Council committee forwards $18.7 million supplemental to replenish programs, cover arbitration awards and boost healthcare reserves

CLEVELAND — Finance officials told the committee that stronger-than-expected ambulance-billing collections have created room for a supplemental ordinance that restores previously reallocated funds and pays for contract and court-ordered obligations.

Ordinance No. 598-2025 would appropriate $13,000,688 to the general fund and $5,000,000 to the internal service (healthcare) fund for a total of $18,688,000. Finance said third-party billing contractor QMC has substantially outperformed earlier expectations and that QMC’s fee (4% of collections) will require added budget authority as collections increase.

The ordinance would fund multiple items, the finance director summarized: refund $5,000,000 to the Minority Business Credit Enhancement project (a promise to council), replenish a $2.2 million transfer for prior NEF reconciliation, add roughly $500,000 for five full-time positions in the Department of Law to staff an added prisoner booking shift, add $115,000 for a Workday support employee in Accounts, fund $1.2 million to cover QMC’s fees as collections rise, add two IT positions and support for software implementation ($100,000), reimburse $3.1 million for Fire promotions retro by court order, provide $800,000 for arbitration awards with the CARE bargaining unit, fund two DOJ analysts ($170,000) required by consent decree, and restore $418,000 to community-development programs (including $350,000 for the neighborhood marketing program and $68,000 for the Sprouts demolition program). The ordinance also includes $20,000 to retain a part-time economic development employee previously grant-funded. Finally, the ordinance increases the City’s prescription fund by $5,000,000, raising the prescription line from $25 million to $30 million; the broader healthcare fund is budgeted at approximately $103 million for the year.

Council members asked detailed questions. Finance said the $1.2 million to cover QMC fees is needed because collections are arriving sooner and in larger amounts than projected, so vendor fees must be paid as collections come in. On the $5 million prescription increase, finance staff explained the change reflects a new rebate model under the city’s pharmacy benefit manager and timing of rebate payments; staff characterized the change as a cash-flow and contract-timing issue rather than a permanent run-rate increase. Council members requested more information on high-cost prescriptions, claims trends and the upcoming RFP for pharmacy benefits.

Council members also asked about payroll, succession and whether additional supplemental ordinances will be needed later in the year. Finance said some revenues are overperforming and some underperforming and that another supplemental at year-end is possible.

The committee passed the ordinance and forwarded it to full council. The May 19 discussion included detailed line items and follow-up questions that administration staff committed to provide to council members.

Quoted material and figures are taken verbatim from the May 19 committee transcript.