Finance - June 16th 2014

Monday, June 16, 2014 – 7:30 p. m.
Main Conference Room – Mayfield Village Civic Center

The Finance Committee meeting was held on Monday, June 16, 2014 in the Main Conference Room at the Mayfield Village Civic Center.  Mr. Marquardt called the meeting to order at 7:30 p.m.

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Present: Mr. Marrie, Mr. Marquardt and Dr. Parker (7:35 p.m.)

Also Present: Chief Edelman, Mr. Wynne, Mr. Metzung, Chief Carcioppolo, Mr. Thomas, Ms. Wolgamuth, Mr. Dinardo, Mr. Esborn (7:50 p.m.), and Mrs. Betsa

1. Discussion of a motion to authorize expenditure in an amount not to exceed $7,500 for Volunteer Appreciation Event.

Mr. Marrie stated, this was discussed pretty thoroughly last time.

The Committee recommended Item #1 for approval.

2. Discussion of a motion to authorize expenditure in the amount of $3,750 plus $570 a month to All  Covered for server back-up and disaster recovery device.

Mr. Marrie asked, is the payback 16 months?  Mr. Wynne replied, 16 or 18 months.

The Committee recommended Item #2 for approval.

3. Discussion of a motion to authorize expenditure in the amount of $5,830 to CompManagement, Inc. for Workers’ Compensation pooled rating program 2015 enrollment fee.

Mr. Wynne reported, this is our annual fee to CompManagement to be part of the pooled rating program through the Ohio Municipal League.  I actually met with the person today. By being part of that pooled rating program, our savings next year will be $28,000.

The Committee recommended Item #3 for approval.

4. Discussion of a motion to authorize expenditure in an amount not to exceed $52,123.15 to Northcoast Two-Way Radio, Inc. for in-car video system for police department cars.

Chief Edelman reported, this is for the videorecording system.  I had another unit go down last week.

Mr. Marrie stated, you can’t operate without them.  Let’s do it.

The Committee recommended Item #4 for approval.

5. Discussion of a motion to authorize expenditure in an amount not to exceed $465,397 to Rosenbauer Engine for replacement of Fire Truck (actual cost $517,123 less trade-in).

Chief Carcioppolo stated, that number should actually be $478,862.  The total cost would be $517,123. Once we subtract out the trade-ins and the pre-pay discount once the chassis is done, it would come out to $478,000.

Mr. Marrie asked, net?  Chief Carcioppolo replied, yes.

Mr. Wynne stated, Council needs to approve the gross amount of the purchase for the vendor.

Mr. Marquardt asked, which is, the $517,000 number?  Chief Carcioppolo replied, $517,123.

Mr. Marrie asked, Ron, why?  Mr. Wynne replied, because you are approving a payment we are going to make to a vendor.

Mr. Marrie stated, but you are really not going to pay him $517,000.  Mr. Wynne stated, right, but the way we record it on the books is the purchase of the vehicle at gross as an expenditure and then we record the trade-in and the discount as a revenue item separate from the expenditure.

Chief Carcioppolo stated, this is the contract from them. Once we release the vehicle, then this vendor will pay for the trade-in.  Rosenbauer will take it off of our bill. 

Mr. Wynne stated, you might want to pass the motion gross to have it on record with the trade-ins.

Mr. Marquardt asked, so the gross is $517,123. What was the net again?  Mr. Marrie replied, $478,862.

Chief Carcioppolo stated, and this is part of it, this piece of equipment that goes on it is a hydraulic pump to run the hydraulic tools and this is through a different vendor. 

Mr. Marquardt asked, is this new?  Chief Carcioppolo replied, no this was always included in the price of the truck, but if we do it through the vendor, it’s $2,000 additional, so if we buy it from this company, they will drop ship it to the manufacturer.

