Sunday, March 13, 2011

Euclid, Buy Euclid

ABC World News Tonight recently aired a wonderful series titled "Made in America." The premise is that buying more American made goods creates more jobs for Americans. ABC News estimates that 1% more spent on American made goods, a mere 18 cents a day, would immediately create 200,000 more American jobs (See ABCNEWS.go.com for the full series)

Let's take that concept to Euclid, with a twist: Buy Euclid. If we all made a concerted effort to spend more of our money here in Euclid, we can certainly have a positive impact on our City economy. Food, clothing, furniture, home improvement, entertainment, its all right here in Euclid.

From the City's stand point, the more money spent in Euclid the more likely these businesses (especially those locally owned) will make more money. That directly impacts how much tax revenue the City receives.

Greater demand at local businesses means that those establishments will stay in Euclid. And, more likely, those businesses will need more help, meaning more jobs will be created here in Euclid.

We, as a City can not simply depend on one or two large industrial firms for the City's financial well being. A healthy retail and commercial base is critical. So, lets all boost the health of our
retail sector, Buy Euclid.





Saturday, February 19, 2011

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.

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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.

Saturday, February 12, 2011

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.






Sunday, January 23, 2011

The Mood of Moody's for Euclid

Last April, Moody's Investor Services rated the City Of Euclid's latest short term debt offering.
Cities typically issue debt for all sorts of government needs, such as road repair, buy equipment, etc.

The City's debt offering totaled about 11 million dollars.

Moody's gave the City's debt issue both an MIG 1, equivalent Aa2 Rating. By definition, this means the City has good credit for short term borrowing. The interest on the debt issued is low saving the City money on its borrowing costs. However, Aa2 rating also means that the longer term risks for the lenders are somewhat higher.

Before you all snooze off, let me recap. For short term borrowing, Euclid's credit is quite good. Our debt to capacity level is low and manageable.

Now, about that longer term risk..................................................
As pointed out by Moody's the City faces some adverse longer term challenges, that can impact the City's credit.

Population Loss: 71,522 in 1970 to an estimated 47,415 in 2008 (38.6% decline)

Per Capita Income (income per person) compared to state average: 127.4% in 1969 vs.
93.6% as of 2008

Median Family Income: (average income level per family: 114.8 % in 1969 vs. 90.3% in 2008.

Unemployment: 11% (Feb 2010)

These dry numbers are telling the story of a community that is losing population and wealth,
Meaning that the burden of providing services is falling on fewer and fewer citizens. Those citizens have less and less ability to pay. That drives the rationale for tax increases, as we saw with the lighting and garbage taxes. That creates tremendous dissatisfaction and drives more folks out of Euclid.

Moody's also underlines our short and long term problem.

For our short term problem, they point out that of our approx 37 million dollars of general fund revenue, 56% comes from the income tax. The income tax grows and contracts with the economy. As Moody sees it, "rebuilding adequate operating reserves from presently narrow levels (1.6 million cash carryover from 2009) is crucial to maintaining overall credit quality." Income taxes are too volatile to depend on, so, develop other sources of revenue is what Moody's is saying.

Longer term, they point out that given the population and income declines, the "need for prudent redevelopment and retention efforts to protect and ultimately grow the City income
and property tax bases."

What Moody's can't know is that various Administrations have failed to address the long term issues of growth and development. Euclid is then left with the short term crisis' that we try and fix with tax increases.

During the past 20 years, such long term development issues have not been resolved.

Lakefront Development: The signature project of redevelopment: The Administration still
is tepid about the marina which is the key to the entire plan.
Shore: The current Mayor still threatens its closure.
Industrial Zone: No plans to create tax incentive districts to bring in business and
create jobs.
Euclid Ave Corridor: No viable redevelopment plan currently exists. No plans to build on
Euclid Historical Society and other community assets along the Avenue.
Downtown Plan: Failed to move on creating a downtown "special improvement district."
to help redevelop the area.
1996 Master Plan: Called for more "upscale housing" No real planning to attract those type of
developers

The failure over theses many years really means a failure to retain and attract wealth. Moving on any of these project over the past 20 years would have likely eliminated the needs for higher income taxes, trash taxes and lighting taxes.

On the budget side, we have also failed resolve long term issues.

City Jail: The loss on jail operations comes to about 1 million dollars a year
since it opened in 1989. If this issue had been addressed 10 years ago, would trash and lighting taxes been proposed?
Alternative Energy: The Administration has rejected using alternative energy (solar &
wind) along with new lighting technologies to save the tax payer money.

Government tends to be reactive, slow to innovate and hostile to new ideas. Euclid is no different. No matter if its 1994 (income tax increase), 2002 (Mayor Oyaski's proposed tax increase) 2004 (Mayor Cervenik's proposal for lighting/trash fees) the fix is generally the same. The result being that our citizens and businesses are burdened with higher fees/taxes, and, projects to grow our City get endlessly bogged down. For Euclid to survive, this must change. We can no longer wait.

That's the real mood Moody's captures!
City Budget Meetings begin on Monday Jan 24 @ 6:30pm, City Hall. They Continue on Jan 26 at City Hall, same time.

Friday, December 24, 2010

A Holiday Message

I have been thinking about the Dec 20th City Council meeting, a meeting that brought to the surface deep seated hurts; that brought up old wounds, divisions and misunderstandings. As I listened to the explanations by City leaders, and gave my own, none were adequate for the real pain and division that exists in Euclid.

Yes, some City leaders spoke fine words. Other leaders, not so good.

