Finance Committee

Finance Committee Monday, May 20, 2024, 8:00 A.M. Virtual meeting pursuant to Chapters 113 and 115 of the Codified Ordinances (as amended in Ordinance 22-28), and Resolution 22-29, enacted on March 22, 2022. Members present: Council Member, Nancy Moore, Chair Council Member, Kim Bixenstine Council Member, Carmella Williams Citizen Member, Martin Kolb Citizen Member, Anthony Moore Citizen Member, Ketan Patel Citizen Member, Kandis Williams Others present: Director of Law, William Ondrey Gruber Director of Finance, John Potts Assistant Director of Public Works, Charles Orlowsky Mental Health Response Program Clinician, Annette Amistadi Principal Planner, Kara O’Donnell Neighborhood Development Specialist, Brendan Zak Frank GoForth, League of Women Voters * * * * APPROVAL OF THE MINUTES OF THE REGULAR MEETING APRIL 15, 2024. Chair Nancy Moore stated that the minutes of the April 15, 2024 meeting were unanimously approved with minimal edits. * * * * REQUEST TO AMEND THE $56,300 DESIGN AND ENGINEERING CONTRACT WITH GPD GROUP FOR THE LEE ROAD PARKING PILOT PROJECT AND ADD A NOT-TO-EXCEED AMOUNT OF $12,000. Principal Planner Kara Hamley O’Donnell requested to appropriate an additional, not-to-exceed amount of $12,000 for the design and engineering contract with GPD Group for the Lee Road Parking Pilot Project. The City adopted the Lee Road Action Plan, and as recommended by that plan, one of the first strategic actions was to develop shared parking and access to improve the district, generate excitement and create a positive impact. Since last fall, we have been meeting with eight commercial property owners on the east side of Lee Road to explore shared access parking to create a more efficient shared parking lot. The City’s Economic Development staff have executed non-binding letters of intent with the owners to confirm their interest in the shared parking. In October of last year, Council approved an ordinance for a $56,300 design and engineering contract with GPD Group. Early this year, the city secured $200,000 in CDBG and CDSG grants to implement the project. The City plans to bid this soon and construction is planned and has to be completed by the fall. So since that time, the Economic Development and Law Department staff have been working to finalize the binding participation in these easement agreements. Negotiations continue with the property owners and we need to move forward on engineering for two alternative design plans. This is due to those grant requirements that we get this out to bid, built and completed by September. Thus, we cannot delay engineering drawings. We will work simultaneously to finalize both the drawings and the final agreements. The additional engineering cost is $12,000. This additional engineering now will permit construction during the tight timeframes, as mandated by the grant, and the budget for the additional engineering will be funded through the 2024 Economic Development operating budget. Council Member Bixenstine asked for further explanation on what two plans will be and where negotiations stand with the property owners. Ms. O’Donnell explained that there are multiple ways of drawing up the plans. She stated that they are down to two options and once they have a single agreed upon option they will stop engineering with whatever the alternative design is. Also, since they are still negotiating, they really can't discuss all the details today, but she stated they are very close. Law Director Gruber stated that most of the property owners are in agreement and so the most likely plan is that there would be a substantial portion of the parking lot and there may be one property that is part of it but that’s still not clear. Citizen Member Kolb asked for clarification on timing between the Lee Road project and this parking lot project. Ms. O’ Donnell explained that the major infrastructure changes on Lee Road will happen in 2027 but there are lots of other projects that they are working on and meeting monthly to implement. This would be the first project they are looking to do. Chair Moore asked if there was any thought to spreading out the additional cost of engineering due to the fact that the City does not have unanimity among all the owners. She explained further in that the City is paying an $12,000 for additional engineering which is necessitated by the need to keep to the deadline for the project. In view of the fact that the City does not have a unanimous agreement by the owners yet and we are working with two different design plans, so that when we do get an agreement, you can use either plan A or plan B. Is that the reason for the delay and the need to expend the additional $12,000 and is there any shared responsibility on the part of owners for that versus the city. Law Director Gruber explained that an agreement is very close. So if the City went back to all the owners and stated that we were going to ask for more money, then the City would have to start negotiations all over again. Page 2 of 13 The Finance Committee approved the request to