CITY OF ROCKY RIVER

NOVEMBER 24, 2008

The Regular Meeting of Council was called to order by Mr. Moran, President of Council, at 8:00 p.m. in the David J. Cook Council Chambers.

Council Members Present: Mr. Hunt, Mr. Shepherd, Mr. Mylen, Mr. Furry,

Mrs. Arabian Whitman, Mr. Long, Mr. Moran

Administration: Mayor Bobst, Mr. Linden, Mr. Thomas, Ms. Whitman

Law Director: Mr. Bemer

The meeting was opened with the Pledge of Allegiance.

Moved by Mr. Moran, seconded by Mr. Furry, that the reading of the minutes of the Legislative Meeting of November 10 and the meeting of the Committee-of-the-Whole of November 17 be waived, and that the minutes be accepted as submitted.

Vote: Hunt - aye Shepherd - abstain Mylen - aye Furry - aye Arabian Whitman - aye Long - aye Moran - aye

6 ayes 0 nays 1 abstention PASSED

MOTION:

Moved by Mr. Moran, seconded by Mr. Hunt, that at the request of the Mayor, an Executive Session be held immediately to review negotiations or bargaining sessions with public employees under Article X, Section 6, Subsection (4) of the Charter.

Vote: Hunt - aye Shepherd - aye Mylen - aye Furry - aye

Arabian Whitman - aye Long - aye Moran - aye

7 ayes 0 nays PASSED

Following the Executive Session, the meeting was reconvened at 8:42 p.m.

MAYOR'S REPORT:

The Mayor opened her report with a summary of the 2009 Budget. She noted that questions and comments are welcome and encouraged Council members to call or visit her office for further discussion.

In formalizing this year's budget, the Mayor asked directors to begin by evaluating programs and priorities, not only from a cost perspective, but also in the light of justifying each expenditure in the context of how it benefits residents and builds and/or strengthens the community. She also asked that they find practical ways to reduce costs without impacting programs and services enjoyed by residents. She asserted that the budget process is integrated in all activities- planning, managing and implementing programs and services. Evaluation should be done in the context of past practices and future needs. The budget process is more than appropriations and line items, but rather, is a process of activities to plan for services and develop capital assets and protections. It also serves as a communication tool to exchange information about the philosophy, priorities, projects and programs of the City.

• The budget must be planned in the context of a long-term perspective which should support organizational goals-economic vitality, safety, quality physical environment, cultural and recreational opportunities, quality education, family and youth opportunities and quality organizations. This is a guiding document which must be closely monitored to determine the financial condition of the City, the economic climate, external factors in community needs, and program performance.

This evening, the Mayor indicated that she wished to focus on the key issues: factors impacting revenues, expenditures, fund balances and debt. Referring to the budget page on fund balances, she acknowledged that expenditures can be seen to be increasing and revenues decreasing resulting in decreased fund balances.

REVENUES:

A large component of revenues are property taxes which represent 28% of the 2009 Budget and are based on real property, utilities, and tangible personal property tax. There continues to be investment, both residential and commercial, but not at previous levels. Economic and Community Development Director Koran recently reported investment in the community which is not what Rocky River has experienced in the past. Another very important factor in property tax revenue is that the County Auditor's office has said that there will be no triennial revaluation which means no increase in this revenue for the City. At the same time, many property owners are appealing their valuations to the Board of Revision. Although final numbers are not yet available, this income will be flat at best, and has the potential of decreasing.

Additionally, tangible personal property tax is being phased out: in 2007, it was 12%, reduced in 2008 to 6.25%. In 2009 it will be zero, but through 2010 the City will be fully compensated; from 2011 through 2018 reimbursements will be phased out.

In income taxes, the City collects 1½% on earned income with a credit up to 1% for taxes paid in other cities. In 2006, total collections were just over $8 million; in 2007, $8.7 million and in 2008, the projection is $8.1 million, down $600,000. This revenue represents 29% of the 2009 budget and once again is projected to be flat and with economic conditions, the City could expect decreasing income tax revenue

For estate tax income, $1 million has been budgeted. That is historically what has been placed in the budget, but it is very unpredictable and unstable, not at all a reliable source of revenue. This year, however, more than that has been received.

Other line items for revenues include sewer collections which will show a full year's accumulation of the Sewer Rehabilitation Fund, the $25 monthly fee designated for the rehabilitation of the City's aging sewer system. Recreation and Senior Services also provide revenue as well as other activities.

