November 22, 2021, Finance Committee, CoW & Special CC Meetings

Finance Committee Meeting

The purpose of the November 22, 2021 Finance Committee meeting was to discuss the 2022 city budget. (You can view the meeting on YouTube HERE.)

The meeting opened with public comments. A representative from the Greater Cleveland Congregation (GCC) Housing Team read a letter advocating for a reassessment of budget cut proposals that would cut 30% across all departments. As the city has stated that housing is its number-one priority, she argued that the city should cut in a targeted manner that would better reflect the city’s priorities. She asked that council reaffirm the city’s commitment to housing by:

  1. increasing Housing Department staff to a minimum of 10 (the 2019 level), or more, and bringing all point-of-sale inspections back in-house as soon as possible, and
  2. funding a one-time survey by Thriving Communities of all housing units in Cleveland Heights to identify the most blighted properties, including data to know which are bank- or investor-owned properties and, thus, most at risk, and to make this list our target for a proactive approach to our housing challenges.

Next (beginning at 5:10 in the video), our Finance Director, Amy Himmelein, presented information clarifying how the city came to be in our present financial state, which is necessitating significant budget cuts to remain financially solvent. (Note: Financial solvency includes not only a balance budget but also maintaining about a 17% reserve fund balance, which comes to around $9–10M, so as to retain our city’s bond rating.)

Himmelein reviewed spending and revenues, as well as one-time payments and expenditures, over 2020 and 2021, some of which was a result of responses to the COVID pandemic, and some were coincidental payments and expenses during this time. While we closed out 2020 in a strong financial position, large one-time expenses as well as multiple budget increases in 2021, along with depleted revenues in some funds, resulted in our reserve fund balance falling from $18.1M at the close of 2020 to an anticipated $4–5M at the close of 2021.

The City Manager noted that the Parking Fund needed to be subsidized due to the suspension of parking meters in response to COVID, but in January 2022, the city will resume charging at parking meters, and that will help make the Parking Fund whole and decreasing/eliminating the need for subsidies from the General Fund. In addition, we anticipate higher revenues from recreation facilities as we increase activities in 2022 closer to pre-pandemic levels.

In addition, the City Manager and the Finance Director noted that, prior to our current Finance Director being employed with the city, it was the city’s practice to budget for a deficit but that they have now changed our budgeting methodology to one that is “more conservative and realistic”—that is, budgeting within anticipated revenues. Himmelein stated that this approach is more sustainable and flexible in the face of emergencies, as well as helps us prepare for increased capital spending (equipment replacement, road work, etc.), which is greatly needed in our city.

Finance Committee Chair Councilmember Hart asked about determining where we can use American Rescue Plan Act (ARPA) funds for revenue replacement to re-establish our reserve fund balance and avoid a downgrade of our bond rating. Himmelein stated that we cannot use ARPA funds for revenue replacement for 2020; we need to wait until 2021 is closed before we can see if we qualify for ARPA funds for revenue replacement for 2021, so we would not see those funds until 2022—if we are eligible. Hart then asked about finding out whether any of our already-paid expenditures in 2021 would be eligible for ARPA funds, which would enable us to increase our reserve fund this year.

The City Manager also stated that they have chosen, per our city’s values, to budget for moderate pay increases not only for our union employees (which are negotiated by the unions) but also for our non-union employees.

Councilmember Cobb asked about budgeting for increased fire and police pensions, which Himmelein responded is something she will be discussing with our new mayor when he takes office. He also asked about legal fees; Law Director Bill Hanna responded that they recently added a part-time counsel to bring legal costs down.

Councilmember Russell asked to have the budget presented differently to more readily lay out past years’ budgets and actual revenue/spending to next year’s budget. She then asked how the departments’ cuts will impact our residents.

The City Manager then explained that she had previously asked all department heads to cut 30% from their department’s budget for the coming year. The City Manager and department heads are still determining just how these cuts will be made; some proposals, such as shortening the Cumberland Pool season, were determined to be unacceptable.

Police Chief Annette Mecklenburg stated that they are cutting no personnel, but instead are primarily making cuts to the jail, as there are fewer people in the jail due to COVID, as well as trainings and educational expenses. She hopes to use the Law Enforcement Trust Fund, which is separate from the General Fund, to pay for training not paid for by the General Fund.

Council President Stein asked about budgeting in the future for necessary vehicle and equipment replacement. The City Manager stated that we have purchased several vehicles this year (police, fire, and public works), and they will continue to plan for these necessary expenses.

Director of Public Works, Collette Clinksdale, stated that she attempted to defend all parts of her budget from cuts, but that ultimately the cuts were made to personnel—she will not be rehiring all of the positions that are currently vacant (the Public Works Department currently has 86 employees, where she usually has around 100). She is hopeful that, by moving employees between departments, she can make it work. The Public Works department, while anticipating a new snow plow (delayed by supply-chain issues), also needs to replace older vehicles.

