Written by the reviewer from the ASR + docket; [verbatim-ASR] = quoted machine transcript; [paraphrase] = reviewer's wording, not a quote.
0:00 All right, we will call community of the whole to order, so I just have a little technical
0:06 So first I'll move to approve the minutes of the January 20th community of the whole
0:12 without the necessity of a reading.
0:15 Motion's been made and seconded.
0:17 Hearing none, all those in favor?
0:20 And that motion passes.
0:21 Okay, so our two main items tonight are hearing from our bond council for our annual
0:29 presentation about the debt load and then we also have a union conversation, the presentation
0:36 from the administration about the city hall proposal.
0:39 So I'm assuming we're starting with bond council, that's kind of where we were thinking
0:44 but I'll turn it over to Director Mahoney and team.
0:50 Good evening everyone, despite wave introduction my name is Jeff Rink, I'm a managing director
1:06 with KeyBank Capital Markets and I head our public finance efforts here working with
1:14 municipalities and school districts and other governmental entities and I'm joined today
1:20 by bond council from Bricker, Katherine Schwartz.
1:25 So for those that have heard from us in the past, wonderful to see all of you and
1:30 for the newer council members, welcome, congratulations and hopefully you'll see as
1:37 we sort of get into our presentation.
1:40 We really want to be here as a resource for the administration and for you so we
1:46 think we've put together a presentation that we've dropped off at your spot up there
1:51 but as we go through it invariably there's always questions as we welcome and should
1:56 be so please interrupt us and you know we'll drill down into whatever questions
2:02 you may have as we go along if that's acceptable.
2:08 So we're obviously here to talk about the city's plan of finance for 2026, it consists
2:14 I know of a number of legislative items around what's called a note issue and then there
2:23 is actually some bond legislation and so we'll explain sort of why we have both
2:29 and what they're looking to accomplish.
2:33 Also a big important topic that I can assure you we are with your wonderful finance
2:39 staff are constantly looking at and working on is sort of the capital and more so debt
2:46 plan of the city so we'll talk a lot about that because I do I know we do come here
2:52 every year and so you only see us once a year and in some instances we're saying
2:57 some of the same things we've said in previous years but there is a lot of analysis
3:03 that goes into this right it's not in you know an unending supply of revenue that
3:10 the city can just continue to borrow from right and so I do say to you we we do try
3:16 to look at all that and with the city administration and with the finance department
3:21 make sure that we're sort of properly planned so that what the administration and
3:27 council decide from a policy perspective and projects you may want to fund that
3:32 at the end of the day we can afford to do that right one of the wonderful things about
3:37 city Lakewood among many is your credit rate right your credit rating is a double
3:42 a two and we'll talk about that in terms of that is on the upper echelon of
3:48 municipalities across the country and one in particular for Lakewood because of a
3:56 lot of the wonderful things that the community offers and then also because
3:59 of how the city is managed and run and that is on the administrative side as
4:03 well as council and how you also oversee sort of the budget and finance
4:08 throughout the year so we'll get into all of that try to be mindful of time
4:12 but but again encourage questions certainly as we go along we truly
4:16 want to be a resource for for the city so my role at KeyBank is to sell
4:23 the debt that the city ultimately makes a decision on issuing and so we
4:29 would sell that debt to institutional funds and other investors in the market
4:34 right that would purchase the city's debt and Katherine who will absolutely
4:41 be part of this presentation I don't mean to monopolize it but as bond
4:44 council she drafts all of the legislative documents and all the
4:47 documents that we need in order to sell the debt into the market and
4:51 raise the funds for your projects so what we wanted to start out with and
4:57 I know you have the books up there so I apologize some of the some of the font
5:01 is small but we always want to present and make sure you're aware at least
5:05 have a resource to go to to see the amount of debt the city has and what is
5:11 exactly that debt so starting on page what I believe five of the book
5:18 there's the beginning of the city's debt profile and the page that's on
5:23 the screen right now is or is reflects sort of the the longest dated debt that
5:32 the city has so the city has spiraled over the years and currently has their
5:36 oldest debt as a bond issue back from 2016 and so we'll come back and talk
5:41 about that bond issue because it's eligible this year to be refinanced
5:47 and so you can sort of think about that as the ability like if you have
5:51 the ability to take advantage of lower mortgage rates on your house we likely
5:57 will have an opportunity later this year to take advantage of lower interest
6:01 rates and refinance this issue so that the net the net cost or really in
6:07 this case the net savings accrues to the city's benefits so we'll talk
6:11 about that because that is why you have bond legislation as part of this
6:16 overall financial plan for this year and it reflects sort of your oldest
6:20 bond issue which goes back to 2016 if we skip ahead to page 7 sorry just the
6:29 page before this I just want to point out point out one other thing on page
6:32 seven in the far most column we total up all of the city's annual debt
6:39 service per year so this is all of the city's debt and what debt
6:44 services do every single year until if there was no more borrowings then
6:49 this would be it right and it would take you out to 2049 and as you can see
6:54 it's descending which is normal right because your older your older debt will
6:59 eventually come off the books and so I just want to point out a couple quick
7:04 things because you know we're here always talking about every year the
7:08 city's financial plan right and and the city's financial plan is usually
7:12 rightfully so projects that have to get funded and therefore we have to
7:15 borrow against those projects so the key thing is how do we pay for those
7:18 right and how do we pay for those so that it doesn't affect the general
7:22 operations of the city right and so part of the way we can continue to do
7:27 this is your the city's overall debt service is coming down every year so
7:33 for example from last year to this year we just picked up about a half
7:39 a million dollars of I'll say savings but it but it's because another bond
7:44 issue was paid off so the debt service for the city last year was five hundred
7:49 thousand dollars larger than it is this year and then next year it's going to
7:54 be another three hundred thousand dollars lower it'll be about the same
7:59 in 2028 right and these are just the numbers you can see on the far
8:02 right column and then in 2029 there's another reduction of about 800,000 and
8:08 then the big big reduction occurs in 2032 when it's nearly a million and a
8:14 half dollars less in debt service so I just wanted to point that out we don't
8:19 always maybe take a lot of time and focusing on that but to point out
8:23 that part of the reason that the city can afford to borrow and do the
8:30 projects the city wants to do is in part because of how the slope of what
8:33 you're paying off right is is in place and it's automatically right descending
8:38 and going down which means as long as our revenue is staying the same and
8:43 later in the presentation we'll show you the the revenue you have for your
8:47 debt surface is actually going up right because you unlike many cities the
8:52 city of Lakewood gets property tax millage dedicated to your debt right
8:57 so I know many of you are well aware of that right so I don't mean
9:01 to profess that that's you know incredible but it is for a nerd like me
9:06 it is unique because most cities don't have that most cities have to fund
9:11 their projects their debt right out of their general fund and they're making
9:16 decisions should we pave this road this year or should we buy a new
9:21 police car for example right the city of Lakewood doesn't for the most part
9:26 have to face that because you have dedicated property tax millage that
9:30 goes to pay your debt service along with the water and sewer fund right that
9:36 funds your water and sewer wastewater type improvement projects right so we
9:43 look at both the expenditures of debt right and that overall debt service
9:48 and then we also look at obviously the revenues that are available to pay
9:50 so I'll pause there if there's any sort of high-level questions related
9:55 to that and then we'll jump into the specifics of sort of what the what
9:59 the plan is for this year for you all to of course react.
10:04 Madam Chair first of all thank you Director Mahoney Mayor George for
10:09 putting together a great presentation tonight Jeff and Katherine good to see
10:12 you again the clarification of terms debt service is principal and
10:18 interest right okay and then the reason for those jumps down this year
10:23 next year in the 2032 is paying off one of the series in the
10:28 proceeding pages that's exactly right for the most part it's it's debt
10:32 coming off of the books and being paid off or some decrease in an existing
10:38 bond issue that we purposely may have you know structured for debt service
10:43 to go down as time goes on but yes you're understanding it correctly okay
10:47 and so another question for the years last several years and I think in
10:52 including this year we have some very expensive yes wastewater treatment
10:57 plant and wastewater treatment system projects that we're financing sometimes
11:01 those came are funded by various grants that we get if they're funded by
11:06 grants they won't appear anywhere in these pages is that true 100% okay yes
11:11 all right thank you what happens is when you have the grants we keep them
11:15 in bands bond anticipation notes the short term until you get the
11:19 reimbursement and then the time that you get the reimbursement we use
11:22 okay so that's an important detail so when you're getting a 50 million dollar
11:30 grant you don't get it necessarily on January 1 you have to be able to pay
11:38 for your construction outlays and then they get reimbursement so we're we
11:42 incur some cost in the financing of notes probably but it's acceptable if
11:49 you're getting 50 million in principle certainly okay thank you yep yep well
11:54 well said that's correct okay so for this year if we jump to page nine so I
12:04 know it's it's a big dollar amount right the dollar amount and if you
12:07 were to add up you have various pieces of legislation that collectively
12:10 will add up to this number Katherine can certainly explain if you'd like
12:16 the detail why that is but that's from a legal perspective there's different
12:20 projects and categories and so they have to be drafted in different types of
12:25 legislation collectively they all add up to 59 million seven hundred and
12:30 forty thousand which we're estimating the size of the note now of that 59
12:35 million 32 million of that are for projects you've already done and you've
12:40 already borrowed for that so you're not borrowing 59 million dollars of new
12:46 money right you've already borrowed 32 million of that last year for
12:52 projects that were done primarily in 2024 in 2025 and remember those
12:59 projects in car they encompass sort of general capital improvements throughout
13:04 the city including city facilities as well as water and wastewater so
13:10 there's different funding sources which we'll talk about the idea is that
13:19 we keep these projects as Katherine was was implying or stating we fund
13:26 your projects your capital projects right at the end of the day it's
13:29 it's it's the administration's decision and council's decision what you're
13:32 gonna fund and how much and then we set it up so that you fund it on a
13:37 short-term basis while the projects are being constructed and then when your
13:41 capital projects are completed and done and you know what that final cost is
13:45 and you know if there's gonna be any grant funding right that's gonna take
13:48 out any of that we then wait for an opportunity to refinance one of your
13:55 older bond issues and when we get that opportunity we then suggest we
14:00 should put the projects dollar amounts the dollars associated with
14:03 projects that are already completed we like to put that in the bond in a bond
14:08 so that we can fix that out over the long term and you're not continuing to
14:11 have to borrow every single year for that right and pay it off every year we
14:14 like to get it off the books so you're not having to pay again to
14:17 borrow on that every year and so we'll talk more about how that plays
14:22 into our request this year but the 59 million is the total between new
14:29 money and we'll talk about that on the next page and existing borrowing
14:34 right existing note that you have coming due that we have to pay off and so on
14:40 the next page this will start to become more clear on page 10 there's
14:46 the you could see in the second line item up top 32 million six nine five
14:51 that's the note from last year and has your sort of 2024 there might I
14:56 don't know Catherine if there be any 2023 projects in that we lasted a bond
14:59 issue in 2024 and as part of that bond issue we wrapped in every project that
15:05 had that was from bands from 2023 and prior so every this the oldest
15:11 that we have right now outstanding in bands found in
15:16 so that 32 million six nine five consists solely of projects that the
15:21 city has completed in 2024 and completed last year and then the city's
15:26 proposal the administration's proposal our proposal to you tonight is to add
15:31 twenty seven million dollars of new money projects to that right and those
15:35 projects are all listed below and I know that's a decision right that you
15:42 all will make as far as what you think the projects should be what what I
15:47 could tell you is we've done the analysis and the city does have the
15:52 capacity again I don't want to make it sound like the city has unending
15:54 capacity forever but the city does have the capacity to borrow this amount
15:59 in such a way that we can pay it off over time from the millage that we
16:07 get dedicated to debt service as well as the water and the wastewater fund
16:11 right that come from fees and I think also some charter millage for for
16:15 some of that wastewater so there is the capacity to to borrow and I'll talk
16:23 more about why that is right and how that is part part of it is what we
16:26 already talked about your debt service is coming down every year so we have
16:29 automatically some capacity because of that right part of it is your
16:34 revenues going up so we have a little bit more capacity because of that but
16:37 we'll talk about sort of where this capacity is coming from because I know
16:42 that's a huge interest as it should be to you all madam chair quick clarifying
16:48 question for this or the previous slide so the retire series 2025 just want to
16:54 make sure I heard you or heard you completely the that amount is going from
16:58 one year note short term to longer term bonds first of all right well
17:03 you're ahead of us but that's true okay normally it would normally well I
17:08 technically what's happening is the bond I mentioned that we're gonna talk about
17:12 in a minute is not eligible to be refinanced until later this year like
17:18 September so so you are correct councilman but we are we're what we
17:23 have to do is we have to sell a short-term note right now because
17:28 we're not able to do the refunding bond okay and so this would be in
17:33 the note all in one note right all right my real question is I don't think
17:37 we completed all 2025 projects by December 31 last year there may be some
17:42 projects that are still we're finishing them or we're waiting for
17:47 the parts etc so the total of 32 million 695 covers I think you said
17:53 24 and 25 right but if there's additional project revenues to complete
18:03 2025 projects those aren't there where are they there somewhere else on our
18:07 balance sheet or am I misinformed there's no requirement that well this
18:12 well the city typically does complete the project and you know spends all
18:17 the project proceeds before going to bonds there's no requirement that you
18:21 that that's just kind of in the procedure that the city has has has
18:27 done historically so we're gonna we're getting ahead a little bit to the
18:30 bonds because we we have this 32 million 695 twice we do have it in
18:36 the note ordinance the note ordinance and then we also have it in the
18:39 bond ordinance because what what we're proposing in the bond ordinance is
18:43 if we go ahead with this refunding deal we're gonna roll in those
18:46 projects and it's up to the 32 695 so if there's a project or two that we
18:52 don't want that we get to October or September when we're issuing this and
18:57 we don't want to do the total amount you're you're directing to Renee to
19:00 make the decision but you're just saying she can only we can only work
19:03 on we can only roll this amount okay so the the highest possible number is
19:08 true three two six nine five there's not another million for a
19:13 okay that's that's the good news is the there's enough handle on the existing
19:18 projects to know it's not going to be more than that that's what we borrowed
19:21 but if it ends up coming in less we don't want to have fixed it out long
19:25 term when you don't really need it fixed out because we could you know
19:29 pay it okay so essentially 24 25 and 26 we're talking about whatever the
19:34 amounts are doing notes for now and maybe bonds when it's timely that's
19:39 right except the 20 26 projects we're not anticipating nor are we asking for
19:45 permission through the legislative process to bond any of the 20 26
19:51 projects all 20 26 projects would be left in the note right and when we
19:56 talk about a note versus a bond a note is simply a one-year note so we
19:59 would sell this note in the amount of 59 million for one year it would
20:04 come due this time next year well really April of next year but it
20:08 would allow we would allow the ability to prepay some of it and that some of
20:15 it would be that 32 million six ninety five if we get to September and the
20:21 bond market continues to look as it looks today and it makes sense to
20:25 refinance your bond so if we get to December and something happens in
20:29 rates of spike and it doesn't make sense right there's no savings to the
20:33 city we're not forced like you're not passing you're not being asked to
20:36 pass anything that forces the city to sell bonds in September no matter what
20:41 but we really would like the permission to be able to do it because the market
20:45 like everything is sort of sensitive right so if we can talk through all
20:49 this and it makes sense to you all and the finance director has the
20:53 permission to then go and do it when it makes sense and the earliest we
20:56 could do it would be in September it's in our advent it's in our
21:00 benefit the city's benefit to be able to react quickly to the market so
21:03 we can get you the most savings but we're not obligated to do that so if
21:08 rates spike and they're in the bond refunding that we'll talk about next
21:12 doesn't make sense and we'll just simply be back here next year talking
21:16 about the same note issue but at 59 million right so the new money
21:23 portion of that right is that 27 million the projects are listed but
21:27 below in terms of just what's in this and so that's the note side if you
21:35 look to the next page on page 11 I know there's a lot on this page but
21:39 here's the bad the good news the bottom line is the bottom left-hand
21:42 corner of page 11 we go back to that 2016 bond that we've already now
21:49 talked about that's eligible to be refinanced come September and so if
21:56 the market stays the same as it is now we're hopeful it actually improves a
22:00 little bit over time this year but if it were to be today if we were at
22:04 September 1 today we would be able to refinance that bond right sell another
22:09 bond to pay off that bond at lower interest rates and that would result
22:14 for the next 10 years there's 10 more years left till 2036 on that bond
22:18 and that would allow or would result in the city having about 55 to 60
22:24 thousand dollars a year in savings on your debt service right so you know our
22:30 collective thought is if we can do that and get some savings for the city we
22:35 should always look to do that before the market changes and we don't have
22:38 that opportunity so the thought would be that we would if we are able to
22:46 get your permission through the legislative process to issue this bond
22:49 this wouldn't be until September and the market would have to be you know
22:55 correct cooperative to generate these savings and you know maybe the savings
23:02 goes up to 65,000 maybe it goes down to 50 it shouldn't move outside of
23:07 that range unless there's a world event and I guess in the world we live in
23:12 now you never know right but unless there is a major world event the
23:16 market should be in that relative range to give the city some some savings and
23:22 and so we do expect to be able to hit the market at the best time come
23:27 September and that's why you sort of see unlike previous years that's why
23:30 you see a bond ordinance before you as well as well as this note order so
23:35 any questions on the bond side of things that's not something we're doing
23:39 now it's the September and it would only be done if indeed it results
23:44 in savings to the city. The 2016 bonds that were essentially refinancing
23:53 are those general obligation bonds I know we kind of talked about how there
23:57 were some bonds that were tied to revenue sources so those are they are
23:59 great question you're spot-on so they are general obligation bonds but that
24:04 doesn't mean that every project in there doesn't have a dedicated revenue
24:10 source outside of property taxes like there are some projects most likely in
24:15 that dollar amount that we would refund that are being paid out of the water
24:19 sewer fund most likely because they were projects that were water sewer
24:23 eligible so you're right it is a general obligation bond but it's
24:28 likely not all being paid with property taxes we are likely gathering
24:34 some dollars from the water sewer funds to be able to pay some of those
24:37 projects that are water sewer projects. We can pay them however we want but the
24:40 securitization of them is general obligation. That's great. Any city money. That's correct.