EXPENDITURES:

The Mayor indicated that the City is holding the line on expenditures. The Mayor asked directors to prepare very conservative budget drafts and when they were initially received, she asked them to reduce those budgets by 8%, not including the personnel line items which account for almost 70% of the budget. She noted that directors are in a good position to make initial budget cuts because they work with programs every day and can understand how to function with less and still provide services even with reductions. Following that, she and Director Thomas reviewed expenditures line by line and eliminated more expenditures totaling $500,000 which have been communicated to directors. Director Linden found an additional $157,000 which was eliminated.

The City continues to use cooperative purchasing, the State bid process, consolidation of purchasing where possible, expanded use of technology, grants and zero interest loans, regional cooperation, and public, private and civic organization partnerships-all to address total expenditures. The Mayor said she cannot overstate the importance of long-term planning. The budget can withstand a year or two of serious cutbacks, but in the long-term it is more problematic.

• Capital equipment expenditures are planned replacements and with planned maintenance are critical. This planning is also critical for technology, parks and throughout the City. Several years ago, the City chose not to address capital equipment replacements. The result was the necessity of spending a great deal at once to replace equipment necessary to serve the City in the same way. All aspects of services and programming are being reviewed to be sure that they most closely match the needs of the community.



• Several large capital projects require local funding matches: Lake Road, the Valley View Sewer Project, and hopefully, the Hampton Interceptor Project.



• Recreation Center expenditures will be further discussed by Director Patterson on December 8, but the Mayor asked him about Civic Center memberships, and she was pleased to announce an 85% renewal rate at this time. This is a substantial increase from the last figures. In addition, there are part-time staffing reductions, programming changes and additional marketing. Historically, the Recreation Department has had about 15% of its budget supported by the General Fund. With the initiation of a new services, it has increased. The Mayor has every expectation that it will return to the traditional level or even lower. She asserted that recreation has value and is an expected service on the part of residents, adding to the quality of life.



• Personnel has, in the past, comprised 67% or 68% of the budget. This year, the Mayor projects that the percentage will rise. This year's budget includes no new full-time hires, a reduction in part-time hours and overtime reduction plans across all departments.

Mr. Moran asked if layoffs have been considered. The Mayor responded that although it is an available tool, it is, for this administration, one of the last to be used. Because staffing is lean, she would not want layoffs which would impact services directly to residents. All things have been considered, but layoffs are not provided for in this budget.

• Health insurance is provided for 210 full-time employees representing 542 individuals. This year the situation has been dire and has required a great deal of work. The first renewal on the three plans offered by the City had a 17.7% increase with a 54% increase in deposit liability. The new benefits consultants have been very aggressive on the City's behalf and the City was able to negotiate those figures down and redesign the plans to better meet the needs of the employees and still be more cost-effective for the City in the long run. The increase on the dental renewal was 22%, negotiated to 17%, and finally settling at 8%. The reason for these significant increases is that last year was the worst in terms of experience in many years. She reminded Council members that it was necessary to transfer $200,000 to the health care account.



• WWTP expenditures will see the Sewer Flow and Strength study this year. The Mayor was pleased to indicate that the budget was reviewed by the WWTP Management Committee, in a meeting which included three finance directors, and was unanimously recommended for passage.



• In other expenditures, there will be a considerable amount of Civil Service testing: fire testing, police testing and promotional examinations in both divisions.

FUND BALANCES:

Looking ahead to the end of 2009, the Mayor acknowledged that while there is still a fund balance in the General Fund, it is diminishing. She explained that it is important to maintain balances at a level consistent with future plans, projects and needs as well as any unexpected expenditures. In addition, it helps determine the City's bond rating. Currently that rating is an excellent Aa2, received from Moody's in 2004 and confirmed in 2005. Fund balances are important because they are compared to revenue; they are now being spent down due to current needs.

DEBT:

For the first time, descriptions of all long-term loans and conduit debt issuance are included in the budget book. The amortization schedules are also included, and details of zero interest loans which have been secured from Ohio Public Works. There is some borrowing in the 2009 budget, if necessary. The Administration is continuously prioritizing, watching revenues, so that it is hoped that borrowing will not be necessary.

• The Mayor explained that conduit debt is not charged to the City's experience, but is a way for entities to take advantage of the City as a conduit with reduced interest rates.

