Finance: June 19th 2017

MINUTES OF THE FINANCE COMMITTEE MEETING
Monday, June 19, 2017 – 7:30 p.m.
Main Conference Room – Mayfield Village Civic Center

The Finance Committee meeting was held on Monday, June 19, 2017, in the Main Conference Room at the Mayfield Village Civic Center.  Chairman Saponaro called the meeting to order at 7:30 p.m.

Present: Mr. Saponaro, Mr. Marquardt, Mr. Williams, and Mrs. Mills

Also Present: Mayor Bodnar, Mr. Marrie, Mr. Wynne, Mr. Diemert, Mr. Metzung, Chief Edelman, Mr. McAvinew, Chief Carcioppolo, Mr. Marrelli, Mr. Cappello, Ms. Wolgamuth, and Mrs. Garbo

Approval of Minutes of Meeting of May 15, 2017

Mr. Marquardt, seconded by Mr. Williams, moved to approve the Minutes of the Meeting of May 15, 2017.

ROLL CALL:  

Ayes: All
Nays: None

Motion Carried. Minutes of Meeting of May 15, 2017 Approved as Written.

1. Discussion of a motion to authorize an expenditure in the amount of $5,150 to Hicap Renovations for painting of exterior entrances of Civic Hall. (Building Department)

Chairman Saponaro stated, we have discussed this at Caucus and on the floor.  Is there any other information we need on this?

Mr. Marrelli replied, I don’t have anything else.

Mr. Wynne replied, the budget was $25,000, so we are well under budget on this.

Ms. Wolgamuth asked, does it include the entry off of the parking lot?

Mr. Marrelli replied, it does not.  It skips the north and south.

Ms. Wolgamuth stated, just because that entryway can use some paint.

Chairman Saponaro asked, so it’s not the entryway off the parking lot then?

Mr. Marrelli replied, no.  We might be able to work something out.

Mr. Metzung stated, you are going to have to do it now.  They are going to have to vote on it.

Mr. Marrelli stated, no, I mean I might be able to work something out with this cost.  We will see.

Chairman Saponaro asked, did you want to amend it to do a “not to exceed” amount?  I think that’s what someone was prompting you to do.

Mr. Marrelli stated, if you want to add $500 to it, that would be fine.

Council President Saponaro stated, I don’t know. You tell me what it should be.

Mr. Marrelli stated, I don’t think any more than $500 to do that entryway.  We can do that.  Let’s amend it then.

Chairman Saponaro stated, all right.  We are going to amend this to be an expenditure not to exceed $5,650.  Does anyone have any questions?

There were none.

The Committee recommended Item #1 for approval.

2. Discussion of a motion to accept bid and to authorize expenditure in the amount of $37,999.82 to Signal Service Company for traffic signal improvements at Wilson Mills Road and Worton Park Drive. (Engineer)

Mr. Cappello stated, this is an illuminated LED No Left Turn sign that will only be on from 6:00-9:00 a.m. and 3:00-6:00 p.m. at the intersection of Worton Park and Wilson Mills.

Chairman Saponaro asked, any questions?

Mr. Wynne stated, we had a budget of $100,000 for that.

The Committee recommended Item #2 for approval.

3. Discussion of a motion to accept bid and to authorize expenditure in the amount of $27,647.46 to Pat Flowers, Inc. for 2017 Street Striping Program. (Engineer)

Chairman Saponaro asked, anything in addition to this?

Mr. Wynne stated, our budget for this is $27,000.  It’s a little bit over.

Chairman Saponaro asked, any other discussion?

There was none.

The Committee recommended Item #3 for approval.

4. Discussion of a motion to acknowledge receipt of financial reports for May 2017 and to approve of same as submitted. (Finance Department)

Chairman Saponaro stated, everyone’s had an opportunity to look at these as well.  Any questions or discussion points?

There were none.

The Committee recommended Item #4 for approval.

5. Discussion of a motion to authorize going out to bid for Senior Snow Removal program for 2017-2018.  (Recreation Department)

Chairman Saponaro asked, any other questions on this or discussion?

There was none.

The Committee recommended Item #5 for approval.