24:44 What's interesting is prior to 2016 2016 included a lot of refunding and
24:50 then it did include some a lot of the city's revenue debt there was some
24:56 water water debt there was some sewer debt there were that was part of
25:01 that and that had been previously issued as revenue debt because at the
25:05 time the city did not have the debt capacity to issue at all as general obligation but starting in 2016 you did have there was the capacity we moved we moved that debt into all general obligation.
25:18 And that's and that's solely because that's how you get your best as you
25:22 know Councilman your best interest rate right like the best debt you can
25:26 issue the lowest interest rate the city can get is by issuing it as a
25:30 general obligation but you hit the nail on the head that doesn't mean you
25:34 can't pay for it from different revenue sources. The risk is lower that's why
25:39 the rates yeah that's right they can collect more. That's right that's right
25:42 yep so it is a general obligation bond the bond that we would propose to
25:48 issue to refinance that would also be a general obligation bond we'll talk
25:51 about the debt limits that Ohio law prescribes in a moment and
25:55 Katherine will walk you through that but there is the capacity to do that
25:59 as a general obligation again just to take advantage of the lowest
26:02 interest rates for you. Madam Chair just a couple more increase our debt financing
26:09 combat jargon here so the 2016 a bonds are callable December 1 but we're
26:16 talking about September refinancing that's just because you need those two
26:20 months to do all the paperwork essentially. Actually you can do a
26:23 currently callable issue can be you can you can do an a bond issue that
26:29 prepare for that call date on December 1 up to 90 days in advance okay so
26:33 legally you can do it starting it's like September 3rd or something okay
26:38 you could close a bond issue on September 3rd. So that's just industry norms so it's really 90
26:44 days before you do and that it could be any time after that and any time
26:48 after and then you're pouncing because what passes for low prime is
26:54 six and a half percent and you're calculating the chart in the bottom
26:57 left of the slide as assuming we hold at six and a half percent prime and
27:02 therefore we're at three percent roughly in the bond market am I getting
27:07 that correctly? Yeah that's a fair that's a fair thought although I would
27:10 just say the the tax exempt bond market right not to get two in the
27:15 weeds but because you're a city you can borrow on a tax exempt basis right
27:19 which means that people investors that buy your debt the interest rate they
27:24 get the interest income they get on your debt is exempt from federal income
27:28 tax they don't have to pay income tax on that as a result they'll take a
27:33 lower interest rate than like a you know that the stock of key bank for
27:37 example which is taxable anything that you earn on that's taxable so the
27:42 the municipal bond market tax exempt bond market is not really doesn't
27:47 follow prime exactly you're not wrong like generally if prime is coming down
27:52 or going up eventually we'll see something but remember the prime rate
27:56 is an incredibly short-term rate right it's it's an overnight rate
27:59 essentially and so we in the tax exempt bond market it is there's an
28:08 entire market different from that and it's you know years one all the way
28:13 out to years 30 right just depending on the on the length of the debt
28:16 so you're not wrong it generally follows it but I wouldn't want you to
28:20 think that not directly so I'll read up off offline on the mysteries and wonders
28:29 of the of the tax exempt bond market but presumably we could look up those
28:34 rates right now you're saying they're favorable you're hopeful they'll
28:37 continue to be for another eight nine months I would actually say a better
28:40 proxy but it's not an exact at all it not at all exact proxy but the
28:44 better proxy would be like the 10-year Treasury and you certainly
28:47 could look that up right every day and and see sort of what's happening with
28:50 that you memorize those every morning before
29:17 percent you're gonna you're gonna get more savings rather than the word
29:24 candidates means our own debt yeah you're looking you can see that coupon
29:29 rate going down you can just see it's a different it's a different number now
29:32 each of those were set in 2016 and it had to do with a lot of factors
29:36 including if they were sold it as a premium or not and there were a lot
29:40 of factors you know when we when those were sold back in 2016 we were
29:44 trying to get the best interest rate you know the best best rate overall that
29:49 we could that he bag was trying to get the best overall we weren't looking at
29:54 for funding but now you look at it you have the higher interest rates are
29:58 gonna you're gonna have more savings if you okay thank you great great
30:04 question okay so if we go to page 12 just very quickly of the new money
30:12 so we've done this in previous years when when when you've had the new money
30:16 portions of your notes right and the projects right we've listed out these
30:20 are the new money projects being proposed adding up to 27 million and
30:24 then on the right hand column under fund right I know it's a number but
30:29 we can explain to you we're showing you the funds where it gets paid
30:33 from right and that that's what's really critical is that we always
30:36 have we always need to make sure we have capacity in these funds to pay
30:42 for ultimately the longer term debt service of the city's borrowing so that
30:47 you're not having to make policy decisions from your normal operating
30:52 general fund dollars right and so you could see of course the sewer and the
30:55 water improvements are funded out of you know out of funds that start with
30:59 with a five the five hundred funds right five ten five eleven are for
31:03 sewer five oh one is water and then the four hundred fun is your bond
31:08 retirement fund and we'll show you how that fund is doing in a moment because
31:13 it's doing very well and and your four hundred fund is where your general
31:17 capital your non water sewer you've done utility type debt gets funded
31:22 from so all your sidewalks street improvements city facility improvements
31:27 of that will get funded out of fund 401 okay I think just maybe quickly
31:36 just hit on the debt limits if that's our every year we talk about two
31:40 different debt limits one is your direct debt limit which is outlined on
31:45 page 14 is a clear outline and this one is not a challenging one for a
31:51 number of reasons it's just a you just look right at the car amount and
31:55 you do have some outstanding debt that is not tax exempt however most of
32:01 your debt for the last eight or nine years we can include an income tax
32:07 pledge and that income tax pledge just indicates that you will use income
32:12 tax if you have to but it's just an additional pledge and basically any debt
32:18 that you issue is no longer subject to the direct debt limitation so this
32:22 this we don't have to focus too much on because we're not actually adding
32:27 any debt in this in either of these issues that would be considered and
32:31 this is just a state law requirement but it's not being added you have plenty
32:35 of capacity I think is the is the is the bottom line here the more
32:41 complicated debt limit that we talk about and we talk about this one
32:45 every year and this one is not necessarily fun to talk about is the
32:48 10-mill limitation and the 10-mill limitation is much more complicated to
32:52 calculate you look at each piece of property and all of your
32:56 overlappers and you have to make sure that there's not overall it's not it's
33:03 not very clear however we try and make it as clear for you as we can and so we
33:09 have shown what we would estimate your 10-mill calculation to be after you
33:15 issue the bond anticipation notes in 2026 including all of your new money
33:20 and at that point in time after we issue 59 million and change whatever the
33:26 total amount is we look at it looks like we are going to have seven point
33:35 one one six three of ten mills used and what that means is in order to
33:42 calculate how much available we could issue we have to look at the par
33:48 amount plus the maximum maturity of that debt so we're looking at we're just
33:53 assuming a lot of your debt is about 27 28 29 years when you when you do a
34:00 weighted average maturity so we looked at we plugged in 29 years and
34:04 theoretically at 6% you could issue in new money after 2026 assuming
34:12 today's assessed valuation 61 million now what is what is great City of Lake
34:19 Woods assessed valuation has been steadily increasing year over year and
34:24 so we would have to do this calculation in 2027 when you've paid
34:29 off all the 2026 debt that number this is kind of the lowest number
34:33 this is assuming no AV change and it's also assuming all of the outs we
34:37 haven't taken out we're not looking at it in 2027 yet we haven't taken out
34:41 your debt that you're paying off in December one 2026 I'll pause there
34:46 because that's a lot of information but it's just showing you what the what
34:50 that debt limit yeah I think it would be helped because I I think I know
34:57 what you're saying okay but I think it would be helpful to go to through
35:00 like every line item on this chart on page 16 and just talk about it
35:04 that may be a lot but I think it would be helpful okay so what we look
35:09 at when we are calculating your overlapping debt is you have to we have
35:14 to put together what you know this this spreadsheet that the Jeff has put
35:20 together where he has your your total principal and interest that's back on
35:27 page 7 so he's put this together and this on page 7 what this is showing
35:33 you is principal and interest that is due on everything except for the
35:37 bond anticipation note because your bond anticipation note is a little
35:41 quirky right really you're gonna you're gonna have the full amount is
35:44 going to be due next year so in order to calculate out what your what the
35:50 indirect debt limit is what we need to do is we need to take the come the
35:56 total issue of 2026 and we have estimated all of those projects having
36:03 maturity of 29 years so then we calculate as if we've issued 29 year
36:09 bonds and done done a you know and created a debt service where we have
36:14 assumed a 6% interest rate so that's where the 6% down below so and then
36:21 we have to figure out on what year is the highest debt service and the
36:26 calculation that we come out with is that your highest debt service year
36:30 that will make some sense to you because you can see that 2027 is the highest
36:35 debt service year currently right it's gonna 2027 we're looking forward not
36:42 looking at 2026 going forward that's going to be your highest debt service
36:46 year right so then you add in the bond anticipation notes and you look at
36:52 what the highest debt service will be and that shows and so this this 12
37:00 million I've got it would have to go back and look at it but that's
37:02 showing a pretty significant interest principal payment related to the
37:07 biomes as well and so and that is also including your overlap there's a
37:12 lot of there's a lot that goes into that and then we look at the assessed
37:16 valuation for your current year which is 1.7 billion and then that is used to
37:23 filter into how many there is a calculation that has to be done there
37:28 are you with me so far you're jumping around a little but but so the
37:33 highest debt service I understand that's that's the debt payment that
37:37 will be due in 2027 that's based on the charts from earlier the next
37:42 level assess valuation that's the total assessed value of every
37:44 property in Lakewood okay and the mills required so then that is an
37:51 evaluation of those two is that like 1.7 billion divided by 12 million I would
37:58 have to there is there is a there I could get back to you on that but it's
38:02 I think a little more complicated than that okay but I could I could I'd have
38:07 but I will I will say the mill you're yes you're on the right target like the
38:18 millage is what what how many mills of property tax right based on your
38:25 evaluation do we have to collect to be able to pay that highest debt
38:28 service payment and so you're right it's gonna be a formula very close
38:32 to what you're suggesting and you're gonna come up with that seven point
38:35 one mills now I just want to say for the record because if you go back and
38:39 you look at those earlier charts you're not gonna see numbers that
38:42 approach twelve point seven for your highest debt service right that's a
38:45 theoretical number as if you were gonna go to bonds right now and pay a
38:51 large principal payment on that 59 million and that's not what we're
38:56 proposing to do it's not what city should do you don't want to put all
39:00 your debt service right now up front you want to spread it out over
39:04 time when your debt service is coming down right like we've shown you on the
39:08 previous pages so that twelve point seven is just a theoretical number but
39:13 but you're understanding what it is it's the theoretical highest debt
39:16 service number you would have and then in order to service that theoretical
39:21 number according to state law based on the city's assessed valuation you
39:27 need to have seven point one mills of taxes generated and you're
39:31 only allowed to hit ten in this debt limitation right so as Katherine's gonna
39:36 walk you through you have to look at where the other she says overlappers
39:41 the other taxing districts the school district the county right the debt
39:45 the taxing districts that if you own a piece of property in Lakewood who
39:49 you're paying taxes to everywhere so it's not city Cleveland but it'll be
39:53 Lakewood schools it'll be Cuyahoga County it'll be the metro parks
39:56 right things that you're having to pay those are the overlapping type
40:01 taxing districts that that Katherine's talking about and they're gonna have a
40:05 lower amount of debt especially the count I shouldn't say lower amount of
40:08 debt the county because their valuation is gonna be astronomical because it's
40:13 the entire county not the city so their millage requirement right it's
40:18 gonna be way way lower than what yours would be because they have such
40:21 a higher you know valuation to pull from because it's all of the county
40:26 not just city of Lakewood so you're understanding it correctly and then
40:30 Katherine if you want to just keep walking down I think if you walk through
40:32 every line item it'll make make sense
40:34 yep and if you take I gave me a moment to actually do the calculation
40:38 make sure I wasn't taking you astray but if you take highest debt service
40:43 divided by assessed valuation and multiply by a thousand then you get
40:48 seven point one one six three that's because one mil is equal to one
40:53 percent or what one tenth one so that's that's how we get there so
40:58 then assess valuation and and you know I mentioned the 29 and the six percent
41:04 because those are important to factor into the highest debt service so that's
41:08 way down below but let's go down so you know highest evaluate assess
41:13 valuations repeated city of Lakewood millage and these overlapping we take
41:18 the largest over lappers like the county and it might be there it's
41:24 schools and see how much they use and they use point six three four eight and
41:31 so that shows that the mills available to the city is two point two four eight
41:36 nine and then the years assumed here is
41:44 that a couple of times and to be honest dollars generated I don't think
41:50 number for you and so then the total debt able to issue is you know this is
42:00 becomes very complicated because you could issue a larger power amount of
42:05 debt if you were issuing 39 year here if your maximum maturity is 39 years
42:10 compared to 10 years so it all looks at what your what you're issuing you
42:15 tend to be in the 27 28 29 range just like looking at your 40-year projects
42:24 like water and sewer and you're managing against your sidewalks which
42:27 are 10 years so that's kind of what happens there so then what the
42:32 millage amount available 29 years you look at the interest rate for
42:36 additional bonds you assess valuation repeating again and that's how we come
42:42 to this calculation of additional debt available and this is this is kind of
42:50 the constitutional limit basically because the state of Ohio has to have
42:54 some formula for determining your ability or general so it's more of a
42:59 legal requirement than a practical one it is or however our you know we
43:03 want to operate and we won't go too deep into the woods but for a number
43:07 of years until we got some significant increases in your assessed
43:11 valuation there were a couple of years where we were these numbers were we were
43:16 really close like you know we were at 9.7 or something back in the late you
43:22 know 27 2018 2019 those those types of years and during those years the city
43:28 made the decision to issue their bond anticipation note as an income tax
43:32 revenue note and the sole reason of doing that was to make sure that we
43:38 didn't have any issues under this deadline because the city is unusual in
43:41 that you have a dedicated revenue source this this debt limit is not set
43:47 up for the city of Lakewood because the concern is to make sure that
43:50 municipalities don't that was what the point is here but you had
43:55 dedicated revenue sources you have the ability to repay you just
43:58 couldn't issue general obligation notes so what we did for a number of
44:03 years is issue income tax-backed revenue notes so that that would alleviate the
44:09 issue for the debt limit and the city was able to issue all of its bonds as
44:17 general obligation kept keep all of its bonds where there's a bigger
