CITY OF ROCKY RIVER
DECEMBER 10, 2007
Regular meeting of Council was called to order by Mr. Gollinger, President pro tem of Council, at 8:00 p.m. in the David J. Cook Council Chambers.
Council Members Present: Mr. Gollinger, Mr. Moran, Mr. Hunt, Mr. Hurtuk,
Mrs. Bartolozzi, Mr. Long
Absent: Mr. Hagan
Council Members-Elect: Ms. Arabian, Mr. Furry, Mr. Mylen, Mr. Shepherd
Administration: Mayor Bobst, Mr. Linden, Mr. Thomas, Mr. Crowe
Law Director: Mr. Bemer
Press: Ms. Macho, Mr. Saylor
The meeting was opened with the Pledge of Allegiance.
Mr. Gollinger called upon Mr. Hurtuk to conduct the Public Hearing for Ordinance No. 123-07.
Following the Public Hearing, the meeting was reconvened at 8:06 p.m. Mr. Gollinger remarked that a great deal of work has gone into the budget process, and said that Mr. Hurtuk was to be commended on his leadership which has benefited the City.
MOTION:
Moved by Mr. Gollinger, seconded by Mr. Hunt and Mr. Moran, that the reading of the minutes of the Legislative Meeting and Executive Session of November 26 be waived, and that the minutes be accepted as submitted.
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - abstain Long - aye
5 ayes 0 nays 1 abstention PASSED
Moved by Mr. Gollinger, seconded by Mr. Long, that the reading of the minutes of the meeting of the Committee-of-the-Whole of December 3 be waived, and that the minutes be accepted as submitted.
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - aye Long - aye
6 ayes 0 nays PASSED
MOTION:
Moved by Mr. Gollinger, seconded by Mr. Long, that the 72-hour rule of notification be waived, and that Ordinance No. 136-07 be added to the agenda for consideration at this evening's meeting.
Discussion: Mr. Gollinger noted that this ordinance has been discussed in committee.
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - aye Long - aye
6 ayes 0 nays PASSED
MAYOR'S REPORT:
The Mayor thanked all those involved in the tree-lighting ceremony and the All Aglow celebration, noting the presence of Councilmembers Hunt, Moran and Long. Several civic organizations and individuals assisted with that celebration: Jim Lewis and Jack Seelie provided their trains; the Key Club was involved; Magnificat students, senior volunteers, Kensington Kids all contributed, and River's Edge led carols and later provided a program. The Mayor expressed pleasure in seeing so many organizations engaged, and expressed special thanks to the Junior Women's Club which put the event together. In addition, this December, that organization will feed more than 80 families in the community that have fallen on hard times. She encouraged all to visit the Senior Center and admire the train display and the wonderful decorations.
Late last week, the Mayor and Director Koran met with Paul Volpe of City Architecture to discuss the Detroit Road Streetscape Work Plan Project. It is off to a good beginning, with the initial assessment completed. A stakeholders' meeting will be convened in January and property owners, business owners, residents will be invited as well as Council and the Administrative staff. Because of Mr. Volpe's background work with the Master Plan, the project is moving ahead smoothly.
Today the Mayor received a letter from the Cleveland Metroparks regarding its deer management program. The letter announced that the program will continue for several day this winter, from January 7 through February 22, 2008. A portion of the Rocky River reservation is within the City's boundaries, and the Police Department will be notified prior to the culling. The reservation will be posted and completely closed. In addition, a letter of information will be sent to residents and property owners who are adjacent to the Metroparks, and the venison will be donated to the local foodbank. Finally, the Metroparks reported that they have initiated research to identify other deer management alternatives.
The Mayor then reported that she had good news to share. In September, Council passed a resolution supporting an application to the District One Public Works Integrating Committee (DOPWIC) for funding for the Valley View Sewer Project. The initial rankings were received about two weeks ago, and the City's project was in the second tier of funding, but with the size of the project, the likelihood of funding was in question. Through conversations with Director Linden and City Engineer Michael Mackay, the points scored were reviewed and two areas were identified where questions could be raised. The Mayor contacted the Cuyahoga County Planning Commission which does the review and indicated the City's concerns. They were receptive because the additions were in depth, not breadth. The Mayor asked to attend their meeting and present the City's concerns on Thursday.
