Finance: January 26th 2015

MINUTES OF THE FINANCE COMMITTEE MEETING
Monday, January 26, 2015 – 7:30 p. m.
Main Conference Room – Mayfield Village Civic Center

The Finance Committee meeting was held on Monday, January 26, 2015 in the Main Conference Room at the Mayfield Village Civic Center at 7:30 p.m.

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

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

ELECTION OF CHAIR

Mr. Marrie, seconded by Mr. Marquardt, nominated Mr. Saponaro as Chair of the Finance Committee.  There was no opposition.

1. Discussion of a motion to authorize expenditure in the amount of $38,175 to Community Partnership on Aging for renewal of Senior Services for 2015.

Mr. Saponaro stated, we received additional information in our packets.

Ms. Wolgamuth stated, the amount should actually be $37,044. 

Mr. Saponaro asked, Bill, I know that you had questions on this. Did your questions get answered?

Mr. Marquardt replied, not really.  This is like paying $150 a month for 250 television channels that you really don’t want, you are only watching 3.

Ms. Wolgamuth stated, I was thinking of the same analogy.  It’s kind of like having cable where you have to pay for the service, you don’t get to pay for just the shows you watch.  It’s a good analogy.

Mr. Saponaro agreed. But you asked for a breakdown of expenditures, correct?

Ms. Wolgamuth replied, which are right here.

Mr. Marquardt stated, but that is expenditures for the organization.  What are our benefits?  What services are we getting?  It’s nothing like that. It’s just the allocation.

Ms. Wolgamuth stated, I gave you that last time.  This is how many people have used these services. 

Mr. Marquardt asked, how is that worth $38,000?

Ms. Wolgamuth replied, that’s up to you to decide.  If you think the services offered aren’t worth that for the 99 residents using it, then you don’t think they are worth it.  I think the number is growing. I think the number will continue to grow.  I don’t think the cost is that extreme, when you look at what the other communities are paying for these services. They have been doing this since 1978. They clearly think it is worthwhile.

Mr. Saponaro stated, we talked after the meeting and said, it’s not our responsibility to make sure our residents know.  Isn’t that part of what they can provide for us? We are paying this money. They need to help us get the word out.

Ms. Wolgamuth stated, and they do. They do try to help us. They did a survey early in 2014. I thought it was a very nice survey. I asked them if they had directly mailed it to everyone. They did not.  The cost to do a direct mailing to our Village would be about $1,000 for that size mailing. That’s something we can do, but I don’t think they have the finances.  If they were going to mail this survey to all of the communities, it’s $1,000 just for us. We are a small community.

Mr. Saponaro stated, I may be speaking out of school here, so tell me if I am wrong, I imagine it like this, we give them $37,000. From one perspective it sits in a pot. When our residents need to use it, they go to that pot and take the money out of there because that’s where it sits.  In one theory that makes sense, right? However, practically speaking, it can’t work that way because you have it across the board. You are paying them and allocating payments based on size of community versus anything else. So what we give can benefit us, but it can also benefit other communities.  Right now, it may be benefitting other communities.

Ms. Wolgamuth stated, it may be, but our percentage is about 12% of our seniors.  The other communities that participate, some of them are sitting at 12%, some are at 16%. I think the highest percentage of usage is 20%, so we are not that low.

Mr. Thomas stated, Mayfield Heights is spending $205,000.  They have a lot more residents.

Mr. Marrie stated, and they are 12%.

Mr. Thomas added, South Euclid is paying $238,000.  They have a larger population.

Ms. Wolgamuth stated, as we talk about regionalizing anything which we are going to have more discussion about that this evening, I think that’s always the situation.  You are paying as a collective to be able to provide the services across the board.

Mr. Saponaro asked, if we were to provide these services on our own and if we were to do a comparison and say, we are going to provide the exact same services, $38,000 does not come anywhere near what it would cost us.

Ms. Wolgamuth stated, apparently there was a time that we looked at transportation, just to do transportation for the Village.  It was close to $70,000.  When we get transportation and all of these other services for $37,000, that’s not a bad price.

Mr. Saponaro asked, any other discussion on this item?

Mr. Thomas advised Mrs. Mills that the transportation issue was discussed. They are making arrangements to get the individual from the house to the vehicle.

Mrs. Mills stated, for general information, a lot of our residents do not have a computer.  They get their information through the mail.

Mr. Thomas stated, we send a number of things in the mail to everyone.  It’s in the VOV, it’s in the recreation brochure, and it’s in the newsletter.

The Committee recommended Item #1 for approval.

2. Discussion of a motion to authorize termination of the Agreement approved by Council on August 18, 2014, entered into with ThenDesign Architecture for rehabilitation of the Community Room and authorization to enter into an agreement in substantially the form attached and approval of an amount not to exceed $95,000 for architectural services and construction management in connection with the design and construction of the Community Room.

Mr. Saponaro stated, we received information on this and discussed it at our last Caucus.  We also received documents dated the 23rd on this.  Are there any questions or comments?