44:20 advantage to be general we kept everything in general so this there's a
44:27 lot of room right now that wasn't even when it wasn't the case we
44:32 still went ahead with your so here's the most important thing though right so the
44:38 bottom line number is 61 million which which technically legally means under
44:43 this debt limit after you do if you were to approve everything that's being
44:47 asked of this borrowing 59 million under this you know state debt limit
44:53 it would say the city still has capacity to issue another 61 million
44:58 we're not suggesting that right like it the debt limits I think you said it
45:04 perfectly Councilman there you know they're more sort of safeguards and
45:08 guidelines but they're not specific to like what we always need to look at
45:12 is what the city can afford to pay and from what sources and as long as
45:17 you can we can identify those sources of where you're paying from it
45:21 or where you are gonna pay the projects from you know then we feel
45:26 collectively okay and the credit rating agency that we'll talk about next
45:30 has agreed with that right because they've kept you constant at what your
45:33 credit rating is so your understanding is is spot-on but don't look at this
45:38 number and and think oh hey the administration and and key banks coming
45:44 back and saying we got another 61 million right like we will always look
45:47 at how the city you know can pay for the project and and this is this is
45:53 million in 2026 I mean just we're also not expecting that this is what what
45:58 you're going to do but there is in 2026 principal amount of 4.8 million that's
46:05 gonna come off in December 1 so you know you would add that you know if
46:09 you're looking at what what is your capacity for next year assuming no
46:13 change in an AV it's the 61 plus the 4.8 million thank you madam chair
46:20 just cook a couple of falls Kevin par is what and then secondly and this no
46:30 doubt this is too literal of a reading but when we talk about inside millage
46:35 didn't we use that term on this slide we hit there's only ten available the
46:41 city doesn't get to use all ten I get the point about the overlapping
46:46 subdivision knowledge but I think other
46:53 other so it's the schools library etc so I think we don't collect seven point
47:04 one one in inside millage right inside millage and indirect debt are related
47:09 but not exactly the same this is your I mean we're talking about your
47:14 limitation then there's ten mil I'm confusing terms here okay so the ten
47:19 mil limitation is what you're talking about you're talking about the yeah
47:24 you're talking about the ten mil limitation which is different than the
47:27 inside which is different than the inside millage but your understanding is
47:29 correct to the ten mil limitation in that you don't get all ten right
47:33 because of the other districts that's what you're saying and so the point
47:36 is that on this slide we can come up with seven point one two mils from a
47:42 mix of sources to be able to afford what it says on the slide according to
47:47 your analysis so this is not this this isn't the same there there's
47:53 affordability is this like this is the legal debt limit which is slightly
47:57 different you could you could have a city who could have the debt capacity
48:01 to issue and might not have the dedicated revenue that is there two
48:06 different analysis okay I think I think you're giving them more
48:12 correct version but I think the answer to my question is probably yes we do
48:15 have you have you have this you have the sources that this was designed to
48:22 protect it plus you have additional okay all right thank you very much
48:27 I had I can follow up on that too so this is saying so trying to take all
48:37 this into consideration so the 61 million in this whole chart is looking at what
48:43 we would if we approved everything is before us then that would be as of
48:49 that date in 2026 that that all goes fun that would be the additional
48:54 capacity but then in 2027 2028 29 we're gonna have additional sewer
49:01 projects and other capital expenditures that we're gonna be back here having
49:05 this conversation and that number is going to be different based on however
49:09 much right I mean that's it's gonna change every it's gonna change based on
49:14 your new money every year and every year we show you the same slide and we
49:19 calculate based on the current AV based on your current borrowing plans
49:23 and you know the the one factor that does change is your overlappers they
49:28 don't tend to change drastically but they you know they're that amount can
49:32 change slightly from year to year as well so there are all of those factors
49:36 that we will look at and we'll show you the slide next year this is not a
49:40 slide that's ever gonna be removed from this presentation and then so and I
49:47 understand too is the difference between the legal the state of
49:51 housing what we can legally do and what is maybe a best practice and
49:56 recommended to do in terms of that so I guess that's where I'm sort of I don't
50:04 know if this is is there a best practice and I know we're gonna we that
50:09 also goes into our rating and we've had that conversation before too but
50:13 like is there a sort of best practice limitation that's different
50:16 than what we're seeing on this slide if that question makes sense it does
50:20 yeah no that's a great question and and the best answer for that question is
50:27 there's not really a best practice per se or for sort of the for debt limits
50:35 in general because cities are so different in terms of how they pay for
50:39 their debt so there's not really a direct best practice we could point you
50:45 to to say hey as long as we're within this this this range instead what we
50:52 try to do is and and we think this actually works a little bit better is
50:56 is tailored specific to the city of Lakeland and say as long as we can
51:03 forecast that we have revenues sufficient in the water sewer fund
51:08 right forecasted out to pay the debt service affiliated with those
51:12 projects and as long as we have revenue in the bond retirement fund right
51:18 forecast it out and that that funds getting every year it takes advantage
51:23 because it's getting millage property taxes put into that fund right just
51:28 for debt service transferred in ultimately and as long as those
51:33 revenues are going up and are able to support the projects right that
51:37 we're assigning them to essentially then then really that's the best
51:42 practice we would argue for the city of Lakeland because we're showing exactly
51:45 how it's getting paid where it's getting paid from and it's not
51:48 affecting public safety it's not affecting you know other general
51:53 operations so that that's a great question around you know how do we
51:58 know what what's really best for us and so that's what we're trying to
52:02 explain is like that's how we're looking at it and make sure that we
52:05 find and we can assign revenue that's coming in which by the way can
52:10 only be used for debt service right that millage you're collecting right not
52:16 all your property tax millage but there's a specific dedicated amount of
52:20 property tax millage that goes ultimately into your debt service fund
52:24 your bond retirement fund and it's by your charter only allowed to be used
52:30 for debt service for capital projects and so that's what we're focused on
52:33 because you can't use it elsewhere yeah and on that so then you were talking
52:43 before about how we have these categories we have to draft it up how
52:48 the legislation is drafted up in the different categories of sewer improvements
52:52 water you know general and then we have certain funding funds for those
52:59 that are connected that makes sense to those but then when Vice President Baker was
53:04 asking too about when the notes are that we're saying this is I'm not going
53:10 to use the correct language general obligation so we we can pay from it
53:15 we have to use our debt service that part of our millage for debt but the
53:22 other things we can pay for it from those funds but we're not legally
53:25 obligated to that's just something that we we do because that's our plan but not
53:31 is that correct yeah yeah absolutely which is a good thing right so you know
53:35 it's a general obligation which means you're pledging everything as a city
53:39 but then you have your specific plan on how you're really making those
53:43 payments right and so at the end of the day general obligation more
53:46 relates to you know property taxes but you're not you're not you're not
53:53 being forced you don't have to pay every single piece of your debt service
53:58 through property taxes to your point like you can pay the projects that are
54:02 water sewer projects from water sewer you know revenues so yes your
54:08 understanding is correct and but to that point too is other than the debt
54:13 service which is dedicated to paying for this other thing so if other
54:18 revenue sources do they are they required to be used so for instance I
54:23 mean we've talked over the years of the challenges with water sewer rates
54:28 to be able to pay for all of our water sewer projects and that's a
54:31 challenging thing because of water used to going down and etc etc and our
54:35 sewer rates going through our projects going up but theoretically we could use
54:39 money from that to pay for the for other of the general obligation it
54:47 wouldn't have to go to the water sure up part of the debt is that am I saying
54:53 that correct I'm see director Mahoney I'm not sure if I'm under if I'm
54:56 articulating that well I'm not saying we should do that I just want to know
54:59 what you're trying to get at is could we use our the property tax that
55:06 we earmark to pay debt service could that go towards water sewer debt
55:13 I guess what I'm wondering is we have this split up in the lead in the
55:20 legislation that creates this but then it goes to general obligation and then
55:24 we can pay from it from hey whichever part of it from wherever part of it is
55:29 that the type of project more than you're paying from it yeah you can go
55:36 one way but not the other way you can you can use your property tax to
55:41 pay for water sewer right but you can't use your water sewer revenues to pay
55:46 for general and that's okay that's what I was looking for
55:49 sewer funds it's a funding issue your water sewer funds are special funds
55:54 and they can they're they're very limited whereas like your general fund
55:58 is not right I mean there are certain so you have to look at each
56:02 fund and see what it can be used what it can be used for right okay
56:06 that's what I was looking for thank you let's present Baker I was
56:10 curious I've always been curious is liquid unique in the debt service did
56:13 we just have someone on bond council that was our Charter Commission a
56:16 hundred years ago that yeah I don't know I don't know if you did it seems
56:20 like you did because I would argue or not argue I would suggest Lakewood is
56:24 somewhat unique in that it was very well planned out when the charter was
56:30 originally drafted to dedicate revenue sources towards capital debt
56:36 knowing that the city of Lakewood's of a sizable community and over time right
56:42 here we're you know we're an inner ring suburbs so we're gonna have
56:45 improvements that we have to make and we also have a diverse population that
56:51 we have to serve so we can't be affecting our operations we got to
56:55 serve people too and so I would say yes you you are unique and that's sort
57:01 of I wouldn't even say the challenge but that's a big part of when we
57:04 talk to the rating agency making sure they understand that because they're
57:08 not seeing that for the most part so yes unique in a good way and and who
57:15 the group that was a part of that really really I think did a great job
57:25 all right so moving forward the next page we don't have to really spend
57:28 time on it just shows the timeline I just wanted to make sure you're
57:32 aware the note doesn't come due till April I know we're sitting here in
57:36 January but we still do deal with with the rating side of things right so we
57:41 just need to make sure that there's time and we need to make sure we can
57:44 tell the parties that are involved in the rating side of this what exactly
57:48 we're gonna be funding right so that's why we're starting early I don't
57:53 want you to think you know there's like we need to know what we're
57:58 gonna fund this year and have time to work it out on the credit side
58:01 before everything comes due in April so that's why we're starting the process
58:06 now that's all from a schedule standpoint and then that just really
58:12 leaves the credit rating side and if you skip to page 19 on the right side
58:18 of the page and I know you've seen a lot of this but right there's well
58:22 first of all there's three rating credit credit rating agencies in general
58:26 there's more than that but the three major ones that are most popular for
58:29 municipalities are Moody's S&P and Fitch you don't need all three you only
58:35 really need one Moody's just happened to be historically the agency that has
58:39 rated the city's debt and as you can see the rating for the most part over
58:45 the history of the city of Lakewood has sort of been in that AA2 category
58:49 and so that's a pretty fresh rating in fact they just came back it might
58:58 be on the next page yeah so they published Moody's published something
59:06 two years ago and then reaffirmed the city's rating last year at that AA2
59:12 rating without even you know a big presentation from the city like
59:18 they'll just sort of look at the city's financial statements from year
59:21 to year make sure everything's sort of on track and so that AA2 rating is
59:25 a fresh very good rating and I will tell you the median rating for cities
59:31 across the country fluctuates from year to year from either a plus or AA3
59:36 which is at least one notch below you sometimes two so you're you know
59:42 despite and and I don't when I say this it's not it's not a it's not a
59:47 negative but we talk about this every year one of the strengths of
59:50 Lakewood right is our diversity and that includes socioeconomic right at
59:56 the same time we have to make sure we're serving the population right and
1:00:01 and we don't have like the tax base necessarily of the city of Westlake
1:00:06 right we don't have wide open land businesses and that's not a slight
1:00:10 against Westlake it's just we don't have tons of land available for
1:00:13 commercial development right and so we have to be very prudent about where you
1:00:21 spend your dollars and your reserves and how you budget in order to
1:00:27 maintain that credit rating and you all have done a wonderful job in your
1:00:32 position of overseeing that and the administration and the finance team
1:00:35 have done a fantastic job in sort of making sure shepherding that from year
1:00:39 to year so that's a big part of why you still have that double a to rating and
1:00:44 you can see that on page 20 just from the commentary that like we won't we
1:00:49 won't dive into anything here but just the commentary that Moody says around
1:00:53 the city specifically what leads us to that and we're wrapping up I promise
1:01:01 in less than two minutes page 21 just shows the historical performance of
1:01:06 your municipal income tax obviously cities their main revenue source or
1:01:11 income tax and so this is a wonderful trend to see income tax continuing to
1:01:16 grow in the city page 22 just shows sort of where your millage is coming
1:01:26 from right it just shows the different amounts of millage and what it is
1:01:30 assigned to and whether that's in Councilman Bullock this is where the
1:01:36 you probably saw the inside millage listed here that's where that comes
1:01:39 from versus the charter millage but at the end of the day this is all basically
1:01:44 property tax millage that the city gets and then honestly probably most
1:01:49 importantly is the last page and this is you know again wonderful to see
1:01:53 there's two column in two two boxes here the general fund right and these
1:02:00 are the property taxes that go into the general fund for your general
1:02:03 operations it's not it's not the totality of what funds your general
1:02:07 fund right you get income tax in there too but you can see that the
1:02:10 property taxes are going up every year as your assessed valuation goes
1:02:14 up but from a debt perspective a debt perspective this goes back to when we
1:02:18 started the discussion tonight we looked at the debt profile and the
1:02:23 debt service principal and interest on your debt coming down over time
1:02:27 and the the flip side of that is the revenue side right your water sewer
1:02:34 funds are are in good shape you're in very good shape on those funds you get
1:02:39 you get water sewer fees there might even be a little millage I think that
1:02:43 goes into that as well so you're you're you have the money to do those
1:02:48 projects right and that's that's really critical because as an older
1:02:51 community you need to make sure that you're you know you're keeping up
1:02:54 with the maintenance and capital on that side on the general capital
1:02:58 improvement side page 23 shows at the bottom the bond retirement fund and
1:03:03 that's where we're grabbing dollars to pay the general capital needs of the
1:03:10 city and the debt service that goes along with that and as you can see it
1:03:16 too has been going up including hitting a very nice six million dollar
1:03:22 figure in 2025 right and so keep in mind that when we talk about like a new
1:03:30 borrowing the new borrowing is layered in to take into effect the decrease in
1:03:35 overall debt of the city from year to year and also the increase in
1:03:41 revenues that are going up right so that we can balance it out and make
1:03:45 sure that the city has those sources of money to pay the debt and and so
