Needed - Trash and Lighting Taxes?

Its been almost one year since City Council (including me), approved the Trash and Street Lighting taxes. So, lets take stock of how our budget did in the past year.

Going into 2010, the City had a cash reserve of about 1.6 million dollars. Projected 2010 expenses would have drained that cash reserve, and, still been about 2.2 million in the red.

To meet this crisis, the Administration proposed the trash and lighting fee tax.

As you may recall, the Mayor's Administration stated the following layoffs would occur without the 2.2 million in additional taxes

Police: 10 officers, along with cutting all special details.

Fire: 6 firefighters, along with the elimination of 2 captain, and three 3 lieutenant positions

Recreation: 3 positions, along with the Ice arena and all pools closed.

Finance: 2 full time staff members.

As presented, this was certainly a grim picture, a picture of a more dangerous City, with fewer amenities to attract and keep families.

Now, we flip to the end of 2010: no such cuts occured, and the City ended the year with a 2.7 million dollar cash balance. That's 1.1 million more than when 2010 started.

Given the gloomy forecast Council and the residents were given, we should have seen the City ending 2010 at about the same cash balance level of 1.6 million, or, slightly lower.

So, what acutally happened:

1) The City spent about 1 million dollars less than budgeted (36 million vs 37 budgeted).

2) General fund revenues (from which we pay police, fire, utility bills, ect) were up about 655K.

Higher revenue and lower expenses are generally a good thing. However, in 2010, we took 2.2 million dollars from our citizens for a dire emergency that did not develop.

Putting money away for a rainy day is of benefit to the City. It helps our municipal bond rating and, will cushion our budget for the next downturn. But that has to be weighed against doing this during the very worst recession since the Great Depression; the very real pain caused to our elderly and less fortunate residents.

This is similar to what the Cervenik Administration did in 2004: then, it borrowed 2 million dollars to plug a budget deficit, but wound up putting a million of that money into cash reserves.
What was done in 2010 was far more serious though, as we directly took more money from you.

This is not simple "Monday morning quarterbacking." Budget forecasting is certainly not an exact science. But given the very real economic issues facing Euclid residents (collapsing property values, reduced work hours, unemployment), weighed against taking more revenue, we should have erred on the side of extra caution....asking for less.

That would have meant that for 2010, Euclid should have only gone with the Trash Tax, or the Lighting Tax, or, a far lower trash tax, and, other, less costly combinations.

While I did work to reduce the original Trash Tax proposal of $14.00 and $9.00 dollars, to the $9.00 and $7.00 and fought to let these fees expire in two years, I should have pushed even further to lesson the burden. For that, I do offer my apologies.

In March of 2010, when Council approved these new taxes, there was a promise made that the Administration and Council would take a very long and hard look at the City's methods of raising money (more specifics on an upcoming post). We did discuss a few ideas last spring, but, have really done nothing more.

So, where does that leave us for 2011? Very much where have been for the last several decades: In bad times we cut staffing, and talk about raising more money
1994 Shared City/School income tax passed.
2002 Mayor Oyaski proposed a 5 year tax issue.
2004 Mayor Cervenik borrowing of 2 million dollars
2004 Mayor Cervenik proposes trash and lighting fees
2010 Trash and Lighting fees passed

........................And, in good times, we bring on staff and give raises.

Complicating future budgets is what the State of Ohio might do to balance its budget: reducing government revenue sharing, eliminating the Estate Tax, etc.

Euclid must break out of this pattern by growing our economic base while finally taking a hard, comprehensive look at how the City of Euclid taxes its citizens and businesses. Expect more of your Administration and Council. You deserve it.

**********************************************************************************

59TH Annual Euclid High Scholarship Dinner Dance

Patrician Party Center, 33150 Lakeland Bvld, Eastlake

Call Barb Carney for your $50 ticket and further details

Let me know what you think, and, don't forget to check out my facebook page for quick takes
on your government.

Fumbling Downtown Storefront Renovations.