Councilmember Russell asked Clinksdale about reinstating weekly bulk trash pickup. Clinksdale responded that making bulk trash pickup monthly is a necessity due to revenue and staffing shortages. She also stated that there is need for public education about when and how residents should put their bulk trash out for pickup (as well as yard waste and recycling).

Councilmember Russell asked for a list of all the departments’ cuts so council can have a clear idea of how budget cuts will impact our residents. The City Manager stated that they are in the process of creating that document and will get it to councilmembers soon.

Finance Committee Chair Councilmember Hart then adjourned the meeting.

Committee of the Whole Meeting

You can watch the November 22, 2021 Committee of the Whole meeting HERE. You can access the agenda for this CoW meeting HERE.

Present: Stein, Seren, Unger, Hart, Russell, Cobb, (Moore via Zoom)

The City Manager began by reviewing the legislation for the evening’s Special City Council meeting—what legislation is on the agenda and which would be voted on that night.

The City Manager questioned whether the resolution of concurrence should be voted on that evening or should go for a third reading at the December 6 regular city council meeting. Councilmember Hart advocated for delaying until December 6 to incorporate requested revisions. Council President Stein and Councilmember Ungar advocated for voting on the resolution that evening. It was agreed that Councilmember Hart would make a motion to amend during the Special City Council meeting and the resolution would then be voted on.

In discussing the first reading on the resolution to authorize the City Manager to enter into a Development Agreement with Flaherty & Collins for the Cedar-Lee-Meadowbrook sites, the City Manager recommended that council focus the discussion of the upcoming 7:15 November 29 Committee of the Whole meeting on a review of the Development Agreement with representatives from Flaherty & Collins present. Councilmember Ungar recommended that this discussion also include a tutorial/review of the development processes: the difference between a memorandum of understanding and a development agreement, when the design work is completed, and so on. The City Manager put this tutorial/review on the agenda for the November 29 CoW agenda as well.

Councilmember Hart confirmed that there will also be time committed at the November 29 CoW, beginning at 6:00, for the incoming council to discuss the process for filling the council seat that will be vacated when Council Vice President Seren is sworn in as mayor.

The City Manager stated that staff has received several applications for vacant seats on the city’s boards, commissions, and committees, but more are still needed. Councilmember Hart asked whether the Racial Justice Task Force (RJTF) can return to applications from past calls for members; Law Director Hanna and Council Vice President Seren stated that the process needs to remain the same as before, namely that some positions need to be directly appointed by council members, and the remaining should come from new applications, from which the committee can make recommendations to council but that council ultimately has the authority to decide which applicants are appointed.

Councilmember Ungar recommended that the incoming councilmembers also play a role in finding new members for the RJTF. Councilmember Russell concurred, stating that Councilmember Moore and Councilmembers-elect Cuda and Mattox should each also be able to appoint a member. Russell also noted that some RJTF members were overwhelmed with the task before them, as the scope of the task force’s work expanded once it convened. The City Manager agreed that some members did not know that there would be subcommittees as well. Council President Stein agreed that the appointments should be delayed until the incoming council has been sworn in.

The Committee of the Whole meeting then adjourned.

Special City Council Meeting

Present: Stein, Seren, Ungar, Hart, Russell, Cobb (Moore was excused)

You can watch the November 22, 2021 Special City Council meeting HERE. You can access the agenda for this meeting HERE. You can access the Council packet for this week HERE.

The meeting opened with public comments. (Note: Special City Council meetings do not usually include public comments, but due to requests from residents, Mayor Stein chose to make an exception for this particular special city council meeting, though he did request that comments be limited to no more than three minutes.)

  • Six residents advocated for maintaining Horseshoe Lake and delaying the vote on the resolution of concurrence with NEORSD’s recommendations.
  • One resident spoke against city council authorizing the City Manager to enter into the Development Agreement with Flaherty & Collins for the Cedar-Lee-Meadowbrook sites.
  • One resident, business owner, and a leader with the Cedar-Lee SID spoke in favor of moving forward with the Cedar-Lee-Meadowbrook development, as well as asking council to authorize a district-wide parking and traffic study for Cedar-Lee.
  • One resident spoke against the proposed shortened season for Cumberland Pool. The City Manager responded to announce that that proposal is no longer on the table; the pool will maintain its normal season.
  • Two residents spoke in favor of voting for the resolution of concurrence with NEORSD’s recommendations for Lower Lake Dam and Horseshoe Lake Dam.
  • One resident spoke in favor of more attention given to ensuring safe roads for our community’s cyclists.

The Council President then moved forward with the Report of the City Manager. Susanna Niermann O’Neil:

  • reminded residents that we need applicants for our city’s boards, commissions, and committees, and encouraged residents to go to the city website to APPLY.
  • expressed gratitude to our city staff, who kept things going during a very difficult year; to council for understanding and patience; and to residents, for their support and encouragement of our staff under trying circumstances.