amend the $56,000 contract with GPD by a not-to- exceed amount of $12,000. * * * * REQUEST TO ENTER INTO A CONTRACT FOR $84,600 WITH KRIVANEK + BREAUX FOR FABRICATION AND INSTALLATION OF A PUBLIC ART SHADE STRUCTURE. Principal Planner Kara Hamley O’Donnell requested to enter into a contract with Krivanek + Breaux for fabrication and installation of the public art shade structure. Public art processes are unique and vary from a typical professional services contract. The City has completed several public art projects and has used similar processes to those employed in this project. This project was always seen as a three-phase project—two phases have been completed. In May 2022, the City worked with the public art non-profit LANDstudio to issue a request for qualifications for artists who might be qualified to create a Signature Art piece in conjunction with the Van Aken District Public Realm project. The chosen artist would enter into a $3,000 design-only agreement for Artist Idea Generation. LANDstudio prepared a list of public artists that they contacted directly and then posted the RFQ publicly. By the June 2022 deadline, 26 artists submitted portfolios for consideration and LANDstudio, City staff, and RMS narrowed the list to four artists to share with the Public Art Task Force (PATF). The PATF reviewed the four portfolios and had a productive discussion and debate about the most appropriate artist and unanimously chose Krivanek + Breaux (K+B) to undertake Phase 1: Artist Idea Generation. To keep the design moving forward in coordination with the Public Realm Design, the City contracted with K+B for a $15,000 Phase 2: Design Development & Construction Drawings. In June, 2023, the PATF approved the final design for the art shade structure titled, Hear, Here. Since then, City staff and the Public Realm designers have continued to coordinate with K+B on final designs. The Van Aken District Public Realm project will begin construction soon. The budget includes pavers designed by K+B and the foundations and lighting for the sculptural shade structure. Shade Structure fabrication in advance of installation will take many months. After the Public Realm project is completed in November, K+B will install the shade structure. With the help of LANDstudio and City staff, K+B has found a local fabricator that can construct the public art. This Phase 3 Professional Services contract is not to exceed $84,600. The Public Art Task Force helped to select the artist and approved the design of the public art shade structure during Phase 1 and Phase 2. Page 3 of 13 The Finance Committee approved the request to enter into a contract for $84,600 with Krivanek & Breaux for fabrication and installation of a public art shade structure. * * * * REQUEST TO ACCEPT AND APPROPRIATE FUNDING FOR THE FIRST CALL PROGRAM IN THE AMOUNT OF $275,000 FROM CUYAHOGA COUNTY FOR THE PERIOD OF MAY 1, 2024 TO MAY 31, 2025. Mental Health Response Program Clinician Annette Amistadi presented the request to accept and appropriate funding for the First CALL Program in the amount of $275,000 from Cuyahoga County. Ms. Amistadi explained that the $275,000 will go towards the overall budget for the program. The Program is expanding outside of Shaker Heights to include Cleveland Heights, Richmond Heights, University Heights, and South Euclid and also having someone in our dispatch center. Ms. Amistadi stated that they are looking to get the program going in the next couple weeks. The Finance Committee approved the request to accept and appropriate funding for the First CALL Program in the amount of $275,000 from Cuyahoga County. * * * * REQUEST TO ENTER INTO A PURCHASE AGREEMENT WITH MR. LARRY KUDLA TO ACQUIRE AND RENOVATE THE CITY-OWNED HALF DUPLEX AT 3340 COLWYN ROAD FOR $1,000. Neighborhood Development Specialist, Brendan Zak requested to enter into a purchase agreement with Mr. Larry Kudla to acquire and renovate the city-owned half duplex at 3340 Colwyn Road for $1,000. Mr. Zak explained how the city acquired the property. When properties become tax delinquent, they will eventually be foreclosed upon by the county, and the county will schedule the property to be auctioned at these auctions. The minimum bid price is any delinquent and overdue taxes, plus any fees the county incurred due to the foreclosure. When properties do not receive any bids, they can be acquired by the City or they can be put on the State of Ohio forfeiture list. The state does not maintain properties that end up on the forfeiture list and the county is responsible for scheduling another auction where properties are sold without a minimum bid price. Both of the half duplexes that are under discussion today were acquired through the tax forfeiture process directly after the sale. They were not put on the forfeiture list. The City acquired these units because at the time we believe we were also going to acquire the other half and then demolish the entire structure. We did not acquire the other half. So we were looking to bring these units back to productive use. Specific to this