Finance Caucus: November 2nd 2015

MINUTES OF THE
FINANCE CAUCUS COMMITTEE MEETING
Monday, November 2, 2015 – 7:15 p.m.
Main Conference Room
Mayfield Village Civic Center

The Finance Caucus Committee meeting was held on Monday, November 2, 2015 in the Main Conference Room at Mayfield Village Civic Center. Mr. Saponaro called the meeting to order at 7:20 p.m.

Present: Mr. Saponaro, Mr. Marrie and Mr. Marquardt

Also Present: Mrs. Mills, Mr. Williams, Mr. Wynne, Mr. Marrelli, Mr. Metzung, Chief Carcioppolo, Chief Edelman, Mr. DiNardo, Mr. Thomas, Ms. Wolgamuth, Mr. Esborn, and Mrs. Betsa

1. Civic Center parking lot entryway signage (Wilson Mills entrance) (Rustbelt Welding - $38,573).

Ms. Wolgamuth apologized that she did not have a color rendering to distribute this evening. I should have that sometime this week and I will get it in packets. To just describe where we are at, this was the rendering that was part of the Civic Center parking lot. This is the last piece. If you remember, last month we approved the lighting around the driveway and then the two lights on either side of the driveway for the signage. On the next page is the arc’s signage. The walls are curved on both sides of the drive. The metal part of the sign is also curved. These are pretty substantial. They are 24 foot long walls. They are 15 foot long signs. Jim McKnight has helped us figure out those proportions. If it’s too small, like the little tiny sign we have out there now, it can’t be seen. This will be much more substantial, but it fits the site.

Once we got the pricing from Rustbelt Welding and it was over $25,000, I was concerned about having to go out to bid because it’s over the $25,000 threshold. I called them and said, the sign, we could argue is a specialty item because Rustbelt Welding does very specific work. It’s artsy in nature. I was concerned about the masonry wall. They said the masonry wall is not just any kind of masonry wall because the metal sign is attached to it and it is very heavy. Just a normal wall would fall over. They work very closely with the mason installing it. I talked to the Law Department. They thought it very easily fell under that exception.

Mr. Saponaro asked, when the Law Department is talking to you, are they giving you a written opinion?

Ms. Wolgamuth replied, no, I do not have anything written. It was verbal. They said they would talk about it tonight.

Mr. Saponaro stated, from an ‘if we all drop off the face of the earth tomorrow perspective’, we need to have things in writing. If they are going to tell us we don’t have to go out to bid for something because it falls under this exception, we need that in writing on their letterhead. That is a matter of course.

Mr. Marquardt stated, a wall with rebar is hard for me to see as a specialty.

Ms. Wolgamuth stated, we can ask them about it.

Mr. Saponaro stated, I am sure there will be a discussion on it, but thank you.

Ms. Wolgamuth stated, if we decide to do this, it’s all through Rustbelt Welding. They will hire the mason and will work with the mason.

Mr. Saponaro stated, yes, they are doing the whole job.

Ms. Wolgamuth stated, right. So we wouldn’t be separating it out and bidding out the wall versus hiring them to do the metal sign.

Mr. Marrie asked, how did we come up with Rustbelt? Why not a sign company?

Ms. Wolgamuth replied, when we came up with the concept of the masonry wall and the metal, they are just a company that we know that does metal work. They did The Grove bike rack. They are one of the known companies that does that. It was someone we used before, so we talked to them about it.

Mr. Saponaro asked, if Council says we would like to go out for bid, then we will go out to bid for it and follow that process.

Ms. Wolgamuth stated, I am looking for feedback on the sign itself. Is everyone comfortable with the work? The stone specked is the same stone we used on the retaining walls along the sidewalk on SOM. We can start using that same stone and have a signature look.

Mr. Saponaro asked, how big would “Mayfield Village” be?

Ms. Wolgamuth replied, “Mayfield Village Civic Center” is 15 feet wide. I can get the actual size of the lettering.

Mr. Saponaro asked, this sign would be in two places, correct?

Ms. Wolgamuth replied, it would be on both sides of the driveway. The other thing I didn’t know is whether they could work over the winter because I thought this may end up waiting until the Spring. They said they will build a little shack and heat it around the area they are working and they could actually do the masonry work over the winter.

Mr. Saponaro asked, is part of the price because of doing all of this now, or it has nothing to do with it?

