Monthly publication of the Ohio Township Association Septem

ber 2015

State upgrading OAKS systemBeginning Sept. 2, the State of Ohio is upgrading OAKS, the financial software many

state agencies use. The upgrade is scheduled to take place over five days - Sept. 3-7. The upgraded OAKS is expected to be up and running on Sept. 8, however, in the event there are any unexpected processing difficulties, the offline period could last through Sept. 9.

What does this mean for townships? This may result in a delay on your monthly motor vehicle license and permissive tax distribution deposits and the monthly disbursement of LGF and the monthly allocation of the extra $10 million for townships. For more information about the OAKS update, visit www.obm.ohio.gov/Memos.

Check your two-hour safety requirement off the list

As is the case every year, if you participate in a group rating or group retrospective rating program through the Bureau of Workers’ Compensation and you had a claim in 2014, you are required to complete two hours of certified training. This training must be complete prior to Dec. 31, 2015. It can be any safety training, and BWC has several no cost options, both in person and online. Recognizing National Preparedness Month

September is National Preparedness Month, and this year’s theme is “Don’t Wait. Communicate. Make Your Emergency Plan Today.” Plan how to stay safe and communicate during disasters that can affect your community.

This year’s weekly hazard focused themes are below.

• Week 1: Sept. 1-5 - Flood• Week 2: Sept. 6-12 - Wildfire• Week 3: Sept. 13-19 - Hurricane• Week 4: Sept. 20-26 - Power Outage• Week 5: Sept. 27-30 - Lead up to National PrepareAthon Day (Sept. 30)Visit www.ready.gov/september for more information.

Law Directors’ meeting scheduled

The next meeting of the Ohio Township Association (OTA) Law Directors’ Group is set for Sept. 11. The session will occur at the OTA office in Blacklick, Ohio, and the cost to register is $100 for members and $150 for non-members. The meetings are geared toward township legal counsel, including county prosecutors.

Topics to be discussed include:• Zoning & Agriculture

Exemptions• Providing Fire Protection in

Townships• Fact Finding & Collective

Bargaining• Recent Law Changes• Land Banks & Township

ParticipationVisit the “Education” then “One-

Day Session” page of the OTA website at www.ohiotownships.org for a registration form.

EPA providing grant writing workshopsThe Ohio Environmental Education Fund is providing Grant Writing 101: Finding the

Right Funder, and Grant Writing 102: Writing a Winning Proposal Nov. 3 in Coshocton, Ohio.

Register by emailing Dennis Clement at dennis.clement@epa.ohio.gov. There is a $10 lunch fee. For additional information on this and other EPA-sponsored trainings, visit www.epa.ohio.gov/oee.

Photo of the Month

Each of Ohio’s 1,308 townships vary in size and budget. The Photo of the Month will give you a snapshot of the diversity that can be found around the state.

Have a photo you’d like to share? Email Kaitlin Hall at hall@ohiotownships.org.

Milan Township/Erie CountyBelow is a photo of the rededication

ceremony of the Milan Township Civil War monument. Originally erected in 1867, the township just completed

a $70,000 restoration project (half the funds were donated from residents and half from the township’s general fund).

Milan Township has a population of 3,686, covers 25 miles of roads,

manages a volunteer fire department, and the Edison Park community

recreation complex.

then trustees whose annual salary is set by reference to the maximum amount allowable under R.C. §505.24 (or §507.09) are not prohibited by Ohio Const. art. II, §20 from receiving the increase in salary since such an increase would result from a change in the external factor used to fix compensation, rather than from an amendment of the legislative formula itself.” (OAG 2000-043)

Fringe benefits, such as insurance coverage, are to be considered a form of compensation. In a Supreme Court decision (State ex rel.Parsons v. Ferguson, 48 Ohio St. 2d 389, 391, 348 N.E.2d692, 694 (1976)), the Court ruled:

Fringe benefits, such as the payments {for insurance coverage} made here, are valuable perquisites of an office, and are as much a part of the compensations of office as a weekly pay check. It is obvious that an office holder is benefitted and enriched by having his insurance bill paid out of public funds, just as he would be if the payment were made directly to him, and only then transmitted to the insurance company. Such payments for fringe benefits may not constitute “salary,” in the strictest sense of that word, but they are compensation.