1:03:50 we're obviously in you know I want a constant contact but but in-depth
1:03:56 contact with the city's financial team to monitor that and you know look at
1:04:01 that from year to year so if I read this correctly the the bond retirement
1:04:09 fund at six million for 2025 technically if we only had five
1:04:14 million dollars worth of like payment obligations we just that we had to stay
1:04:20 in the funding carryover because it's charter kind of bound to that purpose
1:04:27 okay now I was just because I like it it's interesting that our charter
1:04:30 basically makes us have debt but the one other thing that probably could
1:04:39 have been on this is that and Jeff mentioned it that we do have a
1:04:43 property tax millage for sewer as well and that's three and a half
1:04:47 million that brings in it's not specifically tied to debt but that is a
1:04:52 significant source for paying so maybe the answer is on the previous slide but
1:05:01 what's the total dollars that's going to pay debt can we go back one slide
1:05:10 to page 22 so there's a couple ways to answer that question so debt
1:05:16 service 3.47 millage inside millage and then the sewer slash general capital I
1:05:23 believe is going to debt correct but not the other things on there if the
1:05:29 sewer could be to debt I mean but it may not be for some for all of it
1:05:34 right I understand so my real question is and I know we can find
1:05:41 this in the budget book but maybe just save time right now how much would we
1:05:49 pay in 2026 for debt service if we were to pass everything is currently
1:05:55 drafted so it'd be in the sources would be 3.47 plus 2 more or less in
1:06:03 the millage I recall we also agreed to the administration proposal for year
1:06:11 end transfers from 2025 general fund to put a very significant amount towards
1:06:19 debt as well so we're having some general fund cash underwriting some of
1:06:24 the debt at least for this past the transition from 25 to 26 and so what's
1:06:32 the total number that would be paid to support the total par I'm trying to
1:06:37 jump in here I think what you may be thinking about in terms of the general
1:06:42 fund transfers could be a transfer of dollars that have to go to debt
1:06:48 service right like the city's not supplementing operating funds or for
1:06:56 the debt the other way around right no so so what you may see from time
1:07:00 to time transfers between funds but it's going to be transfers of the
1:07:05 dollars that have to go to pay debt service so I want to make sure you you
1:07:10 know that but what you asked was the total debt service for 2026 is going to
1:07:15 be about 8.6 million between 8.6 and 8.7 million that's down from 9.1
1:07:20 million last year and then in 2027 it's going to drop to 8.3 million so
1:07:28 we can find that on page what five seven but not entirely because we
1:07:34 don't have the notes in there right that's only a bond yeah that's right
1:07:40 that's the city's long-term debt and so what we what we are keeping it in
1:07:48 notes and then bonding it out as the debt service comes down right so if we
1:07:53 added the cost of issuing notes and financing notes that would raise the
1:07:59 total above the 8.5 million right it would it would so do we know that
1:08:04 number well well it we do have there there's a million dollars of interest
1:08:11 coming due but we're the principal will get rolled over so you're not going
1:08:15 to have a big principal payment until ultimately we put that note in the
1:08:19 box so the answer is eight point six plus roughly a million to nine point
1:08:24 six yeah for 2026 yes okay and director Mahoney sound seemed like I confused
1:08:33 you what I recall was that year end appropriations for 2025 we had surplus
1:08:40 fund or we had stronger than projected in the initial budget passed at the
1:08:46 end of 2024 looking forward to 12 months in the future we had higher
1:08:51 lower expenditures so with that Delta with that pot which is a good thing we
1:08:56 allocated certain ways some of that allocation did go to capital spending so
1:09:03 okay so that's okay so what that would mean is what 2026 capital to
1:09:13 bring down everything in tonight's presentation or something else
1:09:18 yes it would have been higher had we not transferred some we took some of the
1:09:24 smaller projects and decided to pay cash for them this year okay I know
1:09:30 about the number in the 2026 budget but there was also some in the 2025
1:09:34 and year end appropriations as well weren't there that's correct yes we
1:09:39 transfer some some cash to pay for for some capital
1:09:45 okay so all right so there's a mix of sources I don't know Jeff if you were
1:09:50 aware of that but that's that's part of I was recalling covers we had here
1:09:54 yeah I'm sorry I was just responding to that it wasn't that right so the
1:09:58 city didn't do that doesn't do that to pay its debt but it's a great
1:10:02 practice where if you have some extra dollars and they're not and they're
1:10:07 not gonna impact like your reserves that you take some of that and just
1:10:12 like you might do with your household budget right you might pay a couple of
1:10:17 projects you have rather than putting it on a credit card yep understand so
1:10:20 thank you for that distinction and precise usage of terms of art so the
1:10:27 I guess one one valuation here you know as I'm looking in the budget
1:10:31 book which we don't have on the slides tonight but in ten years we've
1:10:34 doubled the valuation of the city of Lakewood from around 850 million to
1:10:39 what you're showing on page lost it now but if we went to the right okay and
1:10:47 there's been a lot of conversations outside of tonight's debt financing
1:10:51 discussion where we're viewing we're feeling the positives of that because
1:10:56 we have inside millage and we have other things where you see an
1:11:02 increase in fact we're not like the schools at all so that chartered
1:11:05 millage for sewer and general capital at two mills that am I correct that
1:11:12 floats with the property value right unlike a school so all of the city's
1:11:17 millage is going up our collections are going up and we're noticing that in
1:11:23 other conversations all around Lakewood so the strength of the
1:11:27 balance sheet here which which we appreciate is coming also at a cost that
1:11:30 we consistently hear about in the city of Lakewood so what we afford with that
1:11:35 is to me something we've got to put careful thought to because it's like
1:11:40 the analogy of a family budget if we you know experience an increase in our
1:11:46 income we think we can afford some capital that doesn't mean we can we
1:11:51 could buy new cars and a new refurbished the home and buy a
1:11:55 vacation home we're probably gonna have to pick one of those and we're we
1:11:59 have the financial strength to pick one of those which is better than it was
1:12:02 years ago but that's not quite the same thing as saying you know we we we can
1:12:10 commit to additional expensive projects in all areas of our of where we might
1:12:17 wish we probably have to be choiceful in that and and I'm conscious of the
1:12:22 fact that that increase in property valuation is strong in some ways but
1:12:27 people are feeling the carrying costs of that in other ways too and a lot of that
1:12:31 is coming from the way that we and the city side as opposed to the school
1:12:35 side how we calculate our village or rather rather the fact that the that
1:12:42 the state law how that allows for millage to float with property
1:12:48 valuation which is distinct from the way school finance works.
1:12:57 Other councilmembers questions? I did have a question you know we've heard a
1:13:04 lot Councilmember Bullock was alluding to with some of these some of these
1:13:11 movements regarding reconstructing how property tax is handled is that is
1:13:18 there concern as we in in the in sort of debt market about you know if if
1:13:26 any of those bills were to pass that would have very devastating effects on
1:13:33 everything we do here but certainly in terms of our rating and our ability to
1:13:40 pay back and all sorts of things so I just wondered if if you have any
1:13:44 thoughts you could share of if is there any concern about that is their
1:13:48 nervousness and any thoughts now obviously I know director Mahoney's
1:13:53 nervous we're all nervous but like but I mean from from in terms of the markets
1:13:58 or in terms of what you're hearing. As you said it would it would be really
1:14:01 devastating. I mean I think I think the the thing to keep in mind is it
1:14:08 would the effect would be the same for all right this isn't the city of
1:14:12 Lakewood like this would be all cities throughout Ohio and maybe there's
1:14:19 legislators throughout Ohio that feel differently but it seems as you get
1:14:23 even more centered you know even with this this governor it seems like he
1:14:27 recognizes that now I know he's not gonna be governor anymore but the
1:14:34 consequences to all Ohio municipalities and all Ohio school districts is so
1:14:41 dramatic that it's just very hard to believe that they're not gonna be able
1:14:49 to take some of that into consideration like the flip side of the proposal was
1:14:54 if you do something like that then the state needs to make up for that money
1:14:58 right to the local now that's very I know easily said then done but you
1:15:03 know that's there's such a dramatic effect to your point to all these
1:15:09 municipalities throughout Ohio and all these school districts and some cities
1:15:16 are more Democrat than Republican and vice versa and so but all the cities
1:15:20 are gonna have the same effect so it shouldn't be a partisan thing it should
1:15:24 be how are we gonna properly manage right our funding of children and our
1:15:30 services to the population right so it is absolutely something that we're
1:15:36 all watching it's some of us are even being pulled into if lobbying is
1:15:42 the right word but but educating to make sure that folks understand what
1:15:46 the ramifications of some of these things could be and that there needs
1:15:51 to be a plan in place because you have to educate children and you have to
1:15:57 properly service you know your constituents your residents so it is
1:16:02 something we're all tracking yeah I think it's for me it's a well it's
1:16:07 always a concern what happens to the state house but it's also a
1:16:10 concern with you know we've had folks here who are working on a ballot
1:16:14 initiative directly to voters and there's been some you know studies
1:16:18 suggesting that it could pass if it were went directly to voters so it's
1:16:23 just something thinking about like whatever debt we take out we are dead
1:16:28 even if these catastrophic things happen so it's just thinking about and
1:16:33 wondering if it's something that the you know that you're thinking about on
1:16:37 your end and and folks purchasing our our dad actually I heard something
1:16:44 one recently that so property taxes the bill is given to you and it's it's
1:16:53 it's high but can you tell me how much you paid in sales tax last year so
1:16:59 it's because of that shock factor that people I think are so pegged to change
1:17:04 it but if you got rid of property tax you would have to have a sales tax or
1:17:09 income tax to help pay for those same things so you're just gonna replace one
1:17:15 tax with another if these people have any success unfortunately with her yeah
1:17:20 and sales tax would hit you harder it would it would hit the lower it
1:17:26 would be more regressive so hit hit the people that can least afford it
1:17:30 harder anyway that's a whole other yes Councilwoman Hamilton yeah thank you
1:17:36 madam chair so I think that's to your point and what you were speaking on in
1:17:43 the fear of the property tax and I think last year I don't think people
1:17:47 were taking it as serious but I certainly was because I was following
1:17:51 online chatters and having conversations and I think we have to recognize all
1:17:57 of us in this room all of us council members you know and administration we
1:18:02 have to recognize that there is frustration and an anger behind why
1:18:10 people are are moving in that direction and supporting that and to
1:18:14 Councilman Bullock's point about you know people are struggling to put food
1:18:20 on the table pay their rent pay their mortgage buy you know medication pay
1:18:27 for child care pay for their health care and so we have to be conscious and
1:18:35 aware of that and be prudent and responsible in how we spend essentially
1:18:43 their money our money the people's money and we have to also do a lot of
1:18:49 education and how their income tax is being spent in the city and how the
1:18:58 property taxes are being used and how we're spending it and that they are
1:19:02 getting value out of it and we have to make sure that they see that value
1:19:05 and that they feel that value and so I think that's on us that's on all of
1:19:11 us in this room because yes we can say we can afford this that or
1:19:16 another but affording something and going out and doing that when people are
1:19:24 struggling I think it's complete different I think if we were in
1:19:27 different times we wouldn't be necessarily be having this
1:19:31 conversation but I think it's important conversation and I think we
1:19:34 just have to be conscious and aware of that moving forward thank you all
1:19:41 any other questions comments from council members I just did had I had one more
1:19:47 I alluded to this earlier but obviously this is putting together it thank you
1:19:53 for the great presentation and answering all this you know I always every year
1:19:56 I learn a lot and then I have to be re-educated again when you come back
1:20:02 but and refreshed again but there's a lot to take in but you all explain
1:20:06 it in a way that's digestible so thank you but I do have a question so I was
1:20:13 looking through you know we're with our sewer work we have you know with our
1:20:20 IWIP plan and you know so we have some more we have sort of broken into
1:20:28 chunks and in the things that are coming up in 2027 and 2028 so those
1:20:33 obviously are not considered in this legislation before us but as we're
1:20:38 considering you know the the ongoing load and bringing you know as we've
1:20:45 watched see those numbers go down when we're looking at when I was asking
1:20:49 before about best practices is that something that you look at as you're
1:20:53 thinking about all of this you know I know director Mahoney's thinking about
1:20:58 but in terms of thinking about and like we had I remember in 2021 we allocated
1:21:05 25 million of ARPA dollars thinking like oh we're gonna get ahead on our
1:21:08 sewer stuff and then we found out we had to realign the whole interceptor
1:21:12 tunnel for 26 million dollars and so we sort of didn't get ahead like we
1:21:16 thought we were going to so anyway that's a long intro to like how are
1:21:21 we thinking about that in terms of future years and that load yeah so
1:21:26 that's why we have the five-year capital plan and we project this out and our
1:21:31 ability to pay for future future projects I pulled up what we had you
1:21:40 know what we had projected that I think came from last year for 2026 and
1:21:45 what was projected from last year on the new money was 32 million so I mean
1:21:50 it's also a moving target but actually the 27 million is under that and so
1:21:56 every year there is a five-year capital plan there is this then you look at
1:22:01 it again fall to finalize the project and fine-tune it and that plan does
1:22:08 assign the revenues to it right so that the city can plan for what they
1:22:15 need to do and how it gets funded your point about being cognizant of the
1:22:23 public is is a great one too like like so we're we're showing you that the
1:22:27 city has the dollars to fund this but you all collectively obviously are
1:22:34 talking you know policy and that's that's not right that's not Catherine
1:22:38 myself so but but we also are happy to always serve as a resource you mentioned
1:22:45 about education if there's anything we can ever do to be helpful in the
1:22:49 community or some type of meeting where we can help answer questions or
1:22:53 educate folks we're happy to do that don't hesitate to call on us it's
1:22:59 helpful to you and hopefully we won't have another 25 million dollars to
1:23:05 surprise all right any other questions if not then thank you very much I'm going
1:23:14 to suggest we take a couple minute break here and then we'll move on to
1:23:17 the administration's presentation so maybe three minutes is that fair
1:31:05 good to get back going here so all right the other item on our agenda for
1:31:11 tonight is to hear from the administration about the proposal for
1:31:14 city hall I'll turn over mayor George or whoever on the team wants to get
1:31:19 started thank you madam president vice president Baker welcome councilman
1:31:26 Vixen sign I look forward to working with you and welcome aboard I also
1:31:30 think it's a good starting point to say obviously there's gonna be a lot
1:31:34 of new information here and it goes for all seven any questions that you may
1:31:38 have whether new old please reach out to any of us or the developer or finance
1:31:46 whatever the case may be law we'll do the best to get you the answers as
1:31:49 quickly as we can I would say this as a starting point this is kind of a
1:31:55 tale that has been not passed down through generations of mayors and
1:32:00 councils but I think that what we're about to talk about is a hard topic it's
1:32:04 a difficult topic I think if it was an easy one to solve for it would have
1:32:08 been solved already I think this is one that collectively just like we did
1:32:14 with the Castro deal in downtown development we we we worked over time
1:32:19 we worked together to try to come up with a product and a process that
1:32:24 served the citizens of Lakewood as best we could both in terms of fiscal
1:32:28 responsibility but also making sure that we have a project that serves the
