Ron Barnes

Monday, 22 July 2002 09:34

Next stop: Transit's future

Last year, the COTA board of trustees asked for your vote to expand our system and stabilize funding. Thanks to you, COTA now has permanent funding. This allows us to leverage more federal funds to improve our service in the short term.

While the second levy, for major bus expansion and the addition of rail, did not pass, we believe you were telling us to make sure we are using our resources wisely before we grow. That doesn't mean we're abandoning our long-range plan, Vision 2020. It does mean we're moving at a much slower pace and implementing only what limited service our current funding allows.

COTA is working to improve service through "Operation: Excellence," a top to bottom, comprehensive service audit that will provide a complete analysis of our riders, routes and service to see what we're doing well and where we can improve.

Part of COTA's goal with "Operation: Excellence" is to be responsive to the varying needs for service in different parts of the community. As the needs of people change and new centers of commerce grow, COTA needs to focus its service where there is demand.

To that end, COTA has distributed surveys and held a series of public workshops throughout Central Ohio. Later this year, the public will have an opportunity to preview recommended changes. The final report will be issued in January. COTA will begin implementing "Operation: Excellence" recommendations in May 2001.

Because of public interest and increasing congestion, COTA is still considering rail as part of a tool kit of possible traffic management solutions that include buses, ride sharing, infrastructure improvements and public policies.

In a recent survey of Central Ohio residents, 76 percent of respondents said COTA should look at passenger rail to address our growing congestion. Why? Rail transit is one means of giving people an alternative to being stuck in traffic without having to build 10-lane freeways that pave over precious green space.

The Texas Transportation Institute reports that the average driver in Central Ohio spends 40 hours a year stuck in traffic. It will only get worse. The Mid-Ohio Regional Planning Commission predicts a 375 percent increase in traffic over the next 20 years and a shortfall of more than $1 billion to build highway lanes that would keep congestion at 1995 levels.

Through Vision 2020, COTA is in the process of implementing a 1995 study's recommendations for an improved bus system and preservation of existing rail corridors for future use. COTA has also convened a "Fast Trax Advisory Group" of elected officials, business owners, community leaders and neighborhood residents to update this look at bus and rail options from Downtown Columbus to the Polaris area. The group's recommendations will be forwarded to COTA and the Mid-Ohio Regional Planning Commission this winter.

The study is being updated because new rail technology options have opened the door for improved service. In addition, Central Ohio's population, job and congestion increases have led to a heightened interest in transit.

One of the most important things to remember about any transit plan is that it works in tandem with other traffic management solutions like improved roadways, carpooling and van pooling and policies that encourage people who can to leave their cars at home. The result is improved mobility for everyone in Central Ohio. How to reach: Central Ohio Transit Authority, 275-5850 or www.cota.com

Ron Barnes is president and CEO of the Central Ohio Transit Authority.


Moving people to jobs

COTA is transporting people to major employment sites through reverse commute routes, which generally move people from the center city to jobs along the Outerbelt. The routes include:

  • No. 29 to Polaris

  • No. 39 to New Albany business parks

  • No. 22 to East Point retail area on East Broad Street

In addition, COTA is providing new service with its smaller buses. The newest is the Easton "Link," a route serving the 20,000 people working in the Easton area.

Later this winter, COTA will roll out two other new routes, one in Linden with the Linden Transit Center as its hub and one from Port Columbus Airport to downtown hotels. Many of COTA's traditional routes feed into these new routes, increasing access to jobs in different parts of town.

Tuesday, 22 March 2005 09:51

What is NASD arbitration?

In the last several years, the news has been filled with articles about stocks, bonds, mutual fund companies and the financial markets. The period from 2000 to 2002 was tumultuous.

After years of gains, the market, as a whole, suffered tremendous reversals and losses. Since then, the markets have seen recovery but remain volatile.

It was from 2000 to 2002 that investors, stockbrokers and registered representatives of financial advisory firms became involved in disputes. Customers focused on losses in their accounts. Representatives, many times, focused on issues related to being terminated from their firms or issues that occurred as they changed firms.