Mr. Marquardt stated, so straighten out the numbers now.  If you bought that, that was part of the $517,123?  Chief Carcioppolo replied, yes.  Mr. Marquardt asked, now you want to buy it separately?  Chief Carcioppolo replied, it’s part of the package.  Mr. Metzung stated, but it’s a different vendor.

Dr. Parker asked, how much savings is it by buying it through them? Chief Carcioppolo replied, $2,000.

Mr. Marquardt stated, I don’t have an objection. It’s just that you have got to get the numbers right.

Chief Carcioppolo stated, okay, so I can subtract $9,312.

Mr. Marquardt stated, this is $517,123 to Rosenbauer Engine for replacement. If you want to buy that separately, then you need a separate purchase order for approval.  It has to be a separate line item.

Chief Carcioppolo replied, okay. Well, we don’t need that right now.

Mr. Marquardt asked, what is the net cost we are approving here? Do we subtract that off of the $517,123?

Dr. Parker asked, can’t we just amend it?

Chief Carcioppolo replied, $507,811 would be to Rosenbauer.  Mr. Marquardt stated, that’s the gross. Chief Carcioppolo replied, yes.  It would be $469,550. 

Mr. Marrie stated, okay, that’s the two numbers we are going to approve and then you are going to send a separate thing for the other thing later on.

Mr. Marquardt stated, all right. Here’s what we have. We have authorizations to Rosenbauer Engine for a gross of $507,811 which will net out after trade in to $469,550.

Chief Carcioppolo stated, after trade in and pre-pay for the chassis.

Mr. Marrie asked, and then you will send that through completely separate?  Chief Carcioppolo replied, yes, I can do that separately.

Dr. Parker asked, you are reducing one by $10,000 but you are only reducing the other one by $4,000?  What was the $465,000?  Mr. Wynne replied, the $465,000 was already amended to $478,862.  Dr. Parker stated, makes sense then.

The Committee recommended Item #5 for approval.

6. Discussion of a motion to authorize expenditure in an amount not to exceed $20,000 to DJL Materials for crack sealant. 

This is an annual expense.

The Committee recommended Item #6 for approval.

7. Discussion of a motion to authorize purchase of 1,500 tons of salt through the ODOT summer salt program from Morton Salt at $47.90 a ton.

Mr. Metzung stated, we are already committed to it. Dr. Parker added, it’s a no-brainer. It is what it is.  Mr. Marrie agreed.

The Committee recommended Item #7 for approval.

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

The Committee recommended Item #8 for approval.

9. Motion to authorize additional expenditure in the additional amount of $3,300 to Petroleum Maintenance Electronics, Inc. for fuel system for Fire Department.

Mr. Marquardt asked, is the plan to go with the wired?  Chief Carcioppolo replied, we tried to go through the conduit. I even had my guys check to make sure the conduit was good just to make sure there wasn’t an error. There is no way to get the line out to the fuel pump. Either we could put the wireless in for $3,300 or we can trench and cut the concrete and put the hard wire in for $3,000.  I thought I would leave it up to you guys. I prefer to do the wireless route.  

Dr. Parker stated, that’s the way things are going. Mr. Marrie agreed.

The Committee recommended Item #9 for approval.

10. Discussion of the First Reading of Resolution No. 2014-14, entitled, “An Emergency Resolution authorizing the Mayor and President of Council to enter into a Mutual Exchange of Services Agreement with Mayfield Heights and Highland Heights, Ohio for lifeguard services.” Introduced by Mayor Rinker and Council as a Whole.

Mr. Marquardt stated, this was discussed at Caucus. Are there any objections? There were none.

The Committee recommended Item #10 for approval.

11. Discussion of the First Reading of Resolution No. 2014-16, entitled, “An Emergency Resolution declaring it necessary to improve Eastgate Drive and Meadowood Drive between certain termini by constructing sanitary sewers, sanitary sewer service connections and manholes, installing, where necessary, force mains and storm sewers, and replacing, where necessary, pavement and driveway aprons, all together with the necessary appurtenances thereto.” Introduced by Mayor Rinker and Council as a Whole.