1:32:32 people for generations to come that's the starting point from this analysis
1:32:37 from our side of the table the fun the fundamental I guess three points
1:32:46 that we set forth our analysis are as follows the number one is the superior
1:32:56 customer service element of what we do and what is best for the city and what
1:33:00 is best for its residents citizens visitors as well the central location
1:33:07 of the heart of downtown the corner of Maine and Maine is something that is
1:33:10 important we think that having a central downtown City Hall where the
1:33:18 administration would inhabit directly served by the multiple transit routes
1:33:22 north southeast and west is a good one and it matches a lot of the values that
1:33:28 we've talked about over many different topics over the last five years since
1:33:32 I've been here the fourth bullet point I think is one of the most critical
1:33:37 ones because to anyone who comes to City Hall pulls permits pays bills
1:33:42 whatever it may be at present they have to often hopscotch across the
1:33:47 street and we want to consolidate the customer facing departments into one
1:33:52 central location we think that is what's best for efficiency we think it helps
1:34:01 business business owners construction anybody really from a permit basis the
1:34:08 second point is maybe greater than the first though the equitable employee
1:34:11 facilities is you'll see in a future slide the the genesis of how this
1:34:17 came about is the analysis of our police courts safety forces generally we
1:34:22 know that we're behind the curve as it relates to square feet per officer we're
1:34:27 behind the curve as it relates to the facilities needed with the new growing
1:34:33 number of female police officers and I also think it's important to note
1:34:37 that the courts have also expressed a need and that's kind of gone by the
1:34:41 wayside in recent times as far as just dialogue but you can rest assured
1:34:46 that judge Neff is watching this as well because it's an important thing to the
1:34:51 courts and their ability to have stable security and all the things that
1:34:56 we need in the 21st century that we face you know with the the world we
1:35:01 live in the last point is one I've had many back and forth with many of
1:35:07 you on many topics over years and that's the competitive nature of us as
1:35:10 a city recruiting and retaining talent employees generally it doesn't matter if
1:35:15 you're working Metro parks or if you're working in the private sector if you're
1:35:19 doing this mom-and-pop business we're in the same world we need to keep our
1:35:25 talent we want to attract the talent and when it comes to some of the
1:35:28 spatial issues we face namely the public safety side as you know it's a
1:35:33 very very competitive world in that area and this is one of the things
1:35:36 that started this entire deep dive and I give the mayor credit on this
1:35:41 because as it relates to this this this project and this analysis and trying to
1:35:47 come up with the best solution for the city of Lakewood we are not in the
1:35:51 business of kicking the can down the road when the we're in the business of
1:35:54 trying to find solutions and I think we share a lot of the same
1:35:57 collective thoughts on what we think the city needs we can obviously have
1:36:03 tremendous debate over the next couple weeks about what we may think
1:36:07 is best or what we can improve upon but I just want you to know that from
1:36:12 from my standpoint what makes Lakewood great is not only its citizens and
1:36:17 residents but we have great employees and we want to keep it that way the
1:36:21 last point is the first hour of or hour and a half of tonight the
1:36:24 fiscal stewardship pillar obviously you don't think it's done project wise
1:36:28 if it doesn't work fiscally and that was what we were hoping and hopefully
1:36:34 it was conveyed to council as well as the public that this decision has been
1:36:39 analyzed through and through on the financial side to see if it works one of
1:36:46 the starting points I had is that when we first engaged we were Murphy Fox
1:36:50 long ago they brought up above the build out on the northeast side we've
1:36:54 had the discussion namely councilman Evans I know you've had on dialogue
1:36:59 with others about the build out on the on the south face on the lawn one of the
1:37:06 issues I see and and we can discuss this more thoroughly is as it relates
1:37:12 to the ingress and egress of this building and turning this into an
1:37:16 active construction site I think the complexity of that is is massive I
1:37:22 believe that the the fact that this is a communications hub of the whole
1:37:27 city the dispatch police the courts IT to tie into an addition on the on the
1:37:35 south face of this building and to maintain at all times 24 7 365 both
1:37:40 access and to ensure that communication can't waiver for 10
1:37:44 seconds using that as a basis for comparison what we're about to offer
1:37:51 if the price is about right or if the price is very similar to go
1:37:55 downtown and to consolidate down there I think that's a more compelling reason
1:37:59 that to build out on the south face but that's the way I look at this the
1:38:04 other bullet points listed here are essentially go to the same
1:38:08 operational risks of such a build out I think a lot of construction folks
1:38:12 would tell you that it's actually a lot harder to build into an existing
1:38:15 operational building like a hospital like a City Hall like a jail things of
1:38:20 that nature that I have to be functioning all the time and the
1:38:23 costs associated there with on the on the build out of a phased approach like
1:38:28 that to build an addition is a lot harder than simply going to another
1:38:32 location I also think there's a timeliness element to it to to move
1:38:36 downtown that would accelerate the timetable associated with getting
1:38:41 the police and others the space they need this is the police and courts
1:38:50 slide just this is going back to the very beginning trying to articulate for
1:38:56 you the challenges faced by our police and the courts on a daily basis I'll
1:39:03 show you a slide in a second has been I call it the Angie Barrington slide
1:39:06 because it's comparison of a lot of other cities in Northeast Ohio but as
1:39:11 you just read through it's a lot of the things I said before as it
1:39:14 relates to the police square footage bringing them up to industry
1:39:17 standards as well as just comparing ourselves to our competitive cities that
1:39:21 we are actively competing against as far as recruitment and retention of
1:39:25 especially safety forces on the court side judge Neff has reiterated lately
1:39:31 that they need more functional space for a lot of different reasons but a
1:39:35 lot of it has to do with security risks and also hearing rooms for
1:39:39 magistrates and other court staff as well as secure parking for said
1:39:42 staff this is the chart of all charts in my mind this is the chart that
1:39:48 compares Lakewood to ten other Northeast Ohio cities and if you look
1:39:54 at the lowest left-hand box there Lakewood on a square feet per staff as
1:39:59 it relates to the police station is woefully below many of our competitors
1:40:03 it's not anybody's fault it's just a it's a byproduct of the growth of
1:40:07 the police force in this town as well as the overall employee count and the
1:40:13 fact that this space really hasn't been touched in since 1958 many other
1:40:18 cities to the to the right like Rocky River and all that we know that
1:40:22 they've made the investment as of late and that's what we're seeking to
1:40:27 do so here's our our idea one for our 1470 Warren Road the old Board
1:40:34 of Education site we see this isn't once on a generation opportunity for us these
1:40:39 this opportunity to move into a downtown historic building does not come
1:40:44 along very often the cost certainty and fiscal responsibility of making such a
1:40:50 move we wouldn't be here if we didn't think we could get it done from a
1:40:53 pricing perspective we've heard from others what they what they predicted
1:40:57 the price point could be in talking to the developer who's here tonight we
1:41:02 think we can do better and we think we can do so in a manner that protects the
1:41:07 city the goal goes back to the very first slide to consolidate to make it
1:41:16 a one-stop-civic hub for our residents and businesses to centralize
1:41:21 the access to make it easier easier for them to get to City Hall we think
1:41:25 we can improve on many of the way finding accessibility and quality of
1:41:29 service components we know we can modernize some of the customer service
1:41:34 from the current 1958 look we have here it would reduce the resident trips
1:41:42 and internal handoffs as it relates to the permitting process which is what I
1:41:45 explained before jumping across the street going between floors of the
1:41:49 buildings to try to get business done one of the other key components
1:41:55 that we've talked about before is the flexibility and growth this plan
1:41:59 allows for us to grow as well in the sense of we have all the
1:42:04 administrative departments under the one roof we know that our police force is
1:42:08 always evolving changing with the times and we know most acutely with
1:42:13 the female number of police officers we have that we need to make changes
1:42:17 today yesterday we can do that quickly and we can we can give ourselves
1:42:22 the opportunity and in my opinion to align ourselves with a lot of our
1:42:26 other competitive or competitor cities that already have the City Hall
1:42:30 Justice Center dual campus model most of the cities in Ohio of our size
1:42:35 larger and even a little bit smaller than us use the split campus model so
1:42:40 we're not trying to invent something new the last point is another one is
1:42:44 the transportation component we see this as the you know it's a
1:42:49 centralization multimodal hub downtown walking transit bike and
1:42:55 driving is easier than getting to this end of town we have the RTA bus lines
1:42:59 going north southeast west it aligns with the some of the major components
1:43:04 of the active transportation plan of course it's the walkability factor
1:43:08 downtown as well and again I reiterate it's consistent with what other
1:43:13 cities of our size across the state of Ohio already do lastly and
1:43:18 perhaps is one of the major fundamental things that makes Lakewood a
1:43:25 great town is that there's a lot of love and desire to adaptively reuse
1:43:33 historic downtown buildings we famously dealt with it quite a bit in the
1:43:37 downtown Casto project with the Curtis block that struck me when I
1:43:41 first came to Lakewood that this city has a passion for that this is the
1:43:45 core of that we are we are going into one of the most historic buildings that
1:43:48 remains in the downtown core and we're seeking to repurpose it and move make
1:43:53 it our City Hall the municipal investment alignment with the adopted
1:44:00 preservation and sustainability sustainability goals are things we
1:44:03 talk about in almost every meeting I go to with respect to many of the
1:44:06 community members and different organizations around town Lakewood alive
1:44:12 being the most prominent I would say on that but I firmly believe that
1:44:16 there's a downtown hub City Hall model that keeps the Justice Center here
1:44:24 courts and the police in a growing in an ever-expanding footprint space here
1:44:31 will serve the residents of the city of Lakewood the best I'll leave
1:44:39 questions to you guys as well right here if you want to go over anything I
1:44:43 just stated but I have your Silie and Tom Cloris from Liberty here do you
1:44:48 have any comments based upon that presentation thank you members questions
1:44:59 comments at this time yeah we can we want to do did you want to think thank
1:45:15 you madam president members of council again drew Silie Liberty Development
1:45:19 Tom Cloris the CEO and founder of Liberty Development and also a
1:45:22 lifelong Lakewood resident here with me tonight I know we have a committee
1:45:26 meeting next Monday but we just want to kind of give a preview to that and
1:45:31 share our commitment to this process so thank you for considering this
1:45:35 proposal you know the conversation that just happened about physical
1:45:39 stewardship physical responsibility that's council's job that's your
1:45:42 mandate and councilman Hamilton's the council person Hamilton Steiner's
1:45:45 comment about the people's money you know we as we were working our way
1:45:49 through a process that was laid out where we submitted our qualifications
1:45:52 and the work that council did with Weber Murphy Fox and PMC we thought we
1:45:58 had an opportunity to introduce a compelling story and that what we're
1:46:02 offering is a transparent process open book to have a conversation with
1:46:06 council about how we arrived at the proposal we have in front of you
1:46:10 right now we're confident we can deliver the project we've described
1:46:14 that gives you a high quality durable asset this isn't a value engineered
1:46:18 kind of process project it's a high quality durable asset and that we can
1:46:23 draw some distinctions between the effort that was previously done which I
1:46:26 think Weber Murphy Fox and PMC did an admirable job considering the
1:46:30 constraints they were working from existing condition floor plans in a
1:46:34 very compressed timeline they were using the professional acumen to
1:46:38 develop a budget as their professional responsibility requires that would cover
1:46:43 that project and then some but the team that we're going to have here
1:46:46 next week so we're including our design team the contractors that we would work
1:46:50 with that we've worked with a number of times that were as we demonstrated in
1:46:54 our previously submitted qualifications to answer detailed questions so we're
1:46:59 ready to have that conversation with council we're ready for you to stress
1:47:02 test our proposal let's get into those details ask those questions we
1:47:06 have suggestions on how we think the city could and should protect itself in
1:47:10 this process we have no expectation that this is close to the vest closed
1:47:15 book kind of situation this is something that we come to agreement on
1:47:19 exactly what we're going to deliver and at what price and so the analogy
1:47:23 I would use to come not to oversimplify it but it will somewhat is if you
1:47:27 were going to buy a car by a car from us and you outlined all the
1:47:31 features you wanted in that car and we didn't deliver on that you asked
1:47:35 for a sunroof in the day of the delivery of that car it doesn't have a
1:47:37 sunroof you don't have to buy the car we're talking about a similar
1:47:41 process more complicated obviously but we are going to go at risk and
1:47:44 certify a project once we agreed to final design and we'll be able to walk
1:47:49 you through exactly all of our assumptions that we made to get to
1:47:53 that price but if we don't deliver on what we said at any point in the
1:47:56 process or in the final product community is not required to buy that
1:48:00 building from us but that's where we want to get to we want to get to
1:48:03 something that is going to serve this community well that's also going
1:48:07 to be part of our conversation next week this isn't just about the
1:48:10 dollars and cents though that leads it's about the qualitative experience
1:48:14 I think you'll see a notable distinction as we've designed a floor plan we've
1:48:18 designed a layout to make that one-stop shop to solve what we think is
1:48:22 knowingly solving the problems that are from a customer service standpoint
1:48:26 with this building that you can enter one floor of that building and all of
1:48:30 the customer facing departments are right there we're going to go
1:48:33 through some pains to walk through that design to actually show all the
1:48:37 members of council exactly what we're talking about what we mean and then
1:48:40 lastly and then I'm happy to answer any questions council might have we
1:48:44 have a 3d model a live real version of what we're talking about the quality
1:48:49 design in the building adjacent to 1470 1456 we renovated that with
1:48:54 council support we fully leased that building I'd invite any council
1:48:57 members who want to visit that and see exactly what we're talking about
1:49:00 as level of finish quality of construction energy efficiency historic
1:49:05 preservation all the pieces that we embedded in that process we plan to
1:49:09 do the same thing for the building adjacent and hopefully deliver a
1:49:12 quality administrative City Hall for this community so thank you for hearing
1:49:16 us we look forward to next week's conversation we're very prepared to
1:49:19 have that discussion and happy answer any questions council might have
1:49:27 council members come on up come out if you don't mind
1:49:33 Drew's running this project Tom Caluris CEO of Liberty Development I just
1:49:39 want to make sure that you know very clearly I'm a 60 year resident of Lakewood
1:49:43 I started this business 30 years ago really proud of a lot of projects we've
1:49:47 done but there's not much that means more to me than what we do here
1:49:50 McKinley Place those townhomes every time I drive by them that's where I
1:49:54 went to elementary school by the way we developed an own Cozumel that's
1:49:58 our building there's other things that we've done I'm just this is a
1:50:01 the small building the one to the north we promised the school district we
1:50:05 were the only ones to promise the school district that we would
1:50:08 rehabilitate that in a historic tax manner and we are a historic manner and
1:50:13 we did love it we've got great there's some Lakewood residents working in
1:50:17 there and there's some people that come from out of but what I just want
1:50:20 you to understand that besides all of this fiscal responsibility and how well
