October 25, 2021
COUNCIL MEMBERS PRESENT:
S. Marmarou, (in person), D. Reed, L. Sihelnik, J. Cepeda-Freytiz, M. Ventura, M. Goodman-Hinnershitz, J. Waltman (electronically)
L. Kelleher, (in person), S. Smith, S. Rugis, J. Long, F. Lachat, A. Amoros, M. Rodriguez, W. Stoudt, J. Kelly, R. Tornielli, C. Turtell, F. Denbowski, J. Abodalo, I. Litvinov (all electronically)
The meeting was called to order at 5:04 pm by Mr. Waltman.
- 2020 External Audit
Ms. Rodriguez introduced Mr. Turtell from Herbein & Co to present the 2020 external audit.
Mr. Oppenheimer arrived at this time.
Mr. Turtell reviewed a Power Point presentation of the audit. He stated that the City received an unmodified, or clean, audit and that City operations and financial reporting are much improved.
The audit shows the City ended 2020 with:
• $2.4 million surplus
• $34,969,742 general fund balance with approximately $4.9 million assigned
• $30,665,239 unassigned funds in the general fund
Mr. Turtell stated that the City is in a strong position and has worked hard to clean up old items on its balance sheet. He stated that the City has consistently exceeded the minimum $22 million fund balance and is in position to exit Act 47.
Mr. Turtell stated that the City has $6,254,600 available in the liquid fuels fund and $16,817,152 million available for capital projects. He explained that the contribution to the City from RAWA has increased due to the Boyertown Power Plant project and stated that the City is nearing completion of construction at the waste water treatment plant (WWTP).
Mr. Turtell explained that when pension funds are considered the City is in a $123,241 deficit position that rises to approximately $30 million when including pension and other post-employment benefits (OPEB). He stated that all three of the City’s pension funds are now funded over 70% and stated that OPEB expenses are approximately $67,364,031. He explained that $1 million has been set aside in a trust in order to assist with pension funding as needed and he suggested that this $1 million be invested in order to earn interest.
Ms. Rodriguez questioned if investing the $1 million was advisable. Mr. Turtell expressed the belief that investing is advisable rather than having this money sitting in a low or no interest bearing account.
Mr. Turtell stated that the PennVEST drawdowns have been reduced since the WWTP construction is near completion. He stated that the first COVID relief funding was received by the City also occurred in 2020.
Mr. Turtell stated that this is the cleanest audit the City has had for the last 5 – 10 years. He stated that the audit tested several federal award programs with no findings. He expressed the belief that this is a big step forward.
Mr. Turtell stated that the one remaining finding is untimely reconciliation. He stated that reconciliation is occurring but that too many adjustments are needed at year-end.
Mr. Kelly questioned if the audit results could be attributed to Finance staff.
Mr. Turtell stated that the consistency and quality of Finance, CDBG, and Public Works staff all contributed. He stated that reports are being filed timely and properly.
Ms. Rodriguez thanked Mr. Oppenheimer and the entire Finance team.
Mr. Turtell stated that great progress has been made and he is comfortable with the City computing its lost revenue for ARPA reporting. He stated that the first reporting period has been delayed by the US Treasury Dept.
Ms. Goodman-Hinnershitz thanked all for their work. She stated that this has been a long journey but that the team is pulling together. He stated that much work and effort has been done behind the scenes and that she appreciates that. She stated that most residents don’t have any idea of the details needed and that she is very proud. She noted the need to stay on track and sustain these efforts.
Mr. Turtell stated that the City still has issues with grant processing and that there are times when grants cannot be utilized due to a lack of communication. He stated that the City has a new grants coordinator and Mr. Kelly must be sure that she understands the many pieces of grant administration.
Mr. Waltman also commended Mr. Turtell and Ms. Rodriguez for their work. He suggested that anyone who wants to have an in-depth conversation about the audit speak directly with Mr. Turtell or Ms. Rodriguez. He stated that the City manages very valuable assets and that it relies on the audit to keep itself prudent. He stated that he is excited to see progress in the pension numbers.
Ms. Rodriguez thanked Mr. Turtell for his work. She expressed the belief that it is key to plan ahead and noted that the external audit requires teamwork.
Mr. Turtell noted the good work of the Audit Committee with addressing audit findings. He recommended that those with questions can also attend Audit Committee meetings.
Mr. Waltman also noted the role of PFM’s important financial guidance.
