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Akron, Ohio

City of Akron Seeks to Responsibly Monetize Telecommunications Equipment Leases to Build Cash Reserves

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City of Akron Press Release
Published: 12-04-2017

Akron, Ohio, December 4, 2017 – After a year-long study, and public bidding process, the City of Akron is seeking to transfer its interest in 15 telecommunications equipment leases, in exchange for $11 million in revenue that will help stabilize the City’s finances and build up the City’s cash reserves, which can be used in times of emergency.

In 2015, Mayor Horrigan commissioned the Blue Ribbon Task Force to evaluate and identify challenges and opportunities facing the City and make recommendations to move the City forward. While the Task Force, ably led by the late Tim Ochsenhirt, found the City to be “stable, lean, and poised for growth,” it also identified challenges, the largest of which was the City’s financial condition.

“Like many other communities across the country, the City of Akron was hit hard by the great recession of the last decade,” Director of Finance Diane Miller-Dawson said. “Reductions in income tax revenue, combined with devastating cuts form the state and federal government took its toll on our finances.”

To improve financial stability, the Task Force recommended that Mayor Horrigan consider leveraging some of the City’s valuable, non-essential assets, to produce a greater return for the citizens of Akron.

After receiving an initial, unsolicited offer to acquire the City’s telecommunications leases for approximately $5 million, Mayor Horrigan recognized that these telecommunications assets had great value, and that they were in high demand. Proceeding carefully, the City began a comprehensive review of the assets in late 2016, and then engaged in a robust bidding process, with the goal of obtaining the greatest possible value for these leases in 2017.

The highest bid came in at more than $11 million in payment to the City, more than double the value initially expected. 

“This year, the voters of Akron overwhelmingly supported Issue 4, which will empower us to invest much-needed, new revenue into our essential public safety and street infrastructure and services,” Diane Miller-Dawson added. “And while these new funds will benefit us greatly moving forward, we still need to take steps to increase fund reserves that were negatively impacted during the recession.”

The company purchasing the telecommunications leases will assume the risk of loss that comes with changes in technology and regulation. In return, Akron citizens are gaining $11 million in public funds that will keep the City running in the event of a disaster or unforeseen financial shortfall.

“Just like many Akron households, during the recession, the City was forced to dip into its savings in order to pay its bills,” Mayor Horrigan said of the effort.

“However, I’m proud to say that a new day is dawning in Akron.  While we continue to recover from the recession, we are committed to setting our City on a renewed path to financial stability, so our community can grow and thrive for generations to come. Now is the time to make responsible decisions that will enable us to invest in that savings account once again.”

“As leaders in this City, it is our duty to ensure that we have funds on hand to respond to an emergency,” Mayor Horrigan continued.  “This transaction enables us to double our existing cash reserves, without asking our citizens to pay a dime toward the effort.  It is the smart, responsible, necessary choice, and I applaud my staff for their diligence in bringing this valuable agreement to fruition.”

The legislation authorizing the transaction has been submitted to Akron City Council for their review and approval, expected in the coming weeks.

For more information, please contact Ellen Lander Nischt, Press Secretary and Assistant Director of Law at (330) 375-2325 or [email protected].

For further information, contact:
Ellen Lander-Nischt
Press Secretary
166 S. High Street Akron, Ohio 44308
Phone: 330-375-2345
E-mail: [email protected]

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