property it is a two bed, one bath home that we acquired back in 2012 and had the property Page 4 of 13 on our vacant property inspection schedule. Since 2006, we have spent over $11,000 in maintaining this property, including cleaning out items left by the previous occupants, painting the exterior and other nuisance abatement activity performed before we owned it, for which we were never paid back. Mr. Kudlow approached the city to acquire the unit to serve as his primary residence. He has had his contractors look at the property and has submitted estimates to the City for the cost of repair. He is estimating somewhere between $65,000 and $80,000 for these repairs. This property requires significant investment to correct the housing code issues. We have had difficulty previously finding a buyer, and we are very excited that Mr. Kudla is interested in acquiring this unit, rehabbing it, and then using it as his primary residence. Chair Moore asked if the tree in the picture in the memo will be preserved. Mr. Zak stated that this has not been specifically discussed. Chair Moore asked if we can write that into the agreement because often trees are taken down, especially with a renovation. Mr. Zak said yes and that he would discuss that with Mr. Kudlow. Chair Moore asked how do we know that a $20,000 escrow is sufficient if he hasn't itemized or presented, the corrections. Mr. Zak stated that the City understands that it’s not going to cover every single violation that is present on this property. Due to the lower comps of these units in the neighborhood, we have not been able to find a buyer that was willing to fund 150% of the total cost. So with an $80,000 rehab, whereby 150% is $120,000 to go into escrow, this is higher than the comp sales of similar side-by-side duplexes. Chair Moore asked if it is not important to the City with this sale that the violations be corrected. Mr. Zak stated that we do have a timeline and the buyer is going to have to have everything fixed within six months of transfer. And the $20,000 escrow amount is just a lower escrow amount. It will cover every single violation, but the City will not release money until the buyer has either completed all exterior violations, and obtained his building inspections and then once all violations are complete and reinspected the City will release his funds. So we will keep him on a tight timeline and we will make sure that these violations are complete within six months of the property transfer. The Finance Committee approved the request to enter into a purchase agreement with Mr. Larry Kudla to acquire and renovate the city-owned half duplex at 3340 Colwyn Road for $1,000. * * * * REQUEST TO ENTER INTO A PURCHASE AGREEMENT WITH MR. CAMERON TOWNSEND TO ACQUIRE AND RENOVATE THE CITY-OWNED HALF DUPLEX AT 18007 CHAGRIN BLVD FOR $1,000. Neighborhood Development Specialist, Brendan Zak requested to enter into a purchase agreement with Mr. Cameron Townsend to acquire and renovate the city-owned half duplex at 18007 Chagrin Boulevard for $1,000. Page 5 of 13 This request is very similar to the previous one. The City acquired this property through the tax foreclosure process believing we could acquire both sides to demolish the entire structure. We have owned this one since 2019. We were approached by Mr. Townsend, who is a local property rehabber to acquire this property to use as his primary residence. He has had his contractors review the property and submitted estimates to the City for the cost of the rehab. We have listed the proposed pre and post transfer requirements that were negotiated, which are the same requirements as the previous agenda item. This property requires significant investments to address all housing code violations. Estimates have came in at roughly $80,000 for this unit. Mr. Townsend is planning to repair all violations. Citizen Member Patel asked how many of these side-by-side duplexes are left in our inventory. Mr. Zak stated that if these two sales go through we will not have any left. These are the last two that we own. Mr. Patel said that this is a really great way to bring these back into productive use. The Finance Committee approved the request to enter into a purchase agreement with Mr. Cameron Townsend to acquire and renovate the city-owned half duplex at 18007 Chagrin Boulevard for $1,000. * * * * REQUEST TO RECOMMEND APPROVAL TO SELL CONDO NO. 221 (PPN: 731-03- 821C) AT 13800 FAIRHILL ROAD TO THE SOUTH PARK MANOR UNIT OWNERS HOA FOR $1.00. Neighborhood Development Specialist, Brendan Zak requested approval to sell Condo No. 221 at 13800 Fairhill Road to the South Park Manor Unit Owners HOA for $1.00. Mr. Zak explained that this is also similar to the half duplexes that were just discussed. This unit number 221 went through a tax foreclosure and had no bids. The City did not accept title to the property at that time after it failed to sell, and the property went to the forfeiture list. The City's current policy is to not accept any condo units, even if they are eligible for the City to acquire, until we have an