1:50:24 this fits as a Lakewood resident as there's somebody that's going to look
1:50:28 back on this problem raising four kids here they're all growing up here
1:50:32 their mother is from the east side so I sold this place and worse and we
1:50:35 chose to stay here on purpose and love it my wife's become a huge resident more
1:50:40 fat more friends here than I do a project of this kind in a partnership
1:50:47 with you there is not anything more important than what we're doing not to
1:50:51 me I'm not going anywhere we fully intend to continue to raise our kids
1:50:56 here and stay here so the soft part of that is this means more to me
1:51:02 than a project if there's anybody that has any issues or there's always problems
1:51:07 to solve by the way everything's difficult that's kind of the best part
1:51:11 of our business because it keeps a lot of people out we will solve those
1:51:14 problems together and there certainly isn't ever going to be a time that
1:51:18 you should have a question in your mind wondering what we're thinking
1:51:20 unless you haven't asked it or we don't know it somehow this is about
1:51:25 getting something done that has felt to me like when it was proposed to
1:51:29 me because this was not my original idea has been perfect and where it could
1:51:36 be made as close to perfect as you can get just want you to understand this
1:51:40 goes way beyond a project for me and that you should please feel free to use
1:51:45 that in any way you want okay thank you okay thank you I think this other
1:51:56 council members have questions at this time what I'd like to chat a little bit
1:52:00 about how we are the plans for next week so are we thinking you know I know
1:52:09 I'm not sure how much council members really at this time understand what
1:52:14 exactly is we understand the building but like what exactly is being
1:52:18 proposed so what's the plan for next week in terms of presentation if you
1:52:25 don't want to misspeak I mean the plan is to get down and dirty with respect to
1:52:29 the at this stage we've had a fit plan we've had discussions with city
1:52:35 departments over time but I think what the the goal at the next meeting is
1:52:41 to illustrate to you what the idea is today was more of the why and then drew
1:52:49 can with his professional team coming into to City Hall next week we can
1:52:53 start to both elucidate and have back and forth with you on different ideas
1:53:00 as it relates to what is possible yeah council president I think in my mind
1:53:07 and you know please disabuse me of this we were going to take a couple
1:53:11 steps back to kind of re-level set on making sure we're talking about the
1:53:15 same terms what we meant that's why we're going to spend some time
1:53:17 talking about the design the interaction we had with the different
1:53:20 departments in City Hall how we looked at some of the floor plan related to
1:53:26 workflow customer experience and then tie that right into our costs how we
1:53:31 came to the cost we're talking about and then the full scope of what we're
1:53:35 suggesting is being delivered for that cost so that there the idea would be
1:53:39 as a point of beginning that council members walk out with a very good
1:53:44 orientation of the details of our proposal and then we'll be prepared
1:53:47 to have any follow-up we need to have after that so I guess in terms of the
1:54:01 why presentation it's sort of the conversation we've had you know it's
1:54:06 like I think we've all been on the same page had multiple communications we
1:54:10 all recognize the need to solve for the space issues so what I guess what
1:54:15 I was I'm looking for is are we in terms is some conversation about process so I
1:54:21 know we had conversation about one of the other meetings about we had an
1:54:27 opinion from legal counsel about whether we can or whether or how we
1:54:33 can jump right into what is being proposed are we talking about last
1:54:38 week we had the the conversation about procedures and different types of
1:54:44 design process so that's what I'm kind of like what what is what are the
1:54:47 legals what are we talking about in terms of the process yes so if I may
1:54:52 council president so today was just a very very high-level introduction
1:54:55 because we knew a lot of today would be spent with the bond council so we
1:55:00 want to be mindful of timing so just that high-level introduction then
1:55:05 get into the details of again the design the costs and then we can
1:55:11 provide some additional information and how we got there in terms of this
1:55:14 legally and how that works out thank you and thank you Tom and drew for
1:55:20 coming see you at church sometimes Tom and what I'm trying to and I'm project
1:55:28 delivery models Cogin's front of my mind and I'm hearing the design and I
1:55:37 look through the folder again and perhaps there's more we kind of the
1:55:41 shared folder that director Barrington put together the only thing I see in
1:55:45 our name is a phase one ESA do we have a facilities assessment and
1:55:49 appraisal do we have an architect on our contract that's looking this
1:55:53 building beyond web Murphy Fox's kind of high-level boxing plan I want to
1:56:04 misspeak on who so priority architects and others on the team with respect to
1:56:11 Liberty have been looking at this building for a long time and we I
1:56:15 would say in direct answer your question we've been trying to figure
1:56:20 out can we get this thing done and we that's been the baseline question
1:56:26 that has been the overarching theme since this summertime the only in
1:56:32 recent times that we I would say since the Weber Murphy Fox presentation along
1:56:39 with PMC where they came in and gave us a figure that was you know through
1:56:45 their analysis that was the starting point for us to figure out can we do
1:56:49 this because it was only through that lens that we were able to figure out
1:56:56 that the developer has the ability to put together a proposal that obviously we
1:57:03 have to negotiate and agree with and go through the whole step of trying to
1:57:08 figure out if it works both from a design the whole thing operations but
1:57:13 that is the window that gave us the opportunity to be where we are today on
1:57:16 this project and that's how this all began it was basically in the
1:57:21 aftermath of that meeting I don't want to you know you we talked you drew came
1:57:29 and stated basically that the costs that were set forth before us were
1:57:33 obviously a lot of hypothetical contingency upon contingency type
1:57:37 numbers we can do better and that's the starting point of where that was
1:57:40 only two months ago so from that point to today is is what this
1:57:45 conversation is but we have to move forward at some point because they're
1:57:48 going to walk away so council president if I may so the vice president's
1:57:54 question you know what we're also bringing to the table Councilman is
1:57:57 where all of those documents all that documentation that we have as your
1:58:01 drawings asbestos surveys environmental assessments structural
1:58:05 analysis we're putting that in as part of making that all available to
1:58:08 council as a point of beginning on this conversation to share our design
1:58:12 team to your comment about product delivery or project delivery how we do
1:58:15 that I understand the point there are a number of ways we could potentially do
1:58:19 that that's part of what we want to discuss next week we know we're about
1:58:22 that our team is very familiar with a range of delivery models I think the
1:58:27 intent is no matter what that we're putting in a model that's giving or
1:58:31 using a model or a methodology that is protecting the city protecting the
1:58:35 administration and the council's interests but also delivering exactly
1:58:38 what you're asking for with the highest quality most timely most
1:58:42 cost-effective methodology so that's part of what we're hoping to discuss
1:58:46 next week thank you and the we issued an RFQ for design builders on this
1:58:53 building in the summer right and is that the qualifications you're talking
1:58:57 about mr. correct we responded to that with the same team we're gonna have
1:59:00 here next week okay because because my challenge and this is we represent
1:59:07 the city of Lakewood we're the fiduciaries for the city of Lakewood
1:59:10 you represent Liberty Development I think you're honest people but typically
1:59:14 in construction projects there is some right and I appreciate the collaborative
1:59:19 nature of kind of what you're presenting the concern I have is that
1:59:22 architects have a client and that client typically pays them and then
1:59:29 contractors typically have a client and they typically pay them so the the
1:59:34 kind of alarm bells in my mind of project delivery and kind of how
1:59:38 capital construction should go are are at least ringing a little bit as it
1:59:43 seems like there may be an imbalance of information knowledge and reliance that
1:59:48 that the parties have being the parties being Liberty and the city of
1:59:52 Lakewood and into your point not to catch you up but I think that's a
1:59:56 reasonable concern and I think we're prepared to actually talk through how
2:00:00 we might be able to mitigate some of those concerns and come to a fair
2:00:04 balance on that that gets you exactly the protections you're hoping for yeah
2:00:08 and then the the other thing is just you know the general nature of like
2:00:12 public construction and bidding right and and that's where I and and and I
2:00:18 think we're being asked to decide this by whatever the council meeting
2:00:22 is after President's Day the there's a lot here this development agreement
2:00:29 I'm presuming is in draft form I have if it's not I I would like yet at some
2:00:37 point Councilman if I may so a lot of those features of a contract are not
2:00:48 developed yet we first want to have this meeting with City Council before
2:00:51 we spend hours on developing that that purchase agreement and the formal
2:00:58 development agreement our thought and our plan was to lay out the why the
2:01:04 rationale the importance of this building and get the go-ahead from
2:01:09 council to begin to negotiate that contract okay because I and I think
2:01:14 and I don't want to because this is once again you know you you buy a
2:01:21 property you buy a building you know the the seller you get into a
2:01:26 contract with them they can share reports with you but you oftentimes want
2:01:29 to get that report in your own name right you want to get your own
2:01:32 facilities assessments you want to get your own phase one phase two you want
2:01:35 to be the reliance party on there because if what they represent is
2:01:38 incorrect if Liberty shares it with us we can't see redress if there are
2:01:43 material differences in those reports and that's why you want those things
2:01:48 in your name that's why you'd want an appraisal to show the public that
2:01:50 the value of this building is the value we're paying and so those are
2:01:55 things that just concern me and I hope we can in and that's I think skipping
2:02:02 forward to we've all agreed that this is the solution to our problems because
2:02:08 I think that what we've what we've talked about is that there's a shared
2:02:11 understanding at least I share the administration's understanding about
2:02:15 space issues with police and with the courts what what what is a little
2:02:22 troubling is is is I'd hope we'd have some professional a little bit like what
2:02:27 Webber Murphy Fox did is a fit plan for City Hall to have them do that
2:02:32 level of analysis with and that's where City Council was just trying to
2:02:36 through our exercise with with I'm going on a lot of different tangents
2:02:40 here because I this is pretty discombobulating but what City
2:02:44 Council was trying to do with the Webber Murphy Fox and and project
2:02:47 management consultants was to say we can't even conceptualize what these
2:02:52 costs would be from a scale perspective and in construction risk is
2:02:59 priced in as dollars and unknowns are risks so unknowns are dollars so to
2:03:07 mr. Siley mr. Clarice's point they have more information and they
2:03:11 probably can provide a better estimate as to what it would take to rehab
2:03:14 that building but the city could only rely on what we had which was our
2:03:19 work product from Webber Murphy Fox with which to work with PMC to come up
2:03:24 with those estimates we also didn't have a ton of certainty on what a front
2:03:29 edition would look like so that risk was also baked into those analysis
2:03:33 and well as well and what I'm concerned about is that we're going
2:03:36 to go into a process and say council because Webber Murphy Fox and PMC
2:03:41 said that the front edition is this cost and a party that we want a
2:03:46 relationship within trust you know as collaborators are saying they can do it
2:03:51 for for less so then that's used as a justification to not go through public
2:03:54 bidding and so these are some of the concerns that I'm having as I'm
2:03:57 hearing what is being discussed and I hope that there's a presentation that
2:04:03 allays me of those fears because I like I don't know that we need
2:04:08 another 12,000 feet of general office space in our overall City Hall
2:04:12 campus I think we need another 12,000 square feet of police space and that I
2:04:18 think in all the plans that we've talked about have have reflected that
2:04:22 but to get essentially 30,000 more square feet of like under roof space
2:04:28 for a city that has a tax base that's while growing income tax wise is
2:04:32 not growing like development wise we don't have green fields we're not
2:04:37 going to need if anything we need more public service garages and public
2:04:41 you know like so that so that's where I'm we're really far ahead here and I
2:04:47 don't know if we need to be here and so I'm just expressing that to the
2:04:50 administration our partners and my colleagues that but I will certainly
2:04:55 listen next week and hopefully we can have some rubrics of what that
2:05:01 development agreement would look like because it's gonna have to accomplish
2:05:04 a lot of things and allay a lot of fears at least that I have as one of
2:05:08 members because because I feel like we may be asked to vote on something where
2:05:12 I will have only a little bit of the information with which to go on and I
2:05:18 don't feel like I can discharge my fiduciary duties to the taxpayers at
2:05:21 Lakewood without having more information and that's just me being
2:05:24 honest and I typically am brief when I speak and typically I'm not as
2:05:29 contemporaneous but I just felt the need to say these things.
2:05:35 Councilmember Hamilton-Steiner. Okay so with understanding that this was we
2:05:42 were doing the why which is great that's kind of how I like to process
2:05:47 things. I just need more information and more clarification of how this
2:05:55 particular decision fits the why. I don't think we've gotten there so
2:06:01 building off of what Vice President Baker had said we've come to this
2:06:06 conclusion but we've missed a lot in between. So going back to your your
2:06:12 first slide, primary goals, superior customer service. That's great and then
2:06:21 the next point is what is best for the city and its residents and so for
2:06:25 me I think that is the question what is best for the city and its residents
2:06:33 right so I think that is what I want to see and how we got there because if
2:06:39 you look at general public comment I'm not hearing anything about City Hall
2:06:46 and I'm not saying that's how I'm gonna make a decision but I think
2:06:51 it's important that I'm not hearing much about City Hall that that's what
2:06:56 residents want. I hear housing portability. I hear we need better
2:07:03 measures for our streets. I hear that you know with all the snow people are
2:07:09 you know not very super happy right now with snow removal and sidewalks
2:07:15 issues and things like that right. So those are the things I'm hearing
2:07:17 that I'm hearing that they're struggling with health care and food and food
2:07:22 insecurity right. Those are the things I'm hearing. I'm not hearing anything
2:07:26 about City Hall so I think we have to I need to hear how we got there to
2:07:34 that point that this is what's best for the city and its residents. Going
2:07:39 to your next point about equitable employee facilities and just you know
2:07:46 being competitive employer retaining employees. How I want to know how have
2:07:53 we what are the things that we're doing to be competitive. What is our
2:07:58 work from home and flexible work remote policies that exist. Are employees
2:08:04 currently able to work from home one day a week two days a week. Have we
2:08:09 looked at expanding into five days a week to be able to free up some of
2:08:13 that space. So going again building back to compliment Baker's point that we
2:08:19 might not need that much space right and so if we don't need that much
2:08:24 space we can be fiscally responsible by actually expanding and in having a
2:08:34 situation where we have the space that we need with potential to grow
2:08:39 and that's aside from obviously the police I think I don't want to speak for
2:08:44 everyone I know that there is a need for I you know gone on the tour saw
2:08:48 the facilities we know that there's a need no one is arguing that. So for me
2:08:54 it's the how did we get that this is the decision and this is what is best
2:08:59 for the city its residents and I have not quite seen that seen that yet and
2:09:06 then I'm gonna also steal Councilman Bullock's something that he brings up
2:09:11 what does success look like right so I want to I want to know what so what is
2:09:16 best for the city's residents and what is what does success look like for
2:09:22 this project whatever it is that we decide what is success so I want to
2:09:25 sort of I need to see all of that before we get to a decision that this
2:09:30 is this vision and this is what we're doing. Thank you Councilmember Stuping.
