Finance Committee, May 21, 2018

May 30th, 2018  |  Published in Observer Reports

Finance Committee
May 21, 2018

Members Present: Council members Sean Malone (chair), Nancy Moore, Earl Williams, and Robert Zimmerman; citizen members Thomas Cicarella, Martin Kolb, Linda Lalley, and Anthony Moore.
Others present: Mayor David Weiss (by telephone conference), Chief Administrative Officer Jeri Chaikin, Director of Information Technology Frank Miozzi, Director of Recreation Alexandria Nichols, Director of Public Works Patricia Speese, Director of Finance Robert Baker, Assistant Finance Director Cheryl Arslanian

The meeting was called to order by Mr. Malone at 7:30 a.m.

Agenda—Committee actions:

  1. Mr. Malone presented the minutes of the April 16, 2018, meeting for approval. The minutes were approved.
  2. Mr. Miozzi recommended that the city enter into an agreement with Charter Communications Operating LLC for maintenance of the I-Net fiber network for a period of five years (2018-2023) at a total cost of $75,400. Funds are provided in the Information Technology operating budget. The fiber network is essential to the city’s operations, he said, providing remote city buildings with access to the city’s shared telecommunications and computer resources. Mr. Malone wished to know the history of the city’s fiber network. Mr. Miozzi said that the city, schools, and library originally contracted with Adelphia to build out the fiber network in 2000 (within the city, not connecting outside). Then in 2012 Ohio allowed suppliers to charge for connection services—and the city, schools, and library contracted separately. Mr. Kolb asked what the $275,000 franchise fee was for. Mr. Miozzi explained that suppliers pay a franchise fee to the city each year. Ms. Chaikin interjected the fee is regulated by Ohio. Mr. Miozzi continued that the supplier provides other services beyond the fiber cable maintenance. Ms. Lalley remarked that the collaboration between the city, schools, and library was commendable and inquired if a broader collaboration would be beneficial. Mr. Miozzi said the original 2000 study considered a broader collaboration and they would revisit that idea. Mr. Cicarella asked if the city could deduct the $75,000 contract fee from the $275,000 franchise payment, in case the supplier performance did not meet expectations. Ms. Chaikin said the city law director would need to approve. Mr. Malone wished to know the physical location of the fiber—was it buried? Mr. Miozzi said the physical fiber-optic cable is mounted above-ground on poles along main streets. Mr. Malone next asked him to explain the difference of “dark” versus “lit” fiber. Mr. Miozzi explained that dark fiber is the physical cable. A lit network includes the power and electronic switches necessary to provide services on the cable. The city has this equipment, allowing the choice of services and speed for various city functions; the contract is for maintaining this equipment. Mr. Miozzi said the city would prefer longer contracts, because fiber-optic cable will be the choice for many decades. Mr. Williams wished to know how wireless would impact the use of fiber cables. Mr. Miozzi answered that external fiber-optic cables will support faster wireless inside buildings and more wireless would come to the city as computers are upgraded. Mr. Malone wanted to know the expense to maintain dark fiber. Mr. Miozzi replied that squirrels are the worst pests because they chew through cables, but cables do degrade due to weather. The request was approved unanimously.
  3. Ms. Nichols would like the committee to recommend that City Council change ordinances that relate to the age ranges for rink fees and pool passes. The age ranges for the two facilities do not align, and Ms. Nichols said she does not know why. Mr. Cicarella wondered if there was any basis to expand the younger age bracket in order to get people involved earlier and for longer. Mr. Zimmerman asked if this change would have a physical impact on facilities. Ms. Nichols answered that it would not. The request was approved unanimously.
  4. Ms. Speese asked for approval to renew the triennial Tree Assessment at the current rate of $1.16 per front foot. The current assessment expires at the end of 2018. This assessment funds the city’s forestry program, including planting, maintenance, and removal of trees in the city’s rights-of-way. The assessment of $1.16 per front foot is levied against all properties in the city with the exception of property owned by the city and schools. Mr. Williams asked if this charge included resident’s requests for tree choices. Ms. Speese replied that residents can choose different species and sizes of trees for fees ranging from $200 to $1,000. She also shared that the city has a new forester this year, with a degree in forestry, and he was enforcing the contractors