A Primer on Public Finances

Recent talk about deficit spending, pay freezes and tight budgets might may make you wonder about how city finances work. I can’t tell you how finances are actually handled in the city, but I can give you an idea about how the system is supposed to work.
Step One. The Budget
The mayor submits a budget for council’s approval each year. The budget sets financial limits on spending in the city. By law, the finance director can’t issue a payment check unless there is money in the budget to pay for the goods/services that have been purchased.

Step Two. Approval of Requisitions & Vouchers
Proper approval is required before any city funds can be used to pay for goods/services provided to the city.
Highland Heights ordinances clearly spell out which city officials have authority to approve requisitions and vouchers. It's a pretty small list.. This is what our laws say:

(1) Service Director Thom Evans has to submit requisitions for labor and materials to Mayor Coleman "or other authorizing official“ for their signature (§ 172.02(b));

(2) Police Chief Cook and Fire Chief Turner have to submit requisition forms to Mayor Coleman for the labor and material that their departments need (§§ 131.04; 133.04); and

(3) Mayor Coleman and the head of the Park & Recreation Commission (Tony Valentino thru 2009; Rocco Dolciato in 2010) must both sign vouchers before any money can be spent using Park & Recreation funds (§ 139.03).

By law, only the individuals listed above have the authority to approve requisitions/vouchers. No other city administrator or city official does. For example, Recreation Director Dave Ianiro is not authorized to approve vouchers. If he needs goods or services for the park, he must ask the mayor and Park & Rec commissioner to sign a voucher for those goods/services.

Step Three. Approval of the Expenditure of Public Funds to Pay Approved Requisitions/Vouchers
After a requisition/voucher is signed by the proper city official(s), one more step is required before Finance Director Anthony Ianiro can pay it. Final approval to pay the bill must also be obtained. Who can give that final approval depends on who the goods/services are being purchased from.

Regular purchases
For regular purchases, either the mayor, council’s Legislative & Finance Committee (L&F) , or council as a whole must approve paying for the goods/services listed in the requisition/voucher.
Under our laws, Mayor Coleman generally has sole authority to approve expenditures up to $ 3,000. After that, approval by either L&F ($ 3,000 to $ 75000) or council as a whole ($ 7,500 - $25,000) is required. (§ 117.04(a)) Under state law, no one in the city can authorize payment of purchases over $ 25,000; those have to be put out to bid, using formal bidding procedures.

Purchases of Goods/Services From Elected or Appointed Officials
Highland Height law imposes special authorization requirements---regardless of the $$ amount involved -- when the services/goods at issue are being bought from, or provided by: (1) an elected or appointed official; (2) that official’s spouse; (3) that official's lineal ancestors/descendants; or (4) a business connected to that official/spouse/descendant.  By law, only council is authorized approve such a transaction, and council must formally give its approval before any purchase is made or any money is paid out. § 117.04(b) states:

“No goods or services shall be purchased, and no payments shall be made from City funds, regardless of the amount of such purchase or payment, without prior approval of Council, acting on motion, ordinance or resolution at a regular meeting, if …The purchase is made from, or the payment made to any elected or appointed official of the Municipality, the spouse, lineal ancestors or lineal descendants of any such official, or any corporation, partnership, association or other business entity in which any person included in any of the foregoing categories has a direct or beneficial interest."

§ 117.04(b) doesn’t outright forbid the city from purchasing goods/services from an official/spouse/descendant or affiliated business---after all, the city should be able to take advantage of a good business deal, if one is offered---but the law clearly requires, regardless of the amount of $$ involved, that the business transaction is disclosed to, and formally approved by, council ahead of time, before the services are purchased or paid for.
§ 117.04(b) is clear and straightforward. Anyone who tells you otherwise is pulling your leg.

Other Laws That Limit Financial Transactions Between the City and Elected & Appointed Officials
Our city’s financial ordinances aren’t the only laws that protect taxpayer money. While § 117.04(b) imposes a preapproval requirement for business transactions involving elected and appointed officials, state and local ethics and criminal laws may also apply to prohibit those transactions entirely.