end user ready and able to take on the property, rehab it, and sell it to an owner occupant. The City approached South Park Manor to see if they were interested in acquiring this property. The County has given us until June 28th of this year to acquire the property off of the state forfeiture list so that they have adequate time to prepare for the forfeited property auction. The City does not plan on acquiring the property until the HOA has satisfied all pre transfer requirements so that the City can act as a pass through entity and acquire and dispose of the property within the same day. To minimize our risk, the proposed condition of the sale are listed in the memo. Though we are technically able to sell these units on the open market, the city is not geared up to sell improved properties, and we are more interested in being a good partner with our local HOAs than managing a rehab process. Page 6 of 13 Chair Moore asked if we have had experience with another HOA in rehabbing a unit that we have acquired and then deeded to them. Mr. Zak said yes and further explained that a few years ago we had one for the Shaker Club HOA. The City acquired that property for them, sold it to them for a dollar, and they managed the rehab process for us. So we were modeling this agreement, and then another one with Shaker Club off of that original one. Chair Moore also asked about the economic impact. When we were dealing with the mortgage foreclosure crisis and the aftermath of it, there were many condo associations that became underfunded. So the stability of condo associations then became problematic. This is this another attempt to stabilize the financial wellbeing of certain HOAs within condos. Mr. Zak stated that that was a great summary. We theoretically could manage the rehab process and go through the bidding process and take this on ourselves. But, we believe at this time that getting these properties to the HOA to have them manage internally and then get any profits from the sale afterwards on top of having a property that is now paying HOA dues and property taxes is, easier on staff time, but gives the HOA the ability to bring some profits in and hopefully, cover some of the deferred maintenance that that they have. The Finance Committee approved the request to sell Condo No. 221 at 13800 Fairhill Road to the South Park Manor Unit Owners HOA for $1.00. * * * * REQUEST TO RECOMMEND APPROVAL TO SELL CONDO NO. 202 (PPN: 736-07- 858C), CONDO NO. 304 (PPN: 736-07-894C), AND GARAGE SPACE NO. 66 (PPN: 736- 07-819D) AT 19101 VAN AKEN BOULEVARD TO THE SHAKER CLUB CONDOMINIUM UNIT OWNERS HOA FOR $1.00 EACH. Neighborhood Development Specialist, Brendan Zak requested approval to sell Condo No. 202, Condo No. 304, and Garage Space No. 66 at 19101 Van Aken Boulevard to the Shaker Club Condominium Unit Owners HOA for $1.00. Mr. Zak explained that, as just discussed, we entered into an agreement with this HOA a few years ago. We transferred them a unit and they managed that rehab process. So we are discussing these two condo units and a parking space, all of which are parceled out separately. The two units and the separately parceled parking spot all failed to sell at the county foreclosure auction, and were forfeited to the State. So we were proposing to acquire these properties from the forfeiture list to sell to the HOA and for the HOA to rehab and sell to an owner occupant. We will not acquire these properties until the HOA has satisfied all of the pre transfer requirements. The proposed terms are listed in the memo and are the same as the previously discussed condo. The Finance Committee approved the sale of Condo No. 202, Condo No. 304, and Garage Space No. 66 at 19101 Van Aken Boulevard to the Shaker Club Condominium Unit Owners HOA for $1.00. Page 7 of 13  * * * * REQUEST TO RECOMMEND APPROVAL TO ENTER INTO A LEASE AGREEMENT WITH THE EARLY CHILDHOOD ENRICHMENT CENTER (ECEC) FOR USE OF THE SHAKER FAMILY CENTER BUILDING AT 19824 SUSSEX ROAD, FOR THE PERIOD 7/1/24 – 6/30/27. Law Director Gruber requested approval to enter into a lease agreement with the Early Childhood Enrichment Center for use of the Shaker Family Center building at 19824 Sussex Road. The Shaker Family Center is owned by the City and has been leased out for many years to the Shaker Family Center which had a lease that ended at the end of 2020. From that point on, the Early Childhood Enrichment Center (ECEC) took over the lease and the management of the building. ECEC has had a couple of leases and now their current lease expires at the end of June and we are looking to extend the lease for a three year period. The Mayor and Ms. Chaikin have negotiated this lease since the end of last year when ECEC gave us notice and we gave them notice that we were willing to continue the lease going forward. So we're proposing very few changes to the lease, the term is different, it's going to be a longer three years and the biggest difference is that in the current lease, the City provided $200,000 for the year 2023 for ECEC to help to operate the building. That