Dear Friend of Hamilton County:

Happy Thanksgiving. While I want to write to you and offer a detailed discussion about what is
before us for a vote next week, I don’t want to lose sight of the more important matters such as all
that we have to be thankful for. Among the many blessings we have shared is the fact that we
have been able to return to you and to all county residential property owners over $230 million in
property taxes these past thirteen years. I hope to be able to continue providing that important
element of tax relief to county property tax payers.

I also thank you for your email about the county stadium tax fund. I share your concern about the
fund and also your passion to preserve the property tax rollback.

I recently received a copy of an electronic newsletter “Action Alert” printed and distributed by the
group COAST about this issue. Regrettably COAST is churning a difficult issue into soundbites
and partisan politics at a time when the solutions require sound thinking, thoughtful deliberation
and bipartisan cooperation. It also requires decisions that are grounded in facts – a concept that
is foreign to COAST.

Our Board has neither eliminated the property tax rollback, nor have we proposed to do so. What
did happen is we received a report from our County Administrator, Patrick Thompson, and our
Budget Director, Christian Sigman about the terrible condition of the fund along with a variety of
options about how to deal with it. Personally, I do not find any of the options to be appealing.
Since I was elected I have worked hard in applying every other available option to balance the
funds so that property taxpayers like you can still receive a tax break on property taxes
subsidized by sales tax payers.

While COAST tries to make it out that the problems before us are the result of Democrats on the
county commission, the reality is that the die was cast about this day over a decade ago when the
then County Commission [all Republicans] established the fund and its obligations based on
sales tax calculations that have never come true. The voters of Hamilton County supported a new
sales tax by over 63% of the vote in March 1996 that was designed to support a whole program
of new development, services and contractual obligations. The program was dependent upon the
sales tax growing by a minimum of 3% every year. Taxes growing at that level would cover all
obligations and permit a property tax reduction for residential property owners equal to 30% of the
taxes collected to be distributed each year for as long as the tax existed. The results? A scope
of work that is more expensive than the tax will permit because the cost of the overruns plus the
County’s obligations under the Bengals lease, when coupled with a sales tax that is not living up
to expectations, produces a deficit in the fund. All of this was set in motion and done by the three
Republican Commissioners and their Republican county prosecutor/lawyer Joe Deters and his
office over a decade ago.

When I ran for the County Commission in 2000 I ran against one of those Republican
commissioners. I was told every year since 2001 that the stadium fund was going to go into the
red within a year or two. I have had to deal with the deficit in the stadium fund in eight of my nine
years as a County Commissioner. Each year we received several options including eliminating
the rollback. Despite being pressed to eliminate the rollback for eight years I have declined to do
so. As a result I have helped support over $230 Million in property tax reductions as your County
Commissioner. For COAST to assert that Commissioner spending these past 13 years has
created the problem is patently false. During my tenure, I have done everything I can to honor
the promise to the voters and maintain the rollback while taking other action to keep costs in that
fund down.

COAST attacks the use of outside counsel but it was outside counsel that I hired that introduced
new cost control measures overseeing construction of the Reds ballpark that allowed us to build
that stadium on time and on budget, in stark contrast to the overruns at Paul Brown stadium
under the watch of my predecessor commissioners and the prosecutor’s office. These same cost
control measures and additional amendments to them, monitored by outside counsel, brought in
the riverfront infrastructure elements of the ballpark construction under budget and ahead of
schedule – again in stark contrast to the former County Commission and their use of the county
prosecutor as their lawyers.

Outside counsel has produced significant returns to county taxpayers. Since their retention, our
outside lawyers have been directly involved in negotiating contracts; securing grants; and
defending litigation; that has netted or saved county taxpayers between $260 million and $277
million. In other words, our expenditure of money on outside counsel has netted taxpayers about
a 2000% increase in dollars over what we have spent on their fees. I don’t know of any other
investment of county dollars that has produced anywhere close to that rate of return.

I also took substantial personal risk and exposure by bringing a taxpayer suit against the Bengals
in an effort to try to reform the lease agreement and get other financial concessions to try to
ensure the stadium fund remained solvent. Rather than help me, the Republican Commissioners
opposed me. (Republican Commissioner, Phil Heimlich, who was elected in 2002, did come on
board, but the court ultimately determined the statute of limitations expired before he loaned his
support to the effort.) Rather than protect county taxpayers, the prosecutor’s office fought me
and refused to pursue the litigation. Their opposition and refusals delayed the county’s pursuit of
the litigation until after the statutes of limitation expired, essentially killing the litigation.

