Finance Caucus - July 7th 2014
MINUTES OF THE
FINANCE CAUCUS COMMITTEE MEETING
Monday, July 7, 2014 – 7:30 p.m.
Main Conference Room
Mayfield Village Civic Center
The Finance Caucus Committee meeting was held on Monday, July 7, 2014 in the Main Conference Room at Mayfield Village Civic Center. Mr. Marquardt called the meeting to order at 7:32 p.m.
Present: Mr. Marquardt, Mr. Marrie, Mr. Saponaro, and Dr. Parker
Also Present: Mr. Jerome, Mr. Wynne, Chief Edelman, Mr. Metzung, Chief Carcioppolo, Mr. Thomas, Mr. Dinardo, Ms. Wolgamuth, and Mrs. Betsa
1. Earthwork in the Raleigh Drive area
Mr. Marquardt asked, why are we doing this and how much? Mr. Metzung replied, the residents on Derby Drive where we tore the houses down are complaining of lights in the back of their home. They have asked for more buffering.
Mr. Marquardt asked, how much will need to be put into it? Mr. Metzung replied, I have a bid for the earthwork. It’s under $10,000. I am waiting on another gentleman to give me a bid. I just thought I would bring this forward now. I am not looking to actually do the work until the end of August but I would like to be prepared for it.
Mr. Marquardt asked, $10,000 for that, plus what? Mr. Metzung replied, I am not looking to do all of the plantings at once because it is just overwhelming. We will probably put another $4,000 or $5,000 in plantings in the fall.
Mr. Marquardt asked, about $15,000? Mr. Metzung replied, yes.
Mr. Marquardt asked, this is not for right now, right? Mr. Metzung replied, the earthwork will be on this month’s agenda even though I am not looking to do it until the end of August.
Mr. Marquardt asked, so you will have $10,000 on the agenda? Mr. Metzung replied, right. I just wanted to alert whichever contractor we may end up with so that they are aware of it.
2. LEADS Access Fee with a Dynamic Multipoint Virtual Private Network Connection ($600 per month) (replaces CRIS)
Chief Edelman reported, currently we are getting our LEADS and NCIC access through the County. The County charges us $1250 a month. I would like to just go direct LEADS access which cuts our costs in half and provides us with a more user-friendly interface.
Mr. Marquardt asked, the County is doubling? Chief Edelman replied, yes. That goes back to way before I even started on this job. They used to be the ones to just control everything. As computer and internet security were enhanced, LEADS decided to go out with subscriptions of their own.
Mr. Marquardt stated, okay. Better deal.
3. Hydraulic Unit for Fire Truck (Sutphen - $9,312)
Chief Carcioppolo reported, this is the object we were discussing that we pulled out of the fire truck purchase because it was a different vendor and it’s cheaper if we buy it from this vendor and have it drop shipped to the manufacturer.
Mr. Marquardt asked, any comments? Mr. Marrie replied, no. This has been discussed previously.
4. Exterior Building Maintenance (Mike’s Home Improvement - $17,415.00)
Chief Carcioppolo reported, we attempted to receive three quotes with the same scope of work done on the exterior of the building. We started looking at having it painted but the painting costs were coming in anywhere between $8,000-12,000, so we decided it would be better to just clad everything in aluminum or vinyl depending on the surface and what works better for that application. Mike’s Home Improvement came in at $17,415. This is a budgeted capital expenditure. Timperio came in at $18,500. The other vendor did not get back to us even though we attempted to contact him numerous times and they said they would bring a quote, but they never did. The only thing I brought up during Safety and Service was that Mike’s Home Improvement asked for half down at the start to pay for materials. I will try to talk to him and see if he could change the quote to cover it all until it is done.
Mr. Marquardt stated, he will probably charge you more.
Mr. Marrie stated, I would like someone to check on him, if nobody’s done work with him before.
Mr. Marquardt asked, is he bonded? Chief Carcioppolo replied, he is bonded and insured.