Ethics Laws
Highland Heights’ ethics ordinances (§§107.01-107.99) borrow much of their language from, and closely resemble, state ethics laws. Our ordinances impose several different types of limits on officials. Violations of these laws constitutes misfesance or malfeasance in office---i.e. official misconduct. (§ 107.99).

(1) § 107.02(c) bars elected and appointed officials from participating in any transaction that directly affects/involves: the official; an immediate family member; a business entity in which the official/family member owns more that 5% interest; or a business entity with which the official/family member has done more than $ 1,000 in business in the preceding year unless the official first files a written acknowledgment with the council clerk disclosing his interest in the transaction;

(2) § 107.03(b) bars elected and appointed officials from selling or agreeing to sell, except through competitive bidding, any goods or services to the city or to any city department, board, commission or agency---but § 107.03(c) allows appointed officials (only) to sell goods/services if they file a detailed disclosure statement with the council clerk beforehand which states, among other things, the goods or services to be provided/purchased and declares that the official won't participate in any official capacity in the purchase of those goods/services.(Under § 117.04(b), council would also have to formally pre-approve the purchase of/payment for those goods/services ).

Criminal Laws

§ 525.10(a)(2) makes it a crime for an elected or appointed official to knowingly have an interest in the profits or benefits of a public contract with the city or with the agency/ instrumentality that the official is connected with.
§ 525.10(a)(3) makes it a crime for an elected or appointed official to knowingly have an interest in the profits or benefits of a public contract that is not let by competitive bidding, if required by law, and that involves more than $150.00.

Our financial, ethics and criminal ordinances work together to ensure that city officials don’t take advantage of their positions for their own personal gain. They also ensure that there is accountability, on the part of city administrators and officials, with regard to each penny that is spent from the public treasury.
Shouldn't this make you feel more secure about how your tax dollars are spent?

All of the ordinances are pretty clear and straightforward. See for yourself. They are available to read online.
http://www.highlandhts.com/city-council/ordiances-resolutions.php or http://www.conwaygreene.com/Hlandhts.htm
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Pool Repairs, Safety Issues And What To Do With All Of Those Leaves?

Bill Paying Time

Council’s Legislative & Finance Committee (L&F) met before the April 20th Committee of the Whole (COW) meeting.
Finance Director Anthony Ianiro presented several invoices to L&F for approval, including bills for a new park lawn mower ($ 5148) and two new pool “funbrella” shades ($9,975).  Ianiro reported that the Park & Recreation Committee (P&R) stayed within their budget for those two items. L&F also approved additional expenses for several new police vehicles ($6,705).

One issue that re-emerged was the problem of overdue bills. That issue arose several months ago, when Tony Ianiro presented bills to council that were for legal services that had been rendered to the city six months previously. Anyone familiar with large law firms and their billing practices would know that any delay was most likely not on the billing end. At the L&F meeting, Ianiro presented two bills for engineering services that had been rendered in the fall of 2009. Ianiro admitted that he didn’t “know where they (the bills) went” and that the engineer had to resubmit invoices to the city for that work, in order to get paid.
I certainly hope the fact that Anthony Ianiro was reappointed as University Height's Finance Director in January---which means that he is continuing to serve two different masters---is not getting in the way of Ianiro's job performance here.

http://www.universityheights.com/downloads_20009/CC01042010.pdf

Safety Issues

Police Chief Cook and council discussed safety concerns regarding “Gas Well Alley”---the city-owned 20 foot wide pathway that runs parallel to Hawthorne Drive and connects Bishop Road to the back of the Community Park. The discussion was prompted by a recent incident, reported in the Sun Messenger two weeks ago, involving a forcible entry and theft from a shed on a residential property that abuts the Alley. Chief Cook reported that although he did not believe that the Alley was suitable for driving upon, it could be patrolled on foot, on bike or using a golf cart. He promised to contact the victims of the theft and discuss establishing a police presence in the area---a good idea now that the weather is improving, which means increased use of the Alley.

Pool Repairs

Mayor Coleman called a special meeting after the COW. One of the items on the agenda was approval of a contract for repair of the pool.

