THE CITY OF STREETSBORO, OHIO FINANCE COMMITTEE MINUTES Monday, April 25, 2016 This Finance Committee Meeting was called to order on Monday, April 25, 2016 at 7:02 p.m. by Tim Claypoole, Chairman. PRESENT: ABSENT: Jeff Allen, John Ruediger, Tim Claypoole, Bridget Pavlick, Steve Michniak Jessica Timmons, Julie Field ALSO PRESENT: Glenn Broska, Mayor Paul Janis, Law Director Robert Reinholz, Fire Chief Darin Powers, Police Chief Jenny Esarey, Finance Director Bill Miller, Service Director John Cieszkowski, Planning Director Missy Hatch, Parks and Recreation Director Caroline Kremer, Clerk of Council MOTION: TO EXCUSE MS. TIMMONS AND MRS. FIELD. Moved by Mr. Ruediger, seconded by Mrs. Pavlick. Upon voice vote, motion carried. Disposition of Minutes MOTION: TO ACCEPT THE REGULAR FINANCE COMMITTEE MEETING MINUTES OF MARCH 28, 2016 AS PRESENTED. Monthly Financial Report Ms. Esarey had distributed the March 2016 financial reports on April 1, 2016. She said she would continue to monitor the salaries and wages but by the time overtime was carried through expenditures throughout the year they should equal out. The General Fund expenditures including encumbrances were at 35% which was a little higher than the 25% target, but the encumbrances were for dates beyond March 31, 2016. Total expenditures including encumbrances were at 32%. The General Fund revenue was slightly above target at 27.68% and the Total revenue was also slightly above target at 28.93%. She said it was early in the year but things seemed to be going well. [Mrs. Field joined the meeting at 7:04 p.m.] Page 1 of 7
Old Business Discuss Refunding of 2013 Bonds Ms. Esarey had sent an email to Council on April 20, 2016 explaining that Brian Cooper, the City s financial advisor, could not attend tonight. She said Mr. Cooper and Jeff Rink, underwriter from KeyBanc, were working on all the different scenarios Council requested so they could provide the alternatives and options for financing for the bond. The estimated savings was still about $370,000 to $500,000. Ms. Esarey asked if Council would schedule a Special Finance Committee Meeting on May 9, 2016 where Mr. Cooper and Mr. Rink could presented their information and continue the process and not have to wait until the end of May. Ms. Esarey had provided draft ordinances from our bond counsel (Pam Hanover at Squire Patton Boggs) for Council s review. Mr. Claypoole noticed the draft ordinances listed 6.5% and 10% which he thought was higher than what the City was paying now (approximately 4% to 4.75%) and suggested it be adjusted down. Ms. Esarey had talked to Mr. Cooper and Ms. Hanover who explained to her that it was a staple in draft legislation to give the Finance Director the ability to go out to the market, but Ms. Esarey wouldn t authorize anything that would put the City in a worse financial situation and she could ask to have it adjusted down. Mrs. Pavlick preferred to take some time to consider all this and to get to speak to Mr. Cooper and Mr. Rink about the options so she supported having a Special Finance Committee Meeting. Mr. Claypoole agreed. MOTION: TO ASK THE COUNCIL PRESIDENT TO CALL A SPECIAL FINANCE COMMITTEE MEETING ON MONDAY, MAY 9, 2016 FOR FURTHER DISCUSSION. Ms. Esarey expected to have all the financial alternatives from the financial advisors in time for the Council packets the week prior to the May 9, 2016 meeting. She did not expect Council to vote on the legislation that same evening. New Business T-6187 Authorize CHIP Program John Capitoni and Erica Sadaj from NDS in Ravenna asked Council to allow the Mayor to enter into an agreement with the Portage County partnership for the 2016 Community Housing Impact Preservation Grant. Mr. Capitoni said a few years ago the Ohio Department of Services agency asked communities to collaborate and work together on the applications that used to be submitted individually. Streetsboro would be entitled to a $400,000 allocation as part of the grant that Portage County and Ravenna ($350,000) would also participate in. Mr. Capitoni confirmed for Mrs. Pavlick that this was a continuation of what Streetsboro had done in the past. This application under review tonight was for the 2016 program that would run about 24 months and it had been a strong program for Streetsboro in the past. Mr. Capitoni felt that the $400,000 would all be used. MOTION: TO SEND THIS TO TONIGHT S REGULAR COUNCIL MEETING AS EMERGENCY LEGISLATION. Page 2 of 7
