Thread by @RosiePalfy

It’s day 8️⃣ of @CleCityCouncil’s Budget Hearings: I’m live-tweeting this afternoon’s hearing for @cledocumenters & @signalcleveland. Today’s hearing is focused on @CityofCleveland’s Dept. of Finance. #CLEdocumenters #CLECityCouncil #CLEBudgetHearings

Council members covered through the top half of the agenda this morning. Now they are expected to discuss:
Sinking Fund Commission, Revenue Bond Debt Service, Debt Service Revenues & Expenditures, Debt Service Unvoted Tax Supported Obligations, Rainy Day Reserve Fund, etc…

This is the 2023 Mayor’s Estimate
u26043067.ct.sendgrid.net/ls/click?upn=B…

Watch the Budget Hearings livestream here:
youtube.com/live/ytj1nPiZv…

The hearing started. There was initially some confusion about what was covered during the morning session. Council President Blaine Griffin is discussing the agenda with @CityofCleveland Chief Finance Officer Ahmed Abonamah.

They’re starting with the Sinking Fund Commission. But they’re also going to discuss the following because they’re all related.

Revenue Bond Debt Service
Debt Service Revenues & Expenditures
Debt Service Unvoted Tax Supported Obligations

The pages are out of order so I’m not including them because it will be too confusing. Earlier hearings included slide presentations. But this morning’s hearing did not. I will include screenshots from the Budget Estimate when I can.

The Budget Estimate defines the Sinking Fund Ordinance in the glossary. But I still don’t understand it.

Present are Council President Blaine Griffin (@Griff4CLE6), Council Members: Jasmin Santana (@jsantanaward14), Brian Kazy (@kazy_brian), Jenny Spencer (@jennyspencercle), Kris Harsh (@KrisHarsh), & Rebecca Mauer (@rebecca__maurer). There may be others there out of view.

Council Member Kevin Bishop has arrived. Chief Finance Officer Ahmed Abonamah is at the table with “Miss Ruby.” Council President Blaine Griffin did not provide her full name & title.

Miss Ruby says the sinking fund is the city-wide coordinator for the issuance & payment of all the city’s debt. This includes general obligation bonds, subordinate-lien income tax bonds, special revenue debt & non-tax revenue bonds. She works in the office with 1 employee.

“Miss Ruby” is Elizabeth C. Hruby, Assistant Secretary of the Sinking Fund Commission. The Sinking Fund is the City’s bond retirement fund & its operations are governed by the Ohio Revised Code, City Charter & the General Bond Ordinance. Pages 448-449 explain this.👇

The Sinking Fund Commission consists of @MayorBibb, @ClevelandCFO Ahmed Abonamah, & City Council President @Griff4CLE6. They reconcile bank accounts related to the city’s debt, maintain debt records & ensure funds are needed for payments. They’re responsible for compliance.

The office ensures the city complies with required “covenants” in the general bond ordinance, sinking fund ordinance & something else I’m not even going to try to explain. They do something with disclosure agreements to comply with Federal Communications Commission (FCC) rules.

Council President Griffin says “it’s pretty straight forward.” Really? Because I’m lost. He doesn’t have any questions.

Council Member @KrisHarsh is trying to “track down the money” that was raised for the new #Cleveland #police headquarters. He asks if the money is part of the enterprise funds. Harsh asks, where do we see the bond sales for the headquarters?

Hruby says the bond sales came from “subordinate lien income tax bonds” which says that they have a “multitude” of. She refers Harsh to page 440 which has the “debt service” that’s due for those bonds this year.

Harsh looks confused. Finally, someone says the quiet part out loud. “I’m sorry. I’m not a financier & this is complicated for laymen like me,” says Council Member @KrisHarsh. #CLECityCouncil #CLEBudgetHearings #CLEDocumenters

Hruby says the bond proceeds that “came in” on each of the issuances are in capital projects. She says a “project” has been set up for that purpose. Some helpful terms👇

CFO Ahmed Abonamah says in advance of each bond sale, @CleCityCouncil adopts a series of ordinances authorizing the bond sale & the project that will be paid for with the sale’s proceeds. The money is allocated to each project. The CFO mentions federal compliance obligations.