She was pleased to announce that the project was rescored which allowed it to move into the first tier of funding and that the recommendation will be passed on to OPW. One of the best things, the Mayor said, was that in doing this, no one else's project was eliminated because the County decided to postpone one of its large projects until the following year. She expressed gratitude to the Cuyahoga County Planning Commission along with DOPWIC for giving the application full consideration.
The Fire Department received a check today for its part in the response to a derailment in Painesville. CSX Rail Transportation, as part of a $600,000 reimbursement, has forwarded a check for $6,313.81 to cover expenses for assistance with that derailment. She also thanked Chief Flynn for his work in documenting the costs of the response which resulted in the payment.
An e-update will go out to alert residents to a new scam now circulating. American Express Travelers' Cheques are being mailed with instructions to cash it and forward a processing fee. When the check is returned, the victim loses the amount of the check and any fee which has been sent to a third party. Residents who receive any dubious checks may contact their banks or the Police Department for advce.
The "Skate with Santa" event will be this Saturday.
Mayor Bobst thanked President pro tem Gollinger for placing the salary ordinance on the agenda, and noted that a draft of the sewer rate ordinance has been prepared and will be presented next week. If Council members have any questions about how the Administration arrived at those figures or how it fits into the overall budget and the Sewer Rehabilitation Plan, she will be pleased to respond.
Discussion: Mrs. Bartolozzi asked about the change of date for the Tree Lighting Ceremony, wondering if it would be returned to the Saturday after Thanksgiving. The Mayor said that it depends upon the calendar. Thanksgiving was early this year, but the Juniors had their Holiday Home Tour scheduled the next weekend and requested the December date.
Mr. Hunt asked for an approximate dollar figure on the DOPWIC grant. The Mayor responded that the total amount of the project is estimated to be just below $5 million. The funding piece is $3 million with zero interest for 20 or 30 years.
LAW DIRECTOR'S REPORT:
Regarding the home at Wooster and Bonnie Bank, Mr. Bemer was contacted by a resident who was interested in purchasing the property to renovate and potentially resell it. During the past few days, there has been communication between Mr. Bemer and this resident as well as Countrywide. Negotiations followed, and Mr. Bemer requested and received from the resident a representation stating that he would assume possession of the property and complete necessary repairs to make the property habitable within 90 days. Over the weekend, he also received copies of the contract. A pretrial was held this morning on this issue, and Mr. Bemer and the attorney from Countrywide informed the Court of the new status of the case. Verbally, Countrywide had provided representation that the offer was acceptable, but the resident wished to exercise his seven-day right to review the premises to determine the extent of mold damage. Countrywide had already taken some remedial action, so the feeling is that if a problem exists, it will be minimal.
COMMITTEE REPORTS:
Finance Committee: Mr. Hurtuk reported that his committee met earlier this evening to discuss debt service items, revenue projections, the Sewer Rehabilitation Plan, the sewer ordinance and reversing the 85/15 rule on the Permanent Improvement Fund. He is planning a second reading this evening and potentially, a vote for passage next week.
Parks and Recreation Committee: Mrs. Bartolozzi reported that the Parks and Recreation Commission will meet this Wednesday, December 19. On their agenda will be discussion regarding increases in program fees which are evaluated every two years. Councilman Hunt will attend the meeting. Mrs. Bartolozzi commented that since she will not be on Council after January 1, it would be wise to provide for continuity in discussions of the Commission.
COMMUNICATIONS AND ANNOUNCEMENTS: NONE
AUDIENCE PARTICIPATION: NONE
There were no requests from members of Council for changes to the Consent Agenda.