But this core problem that our community faces can not be fixed simply by better City leadership alone, rather the problems are those of the human heart, of how we treat each other each and every day.

It is appropriate that in the season of Holiday and new beginnings that we each reflect on our own behavior toward our fellow citizen, no matter what the background. No matter our faith, or, if no faith at all, we must strive to remember that we are all made out of the same stuff, as you will, that we all contain that spark of the Divine. If we accept this principal, that we are all part of the same human community, then, we will not so easily fall into the habit of snap judgements, half truths and the prejudices that most of us carrier around.

Our goal should be to see the good in each one of us. Mere tolerance of one another is not good enough. Acceptance and understanding are higher goals. Or, as Selman Hirsh stated "Respect, not tolerance, must be our goal if we would diminish prejudice in our time."

The character of each individual should be the measure of that person, not the group that they identify with.

As you can tell, I'm no preacher man, Priest, Rabbi, or Imam, yet I believe it true that compassion and acceptance of our fellow man can only make our Euclid Community stronger.

Here is an organizations out side of our many worship centers that can help better explain and build on what I've talked about.

B.R.I.D.G.E.S. -- BUILDING RESPECT INTERACTION DIALOGUE GROWTH & SOLUTIONS

This Group's basic philosophy is best summoned up by a quote from William Penn "...help me not to despise or oppose what I do not understand."

For more information on BRIDGES, please contact:

Sharon Resar @ str_cdp@yahoo.com

Have a wonderful Christmas Season, and a safe New Years Eve


Monday, November 22, 2010

Euclid Recycling Update

When will curb side recycling start? That is the great unknown. I can only tell you that the City Council has no information on bin distribution, or the actual start date. Stay tuned as I will continue to ask.

In other recycling related news, City Council rejected a proposal by yours truly to allow limited "scrapping" with in the City.

Scrapping, or, "curb side shopping" is the scavenging the discarded furniture and appliances that would other wise wind up in the landfill.

Keeping these heavy items out of the landfill saves the City money in landfill tipping fees. The cost to the City of allowing "scrapping" is zero. Unlike the curb side program, allowing scrapping requires no new hires or equipment. It would not allow anyone to go through trash bags or cans, would not allow anyone on to your property.

Yet the majority on Council would not pass this legislation even on a trial basis. The Mayor as cosponsor, and the Euclid Police Department gave their approval. Many North East Ohio communities already allow this type of activity. The basic arguments of the majority were: increase in crime and "we need to get our hands around recycling first" before allowing this.

The EPD could provide no information currently on arrests for "scrapping." And, the assumption that "scrappers" are some how prone to committing crime has no basis in fact.

For many, salvaging metals and furniture is a way to earn extra money in these difficult times.

As for waiting, the curb side program and 'scrapping" are entirely different. Starting now would determine if the scrapping program can really benefit the City. Any program to save the taxpayer money deserves a fair test. On this matter, the majority of Council failed to see this.

Have a wonderful Thanksgiving!

Sound Wall Noise

Will our I90 Sound Walls ever be replaced? I get that question at just about every community meeting, and, the answer is "yes." In fact, work is finally underway again with the section
just west of 260th about done. The new walls will be just like the walls installed in western Lake county: pressed brick with sections embossed with "Euclid" and water front scenes.

That our old sound barriers were ugly can not be denied. That they gave the City a horrible image for any commuter passing through the City is also true. So, the replacement is welcomed.

Yet, the cost is not cheap. The final tab will run about 3 million for the entire Euclid stretch of
interstate. No, none of this is being paid by the City . But, like most projects, who pays was the big issue for many, many years.

For almost a decade, members of Euclid City Council have pressed the Ohio Department of Transportation (ODOT) to replace the walls. They refused because of cost. Funny how ODOT works: they have put up walls of all sorts, including clear panel walls all over the state, yet, allocated no money for replacement of older failing walls.

So, for the past 8 years, Euclid has endured numerous paint and patch jobs, which was really putting lip stick on the hog, so to speak. Replacement is what we wanted!

A few years back, after more council pressure, ODOT again painted the panels, (but, not the posts). They also glued on the walls, a medallion with "Euclid" embossed on them. That was about the very worst is could get: patched sections of wall, with rusting posts with Euclid medallions that started to fall off after a winter season.

ODOT was absolutely going to leave the City with this eyesore. When it was suggested that
ivy be planted to grow and cover the walls, ODOT refused to consider this, saying nothing could grow along the highway.

So, how did we finally get new walls? You can "thank" the national recession and subsequent federal stimulus money. The Feds allocated to Ohio and ODOT 10s of millions of dollars. In turn, ODOT then had money freed up to finally replace Euclid's section of wall. Of the approximate 3 million dollar cost, federal money is picking up about 90% with State money covering the rest.

So, about 2.7 million in federal stimulus money has gone into the replacement of the sound walls.

I can only hope that we will receive some federal money for projects such as the downtown transportation plan and the lakefront.

But the saga does not end there: Demolition of the old walls occurred in late summer, so why the delay? The ODOT engineers did not figure in the fact that the old posts would be reused. Because of this mistake, the panels were not manufactured properly leading to cracks and misfitting panels.

Remember, the walls were originally installed under ODOT supervision, it's their wall. For ODOT to make such a mistake, well, lets just say that you should expect better from any
public agency.

Finally, ODOT is now working with Cleveland to potentially install new sound walls along I90 on the near west side. That project is tentatively to be paid for entirely by ODOT.