Shaker Heights Peforms Budget Cleanup, Transfers Funds

Shaker Heights City Council has approved 24 operating funding transfers as part of what finance director Bob Baker termed the city's annual "budget cleanup."

In each case, a transfer comes from one department to another and is needed to pay outstanding costs. They are the result of employee transfers between departments, unexpected grant money and unanticipated charges during the budget year. While many of the transfers deal with recent items, Baker said that audits have revealed advances between funds, some a decade old, that should have been repaid.

To display how often budgets change, Baker pointed out that this was the 11th amendment  of the budget presented to council this year.

"Normally, there's two or three items, at most, in one of these amendments, but then we get to the end of the year," Baker said. "(A budget cleanup ordinance) makes sure there's enough money to pay for all of the expenses in the right departments."

Oftentimes, when a new fund is created, the city will approve a transfer from the general fund because the new fund needs money. The thought is that it will be repaid back to the general fund in the future.

"The future can go on for years and years and years, and people forget," Baker said. "It fortuitously turns out that all of the transfers (made during the most recent council meeting) from the general fund to another fund are balanced by the payments from the other funds back to the general fund."

An example is leftover money from the city's fund for winter salt back to the general fund.

The transfer that garnered the most discussion that evening was an appropriation in the city's economic development fund for a $70,000 grant to assist Cellular Technologies Limited.

Council first authorized a storefront renovation grant for the company, at 20521 Chagrin Blvd., in 2006. The biotech company had just moved to the from University Circle. The firm approached the state for a job creation grant, but the state required a local match.

CTL should have requested the grant money after the completion of the first part of its project in 2008, economic development director Tania Menesse said. The second part was to have been given to the company if it completed a 9,000-square-foot expansion of its building. That project was completed earlier this year.

The company didn't request any of its grant money until recently. The business has grown from 10 to 60 employees since moving to the city, Menesse said.

"They're one of our largest businesses, and one of our largest income tax producing businesses in the community," she said. "In less than two years, they will have paid off the amount of this grant in income taxes."

Though the grant was paid for six years ago and Mayor Earl Leiken said CTL was a "magnificent" business that is often highlighted as the city's best, alongside Equity Engineering and University Hospitals, others said the grant process should have been more clear.

Without disputing that the company deserved the grant, councilman Rob Zimmerman said council should explore a "sunset" on such grants. He brought up regarding a grant to the Ludlow Community Association.

Still, nobody disagreed with the value of aiding a top performer in the city.

"(CTL is) just the kind of business we want to encourage in Shaker Heights," Leiken said. "It's often said we don't have a strong enough tax base. If we had more businesses like CTL, we'd have a very strong commercial tax base."

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