Ms. Wolgamuth replied, no.

Mr. Marrie stated, when I saw 24 feet, I thought, that’s gigundous. I guess when you bend it up, it makes a difference.

Ms. Wolgamuth stated, we had Tom Cappello put it out there in paint. We can ask him to do that again so if anyone wants to take a look at it, they can. It’s going to be a beautiful week, so he can do it this week.

Mr. Marrie stated, bring it up at Council tonight and suggest everyone stop by and see it.

Mr. DiNardo asked, how far do the metal signs stick out in front of the wall?

Mr. Marrelli replied, it looks like about a foot.

Mr. DiNardo asked, is that what we really want to do?

Ms. Wolgamuth replied, there’s lighting in between. That’s where the lights are.

Mr. DiNardo asked, so the one foot dimension has been calculated out?

Ms. Wolgamuth replied, yes.

Mr. Saponaro stated, the sign would actually come away from it. Any other questions? There were none. Diane, thank you.

2. Extension Agreement with James G. Zupka, CPA., Inc. for annual audits from January 1, 2015 to December 31, 2018

Mr. Wynne reported, this is formalizing the agreement.

Mr. Saponaro asked, does anyone have any questions or comments?

Mr. Marrie replied, no. We discussed this. I am fine with it.

3. Special Assessment legislation – Eastgate and Meadowood sewer project.

Mr. Saponaro stated, this is Ordinance 2015-29. Everyone should have had an opportunity to read this. Does anyone have any questions or concerns on this?

Mr. Marrie asked, do you send out a bill to them or just a notice they can pay it?

Mr. Wynne replied, once Council approves the legislation at the Council meeting in a couple weeks, we will send a mailing to every resident telling them the assessment is $7,200 and that they have 30 days to let us know whether they want to pay it now or have it added to their property taxes.

Mr. Saponaro asked, can we do an opt out?

Mr. Wynne replied, yes. The notice says you would have to pay it now or then it gets added to the property taxes in December 2016 because the project went longer than anticipated.

Mr. Marrie asked, they pay 3% interest on that?

Mr. Wynne replied, it is calculated at $240 per half or $9,600 per assessment which assumes the 3% interest on the $7,200 over 20 years which is pretty much the rate we would get if were to go out and sell bonds right now.

Mr. Saponaro asked, anyone else? There were no further questions.

4. 2nd Floor Buildout – Fire Station

  • HVAC Services – Denton - $7,350
  • Remodel – Bella’s Remodeling - $13,331

Chief Carcioppolo reported, this is budgeted for capital expense this year. It took a long time to get quotes. The only quote we have for HVAC is from Denton who does our annual service contract. That was produced in June of this year.

As you can see, the other contractors are Bella’s Remodeling and Skoda. One came in in September and one came in in October. Ron worked with them on the actual design of it. There’s no sprinkler work that needs to be done because we are going to utilize the existing sprinkler system and electrical in place. There will be some minor electrical in the hallway that would enter into those rooms and electronic blocks would have to be installed on the door for the equipment storage room and the stairway doors so that the CERT people could have keyed access to only certain parts of the building because they come in at different hours. My question to the Committee pertains to the HVAC. I would recommend that we just go with it.

Mr. Marrie asked, option 1?

Chief Carcioppolo replied, with option 1, yes, but with Denton alone because he has been fixing all the problems that caused our mold issue and he knows what our HVAC system is because he has been working on it for the last 15 years.

Mr. Marquardt asked, what is the purpose of this addition?

Mr. Marrelli replied, office space.

Chief Carcioppolo replied, this one room would be office space. The equipment storage room is for the CERT people because they previously were in our evidence room. There is a key that was left on the door with a lockbox in there. They are going into the evidence room but then I needed to use it for evidence storage so I had to have that rekeyed. This added space was unfinished. This room will be designated for the Tri-County CERT team. This other space won’t be finished. It will just be for future expansion if we needed to. It’s to help organize things.

Mr. Marquardt asked, everyone in the County is going to use this?

Chief Carcioppolo replied, no, it’s the Lyndhurst Tri-Community.

Mr. Marquardt asked, are they kicking anything into it?

Chief Carcioppolo replied, no they are not.

Mr. Marquardt asked, any reason why?