The Mayor voiced her many concerns in this budget:

• First and foremost, finding reliable, predictable, sustainable and diverse sources of revenue.
• She is also concerned about the vulnerability of the local government fund, and estate taxes. There have been frequent discussions in Columbus about doing away with estate taxes which would have an impact. The local government fund is undergoing changes. Funding levels are guaranteed at their present level only until June 30, 2009. After that, it will depend upon the rate of the growth of the State's general fund. It will be called the Local Community Fund.
• Also of concern is the loss of county, state and federal funding. The City has been helped by Homeland Security in the past and it is hoped that there will again be assistance in providing a generator and some fire protection equipment. The Mayor is encouraged, however, by current leaders who seem to be committed to passing along funding which will create jobs. Ohio Public Works may also provide a second opportunity for project funding in the spring.
• From time to time, the City is faced with unfunded mandates and disasters. The City tries to be prepared, but a disaster would be of great concern to the City.
• Personnel compensation with union negotiations, benefit increases with astronomical increases in health care costs and minimum wage changes. Plans must also be made for unfunded liabilities including vacations, sick leave and other compensated absences. The Finance Director has included details in this budget book for the first time.
• There are unmet and expanding needs: for example, Senior Transportation will require planning for the aging population of the City.
• Flat revenue streams and the economy in general including income taxes and property taxes.
• New services and programs. There is nothing as significant as last year's opening of the Civic Center. It is hoped that some balance will be seen this year.
• Fuel costs and those of petroleum-based products including transportation costs are of great concern.

The Mayor once more emphasized the importance of long-term planning. She stressed that prudence and conservatism are necessary in the coming months and years so that the City is not forced to make an unexpected large expenditure. She stated that she will prioritize, watch revenues closely and make decisions on that basis. The Administration and Council have constantly monitored the budget and will continue to do so. Mayor Bobst pointed out that the directors are committed to being aggressive with their oversight of the budget and continue to identify new ways to reduce expenditures even further. There will be ongoing prioritizing of needs and continual monitoring of revenue before proceeding with large expenditures.

She acknowledged challenges because of economic conditions, but she said Council should be proud of the City's financial position and the City's ability to manage resources effectively and be good stewards of taxpayer dollars. She pledged to do more with less and said there will be accountability at every level within the City and within the budget. Throughout her presentation, the Mayor thanked individual directors for their hard work and commitment to the process. She especially thanked the Finance Director, Michael Thomas and the Safety-Service Director, Jim Linden.

• Mr. Moran thanked the Mayor. In the preparations for the budget discussions, he acknowledged that everyone has heard the message that this is a difficult time, and he acknowledged that many months of work have gone into the preparation of this budget.

Responding to a question from Mr. Mylen, the Mayor pledged to be available for Council questions throughout the budget process. Once more she urged any Council member to call or visit her office to discuss any issue of concern. Her goal is to look back on December 31, 2009 and be able to say that residents did not see any difference in City services. This budget does not have any increases in income tax or decreases of credits or any actions with property taxes which would have a significant impact.

Mayor Bobst then continued with her regular report:

Yesterday, the library celebrated its 80^th anniversary. The Mayor thanked Councilman Long for being in attendance. She had the privilege of reading a proclamation honoring this anniversary on behalf of the Administration and City Council. She turned to Mr. Long who related that the date of this 80^th anniversary was significant because 1928, 80 years ago, was when his grandparents first moved to Rocky River, and his family has lived here for ever since. The Mayor extended congratulations to the library.

The Mayors and fire chiefs are reviewing the applications of the possible consolidation consultants. Several submissions have been evaluated and additional information may be available next month.

Economic and Community Development Director Kory Koran presented his development update to the Chamber of Commerce. Throughout the month of December, it will be aired at 6:30 p.m. on Saturdays and Sundays on Cox Communications public access channel.

LAW DIRECTOR'S REPORT:

Ordinance No. 130-08 on Council's agenda this evening, concerns permit, inspection and license fees. Mr. Bemer said that he would be glad to address any questions or concerns and indicated that Building Commissioner Kevin Beirne would be available to come to next week's meeting.

An ordinance will be provided next week which provides for a section number for the tenth of the Charter amendments passed by the electorate last November. This one was for Article X and was untitled as to the section number. It gave Council the authority to delete obsolete language, rearrange numbering etc. That will be numbered as Section 8 because there is a Charter petition which has been circulated with Article X, Section 7. Rather than create a conflict, the Law Director has skipped number seven and gone to number eight.

Representatives of the City's boards and commissions and the Administration met last Friday morning with David Hartt who is updating the City's Development Code. This was an organizational meeting to identify individuals who will be working more intensely with D.B. Hartt concerning that process.

COMMITTEE REPORTS:

Parks and Recreation Committee: Mrs. Arabian Whitman reported that the new Winter-Early Spring catalogue has been issued, and registrations begin next week. There are some exciting changes, including new programming.