6. Discussion of the First Reading of Ordinance No. 2017-28, entitled, “An Emergency Ordinance authorizing and directing the Mayor and President of Council to enter into a Community Development Supplemental Grant Agreement with Cuyahoga County, Ohio.”  Introduced by Mayor Bodnar and Council as a Whole.  (Administration)

Ms. Wolgamuth stated, nothing new. This is the Agreement for the $50,000 for the bandshell.  Mrs. Garbo, do you have the actual Agreement for signature tonight if it is approved?

Mrs. Garbo replied, I will check.

Ms. Wolgamuth stated, once we get them the Agreement because most of the work is done, they will just cut us a lump sum check for $50,000.

Chairman Saponaro stated, all right. Very good. Any other questions?

Mrs. Mills asked, do you want that passed tonight?

Chairman Saponaro replied, we will need it passed tonight, so we will have to do a motion to suspend on that one.

The Committee recommended Item #6 for approval.

7. Discussion of the First Reading of Ordinance No. 2017-27, “An Emergency Ordinance Adopting a Tax Budget for Mayfield Village, Ohio for the Tax Year 2018”, Introduced by Mayor and Council as a Whole.

Chairman Saponaro stated, this is something we do every year at this time to advance a budget to the State as required.  This also needs to pass, correct?

Mr. Wynne replied, correct.

Chairman Saponaro stated, okay, so we will do a motion to suspend on this one.  Are there any discussion or questions on this?

There were none.

The Committee recommended Item #7 for approval.

8. Discussion of Resolution No. 2017-06, entitled, “An Emergency Resolution Authorizing the Mayor and President of Council to enter into a Memorandum of Understanding with the Cuyahoga Soil and Water Conservation District for providing technical assistance in implementing soil and water conservation measures.” Introduced by Mayor Bodnar and Council as a Whole.  (Administration)

Chairman Saponaro stated, this was also discussed at our last meeting as well as at Caucus.  Nothing has changed. Any other discussion points on this?

There were none.

The Committee recommended Item #8 for approval.

Any Other Matters

Chairman Saponaro asked, are there any other matters?

Mr. Wynne stated, yes.  At the Caucus meeting, I mentioned that at some time this month we would be getting our renewal for our property and casualty insurance.  I met with the broker late Friday afternoon so we did not have the chance to get the agenda updated with renewal numbers.  Seeing as these policies expire at the end of June, if possible, I would like it if the agendas could be amended for approval tonight.  The renewal was for $90,975 which is a 4.6% increase over last year for the same coverage.  Considering the two legal matters we are involved with right now that involve our insurance company, I was pretty pleased with that increase.

Chairman Saponaro asked, do we have a p.o. or anything that’s sitting out there that’s in writing somewhere?  Can we get a copy of their renewal and give it to everyone on the floor so at least everyone can have the opportunity to look at that and we will have a discussion on it and you can maybe guide us through it?

Mr. Wynne replied, sure.  In addition to that, they have recommended two changes to our existing coverage.  We currently have a $5 million umbrella policy that goes over everything.  Most communities now are at $10 million. There is a consortium of municipalities in the northern part of the State called NORMA that is at $15 million for their umbrella so they recommended going from $5 million to $10 million on the umbrella policy which would be an increase over the $90,000 number I gave you of about $3,400 in premium.

Chairman Saponaro asked, is that something we have to do at the same time as the property and casualty?

Mr. Wynne replied, the language I drafted for the approval would be a motion for not to exceed $105,000 which would include the renewal, the increase in the umbrella and also I am going to be filling out an application to get a quote on a cyber policy.  That’s something the broker has been pushing for the past 3-4 years and in light of the Ransomwear case recently, he strongly suggests we take a look at it.  At least I want to fill out an application so he can send it to underwriting and get an official quote but he said the quotes on those policies have been averaging $4,000-5,000 a year.

Chairman Saponaro stated, so in order to have a discussion here we need to add this to the agenda, so we are going to amend this agenda and we are going to have a discussion of a motion to authorize an expenditure not to exceed $105,000 for the Village property and casualty insurance and umbrella insurance policy renewals.

Mr. Wynne replied, you can just call it property, casualty and risk management insurance.

Chairman Saponaro asked, everyone is okay with amending to add this to the agenda?  Does anyone have any concerns, questions or problems with that?

