Finance Committee, Aug. 19, 2019

September 4th, 2019  |  Published in Observer Reports

Members Present: Council members Sean Malone (chair), Nancy Moore, Earl Williams, Robert Zimmerman; citizen members Linda Lalley, Martin Kolb, Anthony Moore

Others present: Mayor David Weiss, Chief Administrative Officer Jeri Chaikin, Acting Interim Director of Finance Frank Brichacek, Assistant Finance Director Cheryl Arslanian, Director of Planning Joyce Braverman, Neighborhood Revitalization Director Kamla Lewis, Auditor Chad Gorfido from Rea & Associates CPAs.

The meeting was called to order by Mr. Malone at 7:32 a.m.

Agenda—Committee actions:

  1. Mr. Malone presented the minutes of the June 17, 2019 (corrected), and July 15, 2019, Finance Committee meetings for approval. The minutes from both meetings were approved without comment.
  2. Ms. Braverman presented a recommendation to authorize entering into a contract with RMS Investments for $44,559 for an additional year of the Clean and Safe Program for the Van Aken District (VAD). The funds are available in the Economic Development budget to pay the city’s share of the program cost.

Anthony Moore asked what the impact would be of University Hospitals Health Systems not participating in the next contract. Ms. Braverman replied that the contract presented to City Council would be adjusted to account for UHHS withdrawal. Mr. Malone asked if Rite Aid was a participant. Ms. Braverman replied that Rite Aid was not a participant, but the sidewalks throughout VAD are patrolled to remove trash and control panhandling. Mr. Malone said that at the Lee Road Corridor merchants meeting last week, participants inquired if the city would establish something similar for that district. Ms. Braverman replied that something similar for Lee Road was being investigated for feasibility in 2020. Ms. Lalley remarked that the program was excellent, the cleanliness and presence of security was very effective. Mr. Williams added that panhandling seems to be the dominant issue regarding security, perhaps due to the confluence of bus and train stops, and he was appreciative of the program. Mr. Kolb remarked that his children were visiting recently from out of state and raved about VAD cleanliness and safety. The recommendation was approved.

  • Neighborhood Revitalization Director Kamla Lewis presented a recommendation to approve an application from Sharee and Douglass Thornton, 3639 Avalon Road, in acquiring the city-owned vacant lot at 3643 Avalon Road in order to use it as a side lot. The city would save $650 per year for upkeep and increase the value of the Thornton’s property by approximately $20,000. The Neighborhood Revitalization & Development (NRD) Committee considered the application at their Aug. 14 meeting and unanimously approved recommending it to Council. The recommendation was approved.
  • Mr. Braverman presented a review of the Shaker Heights Tax Incentive Review Council (TIRC) annual meeting on July 23, 2019. The TIRC is charged with reviewing current tax incentive agreements on an annual basis and ensuring transparency and accountability on the part of the city and developer in the management of each of the agreements. The meeting and activities of this state-mandated body are controlled by the Ohio Revised Code and City Ordinance. Ms. Braverman recommended that the Finance and Administration Committee approve a recommendation to City Council to approve the TIRC’s recommendations.

Mr. Williams wished to confirm that the results would have no impact to income taxes. Ms. Braverman confirmed that. Ms. Lalley wanted to know what would happen to the businesses’ taxes if the tax incentives were not continued. Ms. Braverman said the businesses’ taxes would revert to regular taxation. Ms. Lalley asked the status of the Southern Moreland Community Reinvestment Area (CRA). Ms. Braverman said there were no activities in this CRA during the past year. Mr. Malone asked if urban renewal payments in lieu of taxes (PILOTS) were performing better than in the past years. Ms. Braverman said yes, and that the city was providing less tax abatement than in the past. The recommendation was approved.

  • Auditor Chad Gorfido, from Rea & Associates CPAs, presented the Independent Auditor’s Report on Internal Control over Financial Reporting, Report on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards, Report on Compliance for Each Major Federal Program, Report on Internal Control over Compliance, and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance. The independent audit found that the city had no material weaknesses in internal control and no significant deficiencies in internal control, and said there were no reportable findings. Mr. Gorfido remarked that Shaker Heights was one of the few municipalities that did not receive a “concerns” letter from Rea & Associates management, which is a compliment to the city’s clean accounting.

Ms. Lalley asked if there were any pronouncements that the city should prepare for. Mr. Gorfido replied that in about two-three years, all leases will be required to be reported, both operating leases and capital leases. Ms. Lalley continued by asking if any of these future changes might be an issue for the city. Mr. Gorfido answered that he was not aware of any that would affect the city.

Mr. Malone adjourned the meeting at 8:15 am.

Frank Goforth

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