subsidy is no longer in the lease so the city is not subsidizing the operations. The operations will be totally in the hands of ECEC to manage and maintain the building. The City continues as the owner to take on the responsibility of any capital repairs and replacements. ECEC has also agreed to increase the number of children in their program from the Shaker Heights City School District from 70% to 90% as a goal for the three year lease. The other thing that we did was put in the list of obligations for ECEC to maintain, just to clarify and make it a little bit more certain that the building will be maintained in the proper way. We have listed out as an attachment to the lease, very specific requirements not just for maintenance of things that break, but also for proactive types of work that can cause problems if they're not accomplished. Chair Moore stated that this was a very long negotiation and this is the culmination of that work. The Shaker Family Center has been a longstanding, Early Childhood Center that has contained ECEC, which now as an organization has taken over the management of the building. It is an economic catalyst for the Sussex Lomond area and has been as a magnet really, and, as a housing catalyst for many sales. So we are glad to see this lease agreement be accepted. Citizen Member Moore stated that a few years ago when some of these discussions were taking place, part of the challenge seemed to be the ECEC budget and their fundraising ability. How confident are we that they can manage this without $200,000 subsidy? Law Director Gruber stated that City is relying on what ECEC has told us what they are able to do this and to take it on. They know the Page 8 of 13 requirements, they have been managing the building for several years now and they know what the building needs and so we are relying on them to comply with what the lease requires. Citizen Member Moore also asked what would happen if they come up short. Mr. Gruber stated that the Mayor has had conversations with ECEC and he feels confident that they can meet the provisions in the lease. If they default, the City would have to step in. Chair Moore commented that the history of School-owned and City-owned former school buildings has not been smooth. Ludlow School, previously owned by the Shaker Heights City School district has had its long-term tenant, PEP Program leave the building. And so, the question becomes for both the City and the Schools, is there a higher purpose or a better purpose for the use of that building. At the current time, the city has determined that there is no higher and better use immediately, for the foreseeable future. So it's always a calculated bet. Citizen Member Moore stated that he thinks ECEC has done a good job over the years and he is in favor of them being in that space and running their program going forward and hopefully, being successful with it. He is concerned that if they come up short and we don't really have a Plan B in mind, we then would have to step in and does that mean begin the subsidy again or are prepared to remove them from the building. He stated that he would be comfortable if we had at least some kind of funds set aside if they come up short. Mr. Gruber commented that what you're suggesting would be for the City to step in and take over the maintenance of the building. That is what would likely, likely occur in the short run, whether then we would have to make a decision whether they could continue for the next three years in that mode, or would have to close up shop and we would end the lease with some time period of a notice. But setting funds aside is really the same thing. Council would have to step up and appropriate funds to be able to do this. I think that the administration has felt strongly that we did not want to have a term in the agreement and have a public set aside of money that ECEC was told that if you can not do this than we will step in and take it over. We wanted them to have the incentive to maintain the building on its own and to take on that responsibility. Chair Moore stated that our security is a General Fund cash reserve that the city maintains. So we do have the ability to pick up the costs but we are hoping that it will not be necessary. Citizen Member Moore stated that he is fine as long as we have the mindset to say we will step in if we have to, because if the program totally fails, the City really loses. We have other subsidies and this one, if it fails, and goes out of business, it really hurts the city. So he would hope that the City would have the mindset to be willing to consider stepping in if they we have to. The Finance Committee approved the request to enter into a lease agreement with the Early Childhood Enrichment Center for use of the Shaker Family Center building at 19824 Sussex Road. Page 9 of 13  * * * * TREE MAINTENANCE ASSESSMENT RENEWAL FOR 2024, 2025 AND 2026 – RESOLUTION OF NECESSITY. Finance Director John Potts requested a Tree Maintenance Assessment renewal for 2024, 2025, and 2026 and a Resolution of Necessity. The