Ms. Sihelnik thanked Mr. Turtell and noted her excitement at this good news. She noted the need for open communication. She thanked Ms. Goodman-Hinnershitz for serving as Council’s liaison to the Audit Committee. She expressed the belief that cleaning the balance sheet will allow the City to be better focused. She noted the opportunity to increase sewer funds through updated inter-municipal agreements. She noted that the City must understand its key deficits when exiting Act 47 and noted the need to sustain positive momentum. She noted the need to increase federal grant awards.
Ms. Reed thanked Mr. Turtell. She noted her relief to see positive change. She stated that Mr. Turtell is a pleasure to work with and she noted that City employees are showing their expertise.
Mr. Marmarou thanked all for an excellent job.
Mr. Turtell left the meeting at this time.
- Community Development Budget
Ms. Goodman-Hinnershitz stated that an updated budget spreadsheet was distributed this afternoon.
Mr. Kelly stated that Community Development is tab 11 in the budget binder. He screen shared the spreadsheet.
Mr. Kelly stated that abatement has increased to $100,000 and contracted services has increased to $30,000 in Property Maintenance. He stated that more aggressive property enforcement is planned and additional firms to perform clean-ups are needed.
Mr. Abodalo noted his frustration that this is his Department but he has no voice.
Ms. Cepeda-Freytiz questioned why Mr. Abodalo is not making this presentation. Ms. Goodman-Hinnershitz explained that Mr. Kelly has been leading the review process and Dept Directors are available to answer questions as needed.
Mr. Kelly stated that the increase in conferences and training is due to the training needed for the lead abatement program.
Ms. Cepeda-Freytiz questioned the need for the increase in abatement and contracted services.
Mr. Kelly stated that more aggressive enforcement, abatement and education are planned.
Mr. Abodalo stated that the mission is to address property maintenance issues. He stated that improvements began in 2020 and the 2021 abatement funding has been used. He stated that an increase has been requested for 2022 to address nuisances. He explained that the City needs more than one contractor to perform clean-ups and will also need assistance from Law to address how to remove items from resident’s backyards.
Mr. Abodalo explained that there is only one contractor in 2021 and the City is at the mercy of their schedule. He stated that a new RFP will be issued in hopes of having several firms able to perform clean-ups. He stated that a public service announcement has been created to encourage neighbors to help the City make improvements. He stated that the Mayor has given prizes to properties that have made improvements. He offered to email more specifics if Council wishes.
Ms. Cepeda-Freytiz questioned why refunds would be issued. Mr. Abodalo stated that sometimes housing permit costs are overpaid. He stated that the number of refunds issued has been reduced due to better communication with Finance staff.
Mr. Kelly reviewed the Zoning budget. He stated that the increase in contracted services in this area is due to the need for assistance with plan reviews.
Mr. Abodalo explained that he does not have enough employees to process zoning and planning applications. He stated that Council amended the 2021 budget to allow a firm to assist with the reviews, which includes engineering to assist Public Works staff. He stated that this process is now fully functional. He noted the need to improve timelines and encourage additional City projects.
Ms. Cepeda-Freytiz questioned how much more quickly applications could be processed.
Mr. Abodalo stated that it would depend on the project. He expressed the belief that it would have moved the Super Natural Foods project forward three months sooner. He noted the need to show that the City is friendly and welcoming.
Ms. Sihelnik commended Mr. Abodalo for recognizing the bottlenecks in the process and addressing then. She stated that she has witnessed these delays and expressed the belief that there are still issues. She stated that development is occurring and the City needs to be prepared.
Ms. Goodman-Hinnershitz suggested that Department Directors also provide periodic updates to Council as the boards, authorities and commissions do. She stated that she will discuss this with Mr. Amoros.
Mr. Kelly reviewed the Trades budget. He stated that the increase in contracted services is for demolitions. He stated that these are generally unscheduled emergencies.
Ms. Cepeda-Freytiz questioned if ARPA funding could be used for demolitions. Mr. Kelly stated that this increase is in the general fund. He stated that ARPA funds have been earmarked for demolition and the ARPA fund discussion will happen at a future meeting.
Mr. Abodalo explained that there are two demolition programs – scheduled and unscheduled. He stated that unscheduled demolitions result from fire, roof collapses, etc. He stated that if the general fund goes over budget ARPA and CIP funding can be used.
