Commissioners Give Departments 30 Days to Return Money Taken from ARPA Account
Board of County Commissioners (BOCC) Special Meeting - October 10, 2024
Meeting Details: The Board of County Commissioners (BOCC) met on Thursday, October 10, at 2 pm for a special meeting at the County Administration Building, 12611 Ravenwood Drive, Room B303, Chardon, OH. The meetings are in-person only, and there are no recordings for the public. An agenda is available in advance via request to the Commissioners’ Clerk and at the meeting. Items discussed at the meeting but not on the agenda are addressed at the end of this report.
Public Comment Policy: Observer Comment: Commissioner Ralph Spidalieri announced at the end of the April 4, 2023 meeting that public comment would be permitted and that a more formal policy would be forthcoming. There has been no formal policy introduced and there was no public comment permitted today.
Attendance: Present were Commissioners Timothy Lennon, Ralph Spidalieri and James Dvorak. Also present were Finance Manager Adrian Gorton and Commissioners' Clerk Christine Blair. County Administrator Gerry Morgan and Assistant County Administrator Linda Burhenne both were absent.
County Representatives: No other county representatives spoke during the meeting.
Others in Attendance: Frank Antenucci, Chief Deputy Administrator, ADP; Sheriff Scott Hildenbrand and Chief Deputy Sheriff Thomas Rowan; Carolyn Brakey, Geauga Health Board member and candidate for Board of County Commissioners; Reba Dykes, Geauga Mental Health and Recovery Board; Jessica Boalt, Director, Office on Aging; James Flaiz, Prosecutor, and members of the press, the public and this observer.
The Pledge of Allegiance was recited and a prayer was offered by Mr. Dvorak.
Minutes: No Minutes were presented for approval. Observer Comment: Weekly LWVG Observer Reports for BOCC are available online through October 10, 2024, for informational purposes but are not substitutes for approved minutes. Approved BOCC Minutes are posted online here through August 29, 2024.
Administrator’s Report: None
Financial Report:
Mr. Gorton reviewed the following resolution passed on July 30, 2024:
NOW, THEREFORE, BE IT RESOLVED that the Board of Commissioners approves the use of the $10 million (standard allowance) from the ARPA fund to pay for the salaries and benefits of employees and elected officials providing government services within the offices of the Auditor, Clerk of Courts, Commissioners, Coroner, Engineer, Prosecutor, Recorder, Sheriff, Treasurer, ADP, Building Department, Board of Elections, Public Defender and the Veterans Commission.
Observer Note: At the October 8, 2024 Meeting there was a discussion initiated by Mr. Gorton about this resolution. See LWVGeauga October 8, 2024 report for more information.
Mr. Gorton said that after doing a routine check of payroll, he noted that since August a number of departments' payroll funds that are outside the General Fund had been apparently paid from the ARPA fund". This included: the Auditor’s ADP Contract Services Fund and Real Estate Assessment Fund, the Clerk of Courts’s Certificate of Title Administration Fund, the Engineer’s Road Maintenance Fund, the Prosecutor’s Office’s Victim Witness Fund and Delinquent Tax Fund, and the Treasurer’s Delinquent Tax Fund. These are all payroll funds that are outside the General Fund. Mr. Gorton did a quick check and said that roughly $447,530 was being taken out of the ARPA (American Rescue Fund Act) Fund for these payroll funds that are outside the General Fund every month, and he said that since August roughly $1 Million had been taken out from Funds outside the General Fund. Reviewer Note: This is an issue because the Commissioners’ budget had planned for the $10 Million of ARPA money to fund salaries normally paid for by funds inside the General Fund. This in turn would free up $10 Million of General Fund money to help pay for the County Courthouse Expansion project. The solution proposed by Mr. Gorton was that the Commissioners needed to pass another resolution to specify that only payroll funds that were inside the General Fund should use the ARPA account for payroll. He said that a total of $2.5 M would be taken out of the ARPA fund if they didn’t stop the process, leaving $7.5 Million to be withdrawn of the total $10 Million. He also said there should be a discussion about whether those funds (outside the General Fund) should be compelled to be transferred back to the ARPA fund.
Mr. Lennon said that originally they had been told that they could use the ARPA account for the Courthouse expansion project, but then they were told that they couldn’t use ARPA funds to “satisfy a court judgment” and needed to use the ARPA funds for payroll, thereby freeing up General Funds for the Courthouse Expansion. He said he was okay with doing that and understood the reasons. He said “I was always under the impression that this was to pay for ‘General Fund (salaries) only.’ ” Mr. Gorton agreed that this was exclusively his conversation with the Auditor’s office to use Funds from within the General Fund.
Observer Note: See July 30, 2024 LWVG Report for information on the Resolution that authorized the use of ARPA funds for payroll.
Mr. Gorton said that after the July Resolution, the first payroll withdrawals were in August. He said once he noticed the issue, he reached out to the Auditor’s Office and discussed it at the October 8th meeting but he didn’t hear back until today. Mr. Gorton reported that the Auditor’s Office said that “the wording of the original resolution left it ambiguous as to which payroll funds from those departments listed could be used for ARPA money.” Mr. Gorton said that no outside the General Funds payroll accounts were used by the Sheriff’s Office. He further said that there were many salary line items in the Sheriff’s department that come from Funds outside the General Fund, but that they did not use the ARPA funds.