There were none.

Discussion of a motion to authorize an expenditure not to exceed $105,000 for Mayfield Village property and casualty and risk management insurance for 2017-2018.

Mr. Wynne stated, $105,000 is the $91,000 renewal, approximately $3,400 for the increase in umbrella, potentially $5,400 for the cyber policy potentially and the additional amount is just things we will after add after the renewal date, like once the financial is completed, we will have to put that on the policy, when Fire gets their vehicle, I will have to put that on the policy so that extra $4,000-5,000 just covers changes we will have to make during the year as we add to our assets.

Chairman Saponaro asked, any questions on the floor?

Mr. Marquardt asked, this has to be passed this month?

Mr. Wynne replied, our current policy expires June 30th.  If you want to wait and pass it in July you can, but I would like to at least give them a verbal approval with the renewal of the $90,000.

Mr. Marquardt stated, it would be nice to have this all documented before we vote on it.  Kind of early.

Mr. Wynne replied, I got this late Friday afternoon.

Chairman Saponaro asked, if we do not vote on it this evening, what does it do Ron, just so we are aware?

Mr. Wynne replied, our current policy expires June 30th.

Chairman Saponaro asked, so basically we have to vote on it otherwise we won’t have a policy in place?

Mr. Wynne replied, pretty much.

Mr. Marquardt asked, it’s the same company.  Why didn’t they get it to you earlier?

Mr. Wynne replied, I don’t know.  I was out of town in training all week and came back Friday afternoon to meet with them to go over this so I could have it for tonight.

Mayor Bodnar asked, have we evaluated any other insurance companies?

Mr. Wynne replied, these are brokers that he usually goes through.  He gets quotes from multiple providers.  This year he did not because of the legal matters going on right now.  He said it would not be wise to go to market with those two claims.

Chairman Saponaro asked, what’s everyone’s thoughts on this?

Mrs. Mills asked, is there an extension clause?

Mr. Wynne replied, not in the paperwork I have here.

Chairman Saponaro asked, so what do we want to do?  Obviously in a perfect world we would have more time to do this.

Mr. Marquardt stated, I don’t know why we don’t.  That’s not our problem.  They should be able to factor something in somehow.

Mrs. Mills stated, we have been with that company forever, right?

Chairman Saponaro asked, Joe, do you see this an issue?

Mr. Diemert replied, I would hate to have the policies lapse and then they use their clauses in there to say that now you are not covered because the policy lapsed.  It is a claims-made so what we already have pending will be covered.  Even if we drop this company, it will be covered by them, but we don’t know what else could creep up in a non-covered week or two or month.  So we have to trust our broker if we use him and we pay him for this kind of service and he says we can’t go out and market other companies, now we are going to have to take this one.  I don’t know what we all could do about it.

Chairman Saponaro asked, from a legal perspective, your recommendation is to either vote on it tonight or have a special meeting, but it has to be done before the end of the month?

Mr. Diemert replied, paperwork has to be signed off by the end of the month, so even a special meeting is giving Ron and the broker very little time to get it done.

Chairman Saponaro stated, I understand.  So based on that, what’s everyone’s thoughts on this?  I understand.  Somebody should admonish the broker or talk to him or her or whoever it is.  It’s not the way we operate.  I don’t know why this is different this year than it is every other year.  We have always had this prior to it.  We don’t ever get up against this.  Unless, Ron, we have.

Mr. Wynne replied, I went back last year and checked.  We approved it at a Special Meeting the night of the July Caucus last year.  I don’t know if the timing was the same or we did a straw poll or something prior to that and just formalized it at the Special Meeting.

Chairman Saponaro stated, we probably did a straw vote which we can’t do anymore, so that won’t work.  Now we have to have a formal action.  Tommy, what’s your thoughts on this?

Mr. Marrie replied, personally I think it’s unfortunate that it’s here, but it’s like an elephant in a closet, you can’t get rid of it.  I think we would be foolish not to cover ourselves for that.  We are leaving the whole Village vulnerable.  It should pass.

Chairman Saponaro stated, sure. George?

Mr. Williams stated, I think we should move forward tonight and then have a statement of final review.

