The Saturday, December 13, 2008 city council budget hearing ran for three hours and was attended by fewer than 10 people. Nathan Kelly, director of planning and economic development, Jennifer Pae, director of finance, and Michael Coletta, manager of information systems each gave a presentation. Ward 2 councilperson Thomas Bullock rolled into the meeting about 20 minutes late. Lakewood mayor Edward FitzGerald was about an hour and a half late.
Planning and development director Kelly projected his presentation onto a screen. A paper copy of the presentation was not available for review by the public. (View his presentation here)
Kelly’s big request to council was for a $150,000 from the city’s strained general fund to buy distressed houses and either demolish them or repair and resell them. Kelly said the money would be used incrementally over the course of the 2009, and might be returned to the general fund if the need arises.
Kelly expected the program to raise money for the city. He cited the example of the house on Riverside that the city bought and resold for four times what it paid, although “that was an exception.”
Kelly explained it was a good idea to tear down some houses because the city has “more housing than we need.” He estimated 50% of all Lakewood’s housing is rental and the stagnant market discourages property owners from improving their houses and buildings.
Kelly said the Rockport development is way behind schedule, but “not doing that bad.” In regard to attracting young professionals to the city, Kelly said, “We don’t need to offer tax abatement” or advertise. They are naturally drawn to the area, and once here, they tend to stay. He described Lakewood as being “sticky” in that respect.
The city’s storefront occupancy rate increased by 3%, Kelly noted, and also bragged that the Caribou Coffee on Detroit Rd. is the chain’s most profitable location in the region. The nearby Burger King and Einstein Brothers Bagels are doing exceptionally well, too, he said. Kelly said Einstein’s has about $18,000 a week in sales.
At the conclusion of his presentation, Kelly trumpeted a recent American Community Survey result showing that Lakewood’s population is at 54,136. The margin of error is plus/minus 2,400. If the city falls under 50,000, it will lose access to a lot of federal dollars.
Councilperson Brian Powers (At-Large) said he was pleased to see that the planning and economic development department was focusing more on housing issues, and less on business attraction. Powers figured that the bad economy would prevent the city from attracting any new businesses in 2009.
Councilperson Bullock asked Kelly to provide a target list of the vacant or abandoned properties that the city might try and acquire with the $150,000 he was seeking. Earlier in the presentation, Kelly said there are about 400 properties on the problem property list and the city might look to acquire as many as 10 or more of them.
Bullock wondered if the city should pull back from its program to convert duplexes into single family homes and instead focus those funds on acquiring troubled properties. Kelly didn’t like the suggestion. “We have shown it works and it makes sense,” he said. The city has subsidized the conversion of two duplexes so far, one on Bunts and one on Cranford. A third conversion is underway on Clifton.
Councilperson Michael Summers (Ward 3) expressed the idea that the city should consider partnering with a non-profit organization to acquire properties. Councilperson Kevin Butler (Ward 1) said Lakewood Alive would be a good candidate because the city shouldn’t be in the business of “owning properties and trying to sell them.”
Kelly also clarified the land bank situation. The city has the right of first refusal on any troubled property that is eligible for purchase by Cuyahoga County. “The homer in me doesn’t want the county owning a bunch of properties in Lakewood,” he said.
Councilperson Mary Louise Madigan (Ward 4) requested a list of vacant Lakewood storefront properties and asked if Kelly knew how other Lakewood area businesses were doing. Kelly said he wasn’t sure how other businesses in the area were faring.
A representative from the Lakewood Chamber of Commerce was present and explained that many Lakewood businesses are small or privately run and don’t publicly share that information for competitive reasons.
At one point Madigan seemed to forget what the planning and economic development department does and asked Kelly, “What’s going on with [the] Building and Housing [Dept.]?”
Kelly smartly replied, “I can’t speak to those.”
Getting back on track, Madigan asked, “Any vision regarding Birdtown?”
Kelly said the neighborhood stabilization program would target storefronts in the area and there “maybe some news in regard to employment.” Overall, the city “plans to invest more in that area than in others.”
Councilperson Nickie Antonio (At-Large) said she’s “been asking for years” to see more regular progress reports from the planning and economic development department. Kelly said he would have a year-in-review presentation for council in January.
Madigan said it would be a “difficult and hard” decision to give Kelly the $150,000 allocation he is seeking. Councilperson Michael Devers (At-Large) agreed.
Denis Devito, Lakewood resident and union steward for the refuse department, was present in the audience and asked, “Why will no one talk about Section 8? It’s never addressed anywhere.”
As a Cushman driver, he’s frequently in peoples’ backyards and sees things that are amiss.
“99% of Section 8 properties” have a negative effect, he said. “The Building Department needs to stay on top of it, and I don’t see it [happening].” Devito said Bonnieview, the street he lives on, was “devastated by Section 8″ one summer. A single house was the source of constant problems.