There was nothing to report from the Clerk of Council.

Council Vice President Seren, for the Administrative Services Committee, presented the following legislation:

  • Ordinance 153-2021: First Reading only. An Ordinance amending various sections of the Codified Ordinances of the City of Cleveland Heights in furtherance of the transition from the Council-Manager to the Mayor-Council form of government; and declaring an emergency.

Councilmember Russell, for the Community Relations and Recreation Committee, presented no legislation. Russell then wished everyone a Happy Thanksgiving and encouraged residents to APPLY for our city’s boards, commissions, and committees, in particular noting three vacancies on the Commission on Aging (must be aged 60 or over), three vacancies on the Parks and Recreation Advisory Board, and five vacancies on the Racial Justice Task Force.

Councilmember Hart, for the Finance Committee, presented no legislation. Hart then announced that at the November 29 Committee of the Whole meeting, at 6:00pm, the members of the incoming council will meet to discuss the process for filling the upcoming vacant council seat, which will occur when Kahlil Seren is sworn in as mayor. Hart then wished everyone a happy Thanksgiving.

Councilmember Russell, for the Municipal Services Committee, presented the following legislation:

  • Resolution 149-2021: Second Reading. A Resolution authorizing the City Manager to enter into an agreement with Advantech Services and Parts LLC, for the acquisition of a 2022 E-One HR 100ft Aerial Ladder Truck for the Fire Department; providing compensation therefor; and declaring an emergency. Passed 6-0.

Councilmember Russell then officially congratulated all candidates who were victorious in their elections, as the Board of Elections recently certified the election results.

Councilmember Ungar, for the Planning and Development Committee, presented the following legislation:

  • Resolution 151-2021: Second Reading. A Resolution to concur in the proposal of the Northeast Ohio Regional Sewer District (NEORSD), as a part of its regional stormwater management program, and at its cost, to remove Horseshoe Lake Dam and return the lake bed to its naturalized state, including streams, plantings, trees, and other amenities, following a public planning process undertaken in concert with the cities of Shaker Heights and Cleveland Heights; and to rebuild the Lower Shaker Lake Dam to meet Ohio Department of Natural Resources (ODNR) criteria for a Class I dam; and declaring an emergency. (See below.)

Before the resolution of concurrence with NEORSD was voted on, Councilmember Hart made a motion to amend, amending Section 2 of the resolution to read as follows:

“Many residents of the City of Cleveland Heights cherish Horseshoe Lake for its historic significance, tranquil aesthetic, bird sanctuary, and overall as an important amenity for the community and the region. Prior to and during the design and planning processes, the City encourages the Northeast Ohio Regional Sewer District to be open to other ideas from the community that preserve Horseshoe Lake and protect public safety while effectively managing stormwater and not placing any financial burden on the City.”

Councilmembers Cobb, Unger, Russell, Hart, and Seren each made statements discussing the difficulty of their decisions; acknowledging the asset that Horseshoe Lake has been for our community; but also emphasizing the necessity of moving forward with haste on addressing Horseshoe Lake Dam and underlining the city’s inability to “go it alone” (Shaker Heights has already passed a resolution of concurrence) to remove and rebuild a dam as well as maintain a lake and dam in perpetuity; and concluding that moving forward with NEORSD’s recommendations and beginning their process are necessary fiscally as well as for the safety of our own community as well as others.

The resolution of concurrence with NEORSD’s recommendations, as amended, then Passed 6-0.

  • Resolution 154-2021: First Reading only. A Resolution authorizing the City Manager to enter into a Development Agreement with F&C Development, Inc. concerning the “Cedar-Lee Meadowbrook” development; and declaring an emergency.

Councilmember Ungar then wished everyone a happy Thanksgiving.

Councilmember Cobb, for the Public Safety and Health Committee, presented no legislation.

Council President Stein then wished everyone a happy and healthy Thanksgiving and adjourned the meeting.

Upcoming

On November 29, 2021:

6:00pm Committee of the Whole Meeting to discuss the process for filling the upcoming council vacancy (when Council Vice President Seren is sworn is as mayor). Here are links to the agenda and the Vacancy Background Information and Agenda.

7:00pm Special City Council meeting: Here are links to the agenda and the legislation. This is to provide a second reading of the resolution authorizing the City Manager to enter into a Development Agreement with F&C Development, Inc. concerning the Cedar-Lee-Meadowbrook development; this is second reading ONLY, and THERE IS NO ANTICIPATED ACTION (VOTE).

7:15 Committee of the Whole meeting to discuss the Cedar-Lee-Meadowbrook Development Agreement and review development processes and timelines. Here are links to the agenda and the council packet, which includes the Development Agreement.