Council Member Kris Harsh says, “I will continue to struggle to understand the pots of money & the allocated funds in the city…” Finally, he asks council’s policy research team to look at 2 public records requests filed by @WEWS reporters. One was filed more than a year ago.

For my viewing audience, be patient because I’m far behind. I cringed when I saw today’s agenda. There are so many finance divisions, bureaus, funds, etc… that I’ve never heard of. If I can’t understand something I can’t adequately convey the info to the public. Hence the delay.

Moving on… More #Cleveland City Council members have arrived. Council Member Jasmin Santana is now chairing the meeting. Next up is the Rainy Day Reserve Fund.

Rainy Day Reserve Fund explanation:👇

See page 351.

The city previously transferred $20 million of American Rescue Plan Act (#ARPA) funding to the Rainy Day Fund. CFO Ahmed Abonamah says the mayor’s estimate does not include any additional deposits.

Council Member Jenny Spencer asks how many months of city operations does the Rainy Day Fund cover? CFO Ahmed Abonamah looks at his cell phone & appears to be using a calculator. Answer: approximately 34 days.

Spencer asks him to repeat the figure for the “total cash picture.” Abonamah says he will follow up. The figure is in a different notebook. Spencer asks if there’s a target🎯 for the #️⃣ of days the city wants to “cover.”

Answer: in “an ideal world” the city would keep the maximum amount allowed by state law. The payroll reserve fund would “be inline” with the city’s liability which it’s designed to cover. The CFO says it’s a bit of “a balancing act.”

Spencer asks what is the maximum balance allowed for the Rainy Day Fund. Answer: Ohio law allows 🔟% of the prior year’s general fund revenue. Next up is Council Member Brian Kazy.

@kazy_brian says there’s almost $66 million in the Rainy Day Fund & an additional $90 million in the “27th pay fund.” He asks “Where is that money?” The CFO says it’s in the “co-mingled” depository account. Kazy asks if the money💰just sits in a bank. The CFO says yes.

The @ClevelandCFO says that due to the city charter & state law, they have very strict limitations as to how they can invest the city’s deposits. Recently they’ve invested in U.S. Treasury Securities as a way to generate more revenue for the General Fund. home.treasury.gov/services/bonds…

FYI: Council Member Kazy referred to a “2️⃣7️⃣th pay fund.” The Mayor’s Estimate says the city used $90 million of #ARPA funding to establish a Payroll Reserve Fund. This will help cover future payroll-related obligations, including a 27th pay period in 2️⃣0️⃣2️⃣4️⃣.

Council Member Kazy asks if the budget book shows how much income the city made in 2️⃣0️⃣2️⃣2️⃣? Answer: page 34 shows all investment income. But the CFO says it’s not “broken out” by rainy day fund or payroll reserve fund.

Next up is the “Dean of City Council.” Council Member Mike Polensek has a follow-up question about special revenue funds & the Cleveland Stadium on page 352. He asks for an explanation of receipts, expenditures & “the net.”

Council Member Mike Polensek has his hand on his head as he stares at the 5️⃣0️⃣0️⃣➕ page budget book.

Answer: Receipts in are a combination of “sin tax” revenue & general fund transfers. Expenditures are a combination of debt service & capital repairs.

Council Member Polensek asks more questions. Council Member Stephanie Howse interrupts & asks if they’re still discussing the Rainy Day Fund. Polensek says no, they’re still on the Special Revenue Fund. Council Member Jasmin Santana says they haven’t gotten there yet.

Council Member Jasmin Santana clarifies her response & says THEY ARE discussing the Rainy Day Fund. After thoroughly confusing everyone in the room & me at home, I realized that Council Member Polensek derailed the conversation with his stadium questions.