ORDINANCE NO. 95-07 BY FRANK B. GOLLINGER
AN EMERGENCY ORDINANCE CHANGING CHAPTER 1163 OF THE CODIFIED ORDINANCES OF THE CITY OF ROCKY RIVER CONCERNING PROJECTING SIGNS AND TEMPORARY BUSINESS SIGNS, BY AMENDING SECTIONS 1163.01, 1163.04, 1163.05, 1163.06 1163.09, AND 1163.11 AS FURTHER DESCRIBED IN THE ATTACHED EXHIBIT "A"
2ND READING
Mr. Gollinger indicated that this ordinance will remain on hold. It has been recommended by the Planning Commission and approved minutes will be available after their meeting on
December 18. At that time Council will move forward.
AMENDED ORDINANCE NO. 100-07 BY JAMES W. MORAN
AN ORDINANCE TO AMEND PART NINE OF THE CODIFIED ORDINANCES OF THE CITY OF ROCKY RIVER, OHIO TO INCLUDE A NEW CHAPTER 913 TITLED RIGHTS OF WAY ADMINISTRATION
Mr. Moran commented he will also hold this ordinance as he awaits the same minutes of the Planning Commission.
ORDINANCE NO. 116-07 BY FRANK B. GOLLINGER
AN ORDINANCE TO CHANGE THE DISTRICT CLASSIFICATION OF CERTAIN REAL PROPERTY KNOWN AS AUDITOR'S PERMANENT PARCEL NO. 304-09-005 FROM ITS PRESENT CLASSIFICATION OF SINGLE FAMILY RESIDENTIAL
(1F-R1) TO PUBLIC FACILITY (PF) IN ITS ENTIRETY AS FURTHER DESCRIBED IN EXHIBIT "A"
2ND READING
Mr. Gollinger explained that this ordinance was on the agenda for the last meeting of the Planning Commission and was tabled. He indicated that it will be addressed at their next meeting which will be next week.
ORDINANCE NO. 117-07 BY BRIAN A. HURTUK
AN EMERGENCY ORDINANCE REPEALING SECTION 139.02 OF THE CODIFIED ORDINANCES OF THE CITY OF ROCKY RIVER
3RD READING
Moved by Mr. Hurtuk, seconded by Mr. Long, that Ordinance No. 117-07 be passed as read:
Discussion: Mr. Hurtuk noted that this Code section has been rendered obsolete, and that he felt it necessary to move for passage this evening.
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - aye Long - aye
6 ayes 0 nays PASSED
MOTION:
Moved by Mr. Hurtuk, seconded by Mrs. Bartolozzi, that Ordinance No. 123-07 be amended as enumerated by the Finance Director.
Discussion: Mr. Thomas explained that Section 4 was added, and some changes in appropriations were made as presented in the revised copy of the attachment. Mr. Hurtuk further explained that Section 4 specifically denotes that Permanent Improvement Funds be spent only on infrastructure work. With the new ordinance modifying the 85/15 rule, this language could change slightly.
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - aye Long - aye
6 ayes 0 nays PASSED
AMENDED ORDINANCE NO. 123-07 BY BRIAN A. HURTUK
AN EMERGENCY ORDINANCE TO MAKE APPROPRIATIONS FOR THE CURRENT EXPENSES OF THE CITY OF ROCKY RIVER, OHIO, DURING THE FISCAL YEAR ENDING DECEMBER 31, 2008
2ND READING
Discussion of the budget will continue next week.
ORDINANCE NO. 124-07 BY BRIAN A. HURTUK
AN EMERGENCY ORDINANCE FORMALLY CREATING THE FINANCIAL AUDIT COMMITTEE AS A JOINT COMMITTEE OF THE COUNCIL AND ADMINISTRATION OF THE CITY OF ROCKY RIVER
2ND READING
Mr. Hurtuk explained that this ordinance was recommended by the State Auditor to implement an Audit Committee. The Mayor would have three appointments to this committee to further assist Director Thomas.