Ms. Reed questioned the timeline for a demolition project. She noted her concern with the length of time this can take. Mr. Abodalo stated that he agreed with Ms. Reed’s concern. He stated that contractors don’t have enough manpower at this time and many bid requests have only one bidder at a high cost. He stated that when the project is re-bid the costs are even higher. He noted his hope to have multiple contractors.
Ms. Reed expressed the belief that demolition is critical in some cases. She stated that she would appreciate additional demolitions occurring and noted issues with 400 Tulpehocken St.
Ms. Goodman-Hinnershitz expressed the belief that these discussions are important but that they should not derail the budget review process. She expressed the belief that these items can be measurables when Department Directors provide reports to Council.
Mr. Kelly explained that when CDBG funding is used there are additional requirements in the bid process (cannot be used for emergency demolitions).
Mr. Kelly reviewed the CD Administration budget.
Mr. Abodalo stated that there is a reduction of $200,000 in contracted services since the Stantec report will be complete. He stated that staff will need to be flexible and that 22 additional employees are needed. He noted the need for new employees for SWEEP, lead abatement, and HHS grant programs and he noted his hope for additional Zoning and HARB employees. He stated that there are also three vacant positions in CD Administration. He noted the need to increase the pay rate to get qualified employees and stated that there is an increase in CD lead programs.
Ms. Goodman-Hinnershitz suggested a closer look at this budget and suggested that additional federal funding may be received by the City.
Mr. Kelly stated that the CDBG budget will be reviewed tomorrow evening and stated that some of these issues can be addressed at that time.
Ms. Sihelnik questioned if funding to implement the Stantec report is included in the 2022 budget.
Mr. Abodalo stated that some funding is included in ARPA. He stated that if Council adopts the Stantec Plan funding will be allocated beginning in 2023. He stated that some items in the study have already begun.
Ms. Cepeda-Freytiz questioned if the employees hired for specific grant funded programs would be temporary positions.
Mr. Kelly stated that they would be hired for the grant duration – two years.
Mr. Abodalo stated that there are two grants. He stated that the HHS grant began on July 1, 2021 and is for a two year period. He stated that Reading is the only City in PA to receive this grant. He stated that the lead abatement grant is for a period of three years and is $2.9 million. He stated that the goal is to remediate 150 houses over three years. He stated that the Dept of Health grant of $400,000 will also allow the remediation of an additional ten homes.
Mr. Abodalo stated that Reading has 35,000 dwellings and 80% of them were built before 1978. He noted his hope that after the initial three years that the City will receive additional grant funding. He stated that Property Maintenance Inspectors will lead the program. He stated that ten local contractors will be trained to do the remediation work.
Ms. Cepeda-Freytiz questioned where the addition of 22 employees is noted.
Mr. Abodalo noted the need for a Deputy CD Director, executive secretary, program manager, SWEEP employees, etc.
Mr. Kelly stated that many of these positions are not included in the 2022 spreadsheet. He stated that he does not understand Mr. Abodalo’s statement that 22 positions were requested.
Mr. Abodalo stated that he is working with a healthcare institution for the HHS grant employees.
Ms. Cepeda-Freytiz questioned if these would be part time employees. Mr. Kelly stated that he now understands Mr. Abodalo’s request. He stated that these employees will be temporary with the hope to make them permanent in the future. He stated that the additional employees are budgeted as part of Fund 32 and will be reviewed at tomorrow’s meeting.
Ms. Cepeda-Freytiz questioned where the Redevelopment Authority (RRA) is reflected in the CD budget. Mr. Abodalo stated that the RRA has its own budget. He stated that some CD staff assist the RRA but RRA has its own revenue.
Ms. Goodman-Hinnershitz stated that CD has many responsibilities and noted the need to not spread employees too thin and to get projects done timely. She stated that the lead program employees will also require management and supervision.
Ms. Cepeda-Freytiz questioned if the City receives revenue from the RRA. Mr. Abodalo stated that the RRA is not currently paying the City. He stated that the RRA plans to help the City abate blight and they are aggressively pursuing this. He stated that the land bank will be launched shortly and some owners are donating their property. He stated that eminent domain will also be pursued on several properties. He stated that the City cannot be left to fall apart.
Ms. Goodman-Hinnershitz stated that she will be unable to attend tomorrow’s budget review session.
- Council Solicitor
Mr. Waltman stated that Ms. Kelleher has provided a breakout of standard services and supplemental services. He stated that this has been reviewed by Mr. Lachat.