Council Member Polensek says council members had previously asked for the total 💵 amount paid so far on the #Cleveland stadium for principal & interest. “Did we ever receive that figure?”

The camera is focused on Council Member Polensek. In the background, other council members can be heard saying “yeah.” He ignores his colleagues & says “to the staff.” Now you can see everyone at the table. The city employees look bewildered as they turn & look at each other.

Council Member Polensek again reiterates that he wants to know what has been paid to date in principal & interest on “Cleveland Lakefront stadium.” Council President Blaine Griffin is back & he calls on Council Member Stephanie Howse.

Council Member Stephanie Howse says she’s “just a little confused” & asks which fund are they discussing. A chorus of voices reply Rainy Day Reserve Fund — page 351. Howse asks if the Special Fund is “with” the Rainy Day Fund. Are they “all the same thing?”

Folks, this is what happens to your brain after 8️⃣ days of endless budget hearings. CFO Ahmed Abonamah resolves the confusion & says the Rainy Day Reserve Fund is 1️⃣ of 6️⃣ Special Revenue Funds.

Council Member @stephaniehowse asks how many financial institutions are used for the city’s holdings. The CFO says they use 3️⃣ — Key Bank, PNC Bank & Huntington Bank. Howse says she asked for the community & added this is “very problematic.”

She talks about the “parallel” between the “true value” the @CityofCleveland is getting specifically when it comes to housing & “the other things.” @stephaniehowse says, “It’s not the same, but it’s the same. They have our money...”

Council Member Howse says she’s concerned that at least 2 of the 3 banks are “not doing right by our people.” She says the city may need to “seriously reconsider” where they are holding their money, adding that it’s “a deeper conversation.” There no further questions.

Moving on to Non-Departmental Expenses

•County Auditor Deductions — page 346
•Transfers to Other Funds — page 347
•Other Administrative — pages 348-349

County Auditor Deductions — page 346

Transfers to Other Funds on page 347

Other Administrative on pages 348 & 349

Council President Blaine Griffin asks if all professional memberships are listed (referring to page 348). He mentions a few organizations that he doesn’t see on the list. The CFO says it is not an “exhaustive list.” These memberships span beyond a singe department.

Other city departments have appropriations for certain organizations. Council Member Jasmin Santana asks for an explanation Board of Election expense on page 346. Answer: In 2022, the city was billed for the cost of the 2021 election which was citywide.

That explains why the 2022 line item is much higher than what’s projected for 2023. Council President Griffin says, “We anticipate possibly going to the ballot this year for a couple of things. So is that budgeted into this?”

An unidentified gentleman at the table says the city anticipates spending $150,000 in 2023. He explains election billing. If there are multiple, different ballot initiatives, such as a state initiative or a county initiative, then the city would pay a 1/3 of the total cost.

If an election only has a City of Cleveland ballot initiative, “We would pay full freight for that,” says the unidentified gentleman in the middle. The city would split the cost if other municipalities on the ballot. Griffin asks, “What if it's a citizen-led initiative?”

Answer: The city is still pays “full freight” if other municipalities are not on the ballot. The CFO says this shows the value of “leveraging other initiatives” to coincide with other ballot issues the city may want to put forth to mitigate election costs.

Council President Griffin says there may be a construction🚧 reform ballot initiative this year. He wants the city to plan accordingly. Council Member Kazy says there’s at least 1 city council ward election this year. He asks is this what the $150,000 is “guesstimated” for?

Council Member Kazy asks how much it would cost to just hold 1 election in 1 ward? The CFO says $150,000 would cover the cost of this year’s city council special election. Beyond that, it’s more difficult to estimate.