Therefore, an increase in benefits is considered an increase in compensation and thus, such an increase in benefits may not occur during an elected official’s term in office.

Pursuant to OAG 81-099, an increase in the cost of insurance coverage furnished to elected officials, without a corresponding increase in the extent of the insurance benefits, is not an interm increase in the compensation prohibited by Ohio Constitution, Article II, §20.

A recent Attorney General opinion (2015-021) was issued relative to the Affordable Care Act and is worth noting. Under the Supremacy Clause of the United States Constitution, state constitutional provisions are preempted to the extent they conflict with federal statutes. State laws, including a state constitutional provision, are preempted to the extent that a township cannot comply with the mandates of both federal and state law. The Patient Protection and Affordable Care Act (PPACA), Pub. L. No. 111-148, 124 Stat. 119 (2010),

preempts the prohibition against interm changes in the compensation of public officers that appears in Article II, Section 20 of the Ohio Constitution when compliance with that prohibition would make it impossible to comply with the requirements of section 2711 of the Public Health Service Act, 42 U.S.C.A. §300gg-11. Thus, changes can be made to a township’s healthcare plan mid-term when necessary to come into compliance with the PPACA.

Did You Know is informational only and not intended as legal advice.

Did You KnowContinued from page 4

Checking your TPP reimbursements

Included in HB 64, the biennial budget, was language reinstituting the phase-out of TPP and public utility deregulation reimbursements made to townships.

Updated calculations of total resources and estimated personal property reimbursements reflecting the changes enacted are now available on the Tax Department’s website at www.tax.ohio.gov/personal_property/phaseout.aspx.

In addition, the guide to the spreadsheet has also been updated. Townships are being asked to review the posted information and contact TPP@tax.state.oh.us with any questions or concerns.

Money available for high school seniorsThe Ohio Township Association (OTA) provides three $1,500 scholarships to high school

seniors annually. The 2016 application is now available. Students must be a U.S. citizen; reside in a township; and plan to attend a two or four-year Ohio college or university in the fall of 2016 to be eligible.

Scholarships are offered in two categories: Local Government Achievement and Academic Achievement. Students may apply for both scholarships, but may only win one. The deadline to apply is Jan. 29, 2016. Any questions related to the program should be directed to the OTA, and winners are selected by Muskingum University,

who administers the program. The scholarship program is funded through donations by County Township Associations,

personal donations, and proceeds from the OTA’s annual golf outing, which raised $4,700 at the Aug. 7 event.

Visit the “Scholarships” page of the OTA website at www.ohiotownships.org for more information.

Calendar of EventsSeptember 1 Summit County

September 3 Union County

September 7 Labor Day OTA Office Closed

September 8 Pickaway County

September 10 Butler County Erie County Franklin County Scioto County

September 11 OTA Law Directors’ Group Meeting

September 12 Paulding County

September 14 Adams County

September 16 Champaign County Wayne County

September 17 Allen County Clark County Clermont County Lorain County Mahoning County Medina County Preble County Seneca County Stark County Trumbull County

September 19 Fairfield County

September 21 OTA Grant Workshop

September 21 Morgan County

September 24 Clinton County Washington County

September 30 Putnam County

Monthly disbursements to boost general fund

Included in the recently enacted budget was language providing an additional $10 million in revenue for townships in FY ‘16 and FY ‘17. The money is to be divided two ways: the first $5 million is to be equally divided among the 1,308 townships and the second $5 million is to be divided based on the number of road miles in each township.

Unlike the lump sum disbursement granted to townships during last year’s Lame Duck session, townships will see the revenue for FY ‘16 and ‘17 in monthly installments.