Mr. Marquardt asked, do we have any references on him? Chief Carcioppolo replied, I had one of my guys do the research and get the guys out to do the quotes.
Mr. Saponaro asked, is he an individual with a DBA or a company? Chief Carcioppolo replied, it is my understanding he is a company.
Mr. Saponaro asked, did he provide you with insurance information? Chief Carcioppolo replied, no, we were just getting quotes. We did not get to the point of asking them to provide any documentation. We went through these quotes. One guy failed and did not give us anything.
Dr. Parker stated, I think the idea of him being an individual/sole proprietor versus being a corporation is important for us to know. Mr. Saponaro agreed. From an insurance standpoint. He may have empty pockets. A lot of the contractors use their homeowner’s insurance and say, see, we are insured.
Mr. Marrie asked, that doesn’t count? Mr. Saponaro replied, there’s coverage on there, but it’s not much.
Mr. Jerome asked, if he is worried about getting money for the material, can’t he just give us an invoice for the material and we will just buy the material? Chief Carcioppolo replied, that’s what I was thinking. Mr. Saponaro stated, that’s a smart idea too. Chief Carcioppolo replied, yes. If it’s our material, we own it, no matter who does the work.
Mr. Marquardt stated, get a little more detail on it.
Dr. Parker stated, sometimes in the past with these kind of jobs, we didn’t necessarily bid them out. My only concern with this type of job is you don’t know who we are getting versus sometimes we know people who do this stuff.
Mr. Marrie stated, it’s the kind of job that you should have quotes.
Mr. Marquardt stated, let’s get a little more detail.
Later in the meeting, Chief Carcioppolo reported that he looked up the information on Mike’s Home Improvement. He is a member of the Better Business Bureau. And he has an A+ rating. He has been in business for 27 years and he was incorporated in 2003.
5. 2014-2015 Senior Snow Removal
Mr. Thomas reported, this is the initial process for us to plan and get bids so we can get letters out to all of our senior residents sometime in September.
Mr. Saponaro asked, is anyone not being used again? Ms. Wolgamuth replied, I don’t think so. Mrs. Betsa stated, we did not have any problems last year.
6. Bond legislation
Mr. Wynne stated, this legislation is on the Special Meeting agenda for passage. We will be selling the $4,270,000 bond at 2.5% to pay off the $4,270,000 bond that is at 3.5%-5% resulting in about $330,000 in interest savings over the next 12 years. That whole transaction will be happening this week which is why we have to pass it tonight. It will be closed by the 23rd of this month.
Mr. Wynne stated, this is the annual renewal of our notes that take place in the end of August. We currently have $1.9 million outstanding. We will be paying down $800,000 and then selling notes for $1.1 million with hope of paying it off entirely next year.
7. Property and Casualty Insurance (Wichert - $80,000)
Mr. Wynne reported, this is the annual renewal of our business insurance. Last year, the cost was $74,600. The invoices for now are $76,300. I am requesting $80,000 because during the policy year for the next 12 months we buy and trade vehicles. Sometimes it fluctuates up and down a little bit. For the most part they usually tend to net each other out. The premium due for the annual renewal right now is $76,300. That’s $1,700 higher than last year which isn’t bad considering we have a few more vehicles than last year and we have the ODOT property now that we are insuring which was not owned by us last year.
8. RITA Cost of Collections
Mr. Wynne stated, this is just an fyi. We pay RITA 3% of our tax collections every month to cover the cost of them doing that. At the end of their year, they do an analysis and rebate anything over and above the 3%. The actual expenses came in at 1.07% versus the 3% so we received a refund in the amount of $312,608 which was about $30,000 higher than the refund we received last year.
9. 2015 Tax Budget
Mr. Wynne reported, this is something we are required to do every July with the County. The main point of this with the County is so that they can start preparing the real estate tax bills that go out in the fall for next year. Their main concern is to make sure we have the financial resources to cover our debt as it comes due. When I put this together, I use the 2014 budget, revenue and expenses and drop out or add anything significant that I know is going to take place. We pass the final budget in March and then let the County know what our exact numbers are.