Moved by Mr. Michniak, seconded by Mrs. Pavlick. Upon voice vote, motion carried. Review Sunny Slopes Waterline Deferment Requests Mr. Janis noted that anyone to be assessed for the waterline assessments could come to Council for deferment of the assessment to delay payment of the assessment to a particular date certain as defined by City Council by resolution or motion. Once Council defined what the deferment was and the conditions, an amended resolution and ordinance of assessment would be presented to Council to incorporate any deferments that Council granted. Mrs. Pavlick commented that the Sunny Slopes Lake Corporation wanted to be exempt from the assessment, not to defer it. Mr. Janis said the resolution and ordinance that Council had passed did not provide for any exemption, it only provided for deferment and the state law only provided for deferment. If Council wanted to create exemptions, it could be done, however the exemptions would have to be generally stated by conditions, for example, a general condition could be that there would not be an assessment imposed upon a lot that was not buildable, but it wouldn t be proper to just exempt a particular person. Mrs. Pavlick asked how this situation would be handled for this corporation. Mr. Janis thought a deferment would be sufficient for these type of non-buildable lots that were owned by a non-profit corporation that was essentially perpetual for as long as the subdivision exists because the lots would never be sold and the deferment would be sufficient. If for some reason the subdivision changed and the lots were reconfigured to be buildable at some point, in which case the City would want the assessment, so he recommended a deferment in this type of situation. Mr. Allen asked how the deferments would work; would it be a lien on the property and if the property would become buildable then the City would recoup its money at that point. Mr. Janis gave an example in the case of these non-buildable lots, a standard deferment would be that the assessment would be deferred until such time as the property was sold, so with this corporation, the only time it would be sold was if something drastic happened. A deferment was simply a delay in the assessment until a date certain as defined by City Council or as mentioned in the State law when the property was sold or transferred; but Council had the authority to set other standards for that deferment. It was questioned whether the Sunny Slopes Lake Corporation was an HOA or nonprofit. Their request letter indicated the corporation was started in June 1962 and had been nonprofit ever since. Mr. Allen supported deferring the assessment for Sunny Slopes Lake Corporation. Mr. Janis would bring forward an amended assessment ordinance and resolution at a future meeting that mentioned the specific lots to be deferred. Mr. Claypoole asked how long the deferment/lien would stay on the books; he wondered if the City would have to reapply for it. Mr. Janis answered that if Council defined the deferment as being until the property was sold or transferred then the lien would stay there as long as it took and then it would hit all at once and would be added to the settlement in a typical real estate transaction. Page 3 of 7
The next request for deferment was from Tom Buxton. Mrs. Pavlick noted there was a house already built on this property and the request letter didn t really explain why this property owner wanted a deferment. Mrs. Kremer said she had spoken to Mr. Buxton on the phone and offered him the option to send the request by email because he had explained that he was a disabled person on a limited income and it would be a hardship to add the assessment to his property taxes. Mrs. Pavlick just wanted to understand what Council was deciding because she didn t want to do harm to anyone. Mr. Claypoole asked if it cost the City any money to grant a deferment to a property. Mr. Janis said no, it was simply an instruction to the County Auditor not to charge the assessment, but to hold it until a transfer. Mr. Ruediger asked if the letter that went to all these property owners suggested the deferment option if they had any hardships, or had these people just contacted the City on their own. Mr. Janis said the letter that went out did inform all the people who were being assessed that they were eligible to apply for a deferment but it didn t mention a hardship or any standards. Mr. Michniak asked for more information about the lien. Mr. Janis said lien was probably a bad term for this. Once assessments were certified to the County