FINANCE COMMITTEE MEETING FEBRUARY 17, 2015
Committee Chair Ms. Vaughn opened the meeting at approximately 6:00 p.m. Members of the Committee in attendance were Ms. Vaughn, Ms. DePledge and Mr. Licht. Present from Council were Mr. Evers, Mrs. Quinn-Hopkins, Mr. Hoefle and Council President D’Ambrosio.
In attendance from the Administration were Mayor Morley, Finance Director Slocum and CBO Menn.
Also in attendance were members of the public.
LANDSCAPING CONTRACT: NORTHCOAST LAWNSCAPES, INC.
Ms. Vaughn: Mr. Slocum?
Mr. Slocum: We had a bid opening on February 4th. We feel the low bidder was Northcoast. Mr. Menn did his due diligence on the firm and is comfortable with them. We are recommending that we approve this contract.
Ms. Vaughn: It looks like the bids rage from $17.75 per man hour, calculated in minutes increments; $18.00 per man hour, calculated in quarter hour increments; and, $20 per hour, calculated in quarter our increments. Obviously, Northcoast Lawnscapes is the lowest and since it has been checked out I am assuming it is the best.
Mr. Slocum: That is our recommendation.
Upon review, the Committee agreed to move this matter forward to the next regular Council meeting.
There were no further questions or comments
CBO Menn was excused from the meeting at this time.
2015 BUDGET REVIEW: REVENUE
Ms. Vaughn: Mr. Slocum and I discussed a rationale for doing this year’s budget. We determined the Committee will deal with revenue at this meeting. The next meeting will cover expenses and at the third meeting it will be ready to present to Council and must be approved by the end of March. Everyone has had ample time to review the budget. Mr. Slocum?
Mr. Slocum: I did prepare schedules on expenses and one on revenue which provide a history on each account of the year totals from 2009 to 2014. In looking at receipts – the property taxes have dropped by 25% or so. If you will look at the income tax in 2009 the total amount was $6.9 million and now it is $6.3 million – that is $600,000 we are no longer collecting. In the Local Government Fund – the part we get from the County has gone from $1.7 million to $940,000 – very significant losses. This shows where the budgets have been and where we are going. In looking at the General Fund budget going forward – with the income tax I have taken the position that we will probably do the same thing this year as last year. I am hopeful I am right. We came in under budget last year and hopefully we have hit the bottom. But, time will tell. I know we have some things going negative against us – specifically with CEI closing or rather idling. I know there will be some loss there. This last year we collected $226,000 in income taxes from CEI. I anticipate that at least for next year to be down somewhere between $20,000 and $30,000. I am hoping with moving over to RITA that we will be able to pick up something additional. Time will tell. I have given you what I think is my best guesstimate going into this year. One thing we do have – under account #4563 Clerical Inspection Fees you will see a significant increase. CBO Menn’s staff has been investigating several old deposits that we have had on the books for quite some time. In the month of February, Building’s review of old deposits has resulted in over $25,000 in deposits being forfeited to the City. I am real comfortable with that number. That is a big number for us. Basically what he is looking at are things like contractors performance bonds that have not had a lot of activity and there is a lot stagnant money; subdivision inspections; grade deposits – what should really be done with the money in those accounts. Although I had talked to him some time ago Mr. Menn has undertaken the initiative to move this project forward and I really commend him for it.
Mr. Licht: I see in the General Property Tax and the Local Government Fund are optimistic on both fronts. Is there anything specific with the Local Government Fund that causes you to believe we will have a $$66,000 increase?
Mr. Slocum: We get the numbers from the State. Those are pretty hard numbers. I am comfortable with that. As a reminder to everyone – when you look at the property tax what we really collect in property tax includes three accounts – the property tax, the State homestead reimbursement, and the State roll back. Those monies come from the State. When the residents qualify for a homestead exemption the money is actually paid for by the State. Last year we collected $134,000-$135,000. That number could fluctuate and could decrease especially the rollback and the homestead because the State has changed how they are calculating it. They always make it a point that this is a renewal versus a new issue because on the new issues the State is no longer doing the rollback – our taxpayers are responsible for the entire amount. That is why people are pushing to get the renewals.
Ms. Vaughn: Will that affect the homeowners?
Mr. Slocum: It will definitely impact the homeowners on future new levies. We do not anticipate a recycling grant from the County this year – that number is a wash on the expense side – you will see a corresponding decrease in the expenses.
Ms. Vaughn: What are amusement device taxes?