For context, they’re referring to the special election in Ward 11. In January, council members appointed Danny Kelly to fill the vacancy left when Council Member Brian Mooney left office to become a @cuycommonpleas judge. @signalcleveland has the details. signalcleveland.org/cleveland-city…

Danny Kelly is the only @CleCityCouncil Ward 11 primary election candidate listed on @cuyahogaboe’s sample ballot. The unexpired term ends 12/31/25. The election is September 12. See page 14. 👇 boe.cuyahogacounty.gov/docs/default-s…

Council Member Kris Harsh says there are races for municipal court judges this year. He says, “Those are citywide & only citywide… Do the courts pay for their own elections or do we pay for the court's elections too?”

CFO Abonamah says he will look into that. He believes judges are also county officials. The explains how the budget book shows that salaries for municipal court judges are split between the city & county.

Council Member Harsh starts doing math out loud & it doesn’t make sense. He rattles off numbers & says “you know, nickels & dimes later. I suppose.”

I’m not going down⬇️ that rabbit🐰hole. I tell myself: Keep calm😌 & don’t do math🔢.

Council member Harsh says this is “fascinating.” He wants everybody to know that “municipalities pay for elections. It's not a service of the state. It's something we pay for.”

Council Member Howse asks the CFO to talk about the county auditor & treasurer collection fee? He says it’s a fee the city pays the county to collect taxes on its behalf.

Council Member Charles Slife asks for clarification about the estimated $8.5 million transfer to street construction on page 347. Then he refers to page 358 & asks about the $11 million the “transfer in” of street repairs. This is confusing.

Ironically, the unidentified gentleman at the table says there are “other identifiable funds” the city is going to use to make up that difference. He mentions additional bond funding & strategic priority funds. Council Member Slife says this looks like “a new strategy.”

The gentleman says that historically, it’s been funded by the general fund. But the city is trying to “identify” other ways to “mitigate the general fund's liability for transfers.”

Council Member @rebecca__maurer asks about the “capital outlay” on page 347. She says the city doesn’t budget “very much” in that category. Then every year “we come back” & add funds through a “transfer ordinance” or through “reconciliation.”

Council Member Maurer waves her hand in a circle & asks where does that money go? What is it spent on when it's transferred to capital projects? The CFO says the money is used for “the kind of capital work that you would expect” — streets, demolition — “things like that.”

She mentions “inter-fund subsidies” & talks about a “large allocation” from last year that was moving #ARPA money into a “special sub-fund.” Council Member Maurer asks how the city will spend the $6.9 million she’s referring to.

Answer:👇
— $3 million is for economic development. It will be “available in their cash position” for “needs of enticements.”
— $2 million will go to Cleveland Browns for capital repairs.
— $750,000 is for a job creation agreement with Sherwin Williams.

CFO Abonamah mentions “JCIP” several times. It stands for Job Creation Incentive Program. He says JCIP recipients get a “cash payment” from the city for the incentive. It’s not an “income tax credit.” There's “an actual cash transfer” between the city & the credit recipient.

She asks if the cash transfer comes on “the front end.”The CFO says “correct.” @rebecca__maurer says “Fascinating that we give that to Sherwin Williams” & “to almost nobody else.” They continue their discussion about enticements & incentives for large scale projects.

Council Member Maurer asks the city council’s policy team to look at how last year’s funding was spent. Council President Griffin says they’re moving to the “anchor leg” of the hearing — Restricted Income Tax.

The Restricted Income Tax Fund is on page 351. The budget book says it was established in 1981. The fund receives one-ninth of the City’s income tax collections. Funds are restricted by law to expenditures for capital improvements & debt service.

The CFO says these funds “never hit” the general fund.
Council President Griffin asks about the money for council’s “age-friendly home program.” In 2022, $5.2 million was allocated. It’s unclear what he’s referring to or if it’s in the budget estimate.

Council President Griffin mentions the funding council members used to have for “special capital improvements.” He wants to make sure they have “that conversation.”Council Member Jenny Spencer asks a question & uses an acronym I’m not familiar with.