current, triennial tree assessment for the maintenance of trees is expiring at the end of this year. This funds our very important forestry program. We assess a $1.66 per front footage of each property and that assessment was raised 50 cents back in 2021 to cover the ongoing costs of the forestry program. The current rate brings in approximately $1 million towards the program. In accordance with our ordinances, we need a resolution of necessity to levy the assessment. The Finance Department will do a public notice and assuming Council approval, we will calculate and maintain the plans with Public Works. Assistant Director of Public Works, Charles Orlowski added some comments about the Forestry Program. We have an award-winning Forestry Department, and part of that is brought on by this assessment. The City has been recognized 39 times as a Tree City USA and over the last seven years, we have had continuous awards for growth. We have a great Forestry Department who's very responsive when needed for storm emergencies. We have put a lot of effort into maintenance, which cuts down on those storm emergencies, which we've significantly reduced the amount of call outs, by adding on staff members that were afforded by the last assessment. Citizen Member Moore asked if we use independent tree companies and if so, could you provide a sense of how much of the work is contracted on a regular basis. Mr. Orlowski stated that we are in the ballpark of approximately $100,000 a year in tree removal service. It is a necessity due to the fact that with large trees, we do not have the equipment in-house to handle that. So the bulk of that material, which is the large cranes that are needed, the large stump cutters, and then the cleanup, it is much easier to send that work out versus having that in-house, especially the disposal. We have an additional, plus or minus $100,000 that we have for pruning that is in supplement to our crews. So our crews are primarily focused on maintenance. We bring in secondary crews to help us out with the larger trees that we are unable to reach and then supplement our crews so we can hit where we would like to be every year for maintenance. In addition to that, we have over $100,000 in planting that allows us to plant 325 to 350 trees a year. So as we lose trees, we're adding back into the community. We're not looking as blighted as some of the areas surrounding areas of the city, because we're reforesting and try to add canopy back into our city. In addition to that, we will do an additional $20,000 to $25,000 a year in young tree maintenance. We are training young trees before they become large trees. So the more maintenance we do in training them, they're less of a problem as they get older and mature. And we lessen the burden on our forestry crews. That young tree training involves removing, crossing limbs, raising up low limbs, and then perfecting that tree so it, it grows in nice straight tree trunk. Page 10 of 13 Citizen Member Patel stated that he is supportive of the tree renewal but in thinking forward, are we comfortable, that the funds will be sufficient to address our storm emergencies, etc. as we move forward. Is climate change increasing the stresses on our tree canopy and are we being realistic that these funds will be enough. And if there are shortages, do we just go to the general funds on a year to year basis. From a public policy perspective we are charging based on linear frontage so I want to make sure that a flat three year renewal is adequate. Mr. Orlowski stated that they know what dollars are needed in the department, so we try to work within those dollars and make sure everything is handled. In the last seven years as Forester for the City we have not had that issue where we had to go back and ask Council for additional funds. Director Potts stated that we did a pretty comprehensive analysis three years ago to bring the assessment up to cover the cost that the General Fund was having to subsidize. We do take a look at it every three years. There is also a healthy reserve in the Tree Assessment fund for things above and beyond for emergencies that might exceed the budget. The Finance Committee approved the Tree Maintenance Assessment renewal for 2024, 2025, and 2026 and a Resolution of Necessity. * * * * REQUEST TO APPROPRIATE A 2023 DONATION OF $6,958 TO THE K-9 DOG (DONATIONS) LINE ITEM IN THE GENERAL CAPITAL FUND. Finance Director John Potts requested an appropriation for a 2023 donation of $6,958 for the K-9 dog line item in the General Capital Fund. The City received a donation in 2023 and because it was under the amount that needed to be approved by Council, we deposited the funds into the General Capital Fund but mistakenly forgot to go to Council to appropriate them into the proper line item. This is mainly an appropriation clean-up request. The Finance Committee approved the request to appropriate the 2023 donation of $6,958 for the K- 9 dog line item in the General Capital Fund. * * * * REQUEST TO ADJUST BUDGETED APPROPRIATIONS IN THE PUBLIC WORKS AND PLANNING