Application gets stuck in a mire of questions

Questions about JNH's location, back taxes and employees cloud the company's minority loan request.
By ROGER G. SMITH
CITY HALL REPORTER
YOUNGSTOWN -- JNH Trucking's request to borrow $40,000 is a case study in the vagueness of the city's minority loan program.
The saga started June 28, 2000, when JNH applied for and was accepted into the program.
Program guidelines say companies must be minority-owned and within the city limits. Both owners fall into minority categories. Owner Hasper O. Leggett is black and his partner is Jill Reynolds.
Location: The company's location, however, is one question that is delaying the loan's approval.
Program guidelines don't say whether a company must be Youngstown-based or just have an office here.
The control board -- Mayor George M. McKelvey, Finance Director Barbara Burtner and Law Director Robert Bush Jr. -- questions if JNH qualifies. The company and its backers argue it does.
JNH has had a Niles business address for years since that's where it started. Its truck doors still bear that city's name.
The company, however, has been working out of a South Side Youngstown property at 43 Garfield St. for 15 to 20 years, Leggett said.
"The trucks have always been in Youngstown," he said.
JNH qualified for the minority program because it was doing business at the Garfield Street address, said William Carter, director of the Youngstown Area Development Corp. YADC contracts with the city to help companies start the minority loan program process.
Violations: JNH is no stranger to the city.
In October 1998 the city zoning officer issued Leggett several notices of violation. In June 2000 the city zoning officer cited Leggett on four violations.
E. Winther McCroom, JNH's lawyer, appealed to the city zoning board. McCroom said his client had been subjected to "unfair and discriminatory conduct evidenced by these citations." Police constantly watched his client at the city's direction, he said.
In July the city zoning appeals board, headed by Bush, gave Leggett until Sept. 1 to clean up the nuisances.
When nothing happened, the city issued three tickets in October. City court records show former magistrate Lynn Sfara Bruno dismissed all charges Dec. 12.
Today, the property remains filled with tractor-trailers parked between Market and Oak Hill in the mud, which is tracked onto the street. A fence screens piles of junk.
The company isn't violating zoning laws and the property's appearance will cease to be an issue soon, McCroom said.
JNH and the city have been working for a year to relocate the business, probably to land near the Center Street bridge, said Councilman James E. Fortune Sr., D-6th.
Back taxes: Once accepted into the city's minority loan program, companies have two avenues, the mini-loan or the revolving loan funds.
JNH owes a lot of back taxes and didn't meet the more strict mini-loan program standards, so Carter sent the application through the revolving program.
The tax problems are another issue the control board questions.
Loan application and control board records show Leggett and Reynolds were making monthly payments to the IRS on nearly $60,000 in back taxes owed as of mid-2000. About half the total is from penalties and interest on taxes due for 1995 through 1997.
Records also show a $1,345 balance due on state taxes for 1996. Three quarters of the amount is penalties and interest.
City records dated December 2000 say income tax records for the company are "very incomplete." The city needs a "great amount of information" regarding tax returns and about drivers who either hadn't filed the documents or were behind, the records say.
Minority loan program guidelines say any money owed to state, federal or local governments "must be taken care of before any monies will be disbursed." There is no definition of "taken care of."
McCroom argues that companies on a tax payment plan, like JNH, are allowed to borrow under the revolving program.
JNH is current on its city taxes, McCroom said, though that couldn't be verified. The city does not release income tax records.
It's up to the independent drivers -- not the company -- to report their income, McCroom said.
Payroll employees: JNH's drivers and their role in the company are another loan element the control board questions.
Minority loan program guidelines say a chief consideration is "the number of jobs [full time or equivalent] created or retained." The rules don't specify if workers must be on a company's payroll or not.
JNH hires independent contractors to drive its trucks, not workers directly on the company payroll.
After the employee-contractor question was raised, the Mahoning Valley Economic Development Corp. chimed in. The city contracts with the agency to underwrite minority loans.
A MVEDC loan officer told the control board Jan. 10 that the agency now needed proof that "employees listed are actually on the payroll of JNH Trucking, along with proof that new employee jobs created are also actual payroll employees."
That's important because the program is based on job creation, retention and increasing the income tax base, MVEDC said.
JNH and its supporters argue that it shouldn't matter whether the drivers on are on the payroll or not. As long as workers are benefiting, the program is working as intended, they said.
"We make jobs one way or another -- a contractor or an employee," Reynolds said.