Chairman Saponaro asked, Patsy?

Mrs. Mills replied, we need to go forward with it.  That’s true.  But I think we have to set up some parameters for next year on this so we have more time to look at this.

Chairman Saponaro stated, agreed.

Mr. Marquardt stated, yes.  I agree with that.

Mrs. Mills continued, mainly because you have to go out into the field now and get all these quotes and everything else.

Mr. Diemert asked, does he quote NORMA, or they don’t use agents, the brokers?

Mr. Wynne replied, NORMA is something I am going to look at next year.

Mr. Diemert stated, maybe you ought to start looking at them right now.

Mayor Bodnar agreed.

Mr. Wynne replied, we have gone out to the market twice with other insurance carriers.  He has always been the best one.

Mayor Bodnar stated, but not necessarily the best coverage.

Chairman Saponaro stated, whoever is going to look at us, they have to be able to do an audit at their cost to show our coverages, not just the dollars, but our coverages and why they work and don’t work. It takes a lot of time and it costs them money.  If someone were to just call them up and say, hey do an audit, it’s $2,500-3,000.  They do that if they want your business.  This is a big enough book of business that they should do that.  They should be able to run a comparison to show why it will work and not work and then make a good decision.

Mr. Diemert stated, NORMA should always be one of the comparisons.

Chairman Saponaro asked, and NORMA again stands for?

Mr. Diemert replied, the Northern Ohio Regional Municipal grouping. I have had municipalities, still do, that are in the NORMA group and they are all municipalities who more or less self-insure and then they have an underwriting company write the big dollar back-up items for things.  They handle claims all within the group and they have their own Board which is members of the municipalities.  You are not really being represented by brokers or agents or underwriters. You are representing yourself.  You still need them to go out and get the back-up coverage and things like that.

Chairman Saponaro asked, so when we have a discussion the floor, and I am asking that because I think it’s good for our Minutes, if you wouldn’t mind explaining what NORMA is?

Mr. Diemert replied, sure.  The NORMA group, traditionally, has gotten away from it somewhat, but experienced Law Directors, they let them do the defense and then they pay, so a lot of times the Law Director also has to be involved in the case, so the insurance company hires their own lawyer, the Law Director still has to be involved in the case, so the Village still ends up paying for that, but when NORMA hires somebody, they often hire the Law Director if they have experience in that area.

Chairman Saponaro stated, it’s a savings.  Anyone else before we move on?

Chief Carcioppolo stated, one more thing to consider is we also are the insurer for the Regional Tech Team vehicles.  We hold title and insure all the vehicles used by the Regional Tech Rescue Team.  That’s another thing to think about.

Mr. Wynne replied, that’s true.

Chief Carcioppolo stated, their insurance company would not provide that insurance, even though they have Wichert.  For some reason, only our policy would allow for that.

Mr. Diemert asked, and then we get reimbursed?

Chief Carcioppolo replied, yes.

Mr. Marquardt asked, so what’s the action?

Chairman Saponaro stated, we have to vote on approving not to exceed $105,000 for property and casualty insurance.

Mr. Marquardt asked, and the rest of that is after that?

Chairman Saponaro replied, right.  The rest of it is sitting down with this person and figuring out what our plan is going to be.

Mr. Diemert stated, I would start now so you have it months ahead of time.

Mr. Wynne stated, if you want, you can just approve the renewal of the $90,975 and not the increase in the umbrella or the cyber because I don’t have hard numbers on those yet and then I will come back to Council once it goes through underwriting and I come back with those numbers.

Chairman Saponaro stated, we have already done it in a not to exceed.  I would have to amend this in order to approve it.  How does everyone want to do this?

Mr. Wynne stated, to me, if you do a not to exceed, it’s there, it’s done.  When the numbers come back, you still have the final look and say yea or nay.

Chairman Saponaro stated as long as it is very clear and on the record that Council wants the final look, then I would recommend we stay with the not to exceed $105,000.  Is everyone in agreement with this?

There was no further discussion.

ANY OTHER MATTERS

Chairman Saponaro asked, are there any other matters that need to come before the Finance Committee at this time?

There were no further matters to discuss.

There being no further matters, the meeting adjourned at 7:55 p.m.