Finance Caucus - September 8th 2015

Tuesday, September 8, 2015 – 7:15 p.m.
Main Conference Room
Mayfield Village Civic Center

The Finance Caucus Committee meeting was held on Tuesday, September 8, 2015 in the Main Conference Room at Mayfield Village Civic Center. Mr. Saponaro called the meeting to order at 7:18 p.m.

Present: Mr. Saponaro and Mr. Marrie

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

Also Present: Mr. Ed Parker, ThenDesign Architecture

Mr. Saponaro stated, the agenda needs to reflect that Item #10 is actually an item that will need to be either reviewed and approved or rejected as it is on the Special Council Meeting agenda for this evening.

For the record, Council President Marrie brought up concerns relative to the scheduling of Special Meetings. This was also raised during Safety and Service. There are exceptions, however, we have to follow the procedure that Caucus is Caucus where we discuss it and it goes on to Finance and then it is voted on, not at a Special Meeting. On this particular one, I would say our back is to the wall because of the builder. It will be considered at Special Meeting this evening. But I think what we should do is work harder to endeavor that we get items to follow the normal pattern which is Finance Caucus, Caucus, Finance Committee and then on to Council, and not a Special Meeting. I went back, Joe, and for the last five or six months in a row we have gone through this and that is not the procedure we are supposed to be following.

Mr. Saponaro stated, I am not doing anything to make it go into a Special Meeting. The project got rebid. We have a timing issue. We have money that has been appropriated.

Council President Marrie stated, I agree.

Mr. Saponaro stated, but I am not causing the Special Meeting and have not over the past 5 months.

Council President Marrie stated, I didn’t say you did. All I said was I wanted to stop having Special Meetings where all these items are being approved.

Mr. Saponaro stated, you don’t have to tell me. You have to tell all these guys.

Council President Marrie stated, I have told everyone.

1. Theatre Painting (Michael’s Painting - $5,275)

Mr. Saponaro stated, everyone should have received information on this. We did get bids on this. This appears to be the best one.

Mr. Marrelli stated, I talked to Michael’s this morning. I have references from places such as Oberlin College and Goddard School. He comes highly recommended. I am confident he can handle the job.

Mr. Saponaro asked, does anyone have any comments, anything to add, questions? There were none.

2. Dispatch upgrade (Motorola Solutions, Inc. - $296,596)

Chief Edelman stated, this is what we talked about last month. This is for our dispatch center. We are not going to occupy in perpetuity because the County pulled the rug right out from under us and we are trying to bring everyone up to technical standards of today to move forward in the future. This is an upgradeable system. The Fire Chief and I have looked at this in depth. If you recall, at the last Council meeting, I asked the Law Director his opinion on whether or not we need to go out to bid. This is on State contract so we do not need to go out to bid. The price is $296,596.

Mr. Saponaro stated, $340,000 was budgeted. Also, I know one of the things we were looking at is to add on another 2 stations?

Chief Edelman replied, 2, but I do not have a business plan for that at this time.

Mr. Saponaro stated, but that’s something that is not going to be difficult to do. If we wanted to do that and you wanted to include that in next year’s budget or have it be a capital expenditure from that perspective, we are not limiting ourselves with this.

Chief Edelman replied, it would be cheaper to buy all 4, but not so much that it is prohibitive.

Council President Marrie asked, if we have them all filled out, would we have 6?

Chief Edelman replied, no, 4.

Chief Carcioppolo stated, there wouldn’t be enough room if you wanted to expand to 6.

Mr. Saponaro asked, so the total capacity you could have in there is 6?

Chief Edelman replied, yes.

Mr. Saponaro stated, but that would be tight though?

Chief Edelman replied, yes.

Mr. Saponaro asked, do you buy them in 2’s?

Chief Edelman replied, you buy however many you want.

Mr. Saponaro stated, I didn’t know if there was a certain component that had a sharing mechanism. Any other questions or anything else on that? There were none. This item will be moved forward.