Mr. Marrie asked, is this the one you go down before the Board?
Mr. Wynne replied, no, that’s for the TIF’s. That will be the end of August.
10. Tax Levy Renewal
Mr. Wynne reported, we have a 2.3 mill operating levy that’s up for review by the voters every 5 years. If we want to renew that this year, it will be on the November ballot. It has been in place since 1975 and generates about $100,000 in revenue which is a 60/40 split; 20 from businesses and 20 from residents. It’s a renewal levy versus a replacement levy which means the tax we get from a resident is based upon the value of the property when it was put in place in 1975, not what the value of the property is today. There would be no increase to the businesses or residents if the levy is renewed.
Mr. Jerome asked, is this in addition to other money we get from property taxes?
Mr. Marrie replied, this is just extra money.
Mr. Jerome stated, this is just something issued in 1975.
Dr. Parker asked, what was the original purpose of this?
Mr. Wynne replied, to help with operating expenses to the Village at that point in time.
Dr. Parker stated, obviously in 1975 we needed the money. $100,000 was a lot of money back then. Would we ever consider not renewing the tax simply because our budget is such that we maybe shouldn’t be taxing our residents and businesses on something from 1975? The economics have totally changed. We have had a plentiful cash flow. It’s a thought. It might be something a little different than what we always do which is renew, renew, renew. Just throw that out there.
Mr. Marquardt stated, if you receive enough publicity on it.
Mr. Jerome stated, if people don’t want it, they don’t have to vote for it.
Dr. Parker stated, that’s true, but you don’t have to put it on the ballot. Putting it on the ballot is an approval on our behalf that we should be passing that. It’s from 1975. I don’t know that it should be renewed. It’s what everyone does all the time.
Mr. Wynne stated, that’s for Council to discuss at Caucus. $100,000 is not a backbreaker for us by any means. Keep in mind that we are losing about $600,000 of revenue every year now because the estate tax has gone away and the local government fund has been cut out. This is something we would lose on top of that.
Mr. Marrie asked, your opinion from strictly the financial end? Mr. Wynne stated, $100,000 is not a backbreaker.
Mr. Marrie asked, so we may gain a tremendous amount of good will? Mr. Wynne stated, from Council’s standpoint if it is something they want to do to give money back to the residents, this is how we want to do it.
Mr. Jerome asked, how much would the resident save? Mr. Marrie replied, about $50.
Mr. Marquardt stated, even if you decide not to do it, advertise that Mayfield Village is responsive to its residents and businesses.
Mr. Jerome stated, the fact that it is a renewal from 30 years ago; it’s not a ton of money today.
Dr. Parker stated, in some respect it shows that we are not just renewing it to renew it. We are looking at when it was done and why it was done. Obviously, if we needed to, we would come back and raise taxes. We increased our tax rate. We are always going to have situations where we have estates or non-estates. Those come and go over time without a doubt. Sure it was nice.
Mr. Marrie stated, as Bill said and you said, it’s not a lot of money. You can gain a ton of PR because even if it passed, why aggravate everyone. It shows that we are watching them as residents.
Mr. Wynne stated, if this is something we want to move forward on, it will have to be approved at July’s Council meeting because we have to take it to the Board of Elections.
Mr. Marrie stated, let’s work the crowd on that one if we do.
Mr. Marquardt stated, it should be on the agenda.
11. Injury leave compensation to seasonal employee
Mr. Wynne stated, we had a seasonal employee from the Service Department who sustained an injury on June 19th. The injury required surgery. He’s not going to be going back to work this year before he goes back to school. With Workers’ Comp insurance, he would receive 2/3rd’s of his normal base pay for the duration of the injury. He has compensation through the insurance pool.