“I hear that a lot,” councilperson Madigan responded. In defense of Mayor Fitzgerald, who was absent from the meeting at that point, Madigan said that he had Brian Mooney working with the Cuyahoga Metropolitan Housing Authority (CMHA) to handle the situation.
“The mayor has given us two communications” regarding specific residences that have been targeted for review, Madigan said. CMHA “is very hard to deal with because they’re being pulled into a hundred different directions, not that that matters.”
Madigan agreed there is a perception problem with houses belonging to the program and wants more information from Mooney.
Councilperson Bullock said that some of the trouble spots are not actually part of Section 8, and of all the hundreds of addresses participating in the program, only a small number are legitimate problems. Councilperson Antonio asked Devito if the refuse department ever reported the problems they observe.
“It’s all a communication problem,” Devito said. “Information comes in, and nothing comes out.”
Devito revealed that Lawrence Slavik, the top garbage man, is stepping down. Slavik’s leadership was publicly criticized by Councilperson Dever recently for a failed attempt at a pilot mandatory recycling program.
“It’s so important,” Devito said to council, to replace him with someone “who has a little passion for this city.”
“We need a leader to channel this,” Devito said. If the wrong person is hired, he fears “there won’t be a Lakewood refuse department in a couple of years.”
Funding Reserve Balance Accounts
Finance Director Jennifer Pae said the city has passed a structurally imbalanced budget every year since 1992. The city was able to get away with it because revenues always exceeded expenses. Now, however, revenue has “precipitously plummeted.”
It was tough to follow everything she was saying because the hand-outs given to council were not made available to the general public. [Update: Here is Pae's hand-out. Pae said copies of the hand-out were available at the time of her presentation. She indicated they were sitting on a nearby table.]
Councilperson Madigan wanted to know how Lakewood was doing compared to other cities in the county. Pae didn’t exactly know.
Mayor Fitzgerald said he’d done a comparison and Lakewood’s financial situation was similar to that of Cleveland Heights and Parma. No one had as small of a reserve fund as Lakewood except East Cleveland and Garfield Heights.
Councilperson Antonio was pleased with the depth of the information Pae provided. She couldn’t remember being given such detailed data in the past. Pae noted that Lakewood’s bond rating is AA2.
A couple of people in the audience asked some general questions about the reserve balance accounts.
Michael Coletta, manager of information systems, deserves a gold star. Of all of the budget presenters so far, he was the only person to bring along hand-outs for everyone in the room. See it here.
According to Coletta, “the most glaring deficiency at city hall” is the network infrastructure. He wants to spend $125,000 to move the city off of Novell-based software and switch to a Microsoft-based product because Novell is “increasingly difficult to support.” He said working in a Microsoft environment “will allow us to do other things down the road” and “put us in the mainstream”.
Coletta is also asking counsel to approve about $35,000 to create a wireless broadband Internet corridor on Detroit Rd. between Bunts and Arthur. The signal would emanate about 500 feet from either side of the centerline.
He said its primary purpose would be to allow people outside on the street – not in buildings or houses – to get an Internet signal. To avoid interference, it would be configured on a channel separate from that of area coffee shops or retails stores that are also offering free wireless Internet connections. The city would throttle the connection speed and block sites that might be considered objectionable. There would be four access points on Detroit.
Creating the corridor would be proof that the “city is alive and doing some progressive things,” Coletta said. He envisions posting signs along the corridor area promoting the availability of free broadband wireless Internet and thinks it would be a good public relations tool for the area.
Councilperson Summers inquired about the yearly maintenance expense beyond the initial $35,000 investment. Coletta figured it only cost about $1,000 per year. He “was kind of surprised” that he received only two responses to the request for proposal (RFP) for the project.
Mayor FitzGerald described the project as a “nice affordable step to see how it goes.” He said it was the “most high-profile thing we could do” and “made more sense” to do it along that stretch of Detroit because of its on-going development.
Councilperson Antonio called the proposed location a “great idea.” Councilperson Powers also approved of the idea behind the wireless Internet corridor project. “It’s almost a cool thing to tell people,” he said. “It might be a nice business attraction.”
“It’s not a high speed network,” Coletta said, “But it does appeal to younger people.”
The general sentiment in the room was that a full city-wide wireless network wouldn’t be a good idea because of its cost and the fact that other cities have had difficulties successfully implementing such a system.
Coletta is also working a on a master database that will contain up-to-date information on properties in Lakewood. The information is currently stored in several different databases. Mayor FitzGerald called the project “one of the most critical things we need to do.” The database is still in the early planning stages and no cost has been established.
Council will vote on the budget on December 22nd. Councilperson Dever is “adamant” about including mandatory recycling as part of the proposed refuse program.
A couple members of the public spoke. One guy who works at Ernst and Young said they use Novell and it constantly causes problems. A 23-year-old Albanian who has lived in Lakewood on Rosewood for 12 years said he’d rather have wireless Internet access in the parks than on Detroit. Coletta agreed, “Parks are one area we should look at.”