Finance Committee, June 2018

July 3rd, 2018  |  Published in Observer Reports

Finance Committee

June 18, 2018

Members Present: Committee 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, Chief Administrative Officer Jeri Chaikin, Director of Public Works Patricia Speese, Director of Finance Robert Baker, Assistant Finance Director Cheryl Arslanian, Planning Director Joyce Braverman, Principal Planner Ann Klavora, Human Resources Manager Sandra Middleton, Senior Human Resources Analyst Monika Hayes, Director of Building & Housing Kyle Krewson

The meeting was called to order by Mr. Malone at 7:35 a.m.

Agenda—Committee actions:

  1. Sean Malone presented the minutes of the May 21, 2018 Finance Committee meeting for approval. Marty Kolb moved to approve the minutes, Nancy Moore seconded and the minutes were approved.

 

  1. Chief Administrative Officer Jeri Chaikin presented a recommendation the city enter into a grant agreement for the Energized Community Grant Program for 2018 to NOPEC and a grant application in the amount of $60,445 toward the replacement of the boiler at the Police/Court Building. NOPEC’s Energized Community Grant Program provides funds to help member communities implement energy savings or energy infrastructure measures. Based on the rate of $8 per enrolled account for electricity, Shaker will receive $60,445 for 2018 from this program. This recommendation was approved by the Safety and Public Works Committee at their June 1, 2018 meeting.

 

Sean Malone commented that NOPEC had presented twice recently to council and were very cooperative with Shaker. Nancy Moore commented that council members wanted the administration to do all we could to publicize these savings opportunities to residents. Sean Malone added that NOPEC would provide the promotional materials. Linda Lalley asked if the $60,445 was one year or multiple years. Jeri clarified the city would receive $60,445 each year for three years. Nancy Moore moved to approve the recommendation, Marty Kolb seconded the motion and the motion was approved.

 

  1. Director of Public Works Patricia Speese presented her request to apply for and accept the NEORSD Member Community Infrastructure Program as a 50/50 grant in the amount of $850,000 for the Huntington Sanitary Sewer Overflow Mitigation project. The city’s share would be $425.000. As part of the Northeast Ohio Regional Sewer District’s (NEORSD) Sanitary Sewer Evaluation Study (SSES), Shaker Height’s sanitary sewer overflows (SSO’s) were investigated. Various field data was collected and hydraulic modeling was performed by the District’s consultants. Based on this information, NEORSD met with Public Works in early May to discuss the potential of mitigating the activation of the SSO located at Huntington and Southington Roads.

 

Earl Williams asked if this work was included in the 10 year capital plan. Ms. Speese replied there are placeholders for SSO work in the plan and they are expensed as requirements and opportunities arise. Marty Kolb wished to know the total sewer repair liability for 10 years and Ms. Speese replied the total was $30 million spread over 10 years. Sean Malone remarked that this amount had been summarized at the last city council retreat. Mr. Kolb requested the committee should understand the whole liability. Mr. Malone replied this should be a special topic for detailed discussion of the whole budget at the July finance committee meeting. He then asked if this request is within the ‘set aside’ for 2018. Ms. Speese replied that it was and that this particular project was prioritized because it could be done coincident with paving of Huntington, thus saving money in the future. Rob Zimmerman commented there are many unfunded activities and this was prioritized due to the opportunity, it is a small part of a larger problem. We do not want to be find ourselves under an Environmental Protection Agency (EPA) consent decree, like Cleveland Heights with 30 SSO issues. Shaker has only 7 SSO. The benefit of timing is important.  David Weiss added we have a couple of million dollars each year for sewer capital expense, having moved year end excess operating budget funds to the sewer capital fund the past couple of years. Leveraging grants to reduce cost 50% was prudent. Mr. Kolb expressed shock the liability was $30 million.  Ms. Speese remarked this detailed knowledge has been developed in the past year as part of the NEORSD  Doan Valley Tunnel Project along Doan Brook, the Van Aken sewer previously ran 80% capacity on dry days, with the tunnel it is now 20%. Mr. Kolb remarked that the hard discussions of this sewer liability were needed now. Anthony Moore asked what contingency was available if we did not receive the grant. Ms. Speese replied that spot repairs were the alternative. Mr. Moore asked if that were the best plan. Linda Lalley asked Ms. Speese to expand on the NEORSD program for the benefit of all committee members. Ms. Speese explained the NEORSD Member Community Infrastructure Program was new, in its second year, and budgeted at $10M with $7M set aside for 2018. We would have a very good chance at some funding with a 50% sharing proposal, our relations with NEORSD are good. Ms. Lalley asked if Shaker would go to the bottom of next year’s stack of proposals if we won in 2018. Ms. Speese replied each grant winner was independently determined regardless of previous wins. Mr. Moore asked if a higher percent match would improve chances. Ms. Speese replied it probably was not needed. She continued that relining sewers added 50 years to the life of a sewer. Mr. Zimmerman asked if the 10 year plan was outdated. Ms. Speese answered it was not and public works had more detailed specific knowledge to share. Tom Cicarella asked for summaries of the sewer capital plan as background for next committee meeting and then asked if there were any risks of Shaker being issued EPA consent decrees. Ms. Speese replied that the EPA had informed Shaker three years ago we were next on the list of cities to be evaluated for SSO issues. The work being done is proactive toward EPA requirements. She added that residents believe the sewers are undersized, but they are not, there is too much infiltration at joints from the adjacent storm sewers and new technology liners prevent this. Marty Kolb moved to approve the request, Nancy Moore seconded the motion and the motion was approved.