The pool has been leaking for several years. The situation has gotten increasingly worse over time (I heard that by the end of last summer the pool was leaking 1 gallon a minute, but I don’t know how accurate that estimate is). Council was unaware of the issue until one sharp-eyed council member noticed a small reference to the pool leak in the P&R minutes last fall. That ruffled quite a few council feathers because while P&R has been very vocal about demanding $ 300,000 from council to renovate the old pool house, they kept mum about the pool leak.
Mayor Coleman was clearly hoping to get the issue out of the way, by approving a repair contract at the special meeting. Unfortunately, however, that item had to be yanked because a solution for fixing the leak has still not been settled upon.
Service Director Thom Evans happily reported that one company determined that the “piping is intact and not leaking”---but then added the caveat----“as far as they could detect.” It was a bit difficult to follow his explanation, but Evans indicated that the leak appears to be along expansion joints and that the concrete may be deteriorating around those joints. While both caulk and a product called “water stop” were supposed to keep the pool watertight, apparently both of those products have failed.
While the mayor expected one company to come forward with an offer to fix the leak, that company ultimately declined to bid on the project after looking at the pool and determining that its filler product would not be suitable to fix the pool’s leaks.
The ironic part in all of this---which Evans failed to mention---is that P&R budgeted $ 5,000 last year, to have the pool caulked and repainted.
http://www.highlandhts.com/docs/city_council/minutes/2009/04-28-09_council_minutes.htm

So either the caulk was applied improperly last year---a situation that Evans has not suggested occurred---or the situation is not one that mere caulking will fix. Ever the optimist, Evans reported that he hoped to come forward with an inexpensive repair proposal that would fix the leak and allow the pool to open on time . He also stated, however, that caulking is the city’s “only viable avenue” for repair at this point and that, if caulking won’t work, then the city will probably have to cut out and replace areas of cracking concrete---a much more expensive and time-consuming repair job.

Oh Those Leaves Will Fall

When I first moved into the city almost 20 years ago, the city disposed of the leaves it collected by dumping them in the back area of the park and letting them disintegrate naturally. Times have changed. The city now hauls the leaves away each year (unlike Mayfield Village, which shreds leaves and turns them into biodegradable mulch).
Service Director Evans reported that for the last several years (since 2003) the city has paid Utilities Construction, a South Euclid company, to take the leaves that the city collects.
This year, however, Evans was apparently pushed by Council’s Safety Service Committee to come up with a different solution for the city’s leaves. As a result, Evans found a business that recycles leaves and wood chips and is willing to take our leaves FOR FREE.

Well, not entirely for free. It still will cost city taxpayers quite a bit of money, both in terms of man hours, vehicle wear & tear, and gas to haul the leaves away. But we won’t have to pay a company to take the leaves.
Evans did not seem interested in exploring a way to shred and recycle the leaves onsite---which is what Mayfield Village does. In fact, he went so far as to claim that there was “no room” in the 70+ acre Community Park for a leaf shredding area.

That one still has me scratching my head...
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Mayfield Schools’ Gas Well Workshop

Although I was out of town on April 14th, I was able to catch a video rebroadcast of the Mayfield School Board’s gas drilling workshop on tv last night.

The Mayfield Schools community owes a debt of gratitude to the many residents who attended that meeting and who spoke out clearly and passionately against drilling gas wells on school district property. Thank you, thank you.


Let’s Talk Truthfully About School District Taxes, Revenue and Revenue Loss

The Mayfield school district’s main revenue comes from two sources: state/federal subsidies and property taxes. The school district receives two different types of resident-paid property tax revenues: 1) a relatively small proportionate share of property tax revenue is derived from un-voted “inside” millage; and 2) the majority of the school district’s property tax revenue is derived from voter-approved levies.

The “inside” millage property taxes are figured by multiplying assessed property values by a legally prescribed millage amount (it used to be a very modest 7 mills). The amount the school district collects in “inside” millage taxes fluctuates each year, along with assessed property values.

The school district’s levy-derived tax revenue (the majority of its tax revenue) is different; the levies provide the school district with a guaranteed $$ amount of property tax revenue each year--- regardless of what’s happening in the real estate market. In essence, the actual millage amount that is applied to assessed property values is adjusted as necessary each year, to produce the $$ amount of taxes that voters have approved paying to the school district.

