Finance Committee

Finance Committee Monday, June 17, 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: Mayor, David E. Weiss Chief Administrative Officer, Jeri E. Chaikin Chief of Fire, Patrick Sweeney Director of Finance, John Potts Director of Planning, Joyce Braverman Assistant Director of Public Works, Christian Maier Regional Mental Health Pilot Program Coordinator, Annette Amistadi Director of Economic Development, Laura Englehart * * * * APPROVAL OF THE MINUTES OF THE REGULAR MEETING MAY 20, 2024. Chair Nancy Moore stated that the minutes of the May 20, 2024 meeting were unanimously approved. * * * * REQUEST TO ENTER INTO AN AGREEMENT WITH CUYAHOGA COUNTY FOR THE ENGINEERING AND CONSTRUCTION MANAGEMENT OF THE LEE ROAD INFRASTRUCTURE IMPROVEMENT PROJECT. Director of Planning, Joyce Braverman requested to enter into agreement with Cuyahoga County for the engineering and construction management of the Lee Road Infrastructure Improvement Project. The project includes road reconfiguration and resurfacing and implementing other improvements that were recommended in the Lee Road Action Plan. The city has already been awarded significant grant funding toward this project, and the City is now seeking approval to enter into this agreement with the county. This agreement would be similar to how we implemented the Van Aken District improvements. The project is about $25 million border to border with restriping and repaving Lee Road including signal and enhancement crosswalks, intersection improvements, and lighting to increase pedestrian safety. South of Van Aken the City will also be adding streetscaping and an off-road bike path and perhaps a midblock crosswalk. The county anticipates these improvements will begin in the Spring of 2027. The City does have significant grant funding. We have 17 million in grant funds. In addition, we have another million from the County for engineering. At this point we anticipate our local match to be between $4 and $6 million. We are still looking for additional grant funding with the county. The memo does have a full budget as we know it today. We believe the engineering will cost $2.2 million. The RFQ is out right now issued by the County with City input. On June 6th, the Safety and Public Works Committee unanimously recommended approval and there was discussion and comment about the City practice of awarding bids to the lowest and best bidder. The County practice is just lowest bidder. So this does require extra practices to be put in place to make sure we have a high quality project which our staff and Public Works staff are all ready to do. Council member Kim Bixenstine asked what authority will the City have in terms of controlling what the design is with this contract. Director Braverman stated that that will be spelled out in the agreement, which is not yet written. She stated that the City will be partners on the design. The City did review the RFQ that the County compiled and similar to the Warrensville Van Aken project, we were at the table at every design meeting. So we are full partners on this. Council member Bixenstine also inquired if the lights will be LED when put in. She also asked what would separate the cars from the bikes on the proposed bike path. Director Braverman stated that if you look at the Lee Road Action Plan, it shows a landscape strip between the bike path and the road and that is the City’s intention but we haven't started design yet. The same thing with the lights. We do not intend to replace the street lights as these would be more pedestrian level lights. So we have not chosen the lights or looked into that. Although right now, most new lights are LED lights, so it's a good possibility. Chair Nancy Moore stated that she knew the City had looked at LED but recalled that the answer was that the City budget had to be looked at and then prioritized and then evaluated for that. She asked is that how the engineering would go. Director Braverman replied yes, we will go with the concept and we'll then we'll look at the choices and make sure we can afford that. But hopefully we can afford any type of lighting we want within reason. That would be the reason why we are amassing the grant funds so we can do the top of the line lights. But this project is not looking at replacing the regular overhead streetlights. Page 2 of 11 The Finance Committee approved the request to enter into agreement with Cuyahoga County for the engineering and construction management of the Lee Road Infrastructure Improvement Project. * * * * REQUEST TO APPROPRIATE A $1,000 DONATION FROM HEIGHTS CHRISTIAN CHURCH FOR THE FIRST CALL (CRISIS ASSISTANCE AND LOCAL LINKAGE) PROGRAM. Regional Mental Health Pilot Program Coordinator, Annette Amistadi requested to appropriate a $1,000 donation from Heights Christian Church for the First CALL Program. The First CALL Program expands our mental health program here in Shaker Heights into Cleveland Heights Richmond