Ms. Kelleher reviewed the services in the salary and hourly categories. She stated that she estimates 78 hours per year to attend meetings and that this is included in the annual salary category. She stated that it will take approximately 10 hours for hearings and she stated that there is an average of four hearings per year. She stated that she has budgeted $50,000 for 2022 to cover these costs.
Ms. Kelleher stated that the annual salary is proposed at $35,000 and that the hourly rate will need to be negotiated.
Mr. Waltman requested Mr. Lachat’s opinion. Mr. Lachat stated that he reviewed Ms. Kelleher’s information and has no corrections.
Mr. Waltman noted his hope that the Council Solicitor would be appointed by the end of November.
He questioned next steps and how negotiation would occur. He stated that this topic will be discussed again next week.
- Redistricting Commission
Mr. Waltman stated that Ms. Reed must nominate an appointee.
Ms. Reed stated that her original nominee has withdrawn.
Mr. Waltman questioned next steps. Ms. Kelleher stated that the appointments can be made at the November 8 meeting. She stated that the Commission will then determine when and how to meet.
Ms. Reed suggested holding a special meeting on November 1 to make these appointments. All agreed.
Ms. Sihelnik questioned if there is a Council liaison to this Commission.
Ms. Kelleher stated that there has not been one in the past.
Mr. Waltman noted the need for the Commission to be an independent body.
Ms. Goodman-Hinnershitz agreed.
- Agenda Review
Council reviewed this evening’s agenda including the following:
• Public Comment
Ms. Kelleher stated that one person has registered to speak in person and one has registered to speak via Zoom. Both are on non-agenda topics.
Mr. Waltman questioned who would read this evening’s commendation. Ms. Sihelnik stated that she would be happy to read the commendation. Mr. Marmarou agreed.
• Award of Contract for the Southwest Fire Station project to Kinsley Construction in the amount of $138,742
Fire Chief Stoudt explained that the ramp slope at the Southwest Station is steep and has a drop off. He stated that the apparatus is twisting and slides in bad weather. He stated that CDBG funding will be used to replace the ramp.
• Award of Contract for the 9th & Marion Fire Station HVAC system to Shannon Smith in the amount of $1,026,120
Mr. Waltman stated that the other construction contracts were previously approved.
• Award of Contract for two fire pumper trucks from Glick Fire Equipment in the amount of $1,290,446
Chief Stoudt stated that CDBG funding will also be used for this purchase. He stated that engine 9 at 9th & Marion and engine 3 at 8th & Court will be replaced. He stated that since the City is paying 90% of the cost upfront it will save $40,000.
• Resolution authorizing the City to enter into an agreement with the County of Berks for consolidated fire and EMS dispatch services for 2022 in the amount of $390,692.24
Chief Stoudt stated that this agreement will formalize what already exists and there is no cost increase for 2022. He stated that future cost increases will be tied to the CPI.
Mr. Lachat stated that he drafted the legislation.
Ms. Cepeda-Freytiz questioned if this is an annual fee. Chief Stoudt stated that it is and that the agreement will continue until the City or County gives 90 days’ notice to cease.
• Resolution authorizing the reservation of $31,003.50 payable to the City of Reading or to PennDOT in the event the City does not complete the sidewalk work required for the 9th & Marion Fire Station project as required by the PennDOT Highway Occupancy Permit
Mr. Waltman questioned if the funding would return to the City if the City completes the sidewalk. Mr. Lachat stated that it will and that this resolution is required by PennDOT. He stated that the funding is held to pay PennDOT if the sidewalk is not completed.
• Ordinance amending Code of Ordinances Chapter 62 New Officers and Employees Pension Fund, Section 102 to prohibit the participation of new members where the employee is hired or rehired on or after January 1, 2022
Mr. Waltman stated that the Administration has requested this ordinance be tabled again this evening. Mr. Amoros stated that there is a question about vesting former employees.
• Ordinance authorizing the transfer of $29,717 from the Public Works Street Division budget to the Public Property Division budget to pay for the New Neco Replacement Duplex Water Pressure Booster Pump System at the Public Works Center
Mr. Rugis stated that this is the potable water supply for the Public Works Center. He stated that when the pump fails there is no water.
• Ordinance authorizing a budget transfer in the Law Department in the amount of $70,000 from Special Counsel Labor Negotiations to General Legal Services
Mr. Lachat stated that negotiations are complete but that other outside legal counsel is needed.
The meeting adjourned at 6:53 pm.
Respectfully Submitted by
Linda A. Kelleher, CMC, City Clerk