Mayor Morley: Those are what we get from the bars – the machines in the bars.
Mr. Slocum: There is no money coming in from the internet cafes. Are there any questions on the first page of the revenues?
Ms. Vaughn: Except for Willowick and Willowick.
Mr. Slocum: I spoke with the County about the inheritance tax – they have a half year’s collection in the amount of $400. This is a good example – a couple of years ago we collected over $200,000 and that has now fallen.
Ms. Vaughn: The tangible property tax has fallen too?
Mr. Slocum: Yes.
Mayor Morley: On the spread sheet provided all the 0’s are where the State has cut – five accounts – that is a lot of money not just for our City but all cities.
Mr. Licht: Tax Service – JFK Center – $5,400 after not doing anything for the last two years?
Mr. Slocum: This is new – we are getting a new renter at the Center.
Mr. Licht: That goes along with the increase in account #4448 sale/assets and account #4450 sale/materials or is that separate?
Mr. Slocum: These are monies from auctions and the like – last year was a slow year. In 2009 we had $43,000 and the low after that before last year was in 2011 at $9,279. I think the $5,000 is very conservative. Based on history I could probably justify bumping that $5,000 if I wanted to. Right now as we are not totally balanced for the year I may want to.
Mr. Licht: I see an increase in fines and I am curious how we are going to do that with less.
Mr. Slocum: I posed that question to the Police Chief. Last year we budgeted $128,000 and we had a low total in collections. He was not happy with that and told me he will make the number he gave me. I am going by what he represented to me.
Ms. Vaughn: Why do we have $300,000 from the sale of bonds – is that the money we save when we roll over the bonds?
Mr. Slocum: That is the money we borrowed for the salt bin – we are paying for it out of the General Fund.
Ms. Vaughn: It is shown in revenue.
Mr. Slocum: We are not having it this year – we had it last year. The revenue is gone. I am not anticipating any more revenue. I have us paying for the salt bin on the expense side.
Ms. Vaughn: Have they finished the salt bin yet?
Mr. Slocum: They are in process.
Ms. Vaughn: How many weeks have they taken?
Mayor Morley: We started damages.
Mr. Slocum: It was to be done by November 30th of last year.
Mr. Licht: The internet cafes – Ms. Vaughn mentioned Willowick and Willoughby Hills?
Mayor Morley: I talked with Mayor Bonde – there are no fees with these new ones. I do not know about Willoughby Hills. It is a whole new software. We have had people come talk to
Mr. Menn and I. We are looking at the ordinances. There is no money because with the Attorney General’s ruling we cannot get any fees. They are opening up until the Attorney General decides that they want to shut them down again. There is no money there to be had.
Mr. D’Ambrosio: So Willowick is not receiving any revenue?
Mayor Morley: According to their new ordinances – no.
Ms. Vaughn: Any further questions on the revenue? Are there any suggestions on increasing the revenue?
Mr. Slocum: Not in my mind. This is my best professional guess as to where we stand.
Ms. Vaughn: Your track record has been very good the years you have been here as far as projecting revenue. Sometimes it is a little light and that is okay – if that happens again we don’t mind.
Mrs. Quinn-Hopkins: The ATM fees – $1,600? How does that happen?
Mr. Slocum: We get fees from Huntington for the ATM at the post office?
Mrs. Quinn-Hopkins: So they are paying us?
Mr. Slocum: Yes. That offsets…
Mrs. Quinn-Hopkins: And NSF – non-sufficient funds is the same way?
Mr. Slocum: That is if people give us an NSF check – we charge them $25 per check and we collect it.
Mrs. Quinn-Hopkins: The Steve Guard Memorial Trust – in January, 2014 we had $1,327 and we are projected to have none?
Mr. Slocum: What I have done with a lot of these other funds – the Steve Guard Fund the Corporal Daugherty Fund – we have not received any monies in these funds for a couple of years and I am not projecting to receive any more funds but I would like to have the authority to spend any amounts we do have should we find a use for it.
Mr. Licht: So the amount he has in there he is budgeted to spend this year.
Mrs. Quinn-Hopkins: Would you spend it on something regarding that category?
Mr. Slocum: It has to be. But the whole thing is I need the appropriation for it or it cannot be touched or we have to go back for special legislation. If you look at all the 700 accounts I am projecting a zero balance because I am looking to have an appropriation because if I can refund all that money and clean them out I have the ability to do it. Do you want to go through the revenue side of these funds, Ms. Vaughn?
