Special City Council Committee of the Whole Meeting
Meeting on the City’s Strategic Plan on Financial Recovery
City of Richmond Heights
July 19, 2011
Council President, David H. Roche, called the special meeting to order at 6:40 PM
Roll Call:
Present: Alexander, Gambatese, Headen, O’Toole, Roche, Henry (6:45pm)
Excused: Morgan
Motion to excuse Morgan by Gambatese, seconded by Headen. Motion passed 5-0.
Also present: Lynda Rossiter, Mayor Daniel Ursu, Todd Hunt
Roche said this is a working session on the follow up on City’s Strategic financial plan.
Mayor Ursu updated:
Financial Recovery Plan- reviewed legislation that will affect the charter on shared services with police, fire and building services with a partner city. There is a lot of work being this. This may go on the ballot for voters. We are also looking at revenue enhancement, such as looking at a change in the 100% tax credit in the City. A 2% credit limit may be something as well to look at. Law Director, Todd Hunt, is here to talk about these issues and the ballot language.
Charter amendments in Council- Headen asked about. Hunt said they have been read in Council. On July 5, 2011 there was a COW meeting and did not have quorum. Headen asked about if anything was voted on that night. Hunt said nothing was voted on with legislation and with only 3 members it could not be allowed anyways.
Update of recruitment of others- core group established and meeting times. Mayor Ursu said another special COW meeting should be called with members interested. Alexander said he would like to see a night meeting, as that has always been the time frame of meetings. He said it should be decided tonight whether or not it’s going on the ballot or not. Headen said we have only been looking at these issues for 3 weeks (tax issue and shared services). When we looked at the home-based business ordinance, we took 12 months to get that together and discuss it. We had a large meeting, well attended, before we voted on that. With the importance of this tax issue, it is too important to leave residents out. O’Toole said he is in favor of adjusting the tax credit to generate more money for the City. Let’s put something on the ballot.
Mayor Ursu updated the audience on things that the City has done to save money for the City, such as lay-offs and cutting hours. Are we satisfied with the way things are now with less staff? Or should we go back and try to restore things? Having 5 fewer police officers that we have now is something to consider in restoring. Are people satisfied?
Roche said the City does not have any money and said the City is quarter of a million in the hole. We do not have a General Fund balance so to speak of and no money in the Capital Fund budget to buy things we need, such as a new plow truck for the snow.
Headen asked about the Cash Flow projections and how the City can quantify its budget deficit if the cash flow projections for 2011 – 2013 do not show a deficit. In fact the cash flow projections show the City’s general fund balance growing each year.
The cash flow projection do not reflect all of the funds said Rossiter. Rossiter said there are a lot more funds that are not listed there. The Cash Flow chart is incomplete, Rossiter agreed. It has not taken into account all the concessions we are negotiating. Headen said the City’s financial health seems to be improving on the chart. With Senate Bill 5, there could be improvements next year if it fails, said Rossiter. Mayor Ursu explained some of the process in the Fact Finders process with the unions and the arbitrator.
Discussion was had on the work force in the City.
Review of the Charter amendments: Ordinance 43-2011
Hunt made amendments to the ordinance. 5 members of Council would need to vote on participation of shared services and 5 to vote on the abolishment of the Safety Director. Headen asked about the shared services for Recreation with other cities. Why can we not include this in the charter? Alexander said it is a part time position, with flexibility. There is little flexibility now with police and fire due to the Civic Service rules. Hunt said it would be good to pass next Tuesday, in order to get to the Board of Elections in August. Hunt said he did the least possible changes to the existing language with shared services, that’s been there a long time and approved by the voters.
O’Toole asked about the Service Dept- in combining cities. Will we have an issue with combined taxes? Hunt said if they are serving both cities jointly, there should not be an issue.
Headen- Civil Service – Section 6 has been struck out.
Gambatese asked about the Safety Director position- is there a need to change this position? Hunt said it would make sense to keep the position to oversee the shared services.
Alexander said this will put Richmond Heights
Headen noted that we are recommending amendments to the City’s charter in advance of finding another city interested in participating in regionalize with our city.
Mayor Ursu said the rules are very complex for partnership. Council is being very pro-active in their thinking, so we can do this. Other cities in the area may follow.
Hunt said regarding the Tax Credit issue, let him know the percentages and he can drop the numbers into the legislation. The Board of Elections is asking for things to be dropped off 2 weeks earlier than normal this year.
Roche brought up the discussion of services in the City- what to decrease/eliminate and what to improve/increase.