Auditor they existed as property taxes, but they were just deferred until an event happened, such as the sale of the property. So the ordinance that the City would certify to the County auditor would serve as a lien on the title. Mr. Michniak wanted to be sure that if Council granted a deferment they City wouldn t lose its place in line with other creditors or give up any rights the City would have to other creditors that may have claims on the properties when they were sold. Mr. Janis said he understood that an assessment had the same priority as real estate taxes, only a federal tax might take precedent. Mrs. Pavlick said her questions had been answered and she felt all four of the requests were valid and she suggested Council grant these deferments. MOTION: TO GRANT THE REQUESTED DEFERMENTS FOR ALL FOUR OF THE APPLICATIONS. Moved by Mrs. Pavlick, seconded by Mr. Michniak. Mrs. Field asked if other residents could make requests after tonight. Mr. Janis said the ordinance that was passed (and state law) required them to apply within 15 days of the date of the ordinance, which had expired. Upon voice vote, motion carried. There would be legislation prepared to formalize this at the May 9, 2016 Regular Council Meeting. MOU w/portage County for HAZMAT and USAR Chief Reinholz presented the MOU for discussion tonight and Council adoption at the next Regular Council Meeting. He said every year the City and County entered this agreement to participate in USAR/HAZMAT. The fee was $0.21 per resident for operation and maintenance of the PC Hazardous Materials Response team and $0.02 per resident for operation and maintenance of the PC Urban Search and Rescue team, which was about $3,686.34 per year. Chief Reinholz said Streetsboro couldn t afford to have its own HAZMAT or USAR team so it was cost effective to Page 4 of 7
participate in the County team with the expenses shared throughout the County based on population. Towns not participating in the County teams were billed if the team responded to something in their jurisdiction. That billing was calculated by an hourly rate for the number of people and equipment used with a formula similar to how FEMA reimbursed communities during a disaster. Chief Reinholz had the money available in his 2016 budget in a General Fund line item for this annual expected expenditure. Mr. Claypoole noted that some of the Streetsboro firefighters were part of these teams, so if a nonparticipating community was billed for these services, would some money come back to Streetsboro or just stay with the County? Chief Reinholz said it would go back to the sustainment fund. He added that the County Commissioners didn t really support the teams. Streetsboro paid to send firefighters for continuous training monthly, so there was a disproportional amount of money that was the larger cities (Kent, Ravenna) responsibility in manpower, housing equipment, etc. for the smaller communities that couldn t afford it, but Streetsboro really couldn t survive without the joint teams if a disaster would occur. Mrs. Pavlick supported the joint arrangement, especially since Streetsboro had a higher likelihood of something happening because of the Turnpike and other major state routes carrying hazardous materials and various hazardous materials in some of our industrial plants in town. Mr. Ruediger asked when was the last time Streetsboro used the HAZMAT or USAR team. Chief Reinholz said there was a large HAZMAT drill about three years ago, but he didn t remember a call for the teams during his term as Fire Chief, but a tornado or HAZMAT spill could happen; it was an insurance policy that was well worth the $3,686 per year. Mr. Allen remembered a HAZMAT call a few years ago for a resident that opened some old organic fertilizer that knocked him out. Chief Reinholz said Streetsboro was fortunate that our manufacturers were complying with regulations and inspections were being conducted, but there would be major construction on the Turnpike this summer with narrowed lanes that could lead to accidents and there was a lot of hazardous materials traveling on the Turnpike. MOTION: TO SEND TO THE MAY 9, 2016 REGULAR COUNCIL MEETING. T-6188 Authorize Contract for Repairs to Police Station AC Chief Powers said last year the Police Department had spent nearly $60,000 on the main AC system for most of the building. This was a separate AC system, the Liebert system, which controlled the cooling and the humidity for just the server room and the dispatch center. This system was nearing 20 years old and never really had any major repairs. Recently Smylie One found several leaks in the system and replaced the lost refrigerant, but the A coil will need replaced due to those leaks. The cost to replace the A coil was $11,950. There was money available in the PD Capital Equipment line that could be transferred to the PD Capital Building Improvements line with tonight s appropriation adjustments to pay for this repair. This repair should last 5+ years. Smylie One inspected the system and felt the whole system did not need replaced at this time, just this A coil. Page 5 of 7
