Norwood City
Council
Special
Meeting
Council
Chambers
A) CALL TO ORDER
The Council for the City of Norwood met in special session on the above date with President Jane M. Grote presiding. The meeting opened with a prayer and the Pledge of Allegiance.
B) PRAYER
C) PLEDGE OF ALLEGIANCE
D) ROLL CALL
On roll call, the following members answered present: Mr. Gabbard, Mr. Sanker, Mr. Tracey, Mr. Fulmer, Mr. Geers, Mr. Mumper, Mrs. Brown, and Mr. DeLuca.
E) aMENDMENT OF AGENDA
F) Discussion
A) CONSIDERATION ON THE FULL AUDIT PREPARED BY THE OHIO STATE AUDITOR’S OFFICE.
Representatives of the State Auditor’s Office were present and called to the podium to present the Draft Audit report and were then available for questions.
Mr. DeLuca asked the representatives about the deficit and the consequences for the upcoming year. Dave Thompson of the State Auditor’s Office answered that continuing on this path would likely result in the city being declared in a Fiscal Watch during 2004. Mr. Thompson then went on to explain Fiscal Watch, the criteria for entering Fiscal Watch and the process of exiting Fiscal Watch. The support from the State is primarily free-of-charge technical financial and audit support to the City. Council can then use these tools to make decisions to alleviate the current financial crisis and alleviate the Fiscal Watch conditions.
Mr. Sanker asked Mr. Thompson for his explanation of the difference between Fiscal Watch and Fiscal Emergency. Mr. Thompson explained the six criteria for entering Fiscal Emergency and some of the support that is then provided by the State in each case. Mr. Thompson acknowledged that although the projected shortfall at this point does not meet the Fiscal Emergency criteria, it is still significant at more than $1.5 Million. Corrective actions need to be made to address the cash flow problems in the short term, while addressing the long term deficit projections. Mr. Thompson acknowledged that in working with Council, the Administration, the Treasurer’s Office and Auditor’s Office it is clear that the City has the brain power to pull through this crisis. The technical assistance provided by the State may help local Officers finalize these decisions.
Mr. Fulmer commented that there are many municipalities at the local, state and federal level that are struggling financially and cited deficit numbers for each. Mr. Fulmer then asked if the State provided any financial assistance for the municipalities in this same fiscal state. Mr. Thompson agreed with Mr. Fulmer’s comments, and credited the Administration for proactively asking for the Fiscal Watch Audit. Norwood is one of the few that have asked the State to come in and perform a Fiscal Watch audit based on their own forecasts. This makes the upcoming process a bit easier to address than if the Fiscal Watch Audit was initiated at a later date. Mr. Thompson answered the question by reiterating that a Fiscal Watch does not provide financial assistance but provides technical assistance at no cost to the City. The result of this technical assistance is a financial plan that is developed with the City leaders. Performance Audits and additional Forecasts are examples of this technical assistance. The goal is to help the City out of Fiscal Watch as soon as possible.
Mrs. Brown asked the City Auditor, Mr. Jones, how he felt about the accuracy of the numbers reflected in this Audit report. Mr. Jones responded that he is very confident with these numbers and cited the collaboration with his Office, the Mayor’s Office and the Treasurer’s Office. This report also adds some legitimacy to the previous forecasts from his office.
The Chair noted that Mr. Moore is now present in Council Chambers.
Mr. Molony thanked the representatives of the State Auditor’s Office for their hard work on this audit. Mr. Molony also asked questions about the changes in numbers from April and how that led to changing the deficit from $2.5 million to $1.5 million. Mr. Thompson responded with several line items whose projections changed since April and that certainly led to the change including refinancing of debt, accelerated earnings taxes, etc. Mr. Thompson also reminded Council that this forecast is based on current estimates and another entity could perform a forecast in a month and get different totals. Mr. Molony also asked clarifying questions about Fiscal Emergency criteria. Mr. Thompson also explained the technical support provided by the Fiscal Watch status.
Mr. Sanker asked about the details on a Performance Audit. Mr. Thompson responded that a Performance Audit is normally the first tool utilized to determine the efficiencies of the municipality. Mr. Thompson recommended it and this Performance Audit significantly helped a local community.
Mr. Mumper asked about the criteria for entering Fiscal Emergency, and if missing payroll was the most popular criteria for entering Fiscal Emergency. Mr. Thompson confirmed that is the case.
Mr. Moore asked a question regarding the C9 Trust cap and its implication on the forecasts. Mr. Molony responded that the cap is in place and being enforced and the forecasts reflect that cap.
Mr. Moore also asked about the discrepancy in the initial numbers and the final deficit numbers we are seeing today. Ms. Kennedy came to the podium and explained that the projections were very early and many things have been changed. A spreadsheet is available and will be re-distributed to Council members detailing the changes.
At the conclusion of this Question and Answer Session, Mr. Thompson asked for a signature from Council Members and Officials stating they are in agreement with this Draft Report with noted changes.
The Chair noted that Mr. Sanker has been excused for the remainder of the meeting.
G) INTRODUCTORY READING OF ORDINANCE
A) ORDINANCE TO CHANGE APPROPRIATIONS FOR THE YEAR 2004.
On a motion by Mr. Fulmer, seconded by Mr. Mumper, it was moved to suspend the rules and have all three readings of the Ordinance. All members present voted YES.
On a motion by Mr. Tracey, seconded by Mr. Fulmer, it was moved to pass the Ordinance. All members present voted YES.
H) EXCUSE ABSENT MEMBERS
With the exception of Mr. Sanker’s excused early departure, all members are present.
I) ADJOURNMENT
On a motion by Mr. Moore, seconded by Mr. Geers, it was moved to adjourn. All members present voted YES.
______________________________ ______________________________
J. Brian Mumper Jane
M. Grote
Clerk of Council President
of Council