Ms. Vaughn: They are pretty self explanatory. You are welcome to go through them if people wish to or ask questions. There is nothing we have not seen before.
Mr. Hoefle: Do you happen to know if the fees we charge people are in line with other cities?
Mr. Morley: Mr. Menn is reviewing the fees to see if we are in line with other cities.
Mr. Slocum: Regarding insurance proceeds – I guesstimated that if we have insurance claims I have budgeted an additional $30,000 this year in the event I need to – so I have a fund to pay them out of. If you look at the funds you will see what we have budgeted should fairly well track to what we collected last year. Fund #410 – I have a revenue item called insurance proceeds – we collected $20,000 a year and one half ago that has been sitting in the insurance fund. We will move that money from the insurance fund into this fund because the work was actually paid for out of the #410 fund – so we are reimbursing the fund for its own expenditures. There are a couple of smaller funds we will be doing this with the insurance proceeds fund. In fund #421 stadium/vine project – I am projecting an increase in the local motel bed tax. I do not think we will hit the $60,000 that the Radisson hit a couple of years ago but I do think we should come somewhere around $45,000 level. With the stadium rent as things currently stand I anticipate that being about $300,000 this year.
Ms. Vaughn: We will still get $8,000 from the travel bureau fees?
Mr. Slocum: We call it the travel bureau fees but actually we should rename it.
Mayor Morley: That is the rental we have with the baseball academy. I have been trying to get some fees from LakeTran. The last thing I have chosen to do was to estimate what it would cost us to fix the parking lot and I have asked LakeTran to come up with a number they would be happy with giving us for repairs. They have taken the position that the original grant that was in the Transportation Bill which they helped get allows them to be there for free forever.
Ms. Vaughn: Is that what the grant says?
Mayor Morley: We have looked at it. Mr. Slocum and I have a meeting with LakeTran. They said it included things that needed repair. To me the busses are the ones doing the most damage to the parking lot. Our estimate at this point to fix the parking lot is about $60,000 without labor. We met with the Captains today to go over some of the expenses to be taken this year from the CRIF fund. There are some things we have to take care of but we cannot do them all. We are waiting for LakeTran. Two gentlemen met with Mr. Rubertino last week to look at the parking lot so they understand what we are asking for.
Ms. Vaughn: If they do not want to participate maybe it will not get fixed.
Mr. Slocum: Fund #606 Senior Citizens – this accounts for the money we get from the County. Last year we collected $99,700 from the County – this year they are projecting anywhere from $80,000 to $90,000. I have put $85,000. Now the County is starting to short us and are learning from the State and are no better. Under the expenses I am looking to take some of the coordinators salary out of this fund – which we have not done in the past – but, it is being done by other senior centers.
Mr. D’Ambrosio: Was there something that the County was actually collecting more money for the senior center but were not disbursing it?
Mayor Morley: The Mayors had a meeting with Commissioner Troy last week. He explained that everyone believed it was a senior center levy but it was a senior levy. So they have allocated some other money to the Advisory Board for the Seniors. They are looking at having someone come in a do a study on how the money is disbursed and where it is going. That is the reason they are cutting back. The other issue they are looking at like everyone else – that we consolidate. If it would end up being consolidated everyone would go to Wickliffe because they have the newest building. That has been thrown out there but they have not said they would take money away from us or Willowick and make us go to Wickliffe. The only entity in the government that cannot do what they want with this is the City. When the County wants to cut back or raise fees they just sign a paper. Like the CAT tax – they took it away from the State but are raising it 6%. Everything is the power of the pen except for a city. If we had to vote everywhere in the State for the fees they charge and the County it would be the same as here – they would all get voted down. I read in an article that Maple Heights went into fiscal emergency. They have tried everything – going to the ballot – the same thing. It is like reading about us except we are not in fiscal emergency. They went from 207 employees to 100 and they are saying there is no more to cut. That is what we are saying and eventually it will be what it will be if we do not get any more revenue.
Mr. Slocum: I used to be Finance Director at Maple Heights. When the current Mayor came in with his spending priorities I walked. When Mayor Lansky became Mayor – the day previous to that day was my last day at the City under Mayor Ciarvino who I had nothing but the highest regard for. They had choices to make. They were in a poor position when I left and they chose to see if they could borrow their way out of it. They did not borrow their way out of it and how they thought they were going to do it is beyond me. They are paying for it.