 

  1. Principal Planner Ann Klavora presented a request to authorize a grant application to, and to accept a grant from, the Better Utilizing Investments to Leverage Development (BUILD) Transportation Discretionary Grant program of the federal Department of Transportation. Grant funds will be used to design a new intermodal transit station for the RTA Blue Line and prepare detailed environmental documents and engineering plans. This project will implement the Phase 2 recommendation of the Warrensville/Van Aken Station Area Plan adopted by City Council in June 2015. The grant would be $1M from the DOT, and commit the required 20% match ($250,000) to be allocated from the City’s General Capital Fund (specific source to be determined).

 

Earl Williams commented it seems the RTA would be a partner in this application and asked if the RTA does not commit to funding, will this project succeed. Ms. Klavora responded RTA commitment was required for this application. The total project cost is estimated at $14M and RTA is applying for other grants, indeed, Shaker may be competing against RTA for this grant, which is only for design work. Mayor Weiss commented RTA has lost significant funding recently, $55M or more, while their costs exceed revenue. He was in Washington DC a week or so ago and learned the bid materials are late being delivered and this will make the bid window tight. Sean Malone expressed his frustration that this property is owned by the RTA, yet the city funds improvements, can we get a commitment from RTA? Ms. Braverman answered the planning office is adding a commitment clause. Mr. Williams asked if the city has previously committed funds to improvements to the station. Ms. Braverman replied the city funded the busways at the present station. Nancy Moore moved to approve the request, Ms. Lalley seconded the motion and the motion was approved.

 

  1. Director of Planning Joyce Braverman presented recommendation to award the contract for the City Hall Space Study and Plan to Weber Murphy Fox for a total cost of $31,280 for Phase 1 and 8% of construction costs for Phase 2 (in addition to the $8,000 for move management and FFE). The project aims to co-locate the Building and Housing Inspection Department by re-organizing department locations and functionality within City Hall. This project was expanded from the original RFP to explore the potential of renovating the adjoined Firehouse, in addition to the vacant Health Department basement space. The project will include two phases: Phase 1: Concepts for design and use of each space and related cost estimates. Phase 2: Detailed drawings, construction bid set, and updated cost estimate for the chosen option including construction services. The project is funded by 2018 Capital Budget funds. The current project budget is $200,000 for design and construction.

 

Rob Zimmerman wished to clarify if Weber Murphy Fox was a design firm or design and construction firm. Ms. Braverman responded that, yes, they were a design and construction firm with experience with older buildings, which provided the city with more confidence in their ability to meet the bid. Tom Cicarella commented he had no doubts the two finalists were both good firms but concerned about approving Phase 1 & 2 together, he asked we get an exit clause after Phase 1. Ms. Braverman confirmed they will write exit terms into the contract. Mr. Cicarella moved to approve the request, Earl Williams seconded the motion and the motion was approved.

 

  1. CAO Jeri Chaikin summarized the city’s General Liability and Property Insurance coverage for the finance committee. She then asked for volunteers from the committee to join an ad-hoc subcommittee to recommend a consultant to evaluate our current insurance program (cost; adequacy of limits; deductibles and self-insured retentions; etc.) and oversee a Request for Qualifications for agents as well as bids for insurance providers. Ms. Chaikin then introduced Monika Hayes from the Human Resources office, which handles risk management.

 

Earl Williams was familiar with risk management and volunteered immediately. David Weiss remarked he also understood risk management and asked about Social Security liability for Police and Firefighters. Human Resources Manager Sandra Middleton replied SS liability for police and fire was part of their umbrella policy. Sean Malone wished to know about the timing and scope of this study. Ms. Middleton replied the policy would have to renew on January 1 so a request for proposal would be published by September. Mr. Malone wanted to know how we would hire a broker. Ms. Middleton answered the consultant would identify and contract with the broker. Mr. Malone asked if this would be done by year end. Ms. Middleton recommended this be done in November. Linda Lalley asked if we were satisfied with our present broker. Ms. Middleton answered yes we were; the same broker for the past 20 years. Mr. Malone asked if we wanted one citizen member of the subcommittee with risk experience. Tom Cicarella remarked there were people in his firm with risk experience who can be a member, he would inquire. Rob Zimmerman commented the subcommittee should report back to the finance committee before the city council acts on the recommendation. Mr. Malone concurred and stated it would make sense to refer to this as the risk management subcommittee.

 

  1. Human Resources (HR) Manager Sandra Middleton, joined by Senior HR Analyst Monika Hayes next presented the six month update to the 2017 Human Resources Action Plan versus actual actions. There was much committee discussion about terminology and reports.

 

Tom Cicarella asked if HR handled all the required examinations and screening of police and fire personnel. Ms. Middleton confirmed this and that the civil service process was up to 4 months from decision to actual hiring, which explains the continued openings in those departments. Nancy Moore asked if the 2017 increase in claims for employee benefits was low compared to other years. Ms. Hayes replied it was average. Human Resources is responsible for risk management, so the subject was discussed again. Ms. Middleton remarked that training on driving practices yielded a 7.5% decrease in costs from 2016. Anthony Moore asked how some risk items gaining exposure, such as harassment claims, or whistleblower claims, were being managed. He wanted to know if we had an Ombudsman. Ms. Middleton answered we do not have an official ombudsman, but HR personal were trained regarding confidentiality, however, it was a very good question to investigate and recommend action. David Weiss brought up the risk management of non-performing contractors. Ms. Middleton lastly complimented the customer service/ records administration staff who handled 9000 telephone calls last year along with 9500 guests to city hall. They are very personable and have received many compliments from callers and guests.

 

Sean Malone asked if there was any other new business, there was none. Mr. Malone adjourned the meeting at 9:04 am.

 

 

Frank Goforth, observer

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