2:09:35 Thank you thank you I appreciate the conversation everyone how and the why
2:09:41 I'm also very interested in the what and I'm specifically interested in your
2:09:46 slide number five that shows the square footage per employee and sympathetic to
2:09:56 the idea that we we need equitable employee facilities and I'm I'm looking
2:10:03 for the the next step in this chart where you're showing me this is we're
2:10:11 at 179 square feet per staff right now and with this addition we go to
2:10:17 what right where do we go from here do we go up to 474 Lake Bay Village do
2:10:25 we get close to you know 236 Lake Euclid head when we when we look at this new
2:10:35 building does the does the finance department that's operating out of
2:10:41 2,000 square feet now are they operating out of 3,000 square feet if
2:10:46 you if you could show me that thank you on a chart like this with where
2:10:52 departments are now and where they will be I think that would be helpful for me
2:10:56 thank you thank you chair I think thank you Councilman Baker I think you
2:11:08 outlined a lot of the same concerns I have that we've had with this process
2:11:13 so I appreciate that I think one of the major issues I have with this is
2:11:19 that everything we're talking about still is based on a presupposed outcome that
2:11:22 we need to move to Warren Road touched on this but I just am not seeing the
2:11:27 background that's that's making the strongest case for that and I also
2:11:34 still while we have an immediate need in front of us for space and that's
2:11:40 for our police department our officers and while this moves the
2:11:45 needle towards getting to that solution what we're talking about right now
2:11:48 does not immediately solve that solution and that's that's a tough
2:11:52 thing for me I mean that's who I'm trying to find resources for right now
2:11:56 I mean they again we need it yesterday and doing this is not doing that
2:12:00 yesterday it's it's doing this entire project moving people over and then
2:12:04 ready that in this space so it's just another of my concerns I'm
2:12:08 certainly looking forward to next week I wish I could have more
2:12:12 questions I was hoping we'd get a little more detail today but yeah I
2:12:17 like like everyone here we'll keep an open mind but I'm definitely operating
2:12:21 from a place of being a little worried about how the process has gone to this
2:12:25 point and again thinking this is the having this be the only solution that's
2:12:30 ever really been given a lot of thought thanks. Madam President if I
2:12:35 could just just address that one question I know when we discussed this
2:12:39 in my in my conference room a few months back that was certainly your
2:12:43 concern and it remains the concern now and I think what we discussed
2:12:45 then was the idea would be to move out the basement level staff either to
2:12:54 another site so that we can open up that space on the ground floor
2:12:58 immediately so that we can begin to address those immediate needs of the
2:13:03 police department so that would be the plan with this the challenge with
2:13:07 any sort of build out front would be you'd have to wait for that entire
2:13:11 build to be completed before you'd be able to move out those staff so hopefully
2:13:17 that addresses that immediate concern about how quickly we can assist our
2:13:24 police officers and getting them some additional space and and also to all
2:13:28 the other questions these are great questions we're looking forward to
2:13:31 answering them for you if you have questions what would be very helpful
2:13:35 would be send those to us I know you know Council President Keppel you
2:13:39 had mentioned that before we're waiting for questions we're happy to answer them
2:13:43 that can help us fine-tune the presentation to tailor your needs and
2:13:47 to make sure that your questions are being answered so I jotted them
2:13:51 down we'll have our team review them but if you want to send those our way
2:13:55 then we can tailor the presentation to make sure those questions are
2:13:59 answered thank you yes Councilman so would you want those questions to
2:14:05 email just directly to you just who should be on the email because I can
2:14:09 certainly so you have it as well I can certainly email you the questions I
2:14:13 asked yes send them to the mayor's office and and John and Angie and then
2:14:18 we can begin to okay perfect thank you thank you yeah I know add to that
2:14:25 I guess as we were going through part of one of the questions that I have
2:14:30 is in terms of the sort of capital outlay and the spending so as we're talking
2:14:36 about this with the with the bonds and when we had where Murphy Fox and PMC
2:14:43 here and they talked about how 2026 would be more of a design year
2:14:46 typically in 2027 be more of the expense for construction and depending
2:14:52 on the the model that we would move forward with that could look
2:14:57 differently but I'd like that part of the presentation discussed too as well as
2:15:01 the plan for building out the Justice Center I think in the five-year capital
2:15:09 plan that significantly it's maybe we sort of had it we had it in our
2:15:15 presentation from what Murphy Fox and PMC of putting those numbers together
2:15:19 for the totality of the project because it's not just building out
2:15:25 Warren Road it would also be renovating this building which we continue to own
2:15:28 and so we have we know we have the existing things here like the three
2:15:31 million dollars in windows that we'd have to do regardless but then also
2:15:34 renovating turning what's building department and planning department into
2:15:38 police space etc so what level of renovation we're talking about for if
2:15:44 if we were to move the administration some of the administration to Warren
2:15:49 Road what level of renovation are we talking about for the police and
2:15:53 justice or Justice Center solution and you know what that looks like so that
2:16:01 that would be some of my question and then also the the capital outlay for
2:16:04 all of those things and because we are and if we and that's another
2:16:10 question too is in terms of if we are we've sort of packaged these things
2:16:17 because the proposal as I understand it is would be using the 16.5 in the bonds
2:16:24 legislation that we just had we just talked about as part of that whole
2:16:27 package so if we and the finest partners asked us to pass that by the
2:16:33 February 17th meeting after President's Day so we do have a short period of
2:16:40 time if the idea is to expand that capital and go with this plan now so
2:16:45 that one of the other questions would be if Council are not ready to do that at
2:16:51 this time given all that we're talking about right now how that financing
2:16:55 could work in the future so those are some of my thoughts ma'am sure yeah
2:17:00 just I I believe I can answer your first question now about the the
2:17:06 costs for redoing this building so the dollar figure that was mentioned in
2:17:11 my letter to council kind of introducing this a couple weeks ago we included the
2:17:15 numbers from your from PMC and Weber-Murphy Fox for this building so
2:17:20 we included those numbers and then the other piece of that was the numbers
2:17:23 from Liberty Development to completely redo the 1470 Warren Road so okay so
2:17:34 then that goes back to when we had so that's assuming the same level of
2:17:37 renovation then that Weber-Murphy Fox and PMC so that was pretty low weight
2:17:43 wasn't that mostly carpet and we can we can talk about that it's it's just
2:17:47 it's um there are so in a construction project and mr. Shiley knows this
2:17:54 that there are so many decision points that can affect a budget 20 to 30
2:17:59 percent up or 20 to 30 percent down you know whether you deal with issues
2:18:04 today or you deal with them tomorrow as an owner you're eventually gonna have to
2:18:08 deal with them sorry I could actually respond your question part of the
2:18:14 delivery model we have in mind is an option here to address exactly what
2:18:18 you're talking about on timing of debt that the city would incur and how do
2:18:22 you balance the phasing potentially investing in the police department
2:18:25 initially right so what we're talking about is a delivery model to
2:18:28 Councilman Baker's point is where we're gonna certify dollars and we're
2:18:31 gonna go at risk we come to consensus on design and we say it's 16.25 700
2:18:36 whatever that is that's the contract to sell you that building if we
2:18:40 miscalculated and we're spending more than that that's our our risk that's
2:18:44 not coming back to the city and saying oops we had a miscalculation here
2:18:48 we're also talking about a delivery model where you're buying that
2:18:52 building in total turnkey at the end of the process so for example if 20
2:18:56 26 is the design year and 27 and we're delivering the building let's
2:19:00 say in the first quarter of 28 just for discussion that's when you're
2:19:04 incurring you're spending that money in the interim the money that you already
2:19:07 have allocated in the budget if we develop and we can inform this
2:19:11 process as far as timing you're going to invest money in the police
2:19:15 department which is I think something you obviously you're thinking about
2:19:18 now or in the in 2026 or early 27 it allows for that to happen with the
2:19:24 money you're already allocating potentially for physical plant capital
2:19:27 improvements right now so it's not trying to double down that you're
2:19:31 incurring all those costs in the 2026 year 2027 whatever that's going to be
2:19:35 it gives you some additional time to be able to anticipate other capital
2:19:39 projects you may have and the level of investment you want to make in
2:19:42 the police in phase 1 phase 2 phase 3 or however you break up that redo
2:19:46 of this building okay so I'm going to suggest unless oh go ahead Councilman
2:19:58 Boat. Thanks Madam Chair thank you Mayor and team and Mr. Kalouris nice to
2:20:04 officially meet you I love what you said about getting people from the
2:20:08 east side of the west side and putting down roots and and having
2:20:11 pride in your development my kids love Cozumel so there you go and I hear you
2:20:18 loud and clear about the pride of you know make it a pride project that you
2:20:24 would want to drive past and feel proud of so a couple thoughts first on
2:20:29 this slide this is not directed at Liberty but the administration I came
2:20:34 up with a lower number than 130 total employees in the police
2:20:38 department I went through the recently adopted budget and the max you get to
2:20:44 is 127 and three of those are animal control officers so they're not going
2:20:49 to contemplate it to be in this headquarters I think the numbers are a
2:20:53 little lower than what's showing on the slide secondly on the on the bigger
2:21:01 picture questions I guess I do have some questions for Liberty but the
2:21:06 administration first a couple some feedback on the big the what and why it
2:21:09 sounds as if the administration is saying that it's not just renovation of
2:21:15 facilities and space and condition of facilities but it's also you're making
2:21:20 it a major priority to have location in the downtown for accessibility and
2:21:26 so on and so forth if I'm hearing you correctly so that's new I mean
2:21:31 there's there's certainly arguments you could make there how I've been
2:21:35 thinking about this all along is that you'd want that same thing for the
2:21:37 business tenants the tax generating business tenants of the Liberty
2:21:41 properties who right now are doing a beautiful job and I did get the chance
2:21:45 to take a tour of mr. side of the last year of the building that is
2:21:51 finished and it's nicely done and is full I drive by it all the time
2:21:55 because my kids go to Grant Elementary to the rear so all of the same
2:21:59 benefits that we're discussing for potential City Hall operations could
2:22:03 apply to tax generating business tenants as well and arguably the rent
2:22:12 you can command within walking distance of downtown plus the new Lakewood
2:22:17 Hospital redevelopment and other potential spillover developments will
2:22:21 be higher than across the street in the annex you know it's a different
2:22:25 different plane so from a financial strategy point of view there's some
2:22:28 opportunity costs just to remind you Councilman there is a definite
2:22:31 abatement on that property on the on the the 1470 as well as 1456 warm
2:22:38 property yeah I do remember because we adopted that so that's another feature
2:22:42 I wasn't gonna get into but we owned it we sold it we granted a tip and now
2:22:45 we're contemplating buying it back that that that's a little bit of a
2:22:50 difficult sir as you recall it's just a formality within a tip agreement is
2:22:55 that the city owns it for moments as we change hands so that's just the
2:23:00 normal yeah there was never the there's never a time with a city truly
2:23:06 truly owned and wanted to operate or use that facility it was just part of
2:23:12 the general procedure for a test we held it for a while when we took it
2:23:18 over from the Board of Education and you know it was a few years back and
2:23:24 so yeah Liberty bought it directly from the Board of Ed so the city is never
2:23:31 outside of the brief time during the TIF process the city's never owned that
2:23:35 facility that site all right well thank you thank you for for that
2:23:40 correction so the I'm responding to the the the why's that that we're
2:23:48 talking about tonight just just some feedback from one council member the
2:23:56 complexities of construction are good things to anticipate I don't see how
2:24:00 those complexities construction on this campus are avoided for any version of
2:24:04 any project there might be matters of degree but if you're looking at
2:24:10 managing construction of converting the current building to a justice center
2:24:16 for the courts and the police you'll still have the ingress and egress
2:24:21 problems so you're gonna have to manage those successfully you're gonna
2:24:24 have the same challenges at the new site if you did have a two city hall
2:24:30 model so there's there's a lot to think through here in terms of the
2:24:36 costs of dollars the costs of time the cost of efficiency the cost of
2:24:40 construction man there's a lot of moving parts here so we certainly need
2:24:45 to think that through carefully and understand how much space we need are
2:24:50 we considering work from home models where some of the administrative
2:24:53 employees would need not one cubicle per FTE but some fraction thereof you
2:25:01 know we're at the beginning of these kinds of questions in my mind but we
2:25:06 haven't fully answered those so I welcome the the deliberation and
2:25:11 thoughtful discussion and there's a couple different ways we go and then in
2:25:17 terms of like what's the priority for the public you know I I was sincere
2:25:23 in what I said before to Liberty and I heard some colleagues talk about you
2:25:25 know if the public's feeling the pain of increased property tax is not an
2:25:29 affordability and not all that's in the city of Lakewood much of it is on
2:25:33 the national macroeconomic conditions our incomes haven't gone up our costs
2:25:37 are going up nevertheless they feel the pain so if we can't afford to do
2:25:40 one new thing what would that new thing be would it be City Hall
2:25:45 operations which is kind of behind the curtain or would it be something more
2:25:50 public-facing like parks renovations or roads or safety safe intersections or
2:25:54 some some of both okay so those are questions on my mind we do see the
2:26:01 acute nature of police operations but there could be a solution different
2:26:07 than what's currently before us and then the final piece of this for just
2:26:12 solving that one issue you could just solve you could take the approach not
2:26:16 a total City Hall renovation but just police headquarters renovation and
2:26:21 solve for that and I don't think that's been considered or as far as
2:26:25 I can tell and that's not a criticism it's an observation the last point is
2:26:30 there seems to be a time urgency to this and I don't know if that's from
2:26:33 from Liberty's perspective or from the tax financing or from the
2:26:38 administration's or what but I guess a question for Liberty would be if the
2:26:41 city declined the option would you be okay and have other options to find
2:26:50 other tenants other than the city government or is that kind of a
2:26:54 painful thought you'd rather not entertain absolutely we would have I
2:26:58 mean it's a marquee property right in the downtown district right for all
2:27:02 the reasons that we think it services the customer service needs of this
2:27:06 community best we also think it's as we had success with renovating the other
2:27:10 building so this isn't an all-or-none situation by any means we do believe
2:27:14 and that's what we hope to demonstrate so to the kind of the
2:27:17 what and the how and the what right the how this could happen what
2:27:21 will we be delivering why it is a better outcome to touch on some of
2:27:24 the things you're talking about renovating an occupied building is
2:27:27 someone who's renovated a number of buildings is infinitely more challenging
2:27:31 than being able to have free space to renovate an unoccupied building a vacant
2:27:35 building as you're looking at a space like current City Hall to create what
2:27:39 you talked about how do you renovate police headquarters you have to
2:27:43 displace a certain number of people you have operation that mr. story was
2:27:47 touching on operational mandates that can't be interrupted dispatches here
2:27:52 the jail is here you have to create lay down area for all the
2:27:55 construction equipment so where are you putting people while you're doing
2:27:58 all this into your comment Councilman about even if the administration moves to
2:28:03 Warren Road and you're still renovating this building you've created some
2:28:07 additional elbow room to be able to do that you have some flex space within
2:28:11 the building to be able to start displacing folks out of their current
2:28:14 space in the police department for example into another space temporarily
2:28:18 not ideal long term but as a near term a short term situation giving you