Spencer says it’s “an opportunity” to understand the restrictions of the Restricted Income Tax Fund. Answer: it’s generally used for city-owned property.

Council President Griffin looks around the table to see if anyone else has any questions. With no other questions, he raises his gavel & says the 2023 Finance, Diversity, Equity & Inclusion Committee is adjourned.

But wait…there’s more! It’s not over.

Before Council President Griffin can bang the gavel, a voice in the background says “Mr. Chairman.” Griffin looks stunned. With gavel in hand, he turns his head as everyone laughs. Council Member Mike Polensek asks how @Griff4CLE6 plans to proceed with “reconciliation?”

There’s 4️⃣ minutes left & what comes next is arguably the most important part of the meeting. Council President Griffin says “We made it. We made it.” He says members thought they would have to work a couple of Saturdays, Sundays or midnights. #CLEDocumenters #CLECityCouncil

On Monday, Feb. 28 at noon, @CleCityCouncil will have a caucus meeting to “debrief.” Notice the agenda DOES NOT say the meeting will be live-streamed on @TV20Cleveland. #CLEDocumenters #CLECityCouncil #CLEBudgetHearings

Council President Griffin says City Council will “try to stay as close to a structurally-balanced budget as possible.” He has asked council’s policy team to identify areas for potential cuts “first & foremost.” #CLEDocumenters #CLECityCouncil #CLEBudgetHearings

If council members identify areas to recommend “potential cuts,” they will make recommendations for “potential increases,” says Council President Griffin. “We're not going to do what we did last year. It would be impossible. #CLEDocumenters #CLECityCouncil #CLEBudgetHearings

@Griff4CLE6 adamantly reminds his colleagues that “this council” told @MayorBibb’s administration to bring back “a structurally-balanced budget” for 2023. He says “we are not going to be able to run up another $62 million… structurally-imbalanced budget like we did last year.”

For context: Mayor @JustinMBibb’s 2022 budget, “required rolling over more than $60 million of $132 million in money carried over from 2021. Both the federal CARES Act & American Rescue Act Funding helped the city end the year with the balance.” clevelandcitycouncil.org/resources/news…

From the press release above ⬆️: In 2022, Cleveland City Council made approximately $5.8 million in additions to the budget.👇 #CLECityCouncil #CLEDocumenters

Council President Griffin says he has asked staff “to give us some doomsday scenarios” to discuss at Monday’s caucus meeting. He gives 2️⃣ examples. How much will it cost to add “a certain amount of police officers back into the budget?”How much will it cost “to add age-friendly?”

The council president is again referencing the Age-Friendly Home Repair Program for seniors. It provides “financial assistance for critical health/safety home repairs for low income seniors & adults with disabilities.” — Budget Book page 149

Page 151 of the Budget Book shows output metrics for several senior programs.👇

Staff will present “some of those scenarios” on Monday. After members go through the “caucus process,” @Griff4CLE6 & the “leadership team” will sit down with @MayorBibb’s administration to “figure out how they want to move forward.” #CLECityCouncil #CLEDocumenters

Day 8 of the Cleveland City Council Finance, Diversity, Equity & Inclusion Committee meeting is finally adjourned!

#Cleveland City Council members will discuss the budget reconciliation at Monday’s @CleCityCouncil Caucus meeting. It starts at noon. @signalcleveland & @cledocumenters will be there to provide coverage. Here’s the agenda👇

This concludes my coverage of Friday’s Cleveland City Council Budget Hearings. Think we got something wrong? Send any inquiries about the meeting or these tweets to @cledocumenters or email us at [e-mail]

Read live updates about the 2023 Cleveland budget hearings: Friday, February 24 — from @NickCastele & @cledocumenters. There’s also a great General Fund budget hearings wrap-up from @signalcleveland. signalcleveland.org/2023-cleveland…

@NickCastele @cledocumenters @signalcleveland @threadreaderapp unroll