Cleveland City Council Hears Mid-Year Fiscal Update to Prepare for Operational Review Hearings to Address Clevelanders’ Needs

Sep 23, 2024

At its September 23 Caucus meeting, Cleveland City Council received a mid-year fiscal update from the city's Finance Department. Council requested this update to prepare for Operational Review hearings, which will be conducted in late October— early November, and to provide the members with financial details to prepare for February budget hearings.

The Finance Department provided updates on general, enterprise, and capital funds. These funds will cover the vast majority of costs associated with personnel, services, and capital needs.

Council President Blaine A. Griffin (Ward 6) stated, "We wanted to hear about and address some operational issues before our October Operational Review hearings. Today's fiscal update allows us greater insight as we request and deliberate on the line items in next year's budget to address the needs of Clevelanders."

An IRS arbitrage penalty levied against the city for $404,000 was among the issues discussed during the fiscal update. This penalty was imposed because interest income from capital bonds grew at a higher-than-expected rate and above what is allowable. Council learned this increase in bond interest income may be impacted by slower-than-expected spending and contracting to build, renovate, and repair capital projects throughout Cleveland.

Council also addressed the issue of delayed contracts and funding to local community development corporations and other non-profits.

To address these issues, Majority Leader Kerry McCormack (Ward 3) asked, "Do we need to bring in outside contractors to help get projects out of the door to deliver for the people of Cleveland?"

Councilman Kris Harsh (Ward 13) shared, "We're not getting money out fast enough to take care of resident needs – and that has some impact on the arbitrage payment made to the IRS. We have to do better in getting projects out the door."

This issue and many more will be addressed during Operational Review hearings.

Throughout the Operational Review hearings, City Council will examine various aspects of the city's operations, working closely with Departmental Chiefs and Directors to evaluate staffing, services, and capital needs and identify opportunities for service delivery improvements. In conducting these hearings, Council aims to optimize the allocation of resources and ensure that taxpayer funds are being utilized effectively and responsibly.

Council's Operational Review hearings will begin mid to late October. Council will share more information once the hearings are scheduled.