Mr. Jerome asked, will this go on Special Meeting?

Council President Marrie replied, no.

Mr. Jerome stated, okay, so we will wait on this one.

Mr. Saponaro stated, the only thing going on Special Meeting is the Community Room. Everything else is for discussion purposes only.

3. Fall/Winter Community Rec Brochure – Printing (Digest Media - $5,886)

Mr. Thomas stated, this is our annual cost. It’s about the same with a little bit of an increase. It’s for 2,200 brochures. It’s about .27 brochure which is a good cost.

Mr. Saponaro stated, that’s a very good cost.

Mr. Jerome asked, that’s all four communities?

Mr. Thomas replied, correct.

Mr. Jerome asked, what do they pay into that?

Mr. Thomas replied, Gates Mills pays into it, Mayfield Heights we don’t have anything from them at this point We also offset that with advertisers. About $3,600 in advertisements, like Deacon’s ad on the back and Dr. Parker’s ad and so on. We are spending in reality about $2,200 for the print with the offset of the ads.

Mr. Saponaro stated, excellent, great. I appreciate the additional information.

4. Senior Snow Removal Program

Mr. Thomas reported, we had four companies submit bids. The only company that did not submit a bid from last year was Interlock. We want to use all four of these companies so there is no demand on one company.

Mr. Saponaro asked, do we need to have this approved this evening?

Mr. Thomas replied, no, we will wait until the regular Council meeting.

Mr. Saponaro asked, any other questions? There were none.

5. Audit Extension (Zupka)

Mr. Wynne reported, our audit used to be done by the State. Back in 2010, when the State went through a bunch of budget cuts, they handpicked the audits they wanted to keep and went out to bid for independent accounting firms for other ones. We were one of the ones they went out to bid for. Working with the State, we received quotes from 5 different firms. Zupka was awarded a 4-year contract. It expired at the end of 2014. The State contacted me a few weeks ago and said we had been approved for a four year extension on the contract if we wanted. I checked with the Law Director and he said we would not have to go out to bid again if Council is receptive to extending it. I would like to move forward with finalizing that extension with Zupka. It’s a State requirement that you cannot have the same audit firm for more than 10 years, so once we do this 4-year extension, we would be done with them and we would need another firm after that or go back to the State.

Mr. Saponaro stated, from what I gathered from the extension, because of how well we have done on all of the audits, obviously if we had problems they would not be extending it.

Mr. Wynne agreed. It’s been a clean process with that firm. Unless anyone has any objection, I am going to move forward with contacting them and getting a draft agreement for a four year extension.

Council President Marrie stated, as long as you are comfortable with them.

Mr. Saponaro agreed.

6. Tax Rate Resolution for Tax Year 2016

want our property tax money divided between different funds. The biggest concern with the County is to make sure we have enough money to put into the Debt Retirement Fund to cover our debt. There’s no change for how we want to allocate those moneys last year versus this year.

Mr. Saponaro asked, if someone is looking at their property tax bill and they are looking at the tax rate, are they going to draw the line between the tax rate and what they see here?

Mr. Wynne replied, no.

Mr. Saponaro asked, how is their property tax bill affected? What affect does this have?

Mr. Wynne replied, nothing.

Mr. Saponaro asked, this is just taking the money received from that and the allocation of it?

Mr. Wynne replied, this takes the money that we get and from that balance, says, this goes into the General Fund, this goes into the Debt Retirement Fund.

Mr. Saponaro stated, so it’s really the allocation of dollars.

Mr. Wynne replied, yes.

Mr. Saponaro asked, any other questions? There were none.

7. Tax Incentive Review Committee Meeting – Approval of TIFs

Mr. Wynne reported, we received the letter from the County following the meeting Ron and I had downtown with them going through our TIFs to make sure they are compliant and approving them for an extension for another year. On our side, we will have motions at the Council meeting approving the TIFs for another year.