Mr. Marquardt asked, do we have a dollar amount on this that we are approving?  Mr. Wynne replied, we are not really approving anything. This is just giving the go-ahead for the project. We will be sending notices to the residents.

Dr. Parker asked, so we have already gotten numbers on it and everything?  Mr. Wynne replied, no.  The Engineer has put his estimate together, but we have not gone to bid on the project. The way the process works is once this is passed tonight we will send notices to the residents letting them know that Council has approved the project and that the estimated assessment to them will be $7,200 if they pay it lump sum or $480 a year if they go with the installment basis.  They then have two weeks after they receive the notice from us to file a complaint or a hardship claim. We would then have to go through a separate process.

Dr. Parker asked, what is the total project costing us?  Mr. Wynne replied, the Engineer’s estimate is $2.7 million for the whole project.

Dr. Parker asked, how much funding are we getting?  Mr. Wynne replied, none.  Mr. Marrie added, we are doing this ourselves. All this is just for the go ahead.

Dr. Parker stated, we are saying it’s necessary.  I know this has probably been answered before, but is it necessary $2.7 million or is there a reason, is it something we should try to apply again for something?  Mr. Wynne replied, we have done it three years in a row and have been turned down every year.  Dr. Parker stated, okay, that’s fine. I just wanted to make sure.

Mr. Marquardt asked, is there any objection? There was none. Mr. Marrie stated, we have to pass this tonight. 

Mr. Wynne stated, this doesn’t approve the project. It is just saying that Council determines that the project is necessary so we are going to notify the residents that we are going to move forward with it and this is what the assessment will be to them.  There will be separate legislation that will come about a month from now that will allow us to go out to bid.

Mr. Marrie asked, but you need it passed tonight?  Mr. Wynne replied, it’s a Resolution.

The Committee recommended Item #11 for approval.

12. Discussion of the First Reading of Resolution No. 2014-17, entitled, “An Emergency Resolution authorizing the Mayor and President of Council to enter into a Memorandum of Understanding between the Cuyahoga Soil and Water Conservation District and Mayfield Village.” Introduced by Mayor Rinker and Council as a Whole.

Mr. Metzung stated, this is for our Phase II inspections. 

Dr. Parker asked, how often will we have to approve that?  Mr. Metzung replied, once a year.  This is the first one we have done with these guys. We also do one with the Health Department that does our inspections of our outfalls.  This is very similar to that.

Mr. Marquardt asked, so these guys are going to be doing our inspections for the engineer? Mr. Metzung replied, correct.

The Committee recommended Item #12 for approval.

13. Discussion of the First Reading of Resolution No. 2014-18, entitled, “An Emergency Resolution authorizing and directing the Mayor to enter into an amendment to the Urban County Cooperation Agreement between the Village of Mayfield and Cuyahoga County.” Introduced by Mayor Rinker and Council as a Whole.

Mr. Marquardt asked, this is new?  What’s the deal?

Ms. Wolgamuth asked, Mary Beth, who put that on the agenda?  Mrs. Betsa replied, the Law Department forwarded it to me.

Mr. Marquardt stated, I am not going to recommend approval. I would say defer action. We have no information on it.

The Committee deferred Item #13 for additional information to be provided.

14. Discussion of a motion to authorize going out to bid for Civic Center entry drive project.

Mr. Metzung stated, Ted has received information that we will be receiving the Swift Grant.

Mr. Marquardt asked, what are we getting and how much are we spending?  Mr. Metzung replied, we are spending $50,000 that we put into the project originally and we are getting more. I don’t remember the number.  Ted knows the numbers.  

Dr. Parker asked, how are we getting more than what we are spending?  Mr. Metzung replied, actually, it’s a fully-funded grant but they look for you to put money in to help make their decision easier. We are receiving a grant. 

