Cleveland Heights finance committee reviews 2025 budget materials, schedules follow-up meeting

Cleveland Heights finance committee members on an afternoon meeting reviewed year-end financial reports and the city’s draft 2025 appropriations materials, pressed staff for reconciliations of unencumbered fund balances and ARPA obligations, and scheduled a 5 p.m. meeting on Monday, March 3, to continue the discussion and place the appropriations ordinance on the March 3 agenda for additional reading (not final passage).

The materials delivered to the committee included October–December fund reports, unencumbered fund balances, quarterly financial statements, revenue and expense breakdowns for the general fund, and bank reconciliations. Finance Director Hairston told the panel that “we literally just finished this information this morning,” and said the reports were produced after significant year‑end work and IRS and payroll transitions that delayed posting some encumbrances.

The committee’s core concerns centered on reconciling the accounting reports and the timing of obligations. Committee members noted a December “unencumbered” amount that still showed roughly $3.4 million related to ARPA obligations that had been entered but not yet reflected in the system. Hairston and staff said the $3.4 million is a timing/ reporting artifact: the obligations exist contractually but the journal entries and system encumbrances have not fully flowed into the financial reports. Finance staff reported ARPA obligations totaling $38,817,062.

Members also asked why the city’s bank reconciliation showed a substantially higher cash figure than the aggregated unencumbered balances. Council President Tony Cuda and Councilor Bosch cited an approximate $110 million bank balance versus roughly $70–73 million in unencumbered fund totals and asked staff to produce an expense ledger and per‑fund reconciliation (excluding ARPA) to explain the $40 million gap. Finance staff said they would run detailed ledgers and provide pivoted worksheets for committee review.

Other substantive items discussed: - Personal services and benefits: Finance staff said the 2025 personal‑services budget is about $60.6 million (salaries and benefits); 2024 actual personal‑services spending across funds was reported near $52 million. Hospitalization (health benefits) was budgeted at roughly $17 million for 2025, compared with 2024 actuals in the $14–15 million range; staff said the 2025 figure is conservative and lower than an earlier proposed figure. - Capital and encumbrances: Committee members pressed on capital timing (public works showed large budgeted capital versus lower 2024 capital expenditures because many capital projects were encumbered but not spent). Staff noted that much capital spending is encumbered or tied to grant/ARPA timing and procurement backlogs. - Sewer projects and federal consent decree: Staff confirmed large encumbrances in sewer funds reflect ongoing, multi‑year capital work and that the city remains under a partial consent decree with federal regulators to correct Clean Water Act violations. - Reporting tools and systems: Committee members criticized the current report‑generation process (manual pivots from the New World system) and urged investment in report customization so consistent, auditable monthly reports can be produced without heavy manual manipulation. Finance staff agreed and said they are pursuing improved reporting tools.

To move the budget review forward while staff completes reconciliations, the committee agreed to meet at 5 p.m. on Monday, March 3, to continue review; the mayor and director will accept emailed or texted questions in advance and staff offered one‑on‑one walkthroughs of pivot‑table outputs for councilmembers. The committee asked staff to post updated fund summaries and to annotate online materials to show which figures are estimates and which are final.

What the committee did not do: Members did not take a formal vote on the appropriations ordinance during this session; placement on the March 3 agenda was agreed as a procedural step to allow additional public review and another committee meeting if needed.

Committee members and staff left with a list of follow‑up items: run and distribute an expense ledger (excluding ARPA), reconcile bank vs. per‑fund balances, complete journal entries to reflect ARPA encumbrances, produce a clearer non‑departmental table (hospitalization and other centralized lines), and produce a revised fund summary for posting. The finance director said staff and the city administrator will work with legal and auditors to ensure year‑end entries and federal reporting are completed.

The committee adjourned after confirming the March 3 continuation and the plan for staff to provide the requested reconciliations and pivoted worksheets.