ORDINANCE NO. 134-07 BY JAMES W. MORAN
AN EMERGENCY ORDINANCE DELETING AND REPLACING ALL SECTIONS OF THE CITY OF ROCKY RIVER CODIFIED ORDINANCE CHAPTER 1340 BY PROVIDING REQUIREMENTS FOR BOTH SMOKE AND CARBON MONOXIDE DETECTORS FOR LEASED OR RENTAL PROPERTIES
1ST READING
Moved by Mr. Moran, seconded by Mr. Hurtuk, that the rule requiring that Ordinance No. 134-07 be read on three separate days be suspended, and that Ordinance No. 134-07 be placed upon its passage:
Discussion: Mr. Moran acknowledged that a short time ago, there was a situation in the City
which prompted this ordinance. He called upon Mr. Robert Crowe, the Fire Prevention Officer, to come forward to explain what happened. Mr. Crowe recalled that there was a multi-family apartment building which suffered exposure to carbon monoxide due to a failing furnace. This could have been a devastating event for the City and resulted in serious injury or death. In reviewing the ordinances which fall under the Building Code and the Property Maintenance Code for rental properties, it was discovered that there were no contingencies for carbon monoxide detection. Further, carbon monoxide is not addressed by the Ohio Fire Code which was adopted by the City. Finally, the current Code does not identify the requirements for smoke detectors which should be in bedrooms, outside bedrooms and on every level of the home. After researching codes of other cities, and pending House Bill 88 which discusses carbon monoxide detectors, this ordinance was written to deal with smoke detectors and carbon monoxide detectors in rental and leased properties.
Mr. Moran also distributed a copy of the current provisions of the Code which discusses the standards for installation of smoke detectors, but does not mention carbon monoxide detectors. The situation in the City was quite serious and 700 rental units in the City (actually 700 applications for approximately 2800 units) is too large a number to take the risk. The investment is well worth the cost. He said that it is too dangerous a situation to allow for three readings and asked for passage this evening.
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - aye Long - aye
6 ayes 0 nays PASSED
Moved by Mr. Moran, seconded by Mr. Hurtuk and Mr. Long, that Ordinance No. 134-07 be passed as read:
Discussion: See discussion above. Mr. Moran added that any new housing would be required to have carbon monoxide detectors.
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - aye Long - aye
6 ayes 0 nays PASSED
ORDINANCE NO. 135-07 BY BRIAN A. HURTUK
AN EMERGENCY ORDINANCE TO MAKE SUPPLEMENTAL APPROPRIATIONS FOR THE CURRENT EXPENSES OF THE CITY OF ROCKY RIVER, OHIO, DURING THE FISCAL YEAR ENDING DECEMBER 31, 2007 AND TO AMEND ORDINANCE NOS. 154-06; 11-07; 77-07 AND 98-07
1ST READING
Moved by Mr. Hurtuk, seconded by Mrs. Bartolozzi, that the rule requiring that Ordinance No. 135-07 be read on three separate days be suspended, and that Ordinance No. 134-07 be placed upon its passage: Mr. Hurtuk asked the Finance Director to elaborate on the adjustments made in this ordinance. Mr. Thomas noted that salary and fringe benefits accounted for changes for some departments. There was overtime in the Fire Department as well as a need to cover the remainder of the year's claims for health insurance activity. Additionally, two changes were made at the request of two of the City's grantors, Cuyahoga County for the Community Diversion Program to align the budget with what they offer during the year, and FEMA to support the CERT program.
Mr. Hurtuk added that the state auditors had recommended documenting changes on a timely basis.
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - aye Long - aye
6 ayes 0 nays PASSED
Moved by Mr. Hurtuk, seconded by Mrs. Bartolozzi and Mr. Long, that Ordinance No. 135-07 be passed as read:
Discussion: See discussion above. Mr. Moran added that any new housing would be required to have carbon monoxide detectors.
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - aye Long - aye
6 ayes 0 nays PASSED
ORDINANCE NO. 136-07 BY BRIAN A HURTUK
AN EMERGENCY ORDINANCE CREATING POSITIONS AND FIXING THE ANNUAL SALARIES AND HOURLY RATES FOR THE APPOINTED EMPLOYEES IN THE SEVERAL DIVISIONS AND DEPARTMENTS OF THE CITY OF ROCKY RIVER
1ST READING
Mr. Hurtuk indicated that this is a companion piece to the budget and will have its first reading this evening.