There has been some confusion as to where this money should be allocated once received. The revenue should be placed into your general fund, and is permitted to be used at the township’s discretion for any lawful expense. Please visit www.tax.ohio.gov/government/ohiodepartmentoftaxation.aspx and click on the Local Government Fund/Public Library Fund for more information regarding the distribution of this revenue.

Public employee benefit: access to deferred compensation

Studies suggest that your pension only may provide 62-66 percent of your working income in retirement, while most experts recommend that you will need 75-85 percent.

How do you reach that 75-85 percent?Through a deferred compensation plan. In a deferred compensation plan, money that will normally be in your paycheck

is put aside by your employer into a personal retirement account. This arrangement allows your money to grow tax-free.

As an Ohio public employee, you have access to Ohio Deferred Compensation, a supplemental retirement plan. The program is unique in that it is a public, nonprofit organization created by Ohio legislation and is a benefit specifically for Ohio public employees.

Some of the benefits of contributing to Ohio Deferred Compensation are that:• It’s easy. Dollars are automatically deducted from your pay.• It’s flexible. You can increase or decrease the amount at any time. • It can reduce your current income taxes. Taxes are deferred until you

withdraw. • You have full control. You can choose how your money is invested. • You have access to a wide array of investment options. These include hassle-

free target date funds, mutual funds, and a Stable Value Fund. • You’ll have more choices. When you leave a job, you can take out your money

without penalty or leave it in the plan to potentially grow. There is a 59 1/2 age penalty. A 10 percent penalty might apply for withdrawals that come from assets rolled over from another plan type. Withdrawals are taxed as ordinary income.

• You’ll get all the personalized help you need. Account Executives are available to help you keep up with your account.

To enroll in Ohio Deferred Compensation or learn more, visit www.ohio457.org.

Did you know? Constitutional prohibition on interm raise

September 2015 Grassroots ClippingsOhio Township Association6500 Taylor Road, Suite ABlacklick, Ohio 43004

Continued on page 2

®

Included in HB 64, the biennial budget, was language that increases salaries of township officials in 2016 and 2017 by 5 percent each year. Only those township officials that are elected or appointed after Sept. 29, 2015 are eligible to receive the increase. This would include the fiscal officer and trustee that are up for election in November 2015 and will start the new term in 2016. Furthermore, a trustee who is appointed to fill a vacancy for an unexpired term is entitled to receive an increase in compensation which became effective prior to his appointment, but subsequent to the commencement of the term to which he succeeds (OAG 83-015). In layman’s terms, if a person is appointed to fill a vacancy after Sept. 29, 2015, he would be eligible for the raise in 2016 and 2017 even if the term he is filling is an unexpired term that ends Dec. 31, 2017.

If you are not up for election, you are probably wondering why you are not eligible for the raise. The simple answer is that the Ohio Constitution prohibits such action.

Ohio Constitution, Article II, §20The general assembly, in cases not provided for in the constitution, shall fix the term of office and the compensation of all officers; but no change therein shall affect the salary of any officer during his existing term, unless the office be abolished.

For example, when the General Assembly by legislative enactment increases the compensation of a clerk of courts of a county, thus entitling the clerk of a municipal court to an increase in salary under R.C. 1901.31, such an increase is not payable to an incumbent clerk of a municipal court during his existing term, as such an interm increase is proscribed by Article II, §20 of the Ohio Constitution (OAG 77-082). While this example refers to clerk of courts, it would also be applied to township trustees and fiscal officers. Just as a clerk of court’s salary is set in statute, R.C. §505.24 and §507.09 set the pay for township trustees and fiscal officers, respectively.

The rate of compensation for township officials is based on the size of the township’s budget. “…a board of trustees may adopt a resolution that establishes the annual salary of trustees (and fiscal officer) as the maximum amount permitted under R.C. §505.24 (and §507.09), without setting forth a specific dollar figure.” (OAG 2000-043)

The Constitution does not prohibit an increase in pay for township officials should a township’s budget increase. “…if the township budget increases during the term of a township trustee (or fiscal officer), such that the maximum amount a trustee (or fiscal officer) could receive if paid on a per diem basis increases,