The majority of these disputes were resolved in the National Association of Securities Dealers arbitration. NASD Dispute Resolution Inc. (NASD) is the forum in which customers who have complaints about their accounts file the majority of disputes. Over the last 10 years, virtually all of the firms in its account-opening documents have instituted a provision that requires arbitration, many times specifically the NASD.

The NASD has a system of arbitration that provides a forum for a customer who has a complaint. This process is initiated by filing a statement of claim, to which the brokerage firm and a particular broker have the right to respond. There is a limited exchange of documents that occurs during this process, and then a hearing is held in front of an arbitration panel.

For smaller claims, those under $25,000, a single arbitrator -- with or without a hearing -- presides over the dispute. For claims in excess of $25,000, up to three arbitrators may hear the case.

The panel is traditionally comprised of one industry arbitrator and two public arbitrators. An industry arbitrator is someone who is currently or has been so affiliated with the securities industry. Public arbitrators encompass a wide variety of individuals -- businessmen, lawyers, accountants -- who take a training course from the NASD to serve as arbitrators.

Once all of the documents have been exchanged, a hearing is scheduled. Evidence in the form of live testimony and documentary evidence is presented before the arbitration panel. These arbitrations can last, depending on the size of the case, from one or two days to a week. In large cases, it can sometimes take 15 to 20 hearing days.

At the conclusion, the arbitrators confer and render a decision. These awards are generally considered final. There is no specific right of appeal but there is a very limited ability for any party who is dissatisfied to go to court to have the arbitration award vacated and struck down.

If there are disputes between a broker and his firm related to his employment or other issues, those, too, are handled within the context of NASD arbitration.

The number of cases in the NASD system has grown exponentially each year since 2001. As a result, this process, which initially was thought to be a fast, cost-effective method, has become lengthy. The typical time to get to hearing after an arbitration claim is filed is from 12 months to 18 months.

In addition to offering the arbitration process, the NASD also offers parties a mediation system that can be used separately or in parallel with the arbitration process. Thus, the NASD has a complete system for resolution of disputes, whether for public customers or industry members.

Gary A. Barnes is a partner at Gambrell & Stolz LLP, where he practices law in the areas of civil litigation, security arbitration and bankruptcy. Reach him at (404) 221-6509 or gbarnes@gambrell.com.

Tuesday, 30 August 2005 07:49

Estate planning

Permanent repeal of federal estate taxes has been a recurring issue, arising during the presidential election and in Congress. In the last two Congressional sessions, the House voted to repeal estate taxes, but each time the Senate was unable to pass a permanent repeal.

With the uncertainty of a dramatically varying tax-free exclusion between 2005 and 2011 and the continuing potential for permanent repeal of the estate tax, you should review your estate plans more frequently and build more flexibility into plans. Also, remain mindful of the nontax goals of estate planning.

On June 22, 2005, the Wall Street Journal reported Republican and Democratic senators are increasingly confident they will reach compromise on the estate-tax law by the end of the summer, with Senate negotiators reportedly having already agreed to permanently lower the estate tax rate beyond 2010 and boost the tax-free exclusion to more than $3 million per person. Any Senate compromise will most likely pass in the House and would be difficult for President Bush to veto.

State death taxes will likely continue and could increase. Ohio’s estate tax rates range from 2 percent to 7 percent, depending on the size of the estate, applied to estates exceeding $338,333. Varying death-tax laws across state lines will require individuals to update their estate plans for every state where they establish residence.

How might the new estate-tax laws affect your current estate plans?

  • Retirement planning. Income taxes on IRAs and retirement accounts will still be in effect. Planning to avoid income taxes and stretch out withdrawals from retirement accounts will still be important.
  • Capital gains and income tax savings. Charitable remainder trusts will continue to be a popular way to generate income tax savings and provide a means to reinvest highly appreciated assets to produce increased income without incurring capital gains taxes.
  • Family members with special needs. Trusts will still be needed to delay distributions to minor children and provide for disabled children or elderly parents.
  • Protection of assets from creditors or lawsuits. Trusts will continue to be used by individuals to shelter wealth from liability or preserve family wealth for spendthrift family members.
  • Second marriages. Trusts will continue to be used to hold assets for a surviving spouse’s support, with eventual distribution to children from a first marriage.
  • Consolidation of investment and control. For high-net-worth families, trusts provide a means for efficient, diversified investment and control of family wealth.