You can't miss the new look of downtown Euclid. New exterior brick work and stucco panels are being installed at both Shore Center, and the Lakeshore Plaza. Once completed, the new brick facades will certainly "freshen up" what are very old and tired looking properties.

The new look is critical in competing with the recently completed Shoregate renovations in neighboring Willowick.

Storefront renovations require quite a bit of money for planning, engineering and the actual construction. In many cases, owners, especially of older properties find it difficult to finance such project.

In recognition of this, the Federal Government establish a block grant program giving communities a grant of federal tax dollars to invest in just this type of project. For any project,
the block grant usually covers 20%-40% of the total project cost.

In short, the tax payer becomes a minority owner of the storefront improvements.

The City is the guardian of the tax payer investment in any storefront project.

The city has fumbled that role at Lakeshore Plaza.

Lakeshore Plaza renovations cost about 950K. The City invested 240K in block grant money.
On top of the direct tax payer investment, the City is also committed 200K in direct money
to back the owner's loan with Cuyahoga county.

For your investment, you, the tax payer should expect the highest quality project.

What has gone up so far is anything but.

So many complaints came in regarding the quality of the work that the City was forced to retain
Kulchytsky Architects to evaluate the Lakeshore Plaza Project. In their preliminary report, they confirmed issues under three categories:

Masonry: 7 issues, including deviations from approved plans, bricks falling off, violations of
Ohio Building Code.

Flashing and Moisture Control: 4 issues including lack of flashing and poor drainage.

Sheathing/Substrate: 2 issues including deviations from approved plans; not installed to manufactures recommendations.

There could be more issues, but, without tearing off much of the work it is impossible to tell if other defect exist. (for the full report, please contact me for a copy)

How did this happen?

For this type of project, each owner submits plans that must be approved by the City 's Architectural Review Board, and the Building Department. These become the plans of record and, can not be changed by the property owners without coming back to the City.

For decades, the City has followed the rules and standards of the Ohio Building Code. For the storefront program, we have relied on property owners to make sure work was installed per the City approved plans. This is done through the property owner hired Architect or project manager. But for both the Shore Center, and Lakeshore Plaza project, the respective ownership apparently did not hire either. This left the tax payer vulnerable to shoddy work.

Why didn't the City conduct the inspections? The City's inspections focus on items that require permits, like concrete and electrical, heating and cooling. The brick and stucco work going up in downtown Euclid requires no permit.

So, throughout the Autumn, as the brick work went up the City paid no attention to that installation which is now 85% complete. This makes little sense as the project is the brick and stucco work, and, we knew that the owners did not hire a project manager. This project is the exterior work; the City should have taken steps early on to make sure it was being installed up to code and, according to approved plans.

Instead, it took the complaints of several residents for the Administration to take action.

As the Administration admitted at the Jan 3, 2011 Council meeting, we simply have a hole in our inspection process. Under the rules of the Ohio Building Code, it is the property owner that decide how the remedy the problems found so far. Here are the three options:

1)Bring the project up to code, and comply with approved plans.

2)Submit revised drawings.

3)Accept the work as is and forward such list to the City Building officials.

The tax payer should only accept option number #1. By the City approving plans, that is the
project that you should expect to be done. That is the only way Euclid can recover fumbling the initial inspection process.

In the future, the City must have much stronger inspection role to make sure that your investment is protected.

To fix this, I have introduced to City Council a resolution so that inspections are required for any storefront project where public monies are spent.

City Council will take up this matter at the City Growth Committee meeting, March 9, 6:30pm, Euclid City Hall.

Euclid Schools seeks 6.9 Mill Operating Levy. Election - May 3rd

According to the Euclid Board of Education, without passage of the levy, millions of dollars in cuts will have to be made, across the board. The levy is in response to

a projected fall in state aid. If passed, the levy would generate 5.1 million annual for the district. If passed, this levy would replace an expiring 1.8 mill levy. For the average Euclid resident, the cost would come to under $10.00 per month. More information as it become available.

Finally, check out my new face book page for quick hits on City and general Euclid matters. The blog will continue to be for more in depth discussions on specific issues.

For any questions and comments just let me know.