Mr. Ruediger noted the City currently had a contract with Smylie One, and previously had a contract with S.A. Comunale. He asked why the City didn t go with a more local company for a service contract. Chief Powers said about one year ago when the department was looking for a change they reached out to several different companies, but the local companies don t really work on the large commercial type systems they had at the Police Station. Smylie One, Chesterland, Ohio, offered the best prices for the best service agreement and the Police Chief was pleased with their services. MOTION: TO MOVE THIS TO TONIGHT S REGULAR COUNCIL MEETING. Introduce 2017 Tax Budget Ms. Esarey had distributed the proposed 2017 tax budget and a memo to Council with a schedule for review and adoption to meet the July 15 deadline. She said the tax budget was presented annually in order for Portage County to authorize and levy taxes for property for Streetsboro. The tax rate would remain the same at 2.9 mills inside millage. She said the amounts in this tax budget were provided by Portage County and seemed a little high because every year in the actual budget Streetsboro actually received less. Ms. Esarey noted some of the bigger items that were different from the previous year: salaries were increased based on the CBAs that were approved, the health insurance was estimated at a 12% increase, workers compensation was also increased, and the bond retirement fund remained the same because it wasn t certain yet how the bond payments might change. MOTION: TO SEND TO THE MAY 9, 2016 REGULAR COUNCIL MEETING. T-6185 Amend 2016 Appropriations [#4] Ms. Esarey had distributed an amended Exhibit A prior to tonight s meeting. Everything was the same on the exhibit except it no longer included appropriation transfers for a new clerk that was going to be shared by the Engineering and Economic Development departments and the offsetting increase in Inheritance Tax revenue. The administration would bring the clerk position back at a later time once a job description was developed. Most of the items on the exhibit were transfers. There was an item in the 201- fund for health insurance because after a retirement the employee that moved into the position had a family plan instead of a dual plan and an increase to the budget was needed. The street striping bids came in a little more than budgeted so an adjustment was made. In the 2016 budget she had included some money for the CHIP fund because when the 2016 budget was set she didn t know if all the CHIP money would be expended in 2015; it was, so the 2016 budget did not need an appropriation; the County was actually filtering all of the CHIP expenditures for us. MOTION: TO ATTACH THE AMENDED EXHIBIT A TO T-6185. Moved by Mrs. Pavlick, seconded by Mrs. Field. Upon voice vote, motion carried. Mr. Ruediger asked for clarification on why the amended exhibit did not included the increased Page 6 of 7
Inheritance Tax revenue if the City had received the money. Ms. Esarey said the City had received about $94,985.25 in inheritance tax and she had it on the original exhibit to offset the new clerk position, but since that position was not moving forward yet she left the new revenue off in case later in the year there was some unforeseen expenditure for which she could use this increase in estimated resources as an offset. If there was no need for it by the end of the year, she would increase the estimated resources to record it with the County. MOTION: TO FORWARD THIS TO TONIGHT S REGULAR COUNCIL MEETING AS AMENDED. Citizens Comments None. Announcements The Regular Council Meeting will immediately follow this meeting. There being no further business to come before this Finance Committee, and upon motion by Mr. Ruediger, seconded by Mrs. Pavlick, this meeting adjourned at 7:48 p.m. ATTEST: Caroline L. Kremer, Clerk of Council Timothy J. Claypoole, Chairman ck Page 7 of 7