Finance Committee, Nov. 18, 2019

November 25th, 2019  |  Published in Observer Reports

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

Others present: Mayor David Weiss, Chief Administrative Officer Jeri Chaikin, Interim Director of Finance Frank Brichacek, Assistant Finance Director Cheryl Arslanian, Director of Economic Development Laura E. Englehart, Human Resources Manager Sandra Middleton, and Fire Chief Patrick Sweeney

The meeting was called to order by Mr. Malone at 7:33 a.m.

Agenda—Committee actions:

  1. Sean Malone presented the minutes of the Oct. 21, 2019, meeting for approval. There were several typing errors and omission of names in the document such that approval was deferred until the members could review further.
  2. Ms. Englehart presented a recommendation to: (1) approve Tax Increment Financing (TIF) on the new Wendy’s restaurant at Chagrin Boulevard and Warrensville Center Road; and (2) authorize entering into a School Compensation Agreement to share proceeds with the Shaker Heights City School District. The proposed Wendy’s TIF could be used only (1) for public improvements such as traditional infrastructure, land acquisition, environmental improvements, or utilities; and (2) in the geographical area of the Van Aken District to generally benefit the TIF property. The proposed TIF structure on the Wendy’s property would be: 100% exemption from real estate taxes over a 30-year term; in each of years 1-15, the city would receive 62% of the Payments in Lieu of Taxes (PILOTs) and the schools would receive 38%; in each of years 16-30, the city would receive 38% and the schools would receive 62%.

Mr. Zimmerman asked if the estimated increases in revenue for the city and schools were based on a property appraisal. Ms. Englehart replied that a new appraisal by the county had not been completed, so the estimate was 80% of the construction value of the new building. Mayor Weiss added that the county would perform a new appraisal in 2020. Mr. Williams wanted to know the capitalized value of the building, as the county would want to know that value for their appraisal; he also wondered if the school system asked about that number. Mr. Weiss replied the City has arranged with the schools to revisit this estimate next year. Ms. Lalley asked why the city was receiving the larger share in the first half of the TIF period and the schools getting the larger share in the last half. Mr. Weiss said the schools and city agreed everyone wanted to accelerate economic development in the Van Aken District. Ms. Englehart added that this TIF could only be used for public improvement projects. Ms. Lalley stated that some residents believe TIFs are just tax breaks and they need to be better explained by the school board. Ms. Moore added that Ms. Lalley had given the best explanation of TIFs at a community meeting several years ago; perhaps that could happen again. Mr. Malone asked if other locations were being considered for TIFs. Ms. Englehart and Mr. Weiss said that the Lee Road corridor was a likely recipient for a TIF. The recommendation was approved.

  • Ms. Englehart presented a second recommendation to extend the time for Shaker Heights Development Corporation (SHDC) to repay a $27,200 loan, from January 2020 to January 2023. The interest rate will remain at 1% per year, and repaid loan proceeds will return to the Economic Development and Housing Reserve Fund. The former nonprofit Fund for the Future (FFF) ceased operations in 2012 and transferred its reserves and outstanding receivables to SHDC, in part to support commercial and neighborhood development in the Moreland and Lomond neighborhoods. SHDC, during this past three-year period, rebranded and improved The Dealership co-working facility, which is now consistently at 85-90% occupancy; facilitated real estate acquisitions and improvements along Lee Road, including helping Protem Healthcare Services and Process Canine open and expand in previously vacant properties, which brought more than 50 new employees to the Lee Road corridor; implemented targeted streetscape enhancements at the intersection of Lee and Hampstead roads; and began to convene the Van Aken and Chagrin-Lee business associations. Given these early successes and the need to continue the momentum of these new and updated economic development strategies, SHDC has requested a three-year extension for the repayment of the $27,200 loan until January 2023.

Linda Lalley voiced her support of the SHDC and her approval for extending the loan terms, then asked if the City should convert the loan to a grant. Mr. Weiss replied that the SHDC has a new philosophy and direction and that a conversion might come in the future—but that for now he wished to see some success come from the new SHDC direction. The recommendation was approved.

  • Ms. Middleton presented a recommendation to amend the city’s codified ordinances to give firefighters and law enforcement officers the opportunity to request up to three 12-month waivers of the mandatory retirement age to extend employment to the age of 63, subject to a fitness-for-duty examination and the employee’s prior performance reviews, and that the mayor be authorized to grant waivers of the mandatory retirement age for administrative firefighter and law enforcement personnel. These changes would make the city’s ordinance consistent with negotiated labor agreements.

Mr. Moore asked if the proposed change to the ordinance agreed with the Ohio codes. Ms. Middleton replied that it did. Mr. Malone asked about “administrative” people and Ms. Middleton replied it pertained to the Fire Chief, Police Chief, Assistant Chiefs and other experienced personnel in these departments who were not subject to the collective bargaining agreement. Ms. Moore added the mandatory retirement is by law. Mr. Moore asked if the collective bargaining agreement contained appeal rights. Ms. Middleton replied that it did. Mr. Malone asked if the extension required a physical exam. Ms. Middleton answered that it did, and even though employees could use their personal physicians, physicians must confirm that they have read and understand the physical requirements for the job. Ms. Moore wanted to know what caused the city to request this change. Ms. Chaikin responded that the desire to retain experienced personnel drove this request. Mr. Weiss added that many cities do not have mandatory retirement ordinances and Shaker wished to retain its experienced professionals. The recommendation was approved.

Mr. Malone adjourned the meeting at 8:04 a.m.

Frank Goforth, observer

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