to properly care for trees and tree lawns when working nearby, particularly being careful with root systems. Mr. Malone asked if this charge was sufficient. Ms. Speese replied that it was sufficient for normal maintenance, but that 50-year blights and infestations, such as happened with ash borers, cannot be planned and that equipment was not part of this request. Ms. Moore commented that monocultures were commonly used in the past and the city had an abundance of vulnerable maples. Ms. Speese remarked the new forester was aggressively pursuing insurance claims after accidents damaged trees. Mr. Malone asked if there was an inventory of city trees. Ms. Speese said there is a complete inventory by street and we have a great variety now. Ms. Lalley asked if there were federal restrictions on what could be done and by whom. Ms. Speese replied the city was free to maintain trees in-house or under contract. Mr. Kolb asked if some disease infected our trees during the next three years, would the city be stuck with the cost. Mr. Baker replied the city could not increase the assessment. Mr. Malone remarked that this worst case would require the city to use general funds to treat the trees. The request was approved unanimously.
  5. Mr. Baker next summarized the 2019 Tax Budget. His summary included a detailed explanation of “inside millage” (10 mills allowed across government entities) and “charter millage” (millage voted on and included in the city’s charter). The city’s share of “inside millage” is 4.4 mills. The county can claim any surplus the city does not use from the 4.4 mills, so the city always plans to spend all it receives so that it doesn’t have to give back any revenue. Ms. Moore voiced appreciation for the detailed explanation. Mr. Baker added the state had recently changed the laws for rural and urban counties. The budget was approved unanimously.
  6. Mr. Baker requested approval of several 2018 budget amendments and asked the committee to recommend them to City Council for passage on first reading as emergencies. As the city implements its yearly budget, certain items may require changes or corrections in order to provide adequate appropriations for all expected expenditures. Finance is requesting to amend the 2018 budget for two debt service funds, the Economic Development Fund and one Special Revenue Fund. Director Baker summarized the changes required. All department expenses fall into two categories, either personal service or “other,” and directors can move funds within these categories without amendments—but can’t move funds between categories. Mr. Moore asked if funds can move from one personal line to another. Mr. Baker confirmed they can, as long as the total personal budget stays the same. Mr. Moore next asked if the debt service notes had already been sold. Mr. Baker confirmed they had been sold last week. Mr. Moore then asked if this change would have any effect on the closing sale of notes. Mr. Baker advised that if the changes were not made, then the notes sold would technically be in default and have to be reissued at higher interest rates. Mr. Williams asked if the notes were sold to local banks. Mr. Baker confirmed. The amendments were approved unanimously.
  7. Mr. Baker requested authorization of “Then and Now” payments for various transactions. They were approved.
  8. Mr. Baker presented the 2018 First Quarter Budget Update through March 31. Both the real estate and income tax receipts were higher than in 2017, likely due to federal tax law changes. He said he would keep everyone informed as the year progresses. However, for all other revenue lines, the city is collecting less than in 2017. Ms. Lalley wished to know if Mr. Baker had anticipated this. Mr. Baker said he had not, but the Van Aken delays are contributing. Mr. Malone wished to know what might happen if the municipal court transferred to the county. Mr. Baker did not know for sure; however, the municipal court is prohibited by the state from making more money than it costs. The court cannot raise fees above their costs, so there is no upside for the city, but the court has supported itself for many years and is convenient. Mr. Baker continued: all departments’ expenses are within bounds. Ms. Lalley asked if the city were satisfied with the service it receives from RITA. Mr. Baker said he has no control over what we learn from RITA. The city does have input to RITA in regards to subpoenas issued by RITA against delinquent taxpayers. The city wants to pursue every one. Additionally, individual taxpayers who file estimated taxes, mainly those self-employed, introduce big spikes in revenue. RITA does provide the city a list of “top 10” taxpayers, which is always a surprise as their income is episodic.

Mr. Malone adjourned the meeting at 8:58 a.m.
Frank Goforth

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