«FINANCE COMMITTEE MEETING held January 14, 2013 7:30 a.m. Present: Chairman Mike Young Councilman Dwight Clark Councilman Dave Tadych Also Present: ...»
Mr. Young stated that he has found in his private employment in safety training for school systems that the schools are maintaining all the parks. Bay Village pays for all the mowing and striping. Almost all of the cities that Mr. Young does safety training for have indicated that the schools have paid for the set up of the fields. Mayor Sutherland stated that the schools would then be able to utilize the fields at will.
Mayor Sutherland noted that the situation in Bay Village is different because of Cahoon Memorial Park. The city has the direct responsibility for the maintenance of the park.
Mr. Young stated that he is not saying we should bill the schools for this maintenance, but it has not been his experience in the Cleveland area that the cities are paying for the park maintenance.
Mayor Sutherland stated that the overtime in the summer is not that substantial. There is overtime that we can control and we have worked very hard with the baseball clubs and with Minutes of a Meeting of Finance Committee January 14, 2013 Kiwanis to capture some of those expenditures back. Part of the city’s mission is to provide recreational opportunities for all people of all ages and of all abilities, or lack thereof. We will continue to see what we can do to reduce expenditures. We are all very proud of our parks and in comparison to other communities we actually have higher per capita green space/parks than most other communities.
Online Registration Fees
Mr. Clark asked if online registration fees will increase this year with the website up and fully utilized. Mrs. Mahoney suggested that the registration fees should be included in the program fees for which the participant is registering. Mr. Clark stated that part of the reason for isolating the figure was to validate the cost of changing the web site. Mayor Sutherland noted that with the new system at the Recreation Department, the figures shown probably captured only the end of the summer season.
Mrs. Fink asked where Bay Days falls into the budget, because the city has overtime and the Service Department gets involved. Mrs. Fink asked if any revenue from Bay Days is reflected in the Parks and Recreation Department. Mayor Sutherland stated it is not in Parks and Recreation.
It would be through the Police, Fire, and Service Departments. A check was recently received from the Kiwanis Club for approximately $2,300 for a percentage of ride tickets sold at Bay Days.
Street Construction, Maintenance and Repair Account No. 270 Transfers The transfer dollar figure is something that covers the in-house work that the city does, such as street striping or patching. In 2012, that number was increased to do some extra work. The question is what the Service Director, Dan Galli, has in mind specifically for 2013. Mr. Miller, as Chairman of the Public Improvements Committee, will inquire of Service Director Galli of anticipated needs for 2013.
Mr. Clark noted that there was a lower carry-over balance going into 2012 that was replenished.
There was a very robust discussion with former Finance Director Presley about this last year.
Mayor Sutherland stated that she would have to excuse herself from the meeting at this point to attend to a conference call with President of Council Koomar.
Mr. Young commented that the only other items he would have for discussion for this meeting would be Health Care and Sewers.
Mayor Sutherland stated that the discussion regarding Sewers has already been initiated. In many cases they have done what they can do in some areas in the public right-of-way.
Improvements are now going to have to move into private property and there should be a discussion about capital funds for sewers. The Environmental Protection Agency is going to continue to ratchet down.
Minutes of a Meeting of Finance Committee January 14, 2013 Mr. Young stated that the existing sewer fund only covers operation costs. It does not cover capital improvement costs. Mayor Sutherland stated that she thinks the city has done a spectacular job of drawing down financing and leveraging grant dollars and low interest loans to get the sewer improvement work done. We are going to have a huge project on Cahoon Road.
The needs are not going to go away. The city has minimized the amount of flooding, but you cannot completely eliminate it by nature of how our community is structured. This is another year where the city does the strength and flow study at the Rocky River Wastewater Treatment Plant so there may be some fluctuation in what percentage the city is paying. While the EPA has been concentrating on Bay Village and Rocky River, they are also watching the Rocky River Wastewater Treatment Plant and there may be some significant enhancements that are going to have to happen, probably in the next five years. Mr. Tadych stated that would go back to the people.