Because the majority of its tax revenue is not impacted by changes in local property values/assessments, the school district sits in a very different position than surrounding cities and municipalities, which have experienced significant drops in revenue as a result of the recent downward property reappraisals.

Unlike the cities, the school district will continue to collect the same amount of voter-approved property tax $$ this year and every other year in the future, no matter how long the current economic recession lasts.

Several school board members stated that the main reason the school board was considering putting gas wells at the middle school and the high school was to make up for the elimination of an additional small revenue source: tangible personal property taxes. (The legislature made the decision to eliminate that tax several years ago, during the prior governor’s administration.)

I have to admit that I was very confused by that justification for drilling because board members admitted during the April 14th meeting that the state legislature has authorized paying public school districts additional $$ to match their lost tangible personal property tax revenues.  Once again, those payments place the Mayfield Schools in a much more favourable revenue position than surrounding cities and municipalities, who do not receive similar payments-in-lieu of tangible personal property taxes.

All of this leads to several troubling questions:
1. Is the school board really going to base its drilling decision on speculation about financial contingencies that may never come to pass?
2. Given the school district's more favorable financial position vis a vis surrounding cities, is the justification offered by school board members for drilling gas wells on school district property really worth the price that the school district will pay, in terms of loss of community support?

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Policies? We Don’t Need No Stinking Policies...

The first council meeting in April was a Committee of the Whole meeting, a discussion session during which no official action was taken.
There were five items on the agenda: 1) the city’s 2010 street crack sealing program; 2) sidewalk snow removal; 3) the city’s website; 4) the old church building; and 5) the use and identification-marking of city-owned vehicles. There was a lot of frank talk during the evening, but it remains to be seen, at least as to a couple of items, whether any action will result from the discussion.

The Crack Sealing Program
The city is 5 square miles in size and has approximately 92 miles of roadway. Each year, the city service department applies crack sealer to 8-10 miles’ worth of streets, which helps prolong the paved road surfaces.
Service Director Thom Evans asked council to put an item on the agenda for the April 13th council meeting authorizing him to spend $ 12,000 to obtain the necessary kettle and ODOT-approved product for use in crack sealing this year. The money will be paid out of the city’s street maintenance supplies fund.

Sidewalk Snow Removal

Several years ago, Evans reported to council that the specialized vehicle that the service department used to clear sidewalks along the city’s main thoroughfares and the streets adjacent to St. Paschal and Millridge Schools was on its last legs. The replacement cost for that machine: $ 125,000. Evans suggested buying a less expensive, multiple purpose vehicle instead, at approximately 1/3rd of the cost ($ 47,000). He reported last night that although the service department has found many uses for the new vehicle, it does not do as good or as quick a job clearing sidewalks as the old machine.

The city is not legally obligated to clear sidewalks; it is an extra service that the city provides to school children and residents. And while some residents have asked council to expand the sidewalk plowing program, others residents who live on plowed streets complain about the snow that gets deposited on their driveways by the sidewalk plow. For council, it’s a “can’t win” dilemma.

For Evans, it’s a matter of manpower and resources. Depending on how bad a storm is and how quickly the snow falls, it can take service department workers anywhere from 4 to 80 hours to clear the sidewalks on the streets that are already on the plowing list. Evans’ priority, obviously, is keeping the streets adequately plowed and salted.

I have to tell you that I am continually impressed by the common sense that Councilman Bob Mastrangelo brings to the council table.
In response to Evans’ manpower concerns, Mastrangelo asked a simple question: “Does the service department plow both sides of the streets in the neighbourhoods next to the schools?” When Evans answered, “Yes,” Mastrangelo asked: “Do you think that is necessary?” Mastrangelo then suggested that perhaps the sidewalk on only one side of those near-school streets needed to be plowed, which would cut down on labor while still providing safe and good passage to children who do not ride a bus to school.
It was such a sensible suggestion that I think everyone else in the room wondered why they hadn’t thought of it first.

The City’s Website

Council President Scott Mills said he placed this item on the agenda in response to comments and complaints he has received regarding the accuracy and the timeliness of information posted on the city's website.

