Finance committee reviews ODOT escrow plan, revolving loan structure; approves minutes and executive session

Fostoria Finance Committee members approved digital minutes and heard finance staff outline two near-term cash moves affecting the city’s accounts: placing $933,000 into an escrow to allow ODOT to release bids on the 23 South project and funding a $750,000 deposit to a revolving loan fund managed by the Fremont Economic Development Corporation.

The finance director told the committee, “Update of where we're at, 2024 is closed. I'm now in the process of getting the reporting around, state auditor Cindy has looked at it from her perspective and said okay to close. We'll be issuing W-2s and 1099s either late this week, very early next week.” The director said members would receive full 2024 reports at the next finance committee meeting.

Why it matters: the escrow for the ODOT 23 South project requires the city to fund its $933,000 share before ODOT can release bid packages. The finance director explained the escrow approach will allow the city to recover any reduction in its share if bids come in below the engineer’s estimate without waiting until the end of the project.

Committee discussion summarized several practical details about the escrow arrangement. The finance director said the escrow would be a short-term account — “only going to be open for about 6 weeks because once they get the bids, they draw out our portion out of that escrow and they hold it” — with a worst-case of about eight weeks if additional funds are required because an engineer’s estimate proves low. The director described outreach to local banks to administer the escrow: Huntington Bank is frequently used for similar ODOT escrow accounts in Columbus; Premier Bank declined to administer the transaction directly without running it through its trust department (which the director said would have cost about $7,000); and Sutton Bank agreed to handle the escrow.

The committee also discussed the structure of payments and fees for the revolving loan fund. A committee member asked for clarification on why the Fremont Economic Development Corporation (FEDC) would receive interest from EIDL-derived funds. The finance director said FEDC administers loan inquiries and performs initial screening; interest on the idle cash in the fund has been used to pay FEDC for that service in the past. The director confirmed the loan balance will be kept in a separate STAR Ohio account and said the city planned to move money “tomorrow” to meet a planned funding schedule that includes funding the loan on Thursday.

The finance director projected the two upcoming transactions — the $750,000 deposit to the revolving loan fund and the $933,000 escrow deposit for the ODOT project — would reduce the city’s cash balance by about $1.7 million over the next week to week and a half. The director cautioned that if the engineer’s estimate is too low, the city could receive an additional invoice requiring more funds to be placed into escrow.

Votes at a glance

- Approval of digital minutes: motion made and seconded; roll call recorded Mr. Podak: Yes; Mr. Cassidy: Yes; Chair: Yes. Outcome: approved.

- Motion to enter executive session for personnel matters (to consider appointment, employment, dismissal, discipline, promotion, demotion, or compensation of a public employee or official): motion made and seconded; roll call recorded Mr. Cassidy: Aye; Mr. Podak: Yes; Chair: Yes. Outcome: approved; committee entered executive session at 05:37.

What’s next: staff will provide full 2024 reports at the next finance committee meeting and will proceed with the short-term fund transfers described for the revolving loan deposit and the ODOT escrow.