It is a good idea to make an effort to review your estate plans more frequently and to focus on four specific factors.

  • Consider limiting the full funding of credit shelter trusts, intended to hold a decedent’s tax-free exclusion amount, or giving surviving spouses the ability to decide the extent of funding of these trusts.
  • Revisit the need for life insurance policies or irrevocable life insurance trusts, previously established to replace funds reserved to pay estate taxes.
  • As always, revisit beneficiary designations for IRAs and retirement accounts to ensure flexibility and avoid overfunding the tax-free exclusion amount, particularly if trusts are currently designated as a beneficiary.
  • Revisit the need for existing irrevocable plans and be cautious about implementing new irrevocable plans based on tax laws that may dramatically change.

Michael D. Barnes, Esq., is vice president of Johnson Trust Co., a division of Johnson Investment Counsel Inc., one of Greater Cincinnati’s largest independent investment management firms. Managing more than $3.2 billion in assets, Johnson Investment Counsel has been serving clients since 1965. Reach Barnes at (513) 661-3100.

Tuesday, 29 November 2005 04:39

Donor-advised funds

Hurricanes Katrina and Rita have demonstrated, once again, the power and importance of charitable giving in meeting human needs in America. Entering the last quarter of 2005, when you may be considering your year-end charitable giving, consider a donor-advised fund to provide flexibility in meeting your financial and charitable goals.

What is a donor-advised fund?
A donor-advised fund is established by gifts to a separate account at a public charity, which acts similarly to a charitable checking account. However, unlike a checking account, the donor-advised fund is an asset of the charity, and the donor has the right to name the fund, recommend grants from the fund, and, in some cases, suggest how the fund is invested.

How do I start a donor-advised fund?
Donor-advised funds are offered by community foundations, larger charities and many investment firms. You may take a tax deduction each time you make a gift to a donor-advised fund. Investment returns on the fund increase the balance from which the donor may recommend grants in the future.

Who can be advisers for a donor-advised fund?
Often, the donor and his or her spouse are the initial donor advisers who recommend grants from the fund. Most charities allow the appointment of successor donor advisers.

Why must the charity have the authority to approve or deny recommended grants?
A donor to a public charity must relinquish control over the gift before it qualifies for a charitable tax deduction. Typically, a charity’s governing board only denies grants suggested to organizations that do not qualify for public tax-exempt status, or where the donor will receive personal benefits from the grant.

What are tax-wise ways to use a donor-advised fund?

  • Unusually high taxable income in 2005 can be offset by the charitable tax deduction from a gift to a donor-advised fund, perhaps equal to several years of anticipated charitable gifts. In future years, you can recommend grants from the donor-advised fund to make the charitable gifts.

  • Recurring annual gifts can be accumulated in a donor-advised fund to make a substantial grant in the future - for example, to establish a scholarship fund or endowment.

  • A donor-advised fund can be the recipient of annual distributions from a charitable lead trust, a future distribution from a terminating charitable remainder trust or the designated beneficiary of an IRA, providing a charitable legacy for future family giving.

  • Donors can involve grandchildren in their charitable giving by making contributions to a donor-advised fund, from which grandchildren research and propose grants. During a family gathering, grandchildren present their choice of charities to receive grants from the family’s donor-advised fund.

  • Smaller private foundations, which incur sizeable costs to administer and file tax returns, can be terminated by transferring the assets to a donor-advised fund. The fund provides the same family identity and generations of donor advisers for making charitable gifts, with considerably less cost.

Michael D. Barnes, Esq. is president of the Johnson Charitable Gift Fund, a public charity providing donor-advised funds, and vice president of Johnson Trust Co., a division of Johnson Investment Counsel Inc., which manages over $3.2 billion in assets. Reach Barnes at (513) 661-3100.