Mayor Sutherland left the meeting at this point.
Police and Fire Pension Funds- Accounts 280 and 281 Mr. Clark stated that the transfers into these funds came out of the General Fund last year and that is what we are trying to cure with the change in the property tax allocations. Mrs. Mahoney stated that it is just about there. The millage reallocation takes up about $160,000 for each fund.
The property tax change equals about $333,000 to be allocated to those funds, and the average transfer has been $334,000.
Mr. Young noted that there is an extra payment of $56,000 per year to the Police and Fire Pension Funds for the next three years. That will be indicated in the expenses and there may need to be a transfer for that expenditure.
Accrued Benefits Fund Mr. Clark stated that some of the balance in the Accrued Benefits Fund, approximately $30,000, was used in 2012 to help the General Fund revenue balance. Mrs. Mahoney stated that also there was a large hit to this fund because many people retired.
Mr. Young stated that in talking to the Police and Fire Chiefs there are no planned retirements specifically for 2013.
Two percent of municipal income tax receipts are deposited to the credit of the Accrued Benefits Fund.
DARE Fund Account No. 295 Mr. Clark stated that due to the fact that the city has attempted to put as many patrol officers on the streets in the city and have the schools handle the drug awareness programs, there will be no budget for the DARE Fund for 2013.
Minutes of a Meeting of Finance Committee January 14, 2013 General Bond Retirement Fund Mr. Clark stated that there will be a more robust discussion on property tax for General Bond Retirement Fund because we will want to review the debt service going forward. Mr. Tadych noted that it would be wonderful if the city could retire some of those funds. Mr. Clark stated that we refinanced the Police Station Bond Issue. This next year Mr. Clark would like to look at the possibility of refunding the Aquatic Center Bond Issue and the Community Gym, which he believes they may now be callable since they were done in 2002. They are twenty year bonds which typically have a ten year call period. Mr. Clark asked Mrs. Mahoney to prepare to review those by tracking with the bond counsel. The bonds are priced at 4 to 4 ½ percent.
Public Improvements Account 490 Mr. Young questioned the source of the figure of $163,121 listed under Grant Revenue. Mrs.
Mahoney will investigate to determine the source of those funds.
Service Salt Garage Account No. 492 Mr. Clark explained the event of the collapse of the salt garage to Mrs. Mahoney. The city had to redo some of the work by a certain period of time, otherwise they would not receive the insurance settlement. The revenues listed for 2010 and 2011 may be due to that settlement. Mr.
Colin Dean of McGowan Insurance Company may be helpful in providing information.
Bradley Road Improvement Account No. 493
This revenue represents monies advanced out of the Infrastructure Fund. Reimbursement will be received from the state. The project came in so far under budget that there is a minimal amount that the Cities of Bay Village and Westlake have to fund for the project. The total cost of the project was budgeted at $2.6 million and came in at around $1.7. Grant revenue was $1.3 million. The city had to fund the project up front with the state providing reimbursement. There will not be a need for much state borrowing for the remainder of the cost of the project. The state will not release the grant money until the project is certified. A meeting will be held specifically with Service Director Galli regarding this and other projects. Mr. Clark noted that Service Director Galli has a comprehensive spread sheet of all the public improvement projects.
Sewer, Account No. 580
Sewer Revenue is for the operation of the system. The $1 million advance shown is the money that was advanced out of Infrastructure Improvement for the Cahoon Road Aerial Sewer Project that is currently underway. Mr. Young noted that if you look at the collections for the sewer rental it does not cover the cost of these major projects. We can no longer afford to advance out of the General Fund the capital improvement projects for sewers.
Mr. Clark stated that it is incumbent upon the Finance Committee to figure out how these improvements will be paid for in the long term. Ultimately, the state won’t provide their funding until the fourth quarter of 2013 until the projects are done. Even then, we will have to borrow Minutes of a Meeting of Finance Committee January 14, 2013 the money as currently constituted.