Regarding fund #617 Ambulance Trust – we are budgeting a $19,000 decrease from last year. That is because we will not have as many runs with the reduced number the staff we have. We will be monitoring that very closely. The important part is if we miss that $420,000 we are budgeting it will have a direct impact on the General Fund because if the money is not there it has to be made up by the General Fund. We are looking to take $420,000 from this fund to offset General Fund expenses. The same as the stadium fund #421– if we do not make those numbers the stop gap is the General Fund. These revenue projections are just as critical as the General Fund projections. If we do not make the projections in the Ambulance Trust fund it will not be because they are slacking off because it is anything but slacking. But there will be calls that will probably default to Willowick or Willoughby because we do not have the number of people – if you have five people you can sent out two and the third one waits.
Ms. Vaughn: The residents do not want to all go to Lake West. Therefore if someone insists on going to Euclid they may call Willowick or Willoughby for Hillcrest.
Mr. Slocum: They cannot.
Mayor Morley: We will take them to Lake West and they would have to get a private ambulance to take them from Lake West to whatever hospital they want to go. They will be paying twice.
Mr. Slocum: They do not have the ability to call the other stations first.
Mayor Morley: We will be the ones rolling over the call if we cannot take it. The Chief has explained that everyone will go to Lake West and if they want to go to another hospital they will have to pay for a private ambulance. I know people are upset.
Mr. D’Ambrosio: As long as we get them to a hospital.
Ms. Vaughn: But for special problems they must go to a specific hospital.
Ms. DePledge: This affects the senior citizens the most. The income tax levy would not have cost them anything if they had supported it. They are the ones hit hardest by this. Again, they are paying more for less.
Ms. Vaughn: I think the seniors just got bad information.
Ms. DePledge: It is very frustrating when you are trying to help people and use their money wisely and it is just hurting them more.
Mr. Hoefle: You said you are reviewing the service fees. What about parking fees?
Mayor Morley: If you look at the report the Chief provides monthly. I have had the same conversation Mr. Slocum has had. You will see everything has dwindled down – they had two DUI’s last month. They are doing what they can do. Our parking fee of $25 is about the same as surrounding communities.
Mr. Hoefle: I just want to make sure we are in line with neighboring communities.
Mayor Morley: They don’t have the time when they are going down a street to ticket cars because they are going somewhere else.
Mr. Slocum: I think it is something we can look at. I don’t know that I have looked at it since I have been here.
Mayor Morley: I have looked at it hard. I met with the Chief and looked at 2014 – it is the same thing. As the force dwindled from 2011 you see it continue to go down.
Ms. Vaughn: That makes sense. Isn’t there a mandate where fees for some violations are established by Ohio Revised Code and they cannot go over?
Mayor Morley: I will check with the Chief on that.
Mr. Slocum: Traffic tickets is controlled by the Court.
Ms. Vaughn: I believe the fee level is established by the Ohio Revised Code.
Mayor Morley: If you get a $175 ticket – we get $25 and Willoughby Court gets $150 in Court costs.
Ms. DePledge: Some of it goes to the State or the Clerk’s fees or Court fees. Whenever there is an interest that needs to be funded like the drug program. You can look at the Court docket to see where the fee is allocated to. A minor misdemeanor is typically $150 but City ordinances change – like for marijuana our fee is $150 but some communities call it a special misdemeanor and it is a $250 fee. The Court tries to treat everyone the same. There is a schedule to follow and it depends on offenses and the number of offenses. As a City you have the ability to change some of it but for a minor misdemeanor the State is $150.
Mayor Morley: We can take a look at it.
Mr. Slocum: We will have our next budget meeting in two weeks and if you are going through the expenses and there is something you question you do not have to wait two weeks for an answer. I will be more than happy to answer and if it needs to be shared I will be more than happy to do so with everyone. I want you to have an understanding of what we are trying to do and how we are trying to do it. If you have other alternatives or thoughts please share.
Ms. Vaughn: Mr. Slocum has always had an open door policy for any questions. It makes everyone’s job easier if we ask him when he is at his desk in front of his computer instead of here where he has to get back to us.
There were no further questions or comments.
There were no questions or comments
REGOGNITION OF PUBLIC
Curt Weisbarth, 214 Erieview Drive, Eastlake
Mr. Weisbarth: There was discussion about the fire truck to be used by Willoughby. Why don’t you sell it?