Mr. Spidalieri asked what would happen to those departments and the $1 Million. He wanted to know if the Commissioners would have the legal ability to reach into those funds and transfer these funds back.
Mr Gorton responded that those departments that utilized outside General Funds accounts would end up at the end of the year with unappropriated balances due to the money that would have been used to pay for payroll but was not because ARPA money paid for it instead. He added that the money would accumulate, along with the fees and other income that make up those funds. He said that the Commissioners would still have the ability, if these departments attempted to use these unappropriated balances, to review those requests at public session.
Mr. Lennon asked if there was a request to move money out of the General Fund to the Capital Reserve Fund Phase II (Courthouse expansion). Mr. Gorton had said that the request for a $10 Million certification was denied by the Budget Commission. He continued to say “the Budget Commission did not want us to ‘claw back’ appropriations from the various departments in order to pay for the Courthouse expansion.” He said he is “playing a wait and see approach” to see if there is enough money to pay construction bills that come in before the end of the year. Mr. Gorton said so far he has been able to pay the construction bills, but he is anticipating a large pay request on the Courthouse expansion and will need to transfer money out of the General Fund in order to keep things rolling. He said that the original plan to fund the Courthouse expansion was $8 Million from the Capital reserve Fund and $10 Million from ARPA. He said that the Auditor decided that using this money for the Courthouse would not have been allowed because it was money “used to fulfill a court settlement,” which is not permitted by ARPA.
Mr. Gorton said they thought they were on the same page with the Auditor’s Office. Mr. Gorton said that he knew there was a question of why he didn’t notice sooner. Mr. Gorton said, “Payroll is within the Auditor’s oversight,” and he continued, “I do check those (payrolls) periodically…." and when he discovered the issue, he immediately reached out to the Auditor’s office. Mr. Gorton said he had not heard back from the Auditor until that day.
Mr. Lennon said that he appreciated Mr. Gorton checking on this and bringing it to their attention. Mr. Lennon said: “That was unfortunate that communication was not forthcoming.”
Mr. Gorton recommended two Resolutions, as follows:
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To add wording, “from within the General Fund only,” which clarifies that no ARPA funds should be taken for payroll for funds that are outside the General Fund. This is an amendment to the July 30 resolution. Observer Note: See July 30, 2024 minutes here for the full original resolution.
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To require departments to return funds that were used from the ARPA account for payroll if they were taken from Funds outside the General Fund and to do this within 30 days.
Mr. Lennon asked again about what would happen with the $1 Million deficit. Mr. Gorton said if they took this action now, he felt he could find the $1 Million to make up the difference in the General Fund. However, if they waited, it would have been a $2.5 Million deficit, and that would have been more difficult.
Mr. Spidalieri said he had a hard time with this since he felt that they had been communicating that they had been banking on the $10 Million ARPA money for the Courthouse project. He said it was never their intention to do anything else. He said that the Commissioners have granted raises in the last several years to reward employees. He said they have “... made a lot of commitments and good faith positioning to work with some of these elected officials.” He concluded that: “Ultimately it is the Auditor who is directing this and doing this and … I hope they are going to do the right thing.” He said if these departments did this to have extra funds at the end of the year “that is not what we’re supposed to be doing with taxpayer dollars.” Mr. Spidalieri said that, “my request is to make this right.”
Mr. Lennon said, “I think the intent of our original resolution was clear as to the intent. It is disingenuous as to what is happening.”
Mr. Gorton said, “I think it was clear that it says in the last paragraph ‘general fund’.” He admitted it was not explicit above in the resolution when it talks about the departments, but “it does mention the General Fund” in the last paragraph. Mr. Gorton said “the argument has been made that it wasn’t explicit which is why we created these (resolutions).”
Mr. Spidalieri asked both other Commissioners, “Have you heard otherwise about the $10 Million coming from ARPA?” They both agreed that it was their understanding that the $10 Million would come from ARPA for the Courthouse.
Mr. Gorton also said that the Resolution says Salary and Benefits, but that no hospitalization payments had been withdrawn from the ARPA fund. He said it might be a function of reconciliation, but he has reached out to the Auditor to make sure those hospitalization amounts are coming out of ARPA. He said that he has received no response on that question.
Mr. Dvorak confirmed that the language about salary and benefits was in both resolutions and Mr. Gorton said it was.
Mr. Lennon said, “We need to get this thing back to Square One.”
Mr. Gorton read the entire text of the Resolutions, which is similar to the July 30 resolutions with the exception of the clarifying language inserted in the new resolutions.
Both resolutions passed unanimously.
Observer Note: County Prosecutor Jim Flaiz, who attended the Special Meeting, said to this Observer after the meeting that there were certain funds outside the General Fund that could not legally “return” the ARPA money used for payroll. He said the largest such amount seems to be from the Engineer’s Office.
Public Comment: None
Meeting adjourned at 2:42 pm.
More Information and Posted Minutes: Available here.
Next Regular Meeting of the BOCC: The next BOCC meeting after this one is Thursday October 17, 2024 at 9:30 am. This is a change from the normal Tuesday meeting time due to the Columbus Day Holiday on Monday. After October 17, BOCC will resume Tuesday meetings at 9:30 am on Tuesday, October 22, 2024
Observer: Gail Roussey
Editor: Carol Benton
Reviewer: Sarah McGlone
Date Submitted: 10/18/2024
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