Heights, University Heights, and South Euclid, as well as our dispatch center. This donation will go towards purchasing bus tickets, snack items, some hygiene and other necessities that individuals may need while we're out there working with them. The Finance Committee approved the request to appropriate the donation from Heights Christian Church for the First CALL Program. * * * * REQUEST TO AMEND THE CURRENT CONTRACT WITH METRO CONSULTING, INC. TO PERFORM OWNER’S REPRESENTATIVE SERVICES FOR COMPLETION OF THE SECOND PHASE OF VAN AKEN DISTRICT DEVELOPMENT AS WELL AS PRECONSTRUCTION AND CONSTRUCTION OF THE NEW ARCADIA MIXED-USE REDEVELOPMENT PROJECT. Director of Economic Development, Laura Englehart requested to amend the amend the current contract with Metro Consulting Inc. to expand the scope of the owner's representative services. Director Englehart stated that Don Frantz is a Shaker resident and the principal of Metro Consulting, Inc. He is currently performing owner's rep services on behalf of the city for the Van Aken District development. He was previously engaged on the phase one mixed use product that we all call the Van Aken District. He is now currently continuing to work on the apartments, now known as RAYE that are being constructed and almost complete. His work has been absolutely critical in making sure that everyone is coordinated from the City’s multiple departments to the developer, the contractor, and all of the subcontractors as well. At this time, the City would like to amend the contract to also now include the upcoming Arcadia Mixed Use Development Project. Page 3 of 11 The Arcadia project is set to be constructed on the former Qua Buick. It will have approximately 140 apartments and office space on the second floor to be occupied by RDL Architects and first floor retail. The project is slated to probably get started later this summer and we are anticipating the same level of coordination and expertise needed. The City is not requiring any additional funds for the this expansion of scope. Metro has been quite efficient and Mr. Frantz has been really wonderful in making sure his time is effective and efficient. We have approximately $55,000 remaining on his contract now. Some of that will continue to be used for RAYE likely through the end of this calendar year, but we anticipate there should be sufficient funds to also have him work with us and complete his services on the Arcadia project. The memo includes a lot more detail on the types of services. The Finance Committee approved the request to amend the current contract with Metro Consulting Inc. to expand the scope of the owner's representative services. * * * * REQUEST TO ENTER INTO A SERVICE AGREEMENT WITH THE CITY OF UNIVERSITY HEIGHTS TO PROVIDE FIRE DEPARTMENT VEHICLE AND APPARATUS MECHANIC SERVICES. Chief of Fire Patrick Sweeney requested to enter into a service agreement with the City of University Heights to provide Fire Department vehicle and apparatus mechanic services. Chief of Fire Patrick Sweeney explained that the City was looking to collaborate with University Heights on a shared service agreement for mechanical services for their fire service fleet. Historically, the Fire Department has had a mechanic on staff here dating back many years. Right now our current mechanic, has been here for a long time and he retired this past March. The department wanted to change the position from a part-time to a full-time status. During discussions with the Administration, we talked about how we could potentially offset the cost of that transition through a collaborative initiative with a partnering agency. We thought University Heights would be a good agency to do that with. We already have worked with them very closely. Mr. Sweeney went on to say that the size of their fleet would not hurt the initiative too much and would create a good balance. These types of agreements with Fire Departments are not new to us. Dating back many we have developed partnerships with the surrounding communities. Years ago, we provided fire protection to Beachwood until they could build their city out and develop their own full-time department. We have also collaborated on joint dispatching services. Mr. Sweeney stated that he spoke to the University Heights Fire Chief to see if they were interested in this. The discussions centered around efficiency to their department. It also helps them keep their fleet in service as much as possible instead of outsourcing this type of repair work. They were excited about Page 4 of 11 it so we began having more discussions with their Mayor, Council, and Safety Committees. We developed a service agreement and presented it to University Heights. We did a financial analysis and knew that we were going to be short by about $60,000 moving from a part-time to full-time position and we wanted to gauge what type of revenue we could collect from this type of an agreement. Just doing the preventative maintenance