Community Asset Building Coalition of Rocky River: will sponsor the Angel Fund. Any money collected will be forwarded to families with temporary hardships during the holiday season. Tax deductible contributions will be directed to the Rocky River schools who will see that it goes to those in need.

• Responding to a budget question from Mr. Moran, Mrs. Arabian Whitman reported that she has met with Director Patterson and they reviewed everything that goes into the budget. There is hope for even better membership numbers by the time Council reviews the Recreation budget. It should be kept in mind that original membership were for 13 months. The Mayor mentioned that the department is also doing corporate marketing, including businesses on Center Ridge Road.

Finance Committee: Mr. Moran announced that this committee will meet with directors on Tuesday, December 2 from 8:30 until 12:30 in Council Chambers. Another meeting will be held for two presentations which it was not possible to schedule for Tuesday. This will be the next Monday, December 8 at 7:00 p.m. In addition, a Public Hearing for the budget will be held on that evening at 7:30 p.m.

• Mayor Bobst commented that Capital Projects and Capital Equipment Purchases were not discussed this evening. It was decided to hear those presentations from the Mayor and the Safety-Service Director next week.

COMMUNICATIONS AND ANNOUNCEMENTS: NONE

AUDIENCE PARTICIPATION: NONE

ORDINANCE NO. 94-08 BY THOMAS J. HUNT

AN EMERGENCY ORDINANCE DIRECTING THE MAYOR TO EXECUTE AN EASEMENT TO THE OHIO BELL TELEPHONE COMPANY DBA AT&T OHIO ON PROPERTY OWNED BY THE CITY OF ROCKY RIVER, AND AS FURTHER DESCRIBED IN EXHIBIT "A"

Mr. Hunt indicated that this ordinance is one of two requests for AT&T easements. In the absence of communication from the company, this will continue to be held for further discussion.

ORDINANCE NO. 103-08 BY THOMAS J. HUNT

AN EMERGENCY ORDINANCE DIRECTING THE MAYOR TO EXECUTE AN EXCLUSIVE AND A NON-EXCLUSIVE EASEMENT TO THE OHIO BELL TELEPHONE COMPANY DBA AT&T OHIO ON PROPERTY OWNED BY THE CITY OF ROCKY RIVER, AND AS FURTHER DESCRIBED IN EXHIBITS "A-1" AND "A-2"

See discussion above for Ordinance No. 94-08

ORDINANCE NO. 127-08 BY JAMES W. MORAN

AN EMERGENCY ORDINANCE TO MAKE APPROPRIATIONS FOR THE CURRENT EXPENSES OF THE CITY OF ROCKY RIVER, OHIO, DURING THE FISCAL YEAR ENDING DECEMBER 31, 2009

2^ND READING

Mr. Moran noted that this ordinance, the budget, is currently under discussion and will continue to be so in the coming weeks. Responding to a question from Mr. Mylen, Mr. Moran said that his goal is to be certain that all information is gathered and that all questions are answered prior to passage. If this can be accomplished, he would like to pass this ordinance this year, and it could happen on December 8 or two weeks from then if further questions are raised.

ORDINANCE NO. 128-08 BY THOMAS T. LONG

AN ORDINANCE TO CHANGE THE DISTRICT CLASSIFICATION OF CERTAIN REAL PROPERTY KNOWN AS AUDITOR'S PERMANENT PARCEL NOS. 301-18-066 AND 301-18-067 IN THEIR ENTIRETIES, FROM THEIR PRESENT CLASSIFICATION OF OFFICE (O-3) TO SERVICE/MANUFACTURING (S/M) AS FURTHER DESCRIBED IN EXHIBIT "A"

1^ST READING

Mr. Long indicated that this request for rezoning will be referred to the Planning Commission for consideration at its next meeting. Following its return, Council will proceed. The Mayor added that the Building Department has had no plans submitted regarding that property. She explained that the former City service garage, which is housing a car repair facility, is being converted to a new restaurant. The tenant needed a new facility and found this warehouse owned by Spremulli which he feels would be suitable for his business, but a rezoning would be required. Responding to Mr. Long's question, the Mayor indicated that once the vote of the Planning Commission has been taken, the Public Hearing process can be initiated pending approval of the Commission's minutes.