Chief Carcioppolo replied, that’s not the sole reason. The sole reason is because I need my evidence room back and they are a benefit to us to have them in the community and working with. We have been storing all their equipment there. It just makes more sense. That room itself isn’t going to cost that much money. It’s to finish the rest of the space so I can put locked files in a certain place and finish the space that’s dead right now. I am trying to organize everything.

Mr. Marrelli stated, you need secure areas.

Chief Carcioppolo replied, I need secure areas.

Mr. Marquardt stated, but if it’s for them.

Chief Carcioppolo replied, that only part of it. It’s also for us.

Mr. Saponaro stated, basically Chief, you need to get this done. You have a benefit to getting this done because you need secure storage for files and you need an equipment room. Also, CERT which is a benefit to have in the community has now a different place to utilize versus your evidence room which is also problematic for a number of reasons. Now they have the opportunity to use that room on an as-needed basis. The main point of that room is not for CERT, it’s for your use. You will be able to put them there when they need to be. Your equipment storage or whatever else you need in that room can be put in there. It can be multi-purpose.

Chief Carcioppolo replied, it could be. But I was going to let them use that room.

Mr. Saponaro asked, so you won’t use that room at all? Only CERT will use that room?

Chief Carcioppolo replied, we might put some stuff in there, but nothing sensitive.

Mr. Saponaro stated, of course. But it’s an equipment room that you are going to allow them to use. We don’t understand what the benefit is. What it sounds like for us is that we are letting someone use space in our place for free. It’s better for you to tell us why it’s a benefit. You don’t have to do it right this second. Just let us know why it’s better for us to have these people here versus Lyndhurst or Richmond Heights. We are looking at dollars and cents. It’s like, use the Community Room for free. No, we want to know why we are not getting paid for it.

Mr. Marquardt stated, alternatively you could go back to them and say, we are providing this space, how about kicking in? We don’t just give things away. You can negotiate with people.

Chief Carcioppolo stated, we put money in Tri-County CERT.

Mr. Marquardt stated, we are part of it, but so are they.

Chief Carcioppolo stated, by having their equipment stored here, that is a non-monetary benefit for our community in the event we had a callout and we were using their personnel.

Mr. Saponaro stated, take me to the event.

Chief Carcioppolo stated, we have a natural disaster in Mayfield Village such as the power on Hickory Hill went out because a tree fell down in the Metroparks about 4 years ago. Members of Tri-County CERT mobilize, they come to our building and grab their safety equipment and then go out and canvas the neighborhood for us to get back to us on who needs help with certain issues because we don’t have the manpower to accomplish all those tasks.

Mr. Saponaro stated, so they become part of the force.

Mr. Marquardt stated, likewise, if something happened in Lyndhurst, the same thing would happen with Mayfield Village right? They would pick up their stuff and go there?

Chief Carcioppolo replied, yes. They would utilize equipment.

Mr. Marquardt stated, still, it’s a shared service.

Mr. Saponaro asked, so the benefit to having it in Mayfield Village is?

Chief Carcioppolo replied, because it’s their central location. They do most meetings here. It’s a quicker response at Mayfield Village. If people are coming here to obtain their equipment and help us then, yes, I would have to agree that it better.

Mr. Saponaro asked, so let’s just say they went to Richmond Heights and it was there. What benefit do you have now with the use of this space?

Chief Carcioppolo replied, we can utilize it for more storage.

Mr. Saponaro replied, so it’s storage space.

Chief Carcioppolo replied, it is storage space, right. Secured storage space.

Mr. Saponaro replied, okay. Thank you. Sometimes we have to do a dialogue to understand it better.

Chief Carcioppolo replied, that’s what I’m here for.

Mr. Saponaro replied, I appreciate it.

5. Resurfacing by Ohio Department of Transportation of SOM Center Road from south corporation line to Wilson Mills Road as part of larger State project.

Mr. Saponaro asked if everyone look at the memo from ODOT.

Mr. Marrie asked, they are going to stop at Wilson Mills, a while back when they did another part of SOM or Wilson Mills, the County stopped and we had bumps in the road. We had to get the whole intersection done over to match, correct?

Mr. Metzung replied, when we redid SOM, they did from Wilson Mills north to County Line. That was a whole big project. Then they did south of Wilson Mills. They never did the intersection. At some point we went back and did the intersection on our own dime. Now they are looking to redo the south section from the intersection south.

Mr. Saponaro asked, they are going to reimburse us for the intersection?