needs for their fleet we could realize about $16,000 in revenue. More often than not though, there is always repairs that have to happen as there are breakdowns. We also did a rough analysis of how many hours we might generate as billable hours for these emergency repairs. We calculated anywhere from $20,000 to $40,000 a year. So based on this analysis we believe we can generate anywhere between $35,000 to $56,000 a year for this work. This was presented to University Heights. They took it through their Council and it passed on May 20th. We took it to our Safety and Public Works on June 6th and received unanimous support. Chair Moore inquired as to what University Heights is doing right now at the moment. Chief Sweeney explained that they send all of their equipment and vehicles out for repair and it can take a long time for them to get them back. The rates that they are charged by the outside repair agency are right at around $198 an hour. We are looking to charge them $100 an hour. We will be doing all of this repairs and preventative maintenance work at Fire Station Two. Our equipment would be prioritized if we had some equipment that was down. We also might be doing some of the work over in their station to try to keep their equipment in service while repairs are happening. The Finance Committee approved the request to enter into a service agreement with the City of University Heights to provide Fire Department vehicle and apparatus mechanic services. * * * * REQUEST TO APPLY FOR AND ACCEPT A $238,750 GRANT FROM THE NORTHEAST OHIO REGIONAL SEWER DISTRICT MEMBER COMMUNITY INFRASTRUCTURE PROGRAM FOR THE WINSLOW ROAD & AVALON ROAD SEWER STUDY & DESIGN PROJECT, WITH A CITY MATCH OF $238,750, FOR A TOTAL PROJECT COST OF $477,500. Assistant Director of Public Works, Christian Maier requested to apply for and accept a $238,750 grant from the Northeast Ohio Regional Sewer District (NEORSD) Member Community Infrastructure Program for the Winslow Road & Avalon Road Sewer Study & Design Project, with a City match of $238,750. Mr. Maier explained that in in 2022, the NEORSD notified public works of two potential illicit discharges coming from 17200 Van Aken Boulevard and 3440 Avalon. In conjunction with the district and our consultants, Public Works performed a variety of different investigations and tests to determine whether or not there was an illicit connection. What the City found was that the 17200 Page 5 of 11 Van Aken apartment buildings were actually tied to an undocumented, unidentified sanitary system that we did not have any records of. The flow that is generated from those apartments is actually being conveyed to a combined sewer overflow that is at the corner of Avalon and Winslow. With our other investigations for 3440 Avalon, that building is also connected to this combined sewer that runs from the east to the west along Winslow. When we kept on digging a little bit deeper to see what was happening within that intersection, it appears that the flow that is coming from Winslow to the east and flowing towards the west is also connected. When we look at the maps this CSO is actually tributary to a regulator that is in Cleveland called S 45. It is owned and operated by NEORSD. Over the years, there have been multiple different modifications done to this regulator by the NEORSD to minimize the amount of overflows to the environment. NEORSD came out with an MCIP Grant in Spring of 2024 and we thought that this would be a good candidate for them. On May 17th, Public Works submitted a grant application for the study and design to eliminate this connection that exists within that Avalon Winslow intersection. We would also want to figure out how to take these apartments that have this connection to the CSO and take them offline and actually get that sanitary flow into the sanitary system. The general scope of work for the project is a feasibility study and design. This is not for construction. And the general scope of work is going to be expanding the area study flow monitoring, dye testing, and ultimately with the idea that we would have a construction documents that we could go out to bid. The idea is that once we get through the study, and then we get through the design, that we would apply again for the MCIP Grant in the following year. When we developed the cost estimate for the study and the design, in conjunction with GPD, our city engineer, we came up with an estimate of $477,500. In order to maximize the amount of points for the grant we decided that a 50 50 split would be give us the most competitive advantage, which would make the city's contribution $238,750. Provided that we're successful in obtaining the grant, Public Works would be requesting the funding for the project from Council in our 2025 sewer capital budget. This was presented to the Safety and Public Works Committee on June 6th and was passed unanimously. Council member Moore asked whether or not there were other SSOs