ORDINANCE NO. 129-08 BY JOHN B. SHEPHERD

AN EMERGENCY ORDINANCE AUTHORIZING THE SAFETY-SERVICE DIRECTOR TO PURCHASE FOUR (4) 2009 FORD CROWN VICTORIAS FOR THE POLICE DIVISION UNDER THE STATE COOPERATIVE PURCHASING ACT FROM STATEWIDE FORD LINCOLN MERCURY, INC. AT A COST NOT TO EXCEED $90,477.60

1^ST READING

Moved by Mr. Shepherd, seconded by Mr. Long, that the rule requiring that Ordinance No. 129-08 be read on three separate days be suspended, and that Ordinance No. 129-08 be placed upon its passage:

Discussion: Mr. Shepherd noted that this ordinance authorizes the purchase of four police car through the State bid program. The present cars have 100,000+ miles and have additional wear from constant idling.

Vote: Hunt - aye Shepherd - aye Mylen - aye Furry - aye

Arabian Whitman - aye Long - aye Moran - aye

7 ayes 0 nays PASSED

Moved by Mr. Shepherd, seconded by Mr. Furry, that Ordinance No. 129-08 be passed as read:

Discussion: Mr. Linden thanked Council members for allowing the purchase of these cars now because in the past, the order was not placed early enough and the cars had to be purchased in Pennsylvania. The cars sell out quickly, so orders should be placed promptly.

Vote: Hunt - aye Shepherd - aye Mylen - aye Furry - aye

Arabian Whitman - aye Long - aye Moran - aye

7 ayes 0 nays PASSED

ORDINANCE NO. 130-08 BY THOMAS T. LONG

AN EMERGENCY ORDINANCE TO AMEND CHAPTER 1321 OF THE CODIFIED ORDINANCES OF THE CITY OF ROCKY RIVER, CONCERNING PERMIT, INSPECTION AND LICENSE FEES, BY AMENDING SECTIONS 1321.01, 1321.02, 1321.04 AND 1321.05, AND BY ADDING NEW SECTION 1321.11

1^ST READING

This ordinance will be discussed further next week. Mr. Long urged those with questions to consult with the Law Director or Building Commissioner Kevin Beirne.

ORDINANCES UNDER CONSENT:

ORDINANCE NO. 125-08 BY MICHAEL W. MYLEN

AN EMERGENCY ORDINANCE AUTHORIZING THE DIRECTOR OF PUBLIC SAFETY-SERVICE TO PURCHASE GASOLINE, FUEL OIL AND ALLIED PRODUCTS ON THE OPEN MARKET AT THE BEST PRICES POSSIBLE FOR THE PERIOD JANUARY 1, 2009 TO DECEMBER 31, 2009

1^ST READING

Mr. Mylen noted that in last week's discussion of this ordinance, the Safety-Service Director pointed out that there are better prices on the open market for gas through this program. In another example, Mr. Mylen said that the City saved $.17 on diesel and $.23 on unleaded in the most recent purchase which meant the City paid $1300 less.

• Mr. Linden clarified an answer he had given last week concerning whether the State would allow purchasing if the price is lower on an intermittent or temporary basis. This would be permitted only in an emergency situation. The State has only one supplier, BP, and there are other hidden costs in their prices. He said that the open market has never failed to be better.

Mr. Mylen recommended passage based upon the City's success and the absence of restrictions under thisplan.

ORDINANCE NO. 126-08 BY MICHAEL W. MYLEN

AN EMERGENCY ORDINANCE AUTHORIZING THE DIRECTOR OF PUBLIC SAFETY-SERVICE TO PURCHASE TIRES ON THE OPEN MARKET AT THE BEST PRICES POSSIBLE FOR THE PERIOD JANUARY 1, 2009 TO DECEMBER 31, 2009

1^ST READING

Mr. Mylen noted that this was also discussed last week and it is the same type of ordinance. Mr. Linden commented that the City has always and will continue to beat State prices for tires under this ordinance.

Moved by Mr. Moran, seconded by Mr. Furry, that the rule requiring that ordinances of the Consent Agenda be read on three separate days be suspended and that said legislation be placed upon its passage:

Vote: Hunt - aye Shepherd - aye Mylen - aye Furry - aye

Arabian Whitman - aye Long - aye Moran - aye

7 ayes 0 nays PASSED

Moved by Mr. Moran, seconded by Mr. Long and Mr. Furry, that the ordinances of the Consent Agenda be passed as read:

Vote: Hunt - aye Shepherd - aye Mylen - aye Furry - aye

Arabian Whitman - aye Long - aye Moran - aye

7 ayes 0 nays PASSED

MISCELLANEOUS BUSINESS: NONE

AUDIENCE PARTICIPATION: NONE

As there was no further business by members of Council, the meeting was adjourned at 9:50 p.m.

_____________________________ _______________________________

James W. Moran Misao Kurokawa

President of Council Clerk of Council