During a meeting March 28, finance committee chair Mary Stanforth and committee members Greg Maurer and Adam Wilkin voted 3-0 to revise the ordinance by keeping a $25 license fee for “type B” machines and raising the fee for “type C” machines to $50.
As previously reported, nearly six months after their last meeting to consider a proposed repeal of the city’s ordinance for license fees associated with amusement devices, two members of the Hillsboro Finance Committee voted Jan. 19 to instead recommend doubling the current fees. As proposed in that version of the ordinance, the license fees would increase from their current $25 rate to $50 per machine, per year.
The legislation had originally been presented by former council member Ann Morris in July 2021 as an ordinance to repeal, not increase, the fees. During a subsequent finance committee meeting in July, Morris explained that she proposed the ordinance after speaking with the vendor who handles arcade games at her business. She said the vendor had spoken to her, and to the city auditor’s office, about potentially suspending the fees for a year because of businesses that were closed during the pandemic.
The ordinance had its first reading at the Feb. 17 council meeting, with some discussion among council. Brandon Adkins of Wheelersburg, the vendor who had originally made the request for the fees to be waived, also addressed council at both their February and March meetings in protest over their proposal to increase the fees. Council members Jason Brown, Patty Day and Don Storer said they were opposed to the proposed ordinance at the March 17 meeting.
Brown — who had proposed March 17 that the city raise fees on “gambling machines” and waive fees on other machines — was present for the March 28 committee meeting, which began with Stanforth discussing the various classifications of machines.
Stanforth said that she had spoken with Adkins, who explained that there are three types of machine classifications in Ohio.
“You have a type A, which is jukeboxes and arcade games where you don’t get anything back,” Stanforth said. “Type B is where the player receives a prize directly from the machine — the crane and the claw.
“Type C are the skill games where tickets are awarded, and you trade them in. The value is supposed to be no more than $10 for each prize that you get. You get the tickets from the machine, and then you redeem them elsewhere.”
Stanforth added that vendors are required to pay an application fee as well as a license fee for type B and C machines, although the state does not require a fee for type A machine. She proposed that the ordinance specify no fee for type A machines; a $25 fee (the current rate) for type B machines; and a $50 fee (an increase of $25) for type C machines.
According to Stanforth, she also shared that proposal with Adkins, who indicated he had “no problem at all” with that revision.
Under this proposed “graduated fee” scale, Stanforth said the fees collected would be “up to $12,700” — an increase over the $7,450 collected in 2021.
She asked the committee members for their “thoughts” on changing the ordinance.
“I feel like we’ve talk about this at length, and I really feel like this is fair,” Maurer said. “I have no problem with changing it to what you have stated because it’s really a layered system of fees.”
“Right,” Stanforth said. “I think it’s good because it’s a graduated fee, because those skills [game] places, I’m sure, are making more money than what the type B do.”
Wilkin asked if any other vendors had commented on the proposed ordinance, to which Stanforth said “no.”
“I like your system,” Wilkin said. “I don’t see a problem with it.”
Council president Tom Eichinger asked about the logistics of enforcing the ordinance. During the initial meeting on the legislation last July, city auditor Alex Butler said that the city doesn’t have a designated person to inspect the businesses or count their machines.
“It seemed like Alex, who administers the collection of this stuff, couldn’t really say how you’re able to identify the machines, let alone whether they’re A, B or C,” Eichinger said. “So my question is, how do we do that, if we’re going to split the fees?
Stanforth said the vendors have to file paperwork for the city “for each machine.” Maurer, Eichinger and Wilkin each questioned whether the city could cross-check documentation through the Ohio Casino Control Commission.
“All I’m saying is if we rely on the vendors to fill those out, you don’t know whether you’re getting it all,” Eichinger said.
Stanforth agreed that there’s “been no accountability” and again brought up a topic that had been broached in July — that with an increase in fees collected, the city could pay someone to visit the businesses and check the machines once a year.
“Could you do that legally, though?” Brown asked.
Stanforth said that with current state licensing regulations, “when you walk into their business, they have to be able to provide that information to you.”
After several minutes of discussing verifying machines, Stanforth pointed out that it “has nothing to do with the ordinance, unless we want to put that in” the language of the legislation.
She also brought up that in her conversations with Adkins since the March 17 meeting, they have also discussed that the ordinance may need to be updated once online gambling becomes legal in Ohio. Stanforth said she thought they should “just hold off” on changing all the language because it’ll likely be “changed again in a year or two.”
“I don’t think this necessarily needs to be in the ordinance, but I do think that whoever’s responsible for collection of those fees, which I guess is Alex — the auditor — then they’ve got to be clued in to come up with a method to get that information correct,” Eichinger said. “That can be done separately, if an ordinance gets passed, but it needs to be a step that the city follows to straighten that out and create a process for that to happen.
“The more I hear about some of the things we’ve got on the books, that aren’t well-established or well-managed — ‘it’s too much trouble,’ or ‘it costs too much,’ quote, unquote, or ‘it’s never been done before’ — and we got a ton of stuff out there that falls into those categories. And we don’t have time to clean it all up, but when we have a few that show up, we need to nail them and try to get them straightened out.”
Before taking action on the proposed revision, Stanforth asked Brown for his opinion.
“My question to you, Jason, is you were opposed to this as being ‘he’s already paying fees’ and all this,” Stanforth said. “If [Adkins] is agreeable to this — and he said he is, because we’re not changing his fees — are you on board with this? Are you still against it?”
“If [Adkins] is good with it, then there’s no reason for me to be against it,” Brown said.
At the March 17 meeting, Brown likened the fees to “the equivalent of charging a restaurant fee per table that they have, a car dealer a fee per vehicle they have on the lot, a bank a fee per teller window, etc.” Stanforth referenced that argument.
“This has nothing to do with the taxes,” she said. “This is a fee, an application fee or a license fee. This is not based on how much money he makes. This is just a flat, across-the-board fee.”
“It could still be considered a tax, but it doesn’t matter to me,” Brown said. “If [Adkins] doesn’t mind it, I’ve got no dog in the fight.”
Maurer moved to make the amendment to the current proposed ordinance, which passed by a 3-0 vote.
Stanforth said she’d speak to law director Randalyn Worley to have the current ordinance amended. According to Eichinger, the legislation will return to council’s agenda for a second reading April 14.