Mr. Jerome asked, how much longer do we go on those TIFs?

Mr. Wynne stated, when they are put in place, they are 30 year TIFs so they stay in effect until all of our debt and interest is paid off and we are actually reimbursed for some upfront money we paid for the project. They are going to go for a good 8-10 years.

Mr. Saponaro asked, they just stay on there even if they are paid down? Or they don’t get paid down because they keep extending to extend out to that 30 year period.

Mr. Wynne stated, yes. But once we get to the point where all of the debt going into those projects gets paid down, the TIF comes to an end.

Mr. Saponaro asked, so it doesn’t have to be the full 30 years?

Mr. Wynne replied, no. It can’t be for more than 30.

Mr. Jerome asked, but the County could stop it, couldn’t they?

Mr. Wynne replied, if for some reason they felt the TIF was not in compliance, they could stop it.

Mr. Jerome asked, but they are usually pretty good?

Mr. Wynne replied, yes, because the TIF money we get, it is the County’s portion of that tax, so they are allowing us to keep their portion to help us keep the debt down to cover those projects.

Mr. Saponaro asked, any other questions? There were none.

8. Cuyahoga County 2015 Triennial Update

Mr. Wynne stated, this is just an FYI. We had a conference call with the County on this a couple weeks ago. You should have all gotten your appraisals through the mail. This is the triennial timeframe. Every three years, there’s a statistical update and then your next 3 years, it is an actual physical appraisal. This is the physical one where they just kind of take a look at home sales in the area for the past 3 years and figure out how that’s affected the value of homes. If you look at the map that came with it, basically they are saying that the property values in the Village went up by ½% on average. This is just for your information in the event any residents contact you when they get this in the mail. This provides you with a little bit of knowledge.

Council President Marrie stated, I was happy to see an 18% decrease on ours.

Mr. Saponaro asked, the meetings they have for residents who have received it, they are general meetings and then you can object. They are very good about it. I practiced before the Board of Revisions and Tax Appeals. If the residents are taking the time to do it that way, it cuts that process down tremendously. It’s advisable if anyone needs to do that. Thanks for the information on that.

9. Legislation authorizing seeking financial assistance from the State Issue I Infrastructure Bond Program for funding of Phase II of the sewer project on Thornapple, Robley and a portion of Wilson Mills Road

Mr. Saponaro asked, this is the last piece of the puzzle?

Mr. Cappello replied, yes.

Mr. Saponaro stated, so what I read is exactly what we are doing, so it is pretty self-explanatory, but is there anything more?

Mr. Cappello replied, it’s just like what we did with Eastgate and Meadowood, a waterline, rejuvenate the road, resurface it and sanitary sewers. We are not going to do the waterline on Wilson Mills, just Robley and a section of Thornapple.

Mr. Jerome asked, there’s a sanitary sewer on Wilson Mills?

Mr. Cappello replied, west. It stops at Beech Hill.

Mr. Jerome stated, there’s a gentleman I talked to across from Robley. He was hoping to connect now, but he can’t do it yet.

Council President Marrie asked, would you be willing to give an estimate on when this may be done?

Mr. Cappello replied, it depends. We are going to go for funding. If we get it, obviously, next year or the year after.

Council President Marrie asked, you’re talking two, three years?

Mr. Wynne stated, this is a real shot in the dark. At the end of this year we will have maybe half of the cost of the project put aside. By filing this application, we are asking for a loan. The loan amount is a relatively small enough portion of the whole project which is just the number of homes impacted by the conversion times the $9,200 assessment. Then we are going for a huge grant. If it is gets awarded, it doesn’t have to be repaid. It’s less money we have to put aside. This is a real shot in the dark.

Council President Marrie stated, I wasn’t trying to pin anyone. I have just been getting a lot of questions.

Mr. Cappello replied, the Board of Health has not been making people replace their systems. They know this is coming. That’s been about 20 years almost, but they have been patient.