Alexander said to improve Police coverage in adding officers.
Headen said she spoke with other cities -- including Pepper Pike, Bedford Heights, Cleveland Heights, and Warrensville -- who put tax increases on the ballot. They took at least 6 months to discuss and put on the ballot and had a big public meeting. Other cities also commissioned surveys to get feedback from residents about what services they valued.
Concerning the standard of number of police per city, she said the accepted rule of thumb is 1-2 officers per 1,000 residents. Richmond Heights has a1.6 officers per 1,000 residents. Is our downsize the right size?
Alexander said we are living on the edge of having barely enough officers. If something major were to happen, we would not have enough here. We can not keep leaning on other cities to bail us out. We are on the edge.
O’Toole asked how different is mutual aid from regionalization?
Roche said more part timers and asked if Headen’s numbers truly reflect all the staff or just the officers. Headen replied that the numbers of full-time officers are reflected in the annual report of Chief Rowe’s annual report: there are 17 police officers and one part-time officer.
Henry said this is a good point. We are on the edge, but our finances are as well.
Alexander said with the tax credit, residents can vote it down or increase it, so we can add more officers.
Headen said she does not want to work with fear. Why is it that we would take on another unionized employee? Alexander said a part timer would be better. Headen said we can add a part-time officer without increasing taxes. Headen said the City was forced into the layoffs in 2008 because the Police union chose to eliminate junior officers rather than have all officers take a 2% pay reduction.
Mayor Ursu said with all the injuries to older officers and different circumstances in the police dept, Chief Rowe has been challenged in keeping a police work force. The Mayor said the average length of employment for a Richmond Heights employee is 15 years.
Roche said the City is in the Fiscal Watch category now, and if we don’t change this pace, a minor problem would put us in fiscal crisis.
Alexander said we can not run the City on bare minimum. There are going to be problems and we have no reserve to cover it.
Henry said reducing legal expenses is a big line item and should be looked at. Administration also has a lot of expenses. She also suggested looking at contractual expenses, since lots of money goes into contracts. Fire did not give in like police did. They never came forward with their $300K in the budget for cuts. They are a dept to look at. Freezing salaries are necessary until we get out of this mess.
Headen thinks Council needs to look further at the Tax Credit before putting on the ballot. Should hours go back to 35 hours from 40 hours? We should do some community surveys on this before we do anything else.
Alexander said Richmond Hts budget is so thin compared to other cities budgets.
Headen said we have always run thin. She has looked back on the budget from the auditor in years in early 2000’s and the budget has always been thin for the past 10 years. Why change?
Alexander said it’s really only been the past 3-4 years that we’ve had to run so thin. Over 80% of expenses go directly to employees.
Gambatese said our employee tax has gone down, and we do not have any big business in the City. These are issues we are running into. We communicate as best we can given the short reserves we have.
Headen said we do not even know a number yet on what to do for the tax credit.
Mayor Ursu asked if it’s healthy to go forward with small depts., and not having the ability to buy more things needed for the City. Are we OK with services being cut? Are residents ready to pay for it? If people have to make a choice on the services, we may find out what is needed and wanted.
Gambatese said we do not have an Operating Reserve, which is not good at all for a City. Who would want to regionalize with a City who is dead broke?
Henry said we need to look into this, discover why we are broke. Maybe we should go a little slower, let the residents help us decide, and involve the community. We need to think this through more.
Headen brought up the issue of financial statements- we are the only community that does not have its annual audited statements up to date to 2010. She checked all other communities on the web. If we truly do not know where we are at, how can we justify where we are at with the money? There was some mis-management, since the work is not done yet. Roche said there are 3 reconcilers and 2 auditors upstairs working now. Headen said then we should wait a few more months until we can get it right and know for sure. Don’t we need to go back and figure out what happened last December? Where did all the money go…where is the document? What went wrong? How can we guarantee this won’t happen again? We need to clean up our act first. We need just a couple more months until we figure this out.
Rossiter said without the concessions we were hoping for, she wondered where we’d get the appropriations to cover expenses.
Roche said to be a healthy economical community, we need to look at the tax credit.
If we looked at a 100% credit with a 1% limit, we would progress
O’Toole said he does not think there will be any surprises in the books with bank reconciliations to give us extra money. We have done a good a job as we can with the City. Even though we do not have all the financial info we can right now, if we have an emergency, we will be in big trouble next year. We need some sort of revenue enhancement on the ballot this November.