Mayor Bobst added that this is an annual ordinance at this time of year, setting salaries for the upcoming year. Last year, the Mayor noted that the City was hoping to undertake a compensation study which was subsequently completed. This morning it was presented to the directors with the consultant's methodology for that very comprehensive study of the non-bargaining full-time positions in the City. It began with the review of 11 factors surrounding each position including education, decision-making responsibility, financial responsibility etc. Each factor was assessed and point values assigned with internal and external equity also considered. The results, including a few adjustments, are seen in this wage ordinance. More details are available, if Council members have questions.
ORDINANCES AND RESOLUTIONS UNDER CONSENT:
ORDINANCE NO. 126-07 BY BRIAN F. HAGAN
AN EMERGENCY ORDINANCE AUTHORIZING THE MAYOR TO ENTER INTO AN AGREEMENT WITH THE BOARD OF COUNTY COMMISSIONERS OF CUYAHOGA COUNTY, OHIO AND THE CUYAHOGA COUNTY ENGINEER FOR FUNDING EIGHTY PERCENT OF THE COSTS FOR RESURFACING A PORTION OF WESTWAY DRIVE (WITH A MAXIMUM FUNDING TOTAL OF $80,000)
1ST READING
Mr. Gollinger noted that the title ordinance is self-explanatory; the project involves Westway Drive. Since there is a timing issue, it should be passed as soon as possible.
ORDINANCE NO. 127-07 BY FRANK B. GOLLINGER
AN EMERGENCY ORDINANCE MODIFYING THE CITY OF ROCKY RIVER CODIFIED ORDINANCE CHAPTER 538 ENTITLED "FAIR HOUSING CODE", AND AS FURTHER DESCRIBED IN EXHIBIT "A"
1ST READING
Mr. Gollinger noted that this ordinance will update the Code to reference every protected classification within the housing Code. This question was raised when the City applied for a grant.
ORDINANCE NO. 128-07 BY BRIAN F. HAGAN
AN EMERGENCY ORDINANCE AUTHORIZING THE MAYOR TO ENTER INTO AGREEMENT WITH THE ROCKY RIVER WASTEWATER EMPLOYEE'S ASSOCIATION AND AS FURTHER DESCRIBED IN EXHIBIT "A"
1ST READING
This ordinance was discussed in detail at last week's Committee meeting and the legal representation for the WWTP joined Council to explain the negotiations.
ORDINANCE NO. 129-07 BY BRIAN F. HAGAN
AN EMERGENCY ORDINANCE ESTABLISHING A VIDEO SERVICE PROVIDER FEE TO BE PAID BY AT&T OHIO UPON OFFERING VIDEO SERVICE IN THE CITY, AND CERTIFYING THE MAYOR'S NOTICE TO AT&T OHIO OF THE VIDEO SERVICE PROVIDER FEE
1ST READING
Mayor Bobst indicated that the City was notified by AT&T regarding their statewide video franchise. The Administration responded, as required, within ten days, and this ordinance certifies that the 3% franchise fee will be assessed.
ORDINANCE NO. 130-07 BY BRIAN F. HAGAN
AN EMERGENCY ORDINANCE AUTHORIZING THE MAYOR TO ENTER INTO A CONTRACT WITH MEDICAL MUTUAL OF OHIO TO PROVIDE HOSPITALIZATION AND PRESCRIPTION INSURANCE COVERAGE FOR THE FULL-TIME EMPLOYEES OF THE CITY OF ROCKY RIVER, AND AS FURTHER DESCRIBED IN EXHIBIT "A"
1ST READING
This is an annual ordinance which was discussed at the meeting of the Committee-of-the-Whole. The contract is supported by the Administration.
ORDINANCE NO. 131-07 BY BRIAN F. HAGAN
AN EMERGENCY ORDINANCE AUTHORIZING THE MAYOR TO ENTER INTO A CONTRACT WITH AETNA, INC. TO PROVIDE DENTAL COVERAGE FOR THE FULL-TIME EMPLOYEES OF THE CITY OF ROCKY RIVER, AND AS FURTHER DESCRIBED IN EXHIBIT "A"
1ST READING
Mr. Gollinger indicated that this ordinance, which provides dental coverage for employees, is a companion piece to the ordinance which provides for medical coverage.
