill down why they think that and if they’re correct,” Morrical told this news outlet following a Friday morning special meeting of the LCA at Liberty Center’s management office.
Each month, LCA takes in revenue from two sources, a facilities charge from commercial activity and a property assessment charge, Morrical said. Those revenues are designed to provide the funding necessary to cover bond payments.
Now, the LCA is working to determine if the bond trustee should have taken the money from that TIF fund to cover each shortfall or instead from a debt service reserve fund, which was established by the initial bond issuance for Liberty Center as a “rainy day” for financial matters.
“That fund is supposed to have a year’s reserve for operating (expenses),” Morrical said. “That fund was not touched. It was taken from the county’s TIF fund and that’s what the county wants re-paid.”
Morrical emphasized that “it’s not like the money is gone.”
“It’s here, we just have to figure out who’s going to pay back what and when,” he said. “The two reserve funds are solid. The shortfall that was paid, the developer owes that and we’re going to send them a bill for at least last year now and then we’ll discuss the (June 1) payment that we just made, how they’re going to do that.”
LCA has put on the agenda for its regularly scheduled meeting Friday a proposal that, if approved, would expand Clark Schaefer Hackett & Co.’s role. That firm monitors that incoming funds are reported accurately and, under its new role, would provide greater oversight aimed at ensuring there are no discrepancies, Morrical said.
Butler County Administrator Judi Boyko told LCA she was “inspired” by the special meeting.
“It does appear that you all are addressing this matter very seriously, you do understand some of the ramifications and the obligations,” Boyko said.
She asked LCA to ensure that it was building a “good financial methodology and system” was put into place to address the shortfall and how it was handled, and not necessarily tending to the issue as a one-time occurrence.
“This is going to be something that you’re going to be addressing probably for perpetuity,” Boyko said.
Thank you for reading the Journal-News and for supporting local journalism. Subscribers: log in for access to your daily ePaper and premium newsletters.
Thank you for supporting in-depth local journalism with your subscription to the Journal-News. Get more news when you want it with email newsletters just for subscribers. Sign up here.