Mr. Jerome asked, do we know how many houses this is?

Mr. Cappello stated, about 66-69.

Mr. Wynne stated, with this application if we get the funding we will probably be in a position next Fall to go out to bid.

Mr. Saponaro asked, because we can’t encumber the money until after July anyway, right?

Mr. Cappello replied, you can’t award the project until after July 1st.

Mr. Esborn stated, if we score well enough, we will know by December. If we are in the middle, as we know, it can go on for a while. We will have an idea in December if we are definitely going to get funding.

Mr. Cappello stated, it will be pretty similar to Eastgate/Meadowood, going after July or no sooner than August if I can get the plans prepped. If we know we are going to get the money, we can bid it, get everything set so when we award it in July, we can hopefully get things started.

Mr. Jerome asked, what is an estimate of the cost?

Mr. Esborn replied, the construction is $2.8 million.

Mr. Cappello replied, then you add all the other fees and contingencies, it’s about $3.4 million. This also includes when we did Ravine, we got rid of the Thornapple Pump Station behind the Deacon house. We moved it down to Ravine. We upsized the force main from there up to the pump station, the Deacon house. As part of this project, that force main currently discharges and goes down to Oakwood and then discharges into the sanitary that goes into the new sewer district. We would then put a new larger force main in there. We put that back in 2008 and take it to SOM.

Mr. Jerome asked, we are not going to Kenwood?

Mr. Cappello stated, it would go right down Thornapple to SOM.

10. Community Room Re-Bid Results

Mr. Saponaro stated, the Community Room Committee met on September 1st. Diane, thank you for putting together the memo. It was pretty self-explanatory. Mr. Ed Parker from TDA, who is also present at this meeting, was present at the meeting on September 1st. He very thoroughly went through the process with us and look at base bids, what’s included, what’s not included. We appreciate that. You did a great job. It helped make this a much easier process for us to look at this.

Just to reiterate, this is our second bid process. We went out to bid initially. That was part of what Mr. Parker discussed at the meeting. This was the second bid process that came in. After we reviewed everything, it was evident that based on what we were looking at in terms of the base bid and the alternates, Seitz would be the most appropriate for completing the project. Due to the timing and nature of how things transpired, it was requested and required for us to move this in a quicker fashion than we normally do and that’s why it’s sitting on the Special Council Meeting agenda. I have gone through this packet. I know that others here have as well. Are there any questions or concerns?

Mr. Marrie stated, I am fine.

Mr. Jerome stated, we discussed this ad nauseum during the Committee meeting.

Mrs. Mills stated, I am very satisfied. They have done a good job.

Mr. Williams stated, I have looked through the packet and it makes sense.

Mr. Saponaro stated, the packet put together had both of the two closest bids. There were some things that needed to be pointed out. That’s why you received the full bid package. At the end of the day, the recommendation is for Seitz for $2,024,000.

Mr. Jerome stated, with the hope that some of the money won’t be spent.

Mr. Parker stated, there’s an $80,000 contingency. There’s actually $93,000 total including the $10,000 to CEI. The actual amount to CEI is $6,000. There’s $80,000 general contingency.

Mr. Saponaro asked, okay, make sense? Recommend approval? There was no opposition.

The Finance Committee recommended approval of Item #10 to be moved to the Special Council Meeting scheduled for this evening.

11. Beechers Brook Bluff Erosion Evaluation (Burgess & Niple - $5,750)

Mr. Metzung reported, this is something we have been monitoring since we re-did SOM Center Road and graded the sewer under SOM. The erosion began to kind of zipper back. Burges and Niple was our original engineering firm that did the monitoring for this project. They had to do wetland monitoring. They have been on it since then. We have started to have them do the bluff measurements here recently in the last couple years as it begins to go into the SOM Court area. This is the first time it has exceed the $5,000.

Mr. Saponaro asked, this is the first step of telling us what the issue is?