Mr. Young noted that this is a discussion that needs to take place with the Council of the Whole as to how to handle some of these capital costs of the sewers and the Rocky River Wastewater Treatment Plant.
Mr. Clark noted that there was discussion in 2011 about finding the actual cost of operating the sewers and the cost of making capital improvements to the sewers and how we will end up paying for those. The sewer rental charge went up slightly for the 2013 year. The ordinance has been approved through 2013. We have not had a capital component. The City of Rocky River pays $25.00 per quarter for resident for capital improvement costs.
Health Insurance Account No. 600
Mr. Clark commented that the Finance Committee is going through a robust analysis of the city’s health care plan for employees. The goal is to try to reduce the overall cost of health care for the city for 2013 and beyond. The committee will work with Findley Davies in that regard and Council will be updated sometime in the next few weeks.
General Insurance Account No. 601 This transfer represents payment to Travelers Insurance Company, the city’s insurance provider for general liability and property damage insurance.
Summary Mr. Young summarized that the cable television fee will be looked at for an increase as a possible revenue source. Sewer capital improvements will be discussed. Parks and Recreation are to be broken down to define the actual costs. Mr. Tadych stated he would like to see some effort to break out the difference between the two. Mr. Clark stated that we have worked hard to properly fund the Police Pension Fund, Fire Pension Fund, and the Emergency Paramedic Units.
There is no reason we can’t drill down further into the Parks and Recreation Department and fund those operations based on the cost of operating them. Part of this is an increase in the transparency we need given the revenue drop off this next year. There will still be a large hole, whether we set the Estate Tax at $200,000 or $400,000 of anticipated revenue.
The next meeting of the Finance Committee will be held the week of January 21. Mrs. Mahoney will provide 2013 Budget Expense information to the Council in their packets on Friday, January 18, 2013. The Finance Committee will meet with Service Director Galli regarding public improvements. Mr. Tadych noted that new costs such as those for the Findley Davies contract will be charged to health care. Mr. Tadych also noted that there will be costs with the Sunset area improvements. Mr. Clark noted that the Community Gym is underused. The number of memberships continues to go down due to the need for improvements. Mr. Young stressed the need for discussion of sewer capital costs to find a solution to pay for the capital improvements.
Mr. Clark asked Mrs. Mahoney to check with other west shore communities as to what they have in place in terms of billing for operations and for capital costs for sewers.
Minutes of a Meeting of Finance Committee January 14, 2013 Mrs. Fink noted that the City of Rocky River allocates their Estate Tax receipts to capital projects. All of these past years they have taken their Estate Tax and put them into capital projects. The City of Bay Village has taken their Estate Tax revenue and put it into the General Fund for operational purposes.
Mr. Clark noted that Council has tried to be considerate in charging only $12.00 per quarter for refuse collection. There was a small increase in the sewer rental fee. People in Avon are paying $20.00 per month for trash collection. Bay Village residents pay $4.00 per month. For the Finance Committee to get a full picture and make an informed decision, all of these things need to be looked at in total.
Mr. Young stated that determinations need to be made going forward about fees charged and the best way to achieve that determination is to make a comparison with what is being charged in other cities.
Mrs. Fink noted that the residents in Sheffield Village contract with the trash collection company individually. Seniors receive a senior rate. Sheffield Village does have automated collection. It is an option to consider.
Mr. Tadych noted that in Avon Lake the people pay their trash collection fee directly to the trash collection company. There is no bookkeeping done by the city, reducing administrative costs.
The cost that the City of Bay Village is incurring in processing might be able to be alleviated.
Mrs. Mahoney will email neighboring cities Finance Directors for comparison figures for sewer fees and cable television fees.
Mrs. Mahoney will provide a preliminary expense 2013 Budget report in the Council packets on Friday, January 18.
Mrs. Mahoney noted that the City of Shaker Heights has 33,000 expense accounts. There are some advantages to being able to clearly see the expenses.
Mr. Clark stated that it would be helpful to have Ruth Popovich, Assistant Finance Director, at the next meeting of the Finance Committee.