Councilman Bob Mastrangelo noted that the way information is organized on the website is also problematic. As an example, he pointed out that the minutes of Planning & Zoning Commission (P&Z) meetings are not posted on the P&Z page, but instead are accessed through the Building Department's webpage. “The information is there,” he said, “but you have to search to find it.”

When asked how information gets posted on the website, Mayor Coleman responded that it is done through his office. Several years ago he hired a local resident (Pat Divoki) to work part-time on the website. His office acts as the website’s gatekeeper.
The conversation stalled at that point. By claiming that it fell within his purview, Mayor Coleman essentially cut council out---meaning, I guess, that he is solely responsible for the city's website and its contents.

The website has the potential to be a powerful communication tool, but to achieve that end material needs to organized and located more logically, the site needs to be easier to navigate, and it needs to contain more information. It would be nice to see interactive tools added. And wouldn’t it be great if residents could log on and report potholes or other problems needing repair? And how about using it as a way to communicate with, and get answers back, from city administrators?
Okay, I’ll stop dreaming...

The Old Church Building

After discussing the issue for over a year, it appears that council may finally be willing to put the issue of demolishing the old church building to a vote. Ct Consultants estimated in 2008 that it would cost $ 37,000 to demolish the building. A little bit more than that was put in the 2010 budget for that purpose.
According to Building Commissioner Dale Grabfelder, the septic tank does not need to be removed. The city merely needs to pump the tank out, fracture it, and fill it with dirt. Councilman Leo Lombardo suggested the building slab be preserved for future use.

Councilman Ed Hargate did not join in the conversation, although previously he indicated that he would rather leave the building neglected and standing than demolish it for safety reasons and create green space next to the Highland Road pedestrian path, in front of city hall.

True to form, Councilman Frank Legan persisted in the same verbal hand-ringing that he has engaged in for over a year---with a twist. After stating that council needed to either “tear it (the building) down or have a conversation about making it bigger and better than what we have now,” Legan went on to claim that mediocrity results “anytime you gravitate to considering costs without being creative.” In other words, realistic, financially-based decisions are bad, whereas decisions based on pie-in-the sky dreaming are good.

Legan is certainly a master of quotable quotes. But, in reality, all he has brought to the table on this issue is jaw music. Council held off making a decision about the building a year ago, in deference to Legan’s request for more time to come up with a good use for the building. So what has he done with his time? Has he come up with a concrete plan for using the building and a realistic way to pay to renovate and operate it? Nope. Other than verbal hand-wringing and lofty language, Legan has brought nothing forward. Zip. Nadda.

It’s past time for council to make a decision and move on.

The Use and Marking of City-Owned Vehicles or We Don’t Need No Stinking Policy.

Right now, eight city employees are provided with cars to use in connection with their city jobs: Police Chief Cook, Fire Chief Turner, and Service Director Evans, their seconds-in-command; Building Commissioner Dale Grabfelder; and the Building Inspector.

Few, if any, of the cars were marked prior to last year. Undercover police cars of course should remain unmarked, but council has been discussing whether other city owned vehicles shouldn’t be marked, to identify them as city-owned vehicles. Council also wanted to discuss the issue of allowing employees to drive city-owned vehicles home---which is current practice for all but the city’s newest administrator, Building Commissioner Grabfelder.

Fire Chief Turner was adamantly opposed to having his vehicle marked. In fact, he told council that he felt he was being “picked on” and that, if city-owned vehicles are marked, “we (the employees who drove them) will be justifying everywhere we go.”

I think that’s the point. Public officials are supposed to be held accountable to the public. After all, taxpayers pay their salaries--and pay for the cars too.

I like Chief Turner. I really do. But as for the “picked on” part, I think Grabfelder has the most right to feel picked upon, since he's the only administrator who is not allowed to take his city car home (he apparently agreed to that when he was hired).

To kick off the discussion, Council President Scott Mills asked the mayor whether he had a policy on the use and marking of city-owned vehicles and what that policy was.

Mayor Coleman replied: “I do not have a written policy in place.”

Apparently developing and following written policies doesnt’t fit in with the mayor’s management style. No doubt it helps ensure loyalty from administrators and employees, to keep them dependant on the mayor’s personal serendipity and good will.

But is that any way to run a city?
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