Mr. DiNardo asked, this is on top of the initial fee?

Mr. Marrie stated, no.

Mr. DiNardo stated, okay. We are terminating that one.  It’s fine.  It’s in the typical range.

The Committee recommended Item #2 for approval.

3. Discussion of a motion to authorize expenditure in the amount of $6,392 to Creative Microsystems, Inc. for 2015 support for Finance and Payroll Systems.

Mr. Saponaro stated, this is an annual expenditure.

The Committee recommended Item #3 for approval.

4. Discussion of a motion to authorize expenditure in the amount of $14,400 to Chapman & Chapman, Inc. for health insurance consulting services in 2015.

Mr. Saponaro asked, any questions on this?  Anything we need to know?

Mr. Wynne stated, it’s $1,200 a month. It’s a 51% decrease.

The Committee recommended Item #4 for approval.

5. Discussion of a motion to fund the Medical Expense Reimbursement Plan for 2015.

Mr. Saponaro stated, we have discussed this. Anything to add?

Mr. Wynne stated, the amount we are funding right now is $190,250.  There might be some additional funding during the year required.  Right now we are looking at hiring two firefighters for the two open positions we have so once they go on the medical plan, we will need additional funding. 

The Committee recommended Item #5 for approval.

6. Discussion of a motion to authorize expenditure in the amount of $11,568 to TAC Management Co. for CAD System maintenance in 2015.

Mr. Saponaro stated, this was discussed in Caucus.

The Committee recommended Item #6 for approval.

7. Discussion of a motion to authorize expenditure in the amount of $18,000 to City of Bedford Heights for housing of prisoners in 2015.

Mr. Saponaro stated, this is a $3,000 increase based over 2014 because of usage. Are there any questions?  There were none.

The Committee recommended Item #7 for approval.

8. Discussion of a motion to authorize expenditure in the amount of $7,884 to Carlson Service Co. for cleaning of police station in 2015.

Mr. Saponaro stated, this was discussed in Caucus.

The Committee recommended Item #8 for approval.

9. Discussion of a motion to authorize expenditure in the amount of $7,200 to Treasurer, State of Ohio, for LEADS Access Fee with a dynamic multipoint virtual private network connection.

The Committee recommended Item #9 for approval.

10. Discussion of a motion to authorize expenditure in the amount of $8,357.80 to Division of Water for Annual Hydrant Fee for 2015.

The Committee recommended Item #10 for approval.

11. Discussion of a motion to authorize expenditure in the amount of $5,000 to City of Mayfield Heights for Hillcrest Mobile Air Unit and Tech Rescue Team/MAUTRT Annual Fee for 2015.

The Committee recommended Item #11 for approval.

12.Discussion of a motion to authorize expenditure in the amount of $11,520 to Treasurer of State (Fund 5C2) for MARCS Annual Fees for 2015.

The Committee recommended Item #12 for approval.

13. Discussion of a motion to declare ambulance 677 surplus.

The Committee recommended Item #13 for approval.

14. Discussion of a motion to authorize expenditure in the amount of $5,500 to Cuyahoga Soil and Water Conservation District for 2015 Annual Appropriation of Euclid Creek Watershed Coordinator.

The Committee recommended Item #14 for approval.

15. Discussion of a motion to authorize expenditure in the amount of $8,000 to Kayline Company for replacement LED light bulbs for North Commons Boulevard.

The Committee recommended Item #15 for approval.

16. Discussion of a motion to authorize an expenditure in the amount not to exceed $13,000 to Progressive Fitness Center for 2015 memberships for residents (pass-through).

Mr. Marquardt asked, do we spend all of that?

Mr. Wynne replied, it was $11,300 last year.  It has gone down quite a bit.

Mr. Thomas stated, it could be because of the Wildcat Sport and Fitness.

Mr. Wynne stated, it used to be closer to $20,000.

The Committee recommended Item #16 for approval.

17. Discussion of a motion to authorize expenditure in the amount of $9,500 to American Fireworks for 2015 Fireworks.

Mr. Saponaro stated, this is year three price of a three-year contract, correct?

Mr. Marrie replied, right.

Mr. Thomas added, they have done a great job.  Safety-wise as well as the shells.  I am going to recommend that we look at them for three more years.

The Committee recommended Item #17 for approval.

18. Discussion of Resolution No. 2015-01, entitled, “An Emergency Resolution providing for the employment of an engineer for Mayfield Village, Ohio.”  Introduced by Mayor Rinker and Council as a Whole.

The Committee recommended Item #18 for approval.

19. Discussion of Resolution No. 2015-02, entitled, “An Emergency Resolution re-establishing terms, conditions and compensation for the services of the Prosecutor for Mayfield Village, Ohio.”  Introduced by Mayor Rinker and Council as a Whole.

The Committee recommended Item #19 for approval.