Mr. Metzung replied, to keep track of its movement. They measure it.

Mr. Saponaro asked, it’s how we measure it, but is it then a view towards, it’s gotten to this point so now we need to employ?

Mr. Metzung replied, yes, whether or not we wait for the Regional Sewer District. It’s on their agenda should the stormwater issue ever pass. Should something happen, we still need to address it. This tells us a timetable saying it’s moving 2.5 feet a year.

Mr. Saponaro asked, if it is still sitting on the agenda for the Regional Sewer District, are we able to perform the services and then request reimbursement?

Mr. Metzung replied, no. This part of it is really on us.

Mr. Saponaro clarified, not this. I am saying for the remediation.

Mr. Metzung replied, for the remediation, yes.

Mr. Saponaro asked, so we could take care of it and if that passes, we can go back and get reimbursed?

Mr. Metzung replied, no, we won’t be reimbursed but we were working with them as an initial first out project. We were getting ready to start making plans and all of a sudden there was a timeout call. Right in the middle of us working with them, they stopped and went to Court, so now we hope to get back in line and be in front of the line with having this kind of information.

Mr. Saponaro stated, very good. Any other questions or comments? There were none.

12. Trees for Fall planting at various sites throughout the Village (Klyn Nurseries – not to exceed $8,000)

Mr. Saponaro stated, this was discussed in Safety and Service. Is there anything else to add? There were no further comments.

13. Legislation authorizing the disposition of certain municipal property by the Fire Department.

Mr. Saponaro stated, Chief Carcioppolo provided us with the listing which is greatly appreciated. It’s pretty self-explanatory unless you want to add anything else.

Chief Carcioppolo stated, we have a lot of surplus and garbage that we need to get rid of. There’s a lot of work that goes into posting them on-line. You have to include descriptions and pictures. Once that is cleared out of the way, we can go through what else we have laying around that has been sitting there for a long time.


Mr. Saponaro reported, in Drainage and Infrastructure, there was a project for 6786 Seneca. We have a quote from Anselmo’s, Inc. for $1,560. This is a 12-inch catch basin with approximately 40 feet of pipe. It’s a drainage and infrastructure problem.

Mr. Jerome asked, is there a 10% on that for the resident?

Mr. Saponaro replied, yes, there will be.

Mr. Metzung stated, we always approve the higher number so we can pay that number and then get reimbursed.

Mr. Saponaro stated, we will move this on to Finance Council.

Mr. Wynne stated, to the members of the Committee that are here, with that project, according to the Codified Ordinances for that Committee, the maximum that can be spent is $25,000 a year. With this project, you are there. This will be the last project the Committee can approve for this year.

Mr. Jerome asked, but we can approve more money to put in there as Council?

Mr. Wynne stated, the Chapter says that Council may allocate $25,000 a year towards those projects.

Mr. Saponaro stated there have been some projects that were not under drainage and infrastructure but we discussed it there. Will you go over that to make sure?

Mr. Wynne replied, yes.

Mr. Saponaro stated because some of them have been, they really aren’t drainage and infrastructure, we are going to handle it at the Village side of it. Just so they are properly allocated, but that’s fine, glad to know that. Thank you.

Council President Marrie stated to Chief Carcioppolo, you were way ahead of your time. On the early news this evening, they reported a drastic fire in Chagrin Falls. All they did was talk about the different fire alarms and the ones that chief Carcioppolo promoted for our Village almost two years ago. They had two of those and that’s what save their lives because the other ones, the house was loaded with them but none of them went off. It was amazing because all of the broadcasters were saying, what is that? I have never heard of such a thing? Hats off.

Chief Carcioppolo replied, thank you. It’s not just me. There’s other people who share the same view. I sit on UL Standard Technical Panel for smoke alarms and smoke detectors. The vote is due in this evening to change the testing requirements for all smoke alarms and detectors. It looked optimistic earlier that that will pass. So in about 2½ years all of the smoke alarms will be under the same testing requirements so they should all have to work to the same level of testing requirement and alleviate that problem. Thank you.