DEPARTMENTS IN THE GENERAL CAPITAL FUND TO ENSURE THAT $584,909 IN ARPA FUND OBLIGATIONS WILL OCCUR PRIOR TO YEAR END. Finance Director John Potts requested an adjustment to budgeted appropriations in the Public Works and Planning Departments in the General Capital Fund to ensure that $584,909 in ARPA fund obligations will occur prior to year end. Page 11 of 13 We have approximately $2.8 million in ARPA funding that was appropriated through the 2024 budget season. Council, approved appropriating that funding towards two very large projects. One was the 2024 Street Resurfacing project, and another was the City Hall Parking Lot project. By appropriating to those projects, we would be able to meet the Department of Treasury guidelines of ensuring that the ARPA funds are obligated by the end of 2024. We learned early on this year that the City Hall Parking Lot program is going to take a little bit longer for various reasons. Thus, it will not be obligated by the end of the year. The term obligated is defined by a vendor being selected and a contract being signed. We are fine with the Street Resurfacing Project, but we need to adjust some appropriations with the $584,909 for the City Hall Parking Lot Project. Finance held discussions with the Planning Department and as work is starting on the Lee Road Action Plan, we decided to move the $584,909 to that project as we are confident a vendor will be selected and a contract will be signed by year end. This request is effectively adjusting the appropriations in the Capital Fund so that the accounting will be reconciled and we will meet Treasury's requirements. The Finance Committee approved the request to adjust the budgeted appropriations in the Public Works and Planning Departments in the General Capital Fund to ensure that $584,909 in ARPA fund obligations will occur prior to year end. * * * * REQUEST TO APPROPRIATE $1.3 MILLION INTO THE GENERAL CAPITAL FUND FOR THE 2023 OHIO WATER DEVELOPMENT AUTHORITY (OWDA) LOAN FOR THE PUBLIC WORKS TRANSFER STATION REPAIR PROJECT. Finance Director John Potts requested an appropriation of $1.3 million into the General Capital Fund for the 2023 Ohio Water Development Authority Loan for the Public Works Transfer Station Project. This time last year the City received a $1.3 million OWDA low interest loan towards the Public Works Transfer Station project, which is currently in process and projected to be completed by year end. The loan was set up in a way that the OWDA would pay the vendor directly, and so therefore no dollars would be coming into the city and then back out to the contractor. It was the preferred method by the OWDA. Recently our auditors Rea and Associates were auditing the transaction and determined that we did not set it up correctly. We met with Rea and determined the action plan steps that we needed to ensure that the accounting would be correct and those are included in the memo. The 2023 Annual Comprehensive Financial Report will appropriately account for this. As detailed in the memo we need to formally appropriate the $1.3 million loan toward the Transfer Station project as a line item in the General Capital Fund. When the project is complete, that line item will be removed. The loan begins pay back one year from construction completion. There is no impact to the balance in the General Capital Fund. Page 12 of 13 The Finance Committee approved the request to appropriate $1.3 million into the General Capital Fund for the 2023 Ohio Water Development Authority Loan for the Public Works Transfer Station Project. * * * * AUTHORIZING THE EXECUTION OF CERTIFICATES BY THE DIRECTOR OF FINANCE AND THE PAYMENT OF AMOUNTS DUE UPON CERTAIN CONTRACTS FOR WHICH THE FINANCE DIRECTOR HAS ISSUED THEN AND NOW CERTIFICATES IN CONNECTION WITH CERTAIN EXPENDITURES. Director of Finance, John Potts requested authorizing the execution of certificates by the director of finance and the payment of amounts due upon certain contracts for which the Finance Director has issued then and now certificates in connection with certain expenditures. Section 5705.41 (D) (1) requires in part that the fiscal officer certify that amounts required to meet obligations have been lawfully appropriated and are available for expenditure prior to the obligations being incurred. If this is not done the fiscal officer may make such certification, after the fact (commonly referred to as “Then and Now”), however if the amount of the obligation is $3,000 or more City Council must approve payment within 30 days of such certification. Finance Committee approved the request authorizing the execution of certificates by the director of finance and the payment of amounts due upon certain contracts for which the finance director has issued then and now certificates in connection with certain expenditures. * * * * There being no further business, the meeting was adjourned at 9:05 a.m. The next meeting will be June 17, 2024. * * * * Respectfully submitted, ________________________________ John J. Potts, CPA Director of Finance Finance Committee Page 13 of 13