Mr. Marquardt asked, so the total project is in the neighborhood of?  Mr. Metzung replied, $170,000-200,000.  When Tommy comes in, we can ask on the Council floor. I don’t recall.  Mr. Marquardt suggested that Council has some numbers for the meeting. 

The Committee recommended Item #14 with numbers for approval.


Mr. Marquardt asked, are there any other items?

With regard to the bonds, Mr. Wynne reported, I don’t know if you recall about a year or year and a half ago we were looking at the possibility of doing a refunding which is like a refinancing. The interest market changed too quickly before we had a chance to jump in to make it worth our while.  I kept in touch with our investment guy every month keeping tabs on what was going on with the market. We spoke last week. The time is right right now.  We can approach it two ways. One would be a private placement through a bank. We have already gotten preliminary quotes from Charter One and Huntington Bank who are interested in doing it.  Our bonds are currently anywhere from 3.5-5%. They are coming in at around 2.5%.  If we did private placement, I’ll just use Huntington because they are the cheaper of the two right now, the estimated numbers would be an interest savings of $300,000 over the remaining 12 years of the life of the bond. We still would be paying the same principal amount but just reduced interest.  He is going to finalize numbers hopefully tonight and get with me tomorrow. If we decide to move forward with it, it’s just a matter of locking it in with the bank and it’s done pretty quickly. The other route would be to go to market and do an official statement. That process will take two and a half to three months. You run the risk of the interest rate market changing again. Based upon where the market is right now, the savings on that going to market would be about $360,000 over 12 years.

Mr. Marquardt asked, what would you need tonight? Mr. Wynne replied, nothing tonight. I just wanted Council to be aware of it.  Think about it. Do we want to sacrifice a potential $60,000 in savings to lock us in right now, or do we want to go for the $360,000 and do the official statement and run the risk of the market changing over the next two and a half, three months and potentially coming away with nothing? 

Mr. Marquardt asked, do you need a decision tonight?  Mr. Wynne replied, no.  I don’t really have hard numbers to give you. 

Mr. Marquardt asked, you said you could do it immediately.  Would you have to do it immediately?  Mr. Wynne replied, I haven’t seen the proposal from Huntington yet as to how long they will hold that interest rate.  Our investment banker was trying to negotiate the rate down from even the 2.5%.  He was trying to negotiate it down a few more points.

Mr. Marrie asked, are you leaning towards the private?  Mr. Wynne replied, it’s kind of nice to take the sure thing.  You don’t want to leave $50,000-60,000 on the table either.

Mr. Marrie stated, but that’s over 12 years.

Mr. Marquardt stated, let’s wait until we get the numbers and see what the numbers and timing are.  We appreciate the alert.

Mr. Marquardt had a question about item number 5 that was on Finance Caucus, the $1.9 Various Purpose Improvement Notes. Did we need to do anything on that?  It’s not on the agenda.  Mr. Wynne replied, no, that was just an fyi.  I will have legislation from the bond counsel for the July meeting.

Mr. Marquardt asked, any other issues?

Mr. Metzung replied, Ted has the numbers for the Swift Grant.

Mr. Esborn reported, so what we requested is an amount that is for the line items directly related to the stormwater like the pervious pavers themselves, the engineering, and there are other items like removing the concrete walk and excavation and embankment construction that are not included in our request.  However we do those things, whether we do them in-house or we pay somebody to do them, that’s our match.  We requested $126,000 for a $179,000 project.

Mr. Marquardt asked, so the grant is for $126,000?  Mr. Esborn replied, that’s right.

Mr. Marquardt asked, we are going to put in about $50,000?  Mr. Esborn replied, that’s right.

Mr. Marquardt asked, any questions on this? There were none.

Mr. Marquardt asked, any other matters?  There were none.

Dr. Parker, seconded by Mr. Marrie, made a motion to adjourn.

There being no further business, the meeting adjourned at 7:54 p.m.

Respectfully submitted,

Mary E. Betsa, Clerk of Council