2:28:23 the room to be able to do that construction I think that's viable so
2:28:27 those are the kinds of things that are our minds and we're talking about we
2:28:30 hope to talk about next week and some of the sequencing we're thinking I hear
2:28:33 that but it's also not impossible to do what talking about either I'm sure
2:28:37 it's been done nothing else possible but it's a matter of time and cost
2:28:41 yeah so but back to the question inconvenience to your customers so so
2:28:45 for Liberty from Liberty's perspective you've got two successful options for
2:28:49 you could you could have a public city government tenant or owner I
2:28:55 guess the concept is you're involved in the redevelopment and then at some
2:28:59 point you sell but you could also do the current business model which is
2:29:04 you're going to own rehab operate and and be the holder and the property
2:29:10 manager of that property and either of those things could work correct from
2:29:14 your perspective yeah so we're gonna step back a little bit and talk
2:29:19 strategy on what we're gonna do with this as far as reinvigorating downtown
2:29:25 you'll bring a lot more people to that with City Hall than we will I think the
2:29:30 most likely second and I'm not saying it is probably gonna be 28 apartments
2:29:34 30 apartments that's gonna do a little bit that's the most likely I
2:29:40 don't know that that's what we'll do but in terms of reinvigorating
2:29:44 downtown I don't think there's anything better and I want to do we
2:29:48 we have a lot of time to talk about this and I am happy to sit down with
2:29:51 anybody at any time and talk about it the reason we're here and there's
2:29:55 always a lot of things to do you know I'm on a number of nonprofit boards we
2:30:01 always have urgent things to do and we also have to take care of business
2:30:04 we have you know I happen to be on a board of school for learning disabled
2:30:09 children you know you're taking care of families you're doing you're doing
2:30:12 a project to build out a kindergarten you can't say we're gonna you know
2:30:17 this is just exclusive of all that you have to do all of it that's what
2:30:20 you're doing here right we're here because I think there was a problem with
2:30:25 your justice center and your courts more than anything else and they were
2:30:30 looking to find a way to make this that your justice center this is what
2:30:35 I understand anyway so the fact is you they're going to add on here or
2:30:39 you're going to find a way to relate relocate services that don't
2:30:43 disconnect things enough where it doesn't make it efficient which it
2:30:47 feels to me like you've done this is done this isn't just shooting in the
2:30:50 air there was a feasibility study done a program done where every one of these
2:30:54 departments were interviewed what are you doing how are you working together
2:30:58 how many people do you have you expect to grow do you expect to
2:31:00 shrink who needs to be connected to who council chambers you got all you
2:31:04 don't even have offices from what I understand and not much right so all
2:31:08 that has been digested and in the plan that we have and the only reason
2:31:11 we never shared it with you publicly is because we're gonna have to
2:31:15 compete for this project and so that was our proprietary information we paid
2:31:19 for that we did it and we have it now but we we know for a fact that if we
2:31:26 don't have to make this a public bid process if we will reach a deal that
2:31:30 you say this is what we want and we say we will sell you that at our risk
2:31:35 we're willing to take that risk right so nothing is gonna get signed
2:31:40 until you say this is what we want we want tiled bathrooms or we you
2:31:43 go on with however so if you need help to figure out what you want that's one
2:31:48 thing you have a building department that's going to tell you whether or
2:31:51 not things were installed properly how you're gonna go about verifying what
2:31:55 we're doing but I can tell you if we put 16 million dollars or call it
2:31:59 whatever 15 million or whatever the total cost is into this project we're
2:32:02 gonna you're gonna be sure that we're not gonna be guessing at the end of
2:32:06 that that you're not gonna buy it because we didn't do something that you
2:32:10 in this process right so some of what I'm hearing from you I absolutely thank God
2:32:17 you are actually thinking this way because you're my representative and we
2:32:21 should be thinking this way but I also feel like there's an awful lot of
2:32:25 information that you haven't yet to be caught up on like that right and
2:32:29 that's I think that's just the public process or if there's so many of
2:32:32 you we haven't really had a chance to sit down and talk about it's hard
2:32:35 to do that so I get it but the fact is the the why is because this place
2:32:42 hasn't had anything happen to it really any substance since 1958 and you've got
2:32:47 a bunch of women please offer that this is the truth this isn't any it
2:32:50 just is you're gonna have to solve the problem whether this is the
2:32:53 solution or another solution the renovating our building and we know a
2:32:58 lot about this and we also know your plan we've laid it out when you
2:33:02 see it you're gonna make comments I like that I don't like you may love it
2:33:05 you may hate it I don't know but it fits right that solves the problem of
2:33:11 getting departments out of this building that work well together that
2:33:16 don't need all the synergies of being with the rest of with the courts
2:33:19 and the police to work it reinvigorates downtown from our
2:33:23 perspective I don't know that we wouldn't make more money doing
2:33:27 something else it's always easier we have 30 apartments here I can raise
2:33:31 rents every week I like to own things I don't want to sell this frankly I still
2:33:34 don't want to sell it to you but it's the right thing to do in this case
2:33:38 because you want to own it and it should be owned by our by the city
2:33:42 right so there's a lot of this conversation it's already happened
2:33:45 that we need to get together on but when you stop and look at all these
2:33:51 components yet this is one thing you're doing and you got your
2:33:55 couldn't be counseled for quite a while there's gonna be a lot of
2:33:57 big problems you're gonna solve what I'm hearing is that this isn't going to
2:34:01 keep you from solving those problems so that I hope we can kind of just put it
2:34:05 aside I think the decision you need to make is does this solve the
2:34:10 problem that your police and your courts have and if it does solve the
2:34:14 problem and you are comfortable with where this isn't what the cost is then
2:34:19 we keep working together and nobody's agreeing to anything yet till that
2:34:22 piece of paper sign I did a deal with Cleveland State University at
2:34:26 a hundred thousand square feet we didn't sign a piece of paper until it
2:34:29 was all ready to go honest to God so you're nobody's asking anybody to
2:34:35 take any chances until you're ready to take the chance and ultimately we're
2:34:39 the ones that are going to take the chance so we have to have an
2:34:42 alignment of interest in getting this done it solves problems and it
2:34:49 frankly I believe in win-win-wins I don't believe anybody has to lose in
2:34:53 any particular process in any project I don't see that happening here at all
2:34:59 frankly I haven't even agreed to do this yet until because if you come
2:35:02 back to me and you say I will take it for 16 that million but I want a
2:35:05 fourth story on it I'm not doing it we have things to talk about so just
2:35:13 to keep an open mind that you were going to learn some of the things
2:35:18 that you're already asking questions about everybody's got everybody's
2:35:22 best interest in mind and ultimately if it's going to make sense you're going
2:35:27 to want to do it and I think other locations were looked at too and so it's
2:35:33 not like this is the only lease or purchase that was inside I didn't
2:35:38 personally do it but I'm pretty sure the administration looked at several
2:35:41 other properties I don't know where they would be either not to fit
2:35:46 what you want to do and frankly if you said you want to take half of it
2:35:49 we could turn we can work out a lease deal I'd really love that I would
2:35:54 telling you right now you want to lease 15,000 feet from us that would be my
2:35:58 preference so is the time urgency coming from Liberty or is it from some other
2:36:07 source so here's the time urgency I think the time urgency is really that
2:36:11 this is it's we've worked on this a long time we have never once said
2:36:15 that we're willing to walk away or kill the deal because it's not going
2:36:18 fast enough but from a practical perspective we're we just want to know
2:36:25 that we're working on it I don't if it ends up being a project that you think
2:36:29 makes no sense at all and that takes three months to figure out so be it I
2:36:33 just want to know people are taking it seriously and they're working on
2:36:36 it there's that's a sense of urgency I should be working if you kill
2:36:41 it you kill it if I kill it trust me you have to be okay with that okay
2:36:44 but it's just working together and being open and transparent tell me what you
2:36:48 want and I'll tell you if it's I can do it or not we don't have to more time
2:36:54 but for the administration for to be continued next time so part of my
2:36:59 question will be why 16.5 million now if we're not ready to do bricks
2:37:04 and mortar and all of this stuff in 2026 but it's the design and
2:37:12 architecture and planning mode the number isn't 16.5 million if the answer
2:37:17 to that is well we got to start moving people around like mr. Seidle
2:37:21 described then to me the concern is we're doing ready fire aim because there's
2:37:27 a lot of detail that I'm hearing good questions from my colleagues I know
2:37:32 that's not the attention that's not gonna happen it's just not you know
2:37:36 this is a process what I'm suggesting is that we're working on that
2:37:40 process as we go along and aim I my whole life is balancing risk and I'm
2:37:48 not gonna ask you to do anything other than I would do for myself it's
2:37:51 absolutely aim now sometimes you can't have a hundred percent assurance of
2:37:55 anything we will not have a hundred percent assurance but we'll be close
2:37:58 enough that I'm willing to take that risk and you should feel the same
2:38:01 way it will not be anything other than plan aim commit fire right so let me
2:38:10 let me just jump in there because I think there's two different things here
2:38:13 there's the what the what if we were to move forward and what the delivery
2:38:24 model is is one process the other thing is we have to we have
2:38:29 legislation we have to pass in terms of financing that's a that's a different
2:38:33 process and so these are the the two things we're talking about here so to
2:38:38 know how much and when we're passing it is is a is in terms of like I was
2:38:45 saying about the capital outlay you won't find anybody more flexible in
2:38:48 terms of that if we're all working towards something and you've got your
2:38:52 time frame that you need to meet get fast or slow that's that is out
2:38:57 you have to do that so doesn't that's that's fine it's just knowing that
2:39:02 we're trying to figure out whether this is go or no go I know vice president
2:39:06 Baker had a yeah a couple a couple follow-ups and the and I just I have
2:39:16 to take a little bit umbrage with like the building out front issue and
2:39:19 this is it might not be the right solution but I mean my dad was the
2:39:24 project manager on you know connecting to the NICU at Fairview hospital people
2:39:28 do those projects all the time we redid the front of the zoo you know that good
2:39:32 contractors come up with you know plans for ingress egress and that's doable
2:39:38 so to say that that's the reason why we're not doing I think it's not a
2:39:41 good enough reason for me second I have two questions for Tom and Drew
2:39:46 mr. Klos and mr. Siley and perhaps his administration prevailing wage is
2:39:51 important so want to know that and then to would you sell the building to us
2:39:56 and then bid on it if you want all of the information that we have in this
2:40:03 open dialogue that's becoming that's harder to do right you're asking us to
2:40:08 tell all the competition what we're doing and we're paying for it there's
2:40:14 always a way to do anything you want that's how this started I don't know
2:40:18 that's gonna be your most effective way to go but there's always we own the
2:40:23 building you want to buy it there's gonna we certainly work something out but
2:40:27 let's again I'd rather lease it so but that also goes to timing councilman
2:40:33 right so if what we're hoping for Monday is you know our expectation is
2:40:37 that you're not gonna have a completely baked all of your
2:40:39 questions answered on Monday but we want to get a sense of is does it
2:40:43 answer a significant number of questions and does council have
2:40:46 questions that we can address and then or is it a red light day that this
2:40:52 doesn't make any sense we're not moving forward in any way on this because you
2:40:55 can't get there right I don't think that's gonna be the case but what if
2:40:59 we're gonna continue taking steps what we're our expectation would be that
2:41:02 there's a good faith effort to continue to have the conversation we
2:41:05 understand you're evaluating other options at the same time we don't
2:41:08 aren't suggesting this is exclusive that's the only thing you're
2:41:11 considering you know into your point about yes I mean an addition could
2:41:14 be put on this building those things are done all the time it's when you're
2:41:18 evaluating those opportunities concurrently operational risk cost
2:41:21 timing all those things versus what we're suggesting how does that
2:41:25 potentially work to your other question this is a hundred percent
2:41:28 union so the contractors are using are all union contractors that was
2:41:31 that's how we priced for the proposal we actually provide it just from my
2:41:38 perspective and hopefully this is everybody's this isn't a problem that
2:41:42 can be avoided forever what are the city's problem meaning what are you
2:41:46 gonna do with police and the courts and it seems like the most logical
2:41:51 situ and the reason is mostly financial because moving the police out
2:41:55 and replacing all they seem much more complicated maybe adding on to the
2:41:59 building is gonna be a better solution my my instincts are it isn't but
2:42:04 I've been wrong plenty of times in my life I my instincts are that's why
2:42:08 I said the word perfect or whatever I said because all the times I've been
2:42:13 doing this when something's supposed to happen when it fits you feel it and
2:42:17 you work out the problems and this I mean if I this were my business not
2:42:22 the city this again it's mostly instinct but we have a lot of data
2:42:27 which you don't have yet you will have it this is going in the right
2:42:33 direction to solve a problem you guys are gonna have to solve or the
2:42:36 you or the council after somebody's gonna have to solve this problem so we're here
2:42:43 to take a shot at solving the problem see if we can work out that win-win for
2:42:46 everybody and you don't have enough information yet that's obvious but you
2:42:50 will and if they're the end of the day you're you agree with us we're
2:42:53 gonna do it and if you don't we're not but we have to figure that out
2:42:57 yeah but I think I wait till you see the plan it's you know you do have
2:43:02 a responsibility to employees too thank you thank you very much yes thank you
2:43:07 we're very aware of our responsibility to our employees and we have stated
2:43:11 clearly over and over how much everyone on this day is cares about
2:43:16 solving the police problem so I just want to be very clear about that that
2:43:20 has never been a question up here about anyone trying to pass off this
2:43:24 responsibility at all so I just want to be clear about that because we
2:43:28 keep coming back to the why we're all clear about the why we're all
2:43:30 very dedicated to the why and I apologize I didn't that wasn't the
2:43:34 reason I brought it up I heard a few people asking about the why and so
2:43:38 I'm just solving the problem yeah so and in terms of that thank you and in
2:43:42 terms of that why and the urgency to me the urgency is solving the police
2:43:48 problem is the main urgency obviously we want to be respectful of your your
2:43:53 business as well we want you to be successful whether it's with us or
2:43:56 without us you know we want its liberties important to liquid so but
2:44:00 in terms of solving the police problem in one of the things I heard tonight
2:44:03 was about the question of how quickly we could address that and I know Mayor
2:44:12 George you mentioned that if that we could be moving out some of the
2:44:17 basement folks while while the build out is happening at orange so I guess
2:44:21 I'm wondering if we could just go ahead and start doing that because if
2:44:24 we can find other space for them now we could start solving the police
2:44:28 problem while we work on the bigger solution so that's something I'd like
2:44:32 to see if we can do that we could at least solve a little bit of the
2:44:36 problem earlier we could rent some space elsewhere or whatever so that I
2:44:40 would like to see that but we are I know we were hoping it seemed like
2:44:45 the administration is hoping to have a quick intro tonight and we've I
2:44:49 think we've touched on a lot of good questions hopefully that'll be
2:44:53 helpful for the next meeting I do encourage council members to please
2:45:00 send in the specifics you would like in the presentation so that we can have a
2:45:05 productive conversation and I hope well we also have the folks who are
2:45:11 offering us their legal opinion here at that meeting as well I know we had
2:45:15 outside council I thought we for them yeah we'll reach out to them to
2:45:20 check their availability if not I know we could try to get them at the next
2:45:24 meeting all right so with that unless anybody has any burning things let's
2:45:31 save it for next week and please forward your questions so that nothing
2:45:35 further before community the whole without objection we are adjourned