09/17/2024 Meeting Minutes - Laserfiche WebLink

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Our Rita income tax collections are down, through August, by $700,000.00 citywide. $490,000.00 of that goes directly to the General Fund. Our job creation grant, and school income tax sharing requirements with the Industrial Parkway, and the new tenant in Great Northern have not been calculated, the effect of that has not been calculated in yet. Commute Air which is one of our largest employers, as I had provided for you in the packet of information last week, they're leaving in 2025. Our interest income, while interest rates have been high, has sustained us. It's been valuable help to sustain our increased costs, and are declining revenue. But it's going down. It's anticipated that tomorrow the Feds will reduce our borrowing rate by .25 to .5 basis points. The market has already factored that in some extent, and it's going to continue to go down. On the bright side, that does help us in how much we pay for borrowing costs. Additionally, we've discussed the end of Federal Covid Era spending, where fewer grant dollars are going to be available. One of the greatest concerns to me as a Finance Director, looking across our City, and I'm sure to everybody, is the state of our mall. Macy's has opened in Crocker Park, and we are unclear what that means to the City. Macy's owns its own parcel; but again, that means if they will sell it, and they have the right to sell it, the mall does have some approval rights over and above that. But we don't know what that impact is going to be to our City yet. The mall ownership also has some significant financial hurdles coming up in 2025 with its own bondholders. In general, the impact of online retail continues to be a question to quantify the future of a mall, and all the strip plazas. Rafi Auto recently purchased land in Avon, also one of our largest employers, and we have not been notified that they are leaving. However, they currently lease the property on Lorain Road where their high-end dealerships are. They have wanted to own, which was part of their effort into trying to redevelop the Sears property and work with the property, and that was unsuccessful. So that will leave that, and they're moving on to another endeavor which will leave the Sears property and parcels also in question. The economic development CRA deals that we've already made haven't been impacted yet because it's in arrears; and as they're building, it's not until there's a certain level that it's occupiable, that those CRAs start taking into effect. So there will be additional reductions to include because it goes back to the year when it started. So these dollars that we're collecting, some of those will be going back and being refunded. The Lorain Road parcels being added to the Great Northern TIF, will take two years at least to finalize by the State and the County, which also will be retroactively applied, and negatively impact future collections at that time, and I did try to factor out the effect of the TIF. That's why my dollars, and also the collectability of property taxes, were slightly lower than what Mr. Glassburn had quoted as the Plain Dealer number. The County Board of Revision appeals process doesn't even start until January, and it goes through March for the applications. Then it's retroactively applied to the property tax. This process can also take two to three years, depending on how many appeals are filed. All successful appeals will be retroactively applied, and negatively impact future collections. The increased cost impact of all services that the City has provided and continues to provide, one large dollar amount that's going to be changing, that is already going through legislation down at the State, is the employer share of contributions for 09-17-24 Council Meeting Minutes - Page 4