ORDINANCE NO. 132-07 BY BRIAN F. HAGAN
AN EMERGENCY ORDINANCE AUTHORIZING THE MAYOR TO ENTER INTO A CONTACT WITH THE FORT DEARBORN LIFE INSURANCE COMPANY TO PROVIDE LIFE INSURANCE FOR THE FULL-TIME EMPLOYEES OF THE CITY OF ROCKY RIVER, AND AS FURTHER DESCRIBED IN EXHIBIT "A"
1ST READING
Mr. Gollinger noted that this another part of the benefit program for full-time employees of the community.
ORDINANCE NO. 133-07 BY THOMAS J. HUNT
AN EMERGENCY ORDINANCE AUTHORIZING THE MAYOR TO ENTER INTO AN AGREEMENT WITH GINOSKO LABORATORIES, INC. FOR LAB ANALYSIS OF WASTEWATER SAMPLES FOR THE YEAR 2008 ENDING DECEMBER 31, 2008 IN AN AMOUNT NOT TO EXCEED $11,400.00
1ST READING
Mr. Hunt recalled the discussion last week at the meeting of the Committee-of-the-Whole. He noted that the services must be in place for 2008 pursuant to EPA regulations. Ginosko Laboratories has provided good service in the past and of the three quotes, this one was the best and most responsive.
Moved by Mr. Gollinger, seconded by Mr. Hunt and Mr. Moran, that the rule requiring that the ordinances of the Consent Agenda be read on three separate days be suspended, and that said ordinances be placed upon their passage:
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - aye Long - aye
6 ayes 0 nays PASSED
Moved by Mr. Gollinger, seconded by Mrs. Bartolozzi and Mr. Long, that the ordinances of the Consent Agenda be passed as read:
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - aye Long - aye
6 ayes 0 nays PASSED
MISCELLANEOUS BUSINESS:
Mr. Gollinger noted that the related parties transaction form distributed to Council members is due by Friday.
He also mentioned that next Monday's meeting is slated to be the last regular meeting of 2007.
Finally, he commented that in conjunction with recent work done by First Energy, Rocky River's representative, Karen Goodson, did a fine job of communicating with residents about the work being done and the preplanned power outages. Hopefully, as a result of the company's efforts over the past month, the area of work will be power-outage free in the future. He expressed appreciation for Ms. Goodson's efforts on behalf of the City.
AUDIENCE PARTICIPATION: NONE
As there was no further business by members of Council, the meeting was adjourned at 8:55 p.m.
_____________________________ _______________________________
Frank B. Gollinger Misao Kurokawa
President pro tem of Council Clerk of Council
CITY OF ROCKY RIVER
DECEMBER 10, 2007
PUBLIC HEARING - ORDINANCE NO. 123-07
AN EMERGENCY ORDINANCE TO MAKE APPROPRIATIONS
FOR THE CURRENT EXPENSES OF THE CITY OF ROCKY RIVER,
OHIO, DURING THE FISCAL YEAR ENDING DECEMBER 31, 2008
The Public Hearing for Ordinance No. 123-07 was opened at 8:02 p.m. Mr. Gollinger, President pro tem of Council, called upon Mr. Hurtuk, chairman of Council's Finance Committee.
Council Members Present: Mr. Gollinger, Mr. Moran, Mr. Hunt, Mr. Hurtuk,
Mrs. Bartolozzi, Mr. Long
Absent: Mr. Hagan
Administration: Mayor Bobst, Mr. Linden, Mr. Thomas, Mr. Crowe
Law Director: Mr. Bemer
Press: Mrs. McKenzie, Mr. Saylor
Mr. Hurtuk explained that the City Council, by Charter, is charged with the responsibility to hold a Public Hearing to receive input on the annual budget. Finance Director Thomas asserted that notice was published on November 29, which is sufficient notice as required by the Charter.
Mr. Hurtuk then opened the meeting to audience participation on Ordinance No. 123-07.