that were identified after the storm event in 2014. We did a pretty extensive look at our system. And at this point, there does not appear to be any other SSOs that we are aware of. And it should just be noted that the configuration that exists within Winslow and Avalon is not considered an SSO. It is more of a illicit discharge detection and elimination, or IDDE. And we had a general conversation about the differences between SSO’s, CSO’s and IDDE’s. Citizen member Salmon inquired whether or not there are similar configurations that were found at Avalon and Winslow along Van Aken and again, to the best of our knowledge, we do not believe that there are. Council Member Hren asked if an RFP for this service would be needed and from an engineering firm. We will be distributing RFPs to different consulting firms to help us go through this process. Page 6 of 11 Citizen member Ketan Patel inquired as to whether this was illegal connection and who has the ultimate responsibility for the illegal connection. If at the end of the day, would this be property owner's responsibility, and if so, would the city have any ability to seek, if it chooses to do so, reimbursement in any way from the landowner. Mr. Maier explained that if a property owner has an illicit connection to a pipe that it should not be connected to, then yes the City can go after that property owner to make sure that that they have to get rid of the configuration. What's unique about this Winslow Avalon is that we do have an undocumented sanitary main that we never knew about and does not show up in our records. It is within the right of way. So my suspicion is that the property owners connected to this pipe were thinking that they were doing the right thing. The fact that it is connected to a CSO leads us to believe that this connection was made before 1972 which is when the Clean Water Act passed. So at that time, they did not think that they were doing anything wrong. So we do not think in this particular case that we could go after the property owner to say that they have an illicit connection. We need to rectify this in contrast to another property that, had this connection and maybe had done that illegally. Mr. Patel stated that perhaps this is not illegal, inappropriately or improperly, but there's some question as to whether or not the undocumented nature of this connection is not their fault at all. Mr. Maier stated that was correct. Chair Moore asked if the ownership of this building had changed multiple times. So she asked if there was an issue that if this was done illegally, even unbeknownst to the City prior to the Clean Water Act, can future owners be held responsible for an act that occurred 50 years before. Council Member Bixenstine stated that it would depend on the contract about successor liability. The Finance Committee approved the request to apply for and accept a $238,750 grant from the Northeast Ohio Regional Sewer District (NEORSD) Member Community Infrastructure Program for the Winslow Road & Avalon Road Sewer Study & Design Project, with a City match of $238,750. * * * * REQUEST TO ACCEPT FUNDING FROM THE U.S. ENVIRONMENTAL PROTECTION AGENCY (EPA) IN THE AMOUNT OF $1,600,000 FOR THE LYNNFIELD / LOMOND SSO CONSTRUCTION PROJECT, WITH A CITY MATCH OF $400,000, FOR A TOTAL OF $2,000,000 TOWARD THE $6.6 MILLION PROJECT. Assistant Director of Public Works, Christian Maier requested to accept finding from the U.S. EPA in the amount of $1,600,000 for the Lynnfield / Lomond SSO Construction Project, with a City match of $400,000. Page 7 of 11 Assistant Director of Public Works Christian Maier explained that since 2020 Public Works has been planning and coordinating the design for the Lynnfield / Lomond SSO project. The general scope of the work is to eliminate that SSO by increasing the capacity of the sewers within that sewer shed. The limits of that project are outlined in the memo. In addition to the sewer work, we are replacing a portion of the water line along Sherrington and in the other parts of the scope of the work for that project we will be resurfacing, restoration and the construction of different control structures to make sure that we are causing additional problems within that sewer shed. The duration of the project is anticipated to be 18 months, and the probable cost of construction is $6.6 million. Public Works has been successful in securing additional funds. One of them is from the Sewer district for the same grant that we just discussed. The City did get a $2 million zero interest loan from DOPWIC, the District One Public Works Integrating Committee. We have $1.6 million from the US EPA and $670,000 from Cleveland Water to help replace or help offset the cost for the water line on Sherington. $2 million of our City capital fund was appropriated to meet our match requirements for the different grants. With the support of Congresswoman Shontel Brown and Senator Sherrod Brown, the City applied for