Yet COAST writes to taxpayers that we should be entrusting all of these issues to the
prosecutor’s office and that David Pepper and I have caused this fiscal crisis. COAST would also
have us walk away from the Banks redevelopment project. Why would we waste the taxpayer
paid for infrastructure improvements that are in ground and ready to support almost $800 million
of private money that will create jobs and improve our revenue base and our riverfront? Why
would we break existing contracts resulting in costly litigation? If we did the things COAST wants
us to do, we would be wasting tens of millions of taxpayer dollars each year, not the other way
around. Our use of outside counsel has actually saved county taxpayers tens of millions of
dollars more than what we actually spent.

I haven't yet made up my mind about what needs to be done. I do think that what we do should
reflect the framework approved by the voters in 1996. In other words, the voters agreed to
substitute a sales tax for property taxes in an amount of 30% of the sales taxes generated. The
sales taxes were supposed to cover the cost of building two stadiums; the public infrastructure
supporting them; and the infrastructure between them to allow for development to occur. The
sales taxes were also supposed to cover a contribution to Cincinnati Public Schools for dedicated
debt service funding for a percentage of the schools’ long term capital plan. The failure of the
sales tax to grow as projected, coupled with the fiscal failures and legal failures by both the 1990s
County Commission and county prosecutor’s civil legal staff has placed us squarely where we are
today. But we must, I believe, try to come up with a solution that keeps the faith with the
framework of the stadium tax deal which is sales taxes to replace property taxes and to cover the
cost of all obligations.

I am looking at all options. Many people would like for us to maintain the property tax reduction
for residential property owners by making additional cuts in county services. I don’t believe we
can do that without doing great harm to public safety and to our legal obligations. If it comes from
our general fund it will require massive cuts to the recently approved budget – a budget that was
just balanced after laying off over 1000 county employees and reducing overall expenditures by
over $62 million in two years. If we exempt our safety functions and make cuts only out of non-
safety operations we will be unable to run the rest of the county. A pro rata reduction in other
operations, for example, will result in a 42% reduction in funding for the county Auditor,
Treasurer, Recorder and Board of Elections and another 40% cut in funding for economic
development at a time when we are trying to grow out of the recession. The Commissioners and
County Administration will also be cut by 42% while building inspections and facilities operations
of all buildings, including courts and corrections are cut by 26% and 23% respectively. In each of
those county operations we are required by statute to perform functions that cuts of that
magnitude will result in the county violating the law in each area of operation. We simply cannot
responsibly, or legally, make those kinds of cuts in our general fund to support continuing the
reduction of property taxes for residential taxpayers alone. Maintaining the reduction will require
another $13 million in cuts – and that is just for one year. This is a problem that will ultimately
grow to over $700 million in cumulative deficits. Because the sales tax has not grown and what
tax we have is taking care of a higher debt service than expected because of the Paul Brown
Stadium cost overruns. What this points out is that this county commission’s spending is not the
problem. The solution, if we are to preserve the rollback, requires a different solution than cutting
the county general fund.

I expect we will vote on what to do on Monday the 30th. Thank you for your interest and for taking
the time to write me. I am not certain how the matter will end up. What I do know is that by law
we are obligated to pay the debt service on the stadium construction cost. We are obligated by
law to pay the bondholders of the stadium debt. We are obligated by contract to pay for a variety
of Bengals’ expenses. And we are obligated by contract to pay for a portion of the Cincinnati
Public Schools capital program. After those we can consider the issue of the rollback which we
have all committed to pay. How we do that remains the unanswered question. Whatever we do
should, as much as is possible, maintain the same basic framework approved by the voters.
After all, that is how all of this originated. The voters of the county approved taxing themselves to
support a menu of obligations and initiatives. The voters chose to increase their sales tax to be
the funding source. They chose a sales tax largely because about 50% of it is paid by visitors to
our region and not by local residents, and largely because a sales tax is spread out and paid by
everyone instead of only being paid by a small portion of the population that owns real estate.

Again, I thank you for your interest and for taking the time to write to me. Have a great Holiday
weekend.

Sincerely

Todd Portune