AUDIENCE PARTICIPATION:
Fred I. Sokol, 20021 Parkview, who said, as a Rocky River taxpayer, that the annual budget, which he said was $66,127,772 for 2008, was too high. As Council controls the pocketbook, he asked Council to control the budget and suggested that it be cut by 25% of 2007's total. As a taxpayer, he would appreciate it, as taxes overall keep going up, not down.
Mr. Hurtuk explained that there will be another opportunity for community input at tonight's meeting and at next week's Legislative Meeting.
MOTION:
Moved by Mr. Hurtuk, seconded by Mr. Long, that the Public Hearing for Ordinance No. 123-07 be closed.
Vote: Gollinger - aye Moran - aye Hunt - aye
Hurtuk - aye Bartolozzi - aye Long - aye 6 ayes 0 nays PASSED
As there was no further public comment, the Public Hearing was closed at 8:17 p.m.
______________________________ ______________________________
Frank B. Gollinger Misao Kurokawa
President pro tem of Council Clerk of Council
CITY OF ROCKY RIVER
DECEMBER 10, 2007
Finance Committee
The meeting of the Finance Committee was called to order by the Chairman, Mr. Hurtuk, at 7:03 p.m. in the David J. Cook Council Chambers.
Finance Committee Members Present: Mr. Hurtuk, Mr. Gollinger, Mr. Long
Absent: Mr. Hagan
Council members present: Mr. Hunt, Mr. Moran, Mrs. Bartolozzi
Council members-elect: Ms. Arabian, Mr. Furry, Mr. Mylen, Mr. Shepherd
Administration: Mayor Bobst, Mr. Linden, Mr. Thomas, Mr. Crowe
Press: Ms. Macho, Mr. Saylor
Mr. Hurtuk opened the second meeting which was called to discuss the 2008 budget, and thanked all for attending. To be discussed this evening was debt service, and he said that he would ask Finance Director Thomas to elaborate on the City's standing as to current long-term obligations and give an overview on history and future of the obligations. Secondly, he said that he would like to discuss key revenue sources and share his views on recent trends. Following that discussion, he indicated that he would like to discuss plans for financing of improvements and the Permanent Improvement Fund. There will also be a Public Hearing this evening at 8:00 p.m. for the budget and if need be, another committee meeting can be held next week.
Current long-term obligations: Mr. Thomas distributed a summary of the City's most recent Moody's rating from the bonds issued for the Don Umerley Civic Center improvement project, noting that the language shows how an outside analyst described the City. The report acknowledges that finances are managed prudently and conservatively and note that the City is a good steward of funds entrusted to it. The next page is a history of some of the debt transactions undertaken by the City in the last 10 years and is a computation of the legal debt margin over a period of years. Even though the City's gross debt has changed over the years, the margin has stayed within a narrow range because of the growth in the tax base of the City over that time. Mr. Thomas's conclusion is that even though the City has taken on some increased debt in the recent past, it has not overburdened its tax base.
The most recent transactions were at the end of 2004, a $10.4 million issue, $3.1 million of which was used to refinance outstanding debt. The debt that was refinanced was halfway through its life at ten years, the first call date. This meant that there were not significant fees since the bonds had a call feature and the City took advantage of it. Responding to Mr. Hurtuk, Mr. Thomas confirmed that the rate dropped as a result. Mr. Hurtuk commented that the news features a good many items on subprime lending for residential properties and skyrocketing variable rates. He asserted that this borrowing has nothing to do with that situation whatever. Mr. Thomas concurred, noting that when the City has a bond issue, the rates are fixed for the period. He noted that if the period is longer, the rate may be higher, but that they are fixed at the time of issue. In November 2004, voters approved the issuance of bonds for the Civic Center, and in February, 2005, the Civic Center Improvement Bonds were issued for $8.4 million.
Included in the budget book are details on how the debt is amortized. Although those two issues are the most recent, the City also has general obligation bonds for the Municipal Court which are in the City's legal debt calculations.