Mr. Marrie asked, will we have to do the intersection again?

Mr. Metzung replied, no, the intersection is not in bad shape, so there’s no reason to. But, we had gotten a complaint regarding the road surface so Tommy called ODOT to see where we were at and next thing you know, I am not sure if this was coincidental, they said we are doing this. What they are looking at here and I put this as a caveat to this project is what they would consider a mill and fill which means they come and grind the old roadway off and repave it which is what they did last year. The last time they did it, the bumps came back pretty quickly. We went out and met with them. We are going to meet with them again to go over the scope of the project. There may be times where they are going to go, as far as ODOT, we are going to come in and grind this off and we may fix that one but we are not going to fix that one and we are going to just repave it. At that point it may be in the Village’s best interest then to look at maybe putting some funds into it.

Mr. Saponaro asked, are you going to put this as part of your budget for 2016?

Mr. Metzung replied, yes. We probably want to have some kind of contingency money for any time that we may want to go above and beyond what ODOT will do.

Mr. Marquardt stated, I think I want to know what that is before I would vote on this to approve this because it’s open-ended. It’s saying anything we want is going to be extra. It’s saying we are responsible for utilities, anything else. We don’t have a number on it.

Mr. Metzung replied, because the number is their number.

Mr. Marquardt asked, what about our portion? The stuff we are responsible for?

Mr. Metzung replied, right now if we did nothing and said, okay, go ahead, it would be zero for us. They would come and grind it all up and lay down a beautiful new surface.

Mr. Marquardt replied, that’s fine. So what are we going to ask for extra? Because I know there’s going to be stuff extra.

Mr. Metzung replied, that’s the key. What is that that we may disagree upon? We are going to go out and meet with them tomorrow and go over the scope of that. I can’t answer that right at this moment, but we are more particular when we do our side streets because we don’t want to go back in 5 years. That road didn’t hold up nearly as long as it should. If push comes to shove if we are going to argue over a bad joint somewhere, it makes sense to us to just go ahead and fix it so we don’t come back to rebid this.

Mr. Saponaro stated, basically what I am hearing is that you are going to meet with them. They are going to give us the scope of work of what they are going to do and then from that scope of work you and Tommy are going to create a scope of work of what the extra could be.

Mr. Metzung stated, we won’t know until such time as it is ground up.

Mr. Saponaro replied, of course. But then that way, to Bill’s point, you can come back and say, here’s possibilities of what may happen and this is where we think the pricing may be.

Mr. Metzung stated, that would be very difficult.

Mr. Saponaro stated, we can guess at this. You can range it. It’s like anything else, you didn’t realize that when you were taking out the dirt across the street that there was going to be tree trunks and all the other garbage in there, right? We don’t know, we don’t know until we get into it, but at least it gives us a view towards the future and then for budgeting purposes, you can put that into your capital budget. Anything else?

Mr. Metzung stated, we may want to also incorporate curbing. They don’t do that.

6. Tree Maintenance/Replacement.

Mr. Metzung reported, we have planted a lot of trees this year. We still haven’t gotten to our yearly where we have gone out and limbed trees. We are trying to do this semi-methodically. We are still at work back here in the Aintree neighborhood. So in an effort to do the two roads we had looked to do, we need to put some more money into that budget. Ron suggested we take it out of the sidewalk budget which we didn’t touch at all this year and move that over into the tree maintenance program.

Mr. Saponaro stated, sounds reasonable.

7. Freedonia Incentive Grant Agreement

Mr. Esborn reported, Council approved an agreement with Freedonia back in August but then Freedonia had revisions to the agreement that took it far away from what Council approved. It has taken us a while but what we have done is revise the agreement so it addresses Freedonia’s concern while bringing it back in the spirit of the agreement Council passed in August. Freedonia has the agreement now doing a final look at it. If they are okay with it, it will go in Council packets this Friday and then they will move on it next week to execute it.

Mr. Saponaro stated, I spoke with Joe Diemert and he read the language put back in which is what we wanted which was to have if they do not meet their recommendations that we are able to recover that money, not having to wait the 5 years. We got back to where we need to be.

8. Mars Electric Incentive Grant Agreement

Mr. Saponaro stated, everyone should have received information on this in their packets.   The letter sets forth the incentives and what we would do.   It’s basically in Mars’ court right now to tell us what they are actually going to do. Ted, you have been working with them pretty closely and with the broker.