Dr. Parker asked, was he injured on the job? Mr. Wynne replied, yes. We currently have on-the-job injury wage continuation for full-time and permanent part-time, but nothing for seasonal. The cost to do this for this individual through August 20th which is when his last day would be because he is going back to college, would be about $3,500. My recommendation to the Mayor was instead of having Workers’ Comp pay him that we pay him because it keeps the cost of those wages out of our experience in the Workers’ Comp pool. I don’t know if he will need additional surgery on top of the one he has already had or what kind of rehab he is going to have. The more expenses we can keep out of the Workers’ Comp insurance program, the less impact it will have on our pooled rating going forward.
Mr. Marrie asked, if he needs more surgery and/or rehabilitation after he goes back to school, we would pay for it? Mr. Wynne stated, that is paid for by Workers’ Comp. We have people today who sustained injuries 5-10 years ago that still have claims through Workers’ Comp because they have to go through rehab.
Mr. Marquardt asked, what’s the bottom line on this one? Mr. Wynne replied, $3,500 coming out of our pocket versus the Workers’ Comp insurance pool but it’s $3,500 less expense in our experience.
Mr. Saponaro asked, and after 6 years, it’s out of our experience? Mr. Wynne replied, yes.
Mr. Marrie asked, is it a big hassle for them if he went through Workers’ Comp? Does he have to go through a lot of stuff? Mr. Wynne stated, it’s a little bit of a hassle, nothing major. This way we can get him a check this week when we do payroll.
Mr. Marrie stated, I am fine. As long as he’s covered. It’s better for us.
ANY OTHER MATTERS
Mr. Marquardt asked if there were any other questions or comments.
Reporting on the Library drive lighting project, Ms. Wolgamuth reported that the bid opening is Friday. Once we get the bids, we will go back to the Library. They have agreed to participate but we don’t know to what extent they will participate. The Engineer’s estimate is $40,000. That’s what we budgeted. If we can get them to do half, we will be coming back for approval for $20,000.
Mr. Jerome asked about the turning lane. Ms. Wolgamuth stated, Tom Cappello has a traffic engineer looking at that. I also found out from First Energy that there will be no charge to hook up to the pole at the driveway. There’s a transformer there.
Mr. Marquardt asked, what about the Library paying 100%? Ms. Wolgamuth stated, I know you brought that up the last time. That’s why I wanted to mention it.
Mr. Marquardt stated, that’s okay. 100% or I won’t go for it.
Dr. Parker stated, there’s a way to spin that. In terms of the entire budget of their project, $40,000 is not a lot of money. Maybe if it is coming in at that amount, we should suggest that. It’s a smaller amount. Maybe it’s something they should absorb and take care of. You might be surprised that they will come back and say yes. If they do not, we have some bargaining with them. I would agree with Bill.
Mr. Marquardt stated, we gave them a million dollars’ worth of property. $40,000 is nothing.
Mr. Jerome stated, start with that. If they won’t do it, say, you guys cover the material, we will cover the labor.
Dr. Parker stated, I would not start messing around like that. It’s hard to put a number on it.
Mr. Metzung stated, it is our roadway.
Mr. Wynne stated, we already started a precedent. We put in a roadway.
Dr. Parker stated, they are building new libraries everywhere and throwing millions and millions of taxpayer dollars into it. I don’t know that necessarily they shouldn’t bear the responsibility for that lighting. If you are telling me they shouldn’t, that’s another story, but that’s not what I am hearing.
Mr. Metzung stated, my only concern with that is the future development of the back property and the ownership of the rights at that point of the roadway.
Mr. Marquardt stated, they are making a contribution to the Village.
Ms. Wolgamuth stated, we do have a development agreement with Progressive about the Campus III property that says the Village will create that roadway.
Mr. Marrie stated we have nothing to lose by asking them to foot the bill.
Mr. Dinardo asked, can you use that turning lane as leverage?
Ms. Wolgamuth stated, the first step is to see what the bids come in at and then we will proceed.
There being no further business, the meeting adjourned at 7:55 p.m. The next Finance Committee meeting is scheduled for Monday, July 21, 2014 at 7:30 p.m. in the Main Conference Room.
Mary E. Betsa, Clerk of Council