Mr. Hurtuk asked when the next opportunity to refinance and lower the interest rate will occur. Mr. Thomas responded that advance refunding can be done at any time. The City issues additional debt; proceeds are placed in a trust which services the remaining debt. In the refunding done in 2004, the City called the bonds from the holders and sold the 2004 issue. Advance refunding can be done once during the life of the bonds. The reissues of 2004 were at historic low interest rates, so to get into the market now does not seem to be wise.
Mr. Hurtuk asked about the ratings. Mr. Thomas responded that the City's rating is Aa2, the second highest.
One additional point brought out by Mr. Hurtuk was that a surplus was created when bond monies were received in advance of construction and invested. Mr. Hurtuk asked Mr. Thomas if the amount has been determined. Mr. Thomas indicated that he has tracked that figures and it is currently about $224,000 in available funds based on the bond proceeds, premiums and interest earnings compared to what has been expended and contracted. Mr. Hurtuk added that those funds can be used only for the benefit of the Civic Center, and recalled that there were other items in the original presentation that could be added at a later time. At present, funds are growing in an interest-bearing account.
Revenue Sources: Mr. Hurtuk explained that there are three main components of revenue which are
1) income tax revenue paid by residents and non-residents who work in the City,
2) property tax which is based upon the value of the home, and
3) estate tax which is received every year, consistently estimated at $1 million per year, and which is usually much higher. Estate tax funds are not used to operate the City, but are reserved for infrastructure improvements, such as sewers.
As part of this budget, a sewer rehabilitation plan has been presented. As currently designed, the plan will go forward one year at a time. Mr. Hurtuk turned to Mayor Bobst to enlarge on the plan:
Mr. Hurtuk asked about the balance in the Permanent Improvement Fund, which is funded by the Estate Tax. Mr. Thomas responded that it has just over $2 million. Mr. Hurtuk recalled that three or four years ago, the former mayor asked Council to permit the Administration to transfer some Permanent Improvement Funds into the General Fund. An ordinance was passed which authorized the Administration to transfer 15% of the total, if necessary. At that time there was a great deal of uncertainty about the stability of the income tax and a question of whether the City's income would drop. Over the past years, that income has gradually increased, and continues to appear encouraging. Mr. Hurtuk suggested that the ordinance now be reversed. As four members of Council move to new challenges and new Council members come in, he felt it would be better for the Administration to consult with Council for further authorization if conditions change. Because the balance is sufficient and other revenue sources are good, Mr. Hurtuk recommended that the ordinance be reversed before the end of the year. He asked his fellow Council members for their opinions, noting that the transfer was authorized to meet the situation if revenues were to plummet. The Permanent Improvement Fund was always created for infrastructure improvements.
Mayor Bobst agreed with Mr. Hurtuk's recommendation of the reversal of the 85/15 ordinance. She said that at the time it was done, it provided flexibility when there was an unsure financial environment. Today things are steadier and with growth being seen, the transfer may not be necessary. There will still be an opportunity to return to Council if dollars need to be shifted to the General Fund. The primary reason for her support is that the Administration's top priority is to address the sewer infrastructure, and keeping those dollars in that fund is consistent with the Administration's wishes.
In concluding the meeting, Mr. Hurtuk reviewed the process followed in the last meeting, noting that he saw no unreasonable requests and that he felt that the directors and commissioners who addressed the meeting had a great deal of experience and were an integral part of the process this year. Many costs are not controllable because they are set by contracts with various unions. This year will be the third year of a three-year contract, so new challenges lie ahead.
Mr. Hurtuk thanked Council for taking time, not only during budget hearings to talk to members of the Administration. A great deal is accomplished during the week in preparation for Monday's Council meeting.
Mr. Hurtuk noted that having existing contracts makes costs more identifiable. Next year, if contracts are still being negotiated, the City may not have the same ability to pass a budget, but Mr. Hurtuk agreed that he hoped that this theme will continue.
Next week, Mr. Hurtuk commented that he will look for ordinances for the 85/15 reversal and for the Sewer Rehabilitation Plan. He urged Council members to call him or Mr. Thomas if there are any unanswered questions.
There was no further discussion from members of Council, and the meeting was adjourned at 7:46 p.m.
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Brian A. Hurtuk, Chairman Misao Kurokawa
Finance Committee Clerk of Council