Mr. Esborn stated, I have been talking to Mars every day to get more information and to make sure I keep a sense of where they are at in the process. We have also got a draft. Because now with QED and Freedonia we have developed an economic development incentive agreement format, we were able to quickly put together a draft for Mars. I am working with the Law Department on it right now to finalize it. Our plan is when we have that draft in a form that the Law Department approves of, we would like to get it to Mars so we don’t have a situation we have with Freedonia. Let’s get it to Mars early so they can make any suggestions or revisions they want so that by the time it comes to Council, it’s already in a version Mars is okay with.

Mr. Marquardt stated, I don’t understand what the bogey is here. According to your letter, you have 3 numbers, you have 70 jobs, $100,000 in withholding and $5 million in payroll. Based on something there, if they don’t meet that bogey, you don’t pay them anyway. What is it based on?

Mr. Esborn stated, I asked in the letter for them to send documentation and they did. That’s when I learned that the $5 million payroll is aspirational. They think that at this location they can reach $5 million. In 2014, it was $4.1 million.

Mr. Marquardt stated, it was $4.1 at the other location.

Mr. Esborn stated, which also has a 2% income tax rate. We do have a 2014 total for the company which is what we used for other companies we have had incentive agreements with. It may make sense to use that number for Mars.

Mr. Marquardt stated, you have 3 numbers here, 70 employees, $100,000 in withholding tax and $5 million in payroll. Which one of those three numbers are you basing it on and is it only for this location and if they don’t meet that according to the letter, they don’t get any rebate.

Mr. Saponaro asked, there’s not going to be a Willoughby location, so if they move here, this is the only location, right?

Mr. Esborn replied, right. They are completely moving.

Mr. Saponaro stated, right. So they are relocating. The other agreements have been based on payroll withholding, yes?

Mr. Esborn replied, yes.

Mr. Saponaro stated, so it’s payroll withholding, it’s $100,000, correct? We haven’t defined if it’s $100,000, $80,000, $92,000, but it’s the payroll withholding, that’s the bogey.

Mr. Marquardt stated, you’re clarifying, because that’s not in the letter. The letter said, based on the information provided and yet referencing back, you have 3 numbers it can be based on.

Mr. Esborn stated, I have gone back and forth now with the company after the letter was sent talking with them about what the actual payroll is and what the actual withholding is. I am developing an understanding with them of what the bogey is going to be.

Mr. Saponaro asked, so if you look at this, the first bullet point of the second half says, for the first 5 years of Mars’ new lease, an annual grant of an amount equal to 30% of Mars’ withholding tax payments based upon annual withholding tax payments in the payroll set forth above. I know what you are saying, but it’s withholding tax and the only want to get to withholding tax is to get the payroll.

ANY OTHER MATTERS

Mr. Saponaro asked, anything else?

Mr. Wynne stated, just a couple things. I didn’t have the legislation ready for this evening but it will be on Council agenda. Every 5 years Council passes legislation for its designation of depositories which basically allows me to do business with banks. The current legislation and agreements with the banks expires at the end of this year, so I will be proposing new legislation for the next 5 years.

Mr. Saponaro asked, does it specify a particular bank or just banks?

Mr. Wynne replied, it specifies specifically banks. It pretty much lists a majority of the banks in the Cleveland area. It will be on the agenda for approval at the Council meeting. The current designation expires at the end of this year.

Mr. Wynne continued, at some point in time, but I am not exactly sure when because we are still trying to get a couple things done, I am going to be coming to Council requesting that we sell 6827 Thornapple which is the house that Jim Deacon rented. We have to wait until we finalize the easement that relates to the access path on the side. Council will have a choice. We don’t have to go to bid if you don’t want to. We can place it with a realtor or we can advertise it in the newspaper based upon the appraisal value we got back in February of $140,000. We have since put in about $5,000 for the windows.

Mr. Marrelli added, and about $7,500 for the furnace.

Mr. Wynne stated, once that easement is finalized and recorded, we will be coming back to Council to request that the property be marketed for sale.

Mr. Saponaro asked, anything else? There were no further matters.

There being no further business, the meeting adjourned at 8:00 p.m. The next Finance Committee meeting is scheduled for Monday, November 16, 2015 at 7:30 p.m. in the Main Conference Room.

Respectfully submitted,

Mary E. Betsa,
Clerk of Council