RELATED: Liberty Center funds shortfall: Officials working to determine what’s next
Each month, LCA takes in revenue from two sources, a facilities charge from commercial activity and a property assessment charge, LCA Chair Phil Morrical said. Those revenues are designed to provide the funding necessary to cover bond payments.
The LCA board passed a resolution Thursday to levy a “core retail valuation” charge on Liberty Center property owners to cover the $140,000 shortfall, and that bill must be paid by the developer JLL within 30 days. As for the $211,000 shortfall, the LCA’s financial advisor Kerry Roe solved the mystery.
“I don’t know if anyone has done the 10-mill assessed valuation billing,” Roe told the board. “That was handled by Steiner in the past so I don’t if that’s been done. I don’t believe we’ve seen any of those flow through the lock box in 2019.”
Liberty Center attorney Greg Daniels confirmed the oversight and said “that’s one of the things on the timing side for the June payment… there would have been enough to cover that payment, that’ll get fixed just from a cash flow timing standpoint.”
JLL took over management from Steiner + Associates. Mall Manager John Taylor said he still doesn’t have access to some financial data.
The LCA was never notified of the first shortfall and notice of the shortage for the June payment came in May 31. The board also approved expanding the role of Roe’s firm Clark Schaefer Hackett, to keep a closer eye on the taxpayers’ interests.
Morrical said there have been “too many land mines.”
“This is an asset that can be transferred at any time, then we’re faced with ramping up of base knowledge and getting operations to where it should be,” Morrical said. “Through the whole process I really thought the LCA should be more in control of finances and the financial reporting, this whole board is responsible to the citizens of this county because we’re using their funds.”
After the meeting last week members wondered why the U.S. Bank trustee didn’t pull from a rainy day fund that was set up as part of the whole master development agreement. Butler County’s attorney Brenda Wehmer said there is a “waterfall” of funding sources that can be tapped in the instance of a shortfall, and that reserve is $1.5 million.
“The debt service reserve fund is hit only after all the other waterfall,” she said. “It’s at the end of the line.”
While true numbers are still a little murky, LCA members acknowledged there may be an ongoing shortfall issue and they need to address it.
Butler County and Liberty Twp. made a big commitment to mega mall, banking on its success. Liberty Trustee Board President Steve Schramm said with the change in state laws that now allows more widespread collection of internet sales tax, if there has been a slump in Liberty Center’s performance, he believes it will pick up.
MORE: Butler County could reap the benefits if online sales tax revenue materializes
“We all the know retail environment has been testy over the last several years,” he said. “I personally believe with the taxing of internet sales there’s going to be a reset of this whole retail Apocalypse. Suddenly the brick and mortar stores are going to be on more solid footing.”
Liberty Trustee Christine Matacic said she thinks it is all a matter of a new management firm learning the ropes.
“I think they are doing their due diligence quite honestly from what I’ve been told and what I’ve seen and people I’ve talked to,” she said. “I think anytime you have a new group, such as JLL who came in there’s a learning curve and there’s some changes you need to address and some education that has to happen.”
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