federal funding in the Spring of 2022. It was appropriated in the 2023 Consolidated Appropriations Act, and we found out that the U.S. EPA would be administering that grant. When we received that notification it came with a number of documents that needed to be submitted to the EPA. It was a cumbersome process to complete these document, to the point that we needed to get our City engineer involved to help with the environmental review and with submitting this documentation. Ultimately we did get acceptance and we are now authorized to start drawing down funds. The grant amount, as stated before, is $1.6 million with our contribution being $400,000. Our request was presented to the Safety and Public Works on June 6th, and it was passed unanimously. There was a general discussion with Council Member Moore about the length of time it took to secure the funding. The EPA has provided the necessary documents to use funding in an amount not to exceed $1.6 million for this project. Of note, unlike other agreements, the EPA does not require any signatures for this grant so we can start drawing down funds as soon as we get into construction. The Finance Committee approved the request to accept the grant from the U.S. EPA in the amount of $1,600,000 for the Lynnfield / Lomond SSO Construction Project, with a City match of $400,000. * * * * REQUEST TO ENTER INTO AN AGREEMENT WITH THE MANNIK SMITH GROUP FOR ENGINEERING SERVICES RELATED TO SERVICE YARD IMPROVEMENTS IN THE AMOUNT OF $44,321. Page 8 of 11 Assistant Director of Public Works, Christian Maier requested to enter into an agreement with the Mannik Smith Group for engineering services related to service yard improvements in the amount of $44,321. Assistant Director of Public Works, Christian Maier stated that the southeast corner of the Public Works facility is used throughout the year to stockpile different materials and stage equipment. The area itself is 7,500 square yards. The space is essential for overall operations but because of poor drainage and the amount of heavy truck traffic it is in need of extensive repairs. Public Works did solicit RFPs from five different consulting firms for this service. The general scope of the work is to include geotechnical investigations surveying the development construction documents, and also limited construction administration services. On April 26th Public Works received four proposals. We evaluated those using a QBS system, meaning that we looked at the proposals based on the merits itself and the fee did not factor into our decision making process. The criteria that we use is outlined in the memo. We are looking at technical expertise, project team experience, and the overall team or firm's project experience. Based on that criteria, the Mannik Smith Group was collectively the one that we thought could do the job. There is a table in the memo that outline the scoring and the fee. They have done similar types of projects throughout Northeast Ohio and they are located in Shaker. And so if need be, they can come during construction to answer any questions that may arise. When you look at the table of the different consultants that provided a proposal was Alpha Landscaping and Design and it did not seem like they had a complete understanding of what the project was. When we were looking at the different proposals, it was clear that Mannik provided the most detail concerning their DEI Program. They have an internal DEI Advisory Board and have contracted with the Next Pivot Point, a nationally recognized DEI consultant to manage and guide best practices. There was funding that was appropriated in Ordinance 23-122 in the amount of $300,000 and Public Works will be requesting additional funds in late 2024 after we've developed the probable cost of construction. We have that $44,000 that will go to design and then we will figure out what we think the overall construction cost And we will make our request this fall for the balance of that work. This was presented to the Safety and Public Works Committee on June 6th. Citizen member Hren asked if additional funds were going to be requested for next year and we replied yes. Our request is going to be based on the amount of money that we have remaining and what the construction costs are estimated to be. He also asked if the construction would be performed by Public Works. We stated that it will not be because it is too specialized. He also asked if there is a DEI commitment within the proposal and we stated that at this point we do not dictate whether or not we need a certain percentage of the contract to be an MBE or SBE similar to projects with Federal funds. However we do want to see what kind of support they have for the their DEI Program. Page 9 of 11 Citizen Member Patel inquired as to what the current issue is with that corner of the service yard and what exactly the City was looking to do in that corner. Mr. Maier explained that the area itself having