20. Discussion of First Reading of Ordinance No. 2015-01, entitled, “An Emergency Ordinance amending Chapter 175 of the Village’s Codified Ordinances relating to the imposition of municipal income tax and specifically adding a definition for pension at Codified Ordinance Section 175.03131.”  Introduced by Mayor Rinker and Council as a Whole.

Mr. Wynne explained, the State just passed changes to the municipal income tax law, House Bill 5, which will require further changes by us before January 1, 2016.  Out of all of the discussions over the past couple years on the changes to make to the income tax law, one of the issues which was not incorporated into the law regarded SERP, Supplemental Executive Retirement Plan.  There was a case with an executive from the old National City/PNC who retired and got a payout in his SERP of multimillions of dollars. That’s included on a W-2 at the end of the year. Generally, the definition of pensions refers to a qualified pension plan.  It shows up on a 1099. A SERP is not qualified. It shows up on a W-2. When he got that distribution, RITA said that’s taxable, you owe city income tax.  They said no, it’s not.  The executive went to court on it and won.  RITA advised that municipalities clarify in income tax legislation the definition of what a pension is and what it isn’t and that it isn’t a non-qualified distribution that shows up on your W-2 and that type of distribution is taxable. That’s what this is doing.

The Committee recommended Item #20 for approval.

21. Discussion of a motion to authorize expenditure in the amount of $26,220 to Carlson Service Co. for cleaning of Civic Center and Community Room in 2015.

The Committee recommended Item #21 for approval.

22. Discussion of a motion to authorize expenditure in the amount of $1,579.56 to City of Bedford Heights for additional amount due for housing of prisoners in 2014.

The Committee recommended Item #22 for approval.

23. Discussion of a motion to acknowledge receipt of financial reports for December 2014 and to approve of same as submitted.

The Committee recommended Item #23 for approval.

24. Discussion of Resolution No. 2015-02, entitled, “An Emergency Resolution authorizing and directing the Mayor and Director of Finance to file an application with the Ohio Department of Natural Resources for funding through the Recreational Trails Program.” Introduced by Mayor Rinker and Council as a Whole.

Mr. Saponaro asked, any discussion on this?

Mr. Marquardt stated, I can’t rationalize $120,000 for a snow plow for the least essential trail in the Village.  I am sorry. That’s just out of line. To me, that’s irresponsible.

Mr. Metzung stated, it would be a replacement for what we own. Right now, that’s what we own, a trackless snow plow.  That’s the going price for a new one. We had put into the budget last year and we are putting it in again this year for $50,000 to send this one out and get it rebuilt as opposed to buying a new one.  If the opportunity comes to purchase a new one at 20%, it’s hard to pass that opportunity up. To think that it’s going to remain on the trail is probably not likely. It’s probably going to find its way elsewhere.  This machine is certainly a lot more heavy duty than a gator. It will go through everything and I can attach a snow blower to it.  I can’t fathom why it costs $120,000.  It goes 20 miles an hour and has one seat.  But back when we bought ours in 1997, it was $81,000.  That’s how much they cost.

Ms. Wolgamuth asked, if we don’t get the grant, will we repair it?

Mr. Metzung replied, if we don’t get the grant, we will refurbish this one or wait and look to purchase a new one, but it’s going on 20 years.

Ms. Wolgamuth stated, it’s an opportunity to maybe get them to pay for 80% of it.

Mr. Saponaro stated, thank you for that clarification.  Any other discussion on this?  There was none.

The Committee recommended Item #24 for approval.

ANY OTHER MATTERS

Mr. Saponaro asked if there were any other matters. There were none.

With regard to Ordinance No. 2015-01, Mr. Wynne asked if it could be passed tonight since we are going in to tax season.

With regard to the budget, Mr. Wynne stated, I have an initial draft prepared. I have not gone over it with department heads yet. I will be doing that at the end of this week and next week.  I have not gone over it with the Mayor yet. 

Mr. Saponaro stated, I would like to look at the new budget based on looking at last year’s expenditures.

Mr. Wynne stated, it has revenue and expenses and shows actual for 2011, 2012, 2013 and 2014 and then budget for 2015.

Mr. Saponaro stated, you always provide that which is great. I am talking more along the lines of the specific general ledger items like where are we spending dollars so that we understand what has gone on last year and how we are going forward with it? This would give Council an opportunity to ask for specifics, in case there are questions someone has, and we can bring it to the Committee and have a discussion on that. We could give you what we are looking for prior to it so that you can be prepared for it. 

Mr. Marquardt asked, is this going to be available at Caucus on Monday?

Mr. Wynne replied, the Mayor has not seen it yet. I would not want to distribute it without his approval.  If he is okay with it being distributed, I will put a copy in your packets this weekend.  It will be very preliminary.

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

There being no further business to discuss, Mr. Saponaro, seconded by Mr. Marrie, moved to adjourn.  The meeting concluded at 7:52 p.m.

Respectfully submitted,

Mary E. Betsa, Clerk of Council