Mayor Morley: We have had discussion on this. The going rate is not something that will make us a ton of money. We have asked the Chief to get us some better numbers on its worth. I do not know if Willoughby would buy it. Our truck and their truck are the same model. They will be using our ladder truck for us. Right now the truck just sits there. We cannot go on any runs with it because we cannot man it.
Mr. Weisbarth: If they need a run they do not have a truck either.
Mayor Morley: They is why they would take ours and do our work and their work when it comes to the ladder truck.
Mr. Slocum: Using that thought process going forward – if we would sell it to Willoughby then Willoughby would have the right to make us contract with them for them to provide the truck to us and it would be something we would not have negotiating leverage. I have to provide the firefighters with a ladder truck should it be needed and if we don’t have a truck how will be meet the need. I can tell you we have a ladder truck but we do not have the people. It is not just giving it to Willoughby and not getting anything else.
Mr. Weisbarth: I am not implying that at all. I am just saying rather than just loaning them the truck for staffing why not get some up front revenue and create the same deal.
Mayor Morley: We may be able to sell them the truck for $50,000 – that would be gone like that. We will still own the truck. If this goes through they will be paying maintenance, insurance and everything else – that is our savings. They do not think they can get any trade in value for their truck – they are being told their truck is worth scrap value.
Ms. DePledge: The maintenance on the truck is about $20,000 per year. That is a huge cost we cannot afford to pay. By them taking it on and maintaining the truck it is a more regionalization of our fire services. The other benefit with the lease is that we can terminate it at any time – as can they – if they decide they want to go with a new truck we can have it back. It is saving us some money and at the same time putting forth a cooperative effort with our fellow community. It is helping them and it is helping us.
Mr. Weisbarth: Has the Administration and Council starting looking into any revenue that may be able to be generated by the RNC being in Cleveland next year?
Mayor Morley: I am in a group with republicans, democrats, the Commissioners, all the surrounding communities and Chamber of Commerce to work on this. The Captains are asking the league to block out the week the RNC is here to try to get special events there. We have been meeting with the Radisson to try to block out all the rooms so it will be full for a week at least. We have talked to the Croatian Home, the Patrician. We have been meeting at Lakeland. We have been told they will be hiring a group to help us. We are told we are the only County besides Cuyahoga that is looking to try to get everything set up before. We are putting together pamphlets and a book to be handed out to the convention people.
Mr. Hoefle: If the deal on the fire truck goes through will Willoughby be putting their decals on the truck.
Mr. Evers: It will stay Eastlake’s truck.
Mr. Hoefle: It will look good for our Communities working together to show that Eastlake’s truck is over there.
Mr. Slocum: So much fire and ambulance service is being done by a regionalization basis.
Mayor Morley: They are all at the fires. The fire departments have been doing mutual aid for a long time. If I was Mayor Anderson I would not buy a fire truck that could break – I am not going to give $200,000 one year and maybe scrap it the next. That is for me as the Mayor of this City as to how I would look at it.
Mr. Licht: The answer from their Finance Director as to the value was around $50,000.
Mr. Slocum: Even putting the sale price aside. If I am Willoughby – I would be buying Eastlake’s fire truck and still would be asked to provide free fire protection. You know it would not be free at that point. At that point there would be no mutual aid because we would not have the equipment.
Mayor Morley: Like with Timberlake – we charge them $80,000-$90,000 per year to use our stuff. Like Mr. Slocum said Willoughby could charge us and it would be a wash in two years.
There was no one else who wished to speak.
Mr. Slocum: The Mayor and I went to tour RITA last Thursday and met with their senior staff. It is impressive. In talking with their Director there will be some changes in some of our ordinances we will need to make. Not as much because we are going with RITA but more because we are going to be staying in line with the new HB 9 that just passed in December. I know the Clerk had been suggesting some changes in our ordinances but I would rather do it all in one once I get the input from their legal counsel so we can look at everyone in one package. We have time.
Mayor Morley: If you hear a rumor that RITA will penalize more than the City would – RITA gets the information for penalties from our ordinances. They go by our ordinances.
E-PAL: LEASE AGREEMENT: COMMUNITY CENTER
Mr. Evers: E-Pal signed the lease agreement for the Community Center. The Mayor has signed it and we are waiting on Mr. Klammer. We will take possession of the building on March 1st.
Ms. DePledge: The family with the newborn whose house just burned is our website person’s stepdaughter. They are now homeless and are taking donations through the Mentor-on-the Lake Police Department.
There was no one else who wished to speak.
The meeting was adjourned at 6:49 p.m.