poor drainage and heavy truck volume, there is just a lot of rutting. There are just not enough good surfaces in the yard. We have the stockpile material that we use our equipment to scoop up. It is not an optimal way to do it because then we are co-mingling between the material we are trying to pick up versus the dirt that is on the ground. In various parts of the year, depending on the amount of rainfall that we have, the soil gets saturated to the point that it is unsafe at times for our trucks to be coming back there. As part of our road program, we will use and throw our asphalt grindings into temporary bridges to make it a more uniform driving surface. We are thinking about doing to correct this is after we get the geotech reports we are going to cement stabilize that soil to minimize the amount of rutting. We will ask the engineers to give us advice on whether or not we want to use a combination of concrete asphalt so that we have a more durable surface to make sure that we're not coming back in five years because we have the same issue. We want to create a long- term solution to make sure that this is not going to continue to be a problem for us. The Finance Committee approved the request to enter into an agreement with the Mannik Smith Group for engineering services related to service yard improvements in the amount of $44,321. * * * * 2025 TAX BUDGET FOR THE FISCAL YEAR BEGINNING JANUARY 1, 2025. Director of Finance John Potts presented the 2025 Tax Budget for the Fiscal year beginning January 1, 2025. The Ohio Revised Code requires that Ohio city councils adopt a tax budget for the next fiscal year no later than July 15th of the current year and that the adopted tax budget be submitted to the County Budget Commission no later than July 20th. The tax budget represents the City’s first estimate of its anticipated financial resources and needs for the coming fiscal year. The primary purpose of the tax budget is to demonstrate the City’s need to levy property taxes for the coming fiscal year (2025). The Ohio Revised Code Section 5705.281 allows county budget commissions, if desired, to waive the adoption of the tax budget requirement. While not waiving the requirement completely, the Cuyahoga County Budget Commission implemented the prescribed alternate tax budget format in order to gather basic fiscal data from County governments while streamlining the process. The City of Shaker Heights’ 2025 Tax Budget has been prepared in the prescribed format and it is attached. The City of Shaker Heights has been submitting this alternate format since 2003 when the new requirement was implemented in Cuyahoga County. The alternate format includes four separate schedules and the approved resolution adopting the 2025 tax budget. Page 10 of 11 Revised Code also stipulates that the tax budget be made available for public inspection. Therefore, a copy of the proposed 2025 Tax Budget is available in the City’s Finance Department prior to adoption and submission to the Budget Commission. In accordance with ORC 5705.30, a public hearing is not required prior to the City Council’s adoption of the tax budget. However, the City of Shaker Heights in previous years has held such hearings prior to City Council’s adoption. Maintaining the public hearing prior to adoption will enable the public to comment if desired. In addition, an advertisement of the 2025 Tax Budget public hearing was published in the Sun Newspaper on June 13, 2024 and again on June 20, 2024. The published notification satisfies the ten day advance notice required by Revised Code. It is recommended that the resolution adopting the 2025 Tax Budget be approved by City Council on June 24, 2024 and subsequent transmittal to the Cuyahoga County Budget Commission. Although not required by the Ohio Revised Code per Section 5705.30, it is also recommended that a public hearing be held on June 24, 2024 prior to City Council’s consideration of the 2025 Tax Budget to continue the City of Shaker Heights’ open government philosophy. Council Member Kim Bixenstine inquired about the new property tax assessments that are forthcoming and how that might impact this tax budget. Mr. Potts explained that it is likely the City will see an increase in property tax receipts due to the sexennial adjustment but we will not know those amounts until next year and the tax budget is prepared based on the City’s assessed valuation as of January 2024. Once we know our City’s new assessed value from the sexennial work we will have that information after the next year and that amount will be used to calculate the 2026 Tax Budget. The Finance Committee approved the 2025 Tax Budget for the Fiscal year beginning January 1, 2025. * * * * There being no further business, the meeting was adjourned at 8:50 a.m. The next meeting will be July 15, 2024. * * * * Respectfully submitted, ________________________________ John J. Potts, CPA Director of Finance Finance Committee Page 11 of 11