Council President Marrie stated, thanks to the whole project.

Mr. Esborn stated, Council should have received in their packets a redlined version of a revised Agreement with Freedonia. The situation there is that the Agreement has already been approved before the revisions.

Mr. Saponaro stated, my only concern about the revisions to be honest with you is that the revision that talks about the failure by the company to generate the minimum income tax revenue. The remedies can’t be pursued until the end of the contract which is a huge red flag for me because and maybe there’s a different way to word it, but let’s say that after year 1, they do not meet that requirement we have to wait for 4 more years. We don’t know what’s going to happen with the company at the time. If there was a way to do kind of a standby letter of credit or some sort of escrow, something, that we can know that money is set apart and sitting there versus we hope you are around at the end of the five year term and we will get the reimbursement. That’s my concern, to be blunt.

Mr. Esborn stated, the company comes at it from the angle of because we set the minimum income at that 2014 level, their point is there may be years where they say our bonuses are structured off of profit and so if profit is down one year, we have a down year, so if they happen to have a year where it’s below, that was the reason we moved to pursuing a remedy until the end. I guess the biggest question is what should we do with the company now? If we want to make additional changes to the Agreement.

Mr. Saponaro stated, here’s the thing. I would rather the minimum be readjusted. If we needed to look at instead of 2014, but let’s look at a three year average or do something along those lines to make it a minimum and that minimum is not a minimum where they feel that’s not really the norm, that’s not even the average, that was a good year and now you are making us go up here and what if we don’t go up there and then we are in trouble, right? We don’t get any of that. That’s the better place for me to adjust. To take away our remedies, again, we are using this as a benchmark agreement for other companies. I don’t want this to be the way we do business and have to wait for monies to come back in. I don’t think there would be any problem. I am sure they would be able to meet all this. The language is in there in the likely event this occurs, but we have to contemplate that.

Mr. Esborn stated, as always, I am worried about the timing with the company. One question is would we then have to wait until the Council meeting on the 21st to be able to then execute?

Mr. Saponaro stated, you would have to wait on this. There’s two ways to deal with it. One, if they want us to wait until the end to collect the monies, they have to put the monies aside. There has to be some sort of security instrument there. Standby letter of credit is great because that goes right from the bank to wherever and then we can hit it if we needed to. That would be one way. Or leave the language the way it is but let’s lower this annual income tax revenue. Let’s make it realistic. If it’s at $90,000 and they said we can live with $75, 0000, that $75,000 is also going to affect what they get back because then it’s going to be at $75,000.

Mr. Esborn replied, actually we started this process with remember at 80% but then we raised it up to 100% because there was concern about their points. Initially we had the minimum level at 80% for 2014. That was way back at the beginning of the process. We can talk to the Law Department about how to move forward from here. They have finalized this with Freedonia. Introducing that change would go through Mark and Joe. We can talk about it with the Law Department.

Mr. Saponaro stated, those are two ways I see we deal with it. I would rather get away from language that says you can’t act on remedies. I don’t think that’s good for the Village in any capacity because who knows what happens in four years. I would rather lower the initial. It’s an easier bar for them to hit. See what they come back with on that. Does anyone else have any comments on that? There were no further comments.

Mr. Saponaro asked, any other items?

Ms. Wolgamuth stated, as you know, the Civic Center Parking Lot is being worked on right now. The bid for that project did not include lighting for the parking lot. We have had a photometric analysis done and we are comparing the documents. That’s just a heads up that that is something you will be able to see in October.

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

There being no further business, the meeting adjourned at 7:55 p.m. The next Finance Committee meeting is scheduled for Monday, September 21, 2015 at 7:30 p.m. in the Main Conference Room.

Respectfully submitted,

Mary E. Betsa, Clerk of Council