CPA contract awaits mayor’s signature as finance director reports roughly $31 million in general-fund reserves

Cleveland Heights’ Finance Committee on Jan. 14 was told the city’s independent CPA engagement is formally passed by council but still awaiting the mayor’s signature, and the acting finance director said preliminary closing numbers show roughly $31 million in unencumbered general-fund reserves at the end of 2024.

The CPA contract — described in committee discussion as approved by council and requiring signoff from the law department, the accounting office and the mayor — is “sitting on the mayor’s desk,” Committee Chair Gail Larson said during the meeting. Larson asked at the outset, “Do we have an agreement signed by the mayor so we can proceed?” The mayor later replied at the meeting, “Sign and send back to the law,” indicating the administration was prepared to finalize the paper work.

Why it matters: council members said the CPA review is intended to provide independent advice while the city finalizes its 2025 appropriations ordinance and year-end accounting. Acting Finance Director Mark Fowles (at the meeting) told the committee he expects to publish final end-of-year balances to council by the Jan. 21 meeting and that the numbers will inform deliberations on the budget the administration introduced for 2025 (Appropriations Ordinance No. 11, 2025).

What the committee heard

- Contract and communications: Committee members discussed how the CPA firm should be engaged once the mayor signs. Councilors agreed they want transparency on questions sent to the CPA and their answers; the group proposed copying the full committee on email queries and asking the firm to “reply all” so committee members can see both questions and responses, while avoiding “reply all” among council members to prevent inadvertent quorum communications. Committee members also discussed appointing a single funnel or point person for communications but emphasized the firm’s answers should be visible to all committee members.

- CPA access and timing: The committee was told the CPA contact, identified in committee remarks as Frank Ike of the firm (referred to in the meeting as Achiuti and Panicky), has reviewed preliminary materials but needs a signed agreement to proceed officially and to meet with council. Members said the firm was expected to engage in early January but that schedule slipped while awaiting signatures.

- Year-end fund balances and reserves: Fowles presented preliminary end-of-year estimates and the budget outlook for 2025. Key figures discussed in committee: an estimated unencumbered general-fund balance of about $31,000,000 for the end of 2024, compared with an earlier internal projection near $21,000,000; the administration’s proposed 2025 budget shows general-fund expenditures near $58,000,000 and an expected general-fund reserve around $32,000,000 under current assumptions. Fowles also said the Government Finance Officers Association (GFOA) guidance suggests a general-fund reserve near 16.7% of expenditures; by that metric the city’s reserves are well above guidance.

- Capital and sewer funds: The acting finance director reported Fund 402 (the city’s capital projects/finance capital fund) began 2025 with roughly $9.5 million unencumbered and, combined with appropriations already proposed in the ordinance and other anticipated capital funding, the city could have roughly $22–23 million identified for capital investment in 2025. Fund 602 (sewer fund) was reported with approximately $11.3 million unencumbered and a projected 2025 year-end unencumbered balance near $15.8 million under current budget assumptions.

- All-funds totals and special revenues: The administration’s introduced appropriations package lists roughly $95,899,000 in all-funds expenditures for 2025 and the committee was told the city’s all-funds unencumbered balance is currently in the range of $81–83 million (roughly an 80% reserve relative to the introduced all-funds expenditures). Fowles and councilors noted special timing effects (for example, ARPA receipts and the timing of grant recognition) that affect how some funds may appear in single-year comparisons.

- Budget documents and next steps: The finance director committed to publishing updated end-of-year financial reports (October–December 2024) and making them available to council by the Jan. 21 Committee of the Whole meeting. Committee members asked for: the end-of-year fund-balance schedules; bank reconciliations; the schedules that underpin 2025 revenue estimates (property tax, local income tax, TIF proceeds and grants); department-level totals and cross-fund schedules for shared costs (for example, hospitalization/benefits); and a list or total of wages covered by bargaining-unit contracts (the director said aggregated totals could be provided).

Votes, motions and formal actions

- Independent CPA engagement: Committee discussion identified a council-passed piece of legislation authorizing the city to engage an independent CPA firm. Committee members said the law department and accounting office have signed, and the item is awaiting the mayor’s signature. (Motion text, mover/second and vote tally were not specified in the transcript.)

- Appropriations Ordinance No. 11, 2025: The administration said it has introduced an appropriations ordinance for 2025 (referred to in the meeting as Ordinance 11, 2025). The document was presented to committee members as the administration’s recommended package; council retains authority to amend or adopt the ordinance. (Introduction was stated; no final council vote was recorded in the transcript.)

Context and caveats

Committee members repeatedly asked for clarity rather than lengthy justification on numbers, and staff said they want to avoid publishing preliminary figures that later require revision. The acting finance director emphasized the difference between “end-of-year financial reports” and the materials that appear in a budget book, and he said some of the variance in year-over-year tables reflects amendments or timing of revenue recognition (for example, TIF and ARPA receipts).

What’s next

Committee members set a schedule to receive updated year-end financials by the Jan. 21 Committee of the Whole meeting and discussed reconvening the Finance Committee the week of Jan. 23 if needed. The CPA firm will meet with council or the committee once the mayor signs the agreement and the law department clears the contract. Members also asked the administration to provide: bank reconciliations, the revenue build schedule underpinning 2025 assumptions, department-level schedules that show cross-fund personnel costs, and an aggregated total of wages for bargaining-unit employees for council planning.

The committee’s discussion made clear the CPA engagement and the final 2024 closing numbers are linked: the CPA will advise on budget and financial reporting once their engagement is formally executed, and council expects the updated reports to inform final action on the 2025 appropriations ordinance.