Headen said she is in favor of holding off and discussing more. The projections we were given for the next 2 years are incomplete. We have already raised taxes in 2007, 2008, and talking about for 2011. That tells me we have not figured out what we are doing wrong. We need to be able to reasonably predict these increases, and plan ahead some more.
Roche said the taxes that were passed, were not actually collecting as much that was passed on. 3 were reduced extensively.
O’Toole said we need to take the common sense approach, and get what we need now.
Henry said if we have a projection of what we need, and take the time, like Headen is saying, and get involvement from the people, we can get what we need. The community needs to be involved.
Gambatese said she believes we do have enough time here to discuss with the residents, and get their input in the next few weeks. If we can’t get it right in November, we’ll probably be in Fiscal Emergency and still have to go to the voters anyways.
“Measure twice, cut once”, said Headen. What is our budget deficit?
Roche said there was some question on the levies in the past. They do collect the same amount of money. The Fire Service Levy is bringing in 2% less now. The revenues have stayed the same and not kept up with inflation. The effective rate is .55, even though 2.55 was passed a few years back.
Mayor Ursu said no decision will be made tonight.
Audience:
Linda Pliodzinskas- School Board and resident:
We’ve had to put a renewal on the levy for schools, and have not been able to do a huge improvement with schools. We chose because of economy to go to the voters for a renewal. We spent $7,000 to survey the residents to ask what they would pay for. We had to do this fast. After getting the feedback, we saw what they’d spend. We put 4 mil on, even though we needed 8 mil. We had a plan in motion with the passage. It would be advantageous to get the City and School Board together, as we are both in deficit. We are both going to the same tax base. How can we create a plan together? The school has cut so many clubs, sports, bussing…ect. She thinks the City and School should work together that would be beneficial to all.
Pam O’Donnell, Rachel Lane :
Publicize any special meetings please, as she does not see on the website.
Sweepstakes companies legislation? Are we doing anything with them? People are saying you are not taxing these businesses. Roche said that is not true. They are in second readings already and in discussion. We don’t have all the data that you have, so would be helpful to have more info.
Paul Ellis, 4795 Rachel Lane :
My feeling is that unless we go to the ballot with a good plan in hand, you are going to be wasting your dollars. Unless you communicate well with the residents, it will not pass, just like the school levies had not passed for a long time.
Russell Johnson, Richmond
I agree with Henry and Headen. We are all having financial problems. You need to justify what you need and why? How have you been faithful with the dollars we’ve already given you? What promises have been made? The citizens are leery of what is going on, as the Board of Education has not fulfilled promises to the citizens in regards to bussing. What’s going on? The need has to be justified. We do not see the financial paperwork, so we don’t know all the details. You will get those dollars, if you take time and diligence.
Thomas King, Rachel Lane :
On revenue enhancement side are the delinquent taxes on the Trebisky Woods recoverable? That would be substantial. Roche said these things are out of our hands to a degree. The county is the tax collector for the gov’t agency.
Linda Pliodzinskas- School Board and resident:
This is why we need months to plan these things. Bussing was planned and things need to be planned, but they did not have the time either.
Vida Habjan, 4459 Rabun Lane :
Does Highland Ridge owe the City $300K? Roche said yes.
Financial Assistance needed- agree, but agree with the council women. We do need to balance our budget and see exactly what we need.
Headen said getting our financial statements in order is no small feat.
Nica Slade, Douglas Blvd
Sense the frustration as far as the school goes. She would like City to partner with the school. You are coming to the same tax base. She is a parent of a child in the schools. Many of us pay to send our kids to other schools. They are very important to our City.
Gambatese said the workshops and survey in 2005 was done in conjunction with the schools.
She asked to review the charter in manner of the schools. Otherwise, many people will be leaving the City. Efforts should be collaborated.
Roche said she needs to work with the School Board and Superintendent with her concerns on the schools.
Alexander added that the City has helped numerous times with the school, such as snow plowing, supporting levies and more. There is separation of entities as well.
Linda Pliodzinskas- School Board and resident said the school needs new facilities and we never got it. Our school buildings are from the 1920-1960’s. The City built a new City Hall and Police Station. Our services have decreased in the City and the school buildings, and homes, and none of us like it. If we stay separate, it’s not going to work.
Romas Pliodzinskas- resident: added that things are not credible in the City. Who is responsible?
Vida Habjan- added that more people need to come to these meetings.
Roche adjourned the meeting at 9:22 pm.
Minutes were taken by Betsy Traben, Clerk of Council
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