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HomeMy WebLinkAbout05/02/2011 - Special Meeting 53:0084 ARCADIA CITY COUNCIL /REDEVELOPMENT AGENCY SPECIAL MEETING MINUTES MONDAY, MAY 2, 2011 7:30 a.m. Location: Police Department Community Room (EOC), 250 W. Huntington Drive CALL TO ORDER Mayor Kovacic called the meeting to order at 7:30 a.m. ROLL CALL OF CITY COUNCIL /REDEVELOPMENT AGENCY MEMBERS: PRESENT: Council /Agency Member Amundson, Chandler, Harbicht, Segal and Kovacic ABSENT: None PUBLIC COMMENTS (5 minutes per person) STUDY SESSION a. Report, discussion and direction regarding the Proposed 2011 -12 Fiscal Year Budget. City Manager Don Penman provided a brief overview of the current budget and the proposed 2011 -12 budget and explained PERS projected rate increases; he reported that the General Fund is projected to have a deficit of $1,574,816 for Fiscal Year 2011 -2012; that 77% of the General Fund is personnel and benefits related services; he discussed the 2.5% reverse priority list of possible cuts from each department; he noted that the 960 program will not be included in the 2011 -12 budget; he addressed one time monies used to balance the current budget i.e. $180,000 from the workers compensation fund, interest from the Capital Outlay and Equipment Fund and the Agency loaned the City $3.5 million which generated about $196,000 and $770,000 was generated in one time monies; he stated the interest earned in the Equipment and Capital Fund is not that significant; that Gas Tax money is being proposed to be transferred to the General Fund for maintenance which means there would be no Gas Tax program; that the fund balance in the capital outlay program is a little more than $2 million; and advised that money could be allocated from the capital program for the slurry seal project; and noted that the capital outlay fund is money from the race track which is Tess by about $175,000 due to the Toss of Oak Tree and another $20,000 to $30,000 in sales tax. He further reported that there will be a $1.1 million surplus which was not expected including some significant one time savings in personnel costs and contract services and that one time revenues helped balance the budget; and noted that historically there usually is a 1% savings in the general fund of about $470,000; and reported that there may be some movement toward a compromise regarding redevelopment money which is good news, but indicated that we should expect that money will be taken. Mr. Penman indicated that the budget does not include any costs of living expenses. Hue Quach, Administrative Services Director provided a brief summary of the 2010 -11 and 2011 -12 General Fund beginning and ending fund balances, estimated revenues and proposed expenditures; projected expenditures and savings; estimated revenue sources, general fund revenue year over year change; and major revenue projections; he noted a projected increase of approximately 2.5% in property tax, 1.75% in Transient Occupancy tax, 1% in Utility Users 05 -02 -11 1 53:0085 Tax and 2% in Business License Tax; and provided a brief summary of department General Fund expenditure increases and decreases; and provided a summary of proposed 2.5% department cuts and saving options. Mayor Pro Tem Harbicht expressed his satisfaction with last year's budget and recommended the City Council not consider or take any action on any of the proposed budget cuts at this time; that City's finances are in a good shape and explained that his only concern is employee negotiations and not knowing what the outcome would be after negotiations. Council Member Segal commented on the proposed department cuts and feels that residents would be upset if any cuts were made knowing the City has $22 million of unrestricted reserves; that he would not be willing to make any of the proposed cuts unless they were an operational decision made by Mr. Penman; he feels that the biggest line item problem is the $1.4 million in PERS increases and the $2.7 million in PERS reserves the City had put aside to deal with increases; he feels that cuts are not warranted at this time; he agreed with comments made by Mayor Pro Tem Harbicht; he commended the Department Heads, staff and Mr. Penman on doing an excellent job at a terrible time and advised that he is not prepared to discuss any of the proposed cuts at this time. Council Member Amundson also agreed with comments made by Mayor Pro Tem Harbicht and Council Member Segal and is also not prepared to discuss any of the proposed cuts at this time. Council Member Chandler also agreed with the comments made by the other Council Members; he commented that the City needs more revenue; that utility users' tax lowered from 7% to 5% 15 to 20 years ago and can be increased 2% without the vote of the people and feels that the City should consider an increase. Mayor Kovacic agreed with the overall analysis presented by Mayor Pro Tem Harbicht and Council Member Segal; and stated that he is not in favor of cutting street sweeping or tree trimming. Council Member Segal recommended that consideration be given to transferring $500,000 from the PERS Reserve Fund to the General Fund and then fund the Equipment Replacement Fund with the $500,000. Council Member Segal requested the consensus of two Council Members to discuss the role of the Chamber Executive Director which he feels may be a conflict. Council Members Amundson, Chandler and Harbicht agreed. At the request of Mayor Kovacic, Mr. Penman explained that the City gives $62,000 of subsidy money to the Chamber for programs and services; that the Chambers pays the City $400 per month for rent and the City maintains the grounds and at the end, it comes out to be a wash; he stated that the Chamber Director is on the Board of Arcadia's Best Foundation, the Library Board of Trustees and the Board of the Historical Society and questions have come up regarding the role as the Chamber Executive Director and the other boards he serves on in the City which may be a conflict of conflict. The City Council authorized Mr. Penman to write a letter to the President of the Chamber requesting clarification of the Chamber Executive Director's role and how it affects the other activities he is involved in and how the money the City provides to the Chamber is spent. 05 -02 -11 2 53:0086 At the request of Mr. Penman, Tom Tait, Public Works Service Director provided a status report of the City Hall Energy Efficient project; Sara Somogyi, Director of Recreation and Community Services explained the Bonita Park Synthetic Field project; and Hue Quach, Administrative Services Director reported on the Fiber Optic Connection Project at City facilities. Mr. Penman provided a brief summary on the next phase of the Asphalt and Concrete project. At the request of Mayor Kovacic, Carolyn Garner -Regan advised that interviews for the Director of Library and Museum Services are scheduled for May 17, 2011. Mr. Penman reported that the Police Chief recruitment closes May 5, 2011. At the conclusion of the meeting, the City Council directed the City Manager to schedule a May 17, 2011 Study Session regarding the budget at 5:00 p.m. No further business, the Special Meeting adjourned at 9:50 a.m. y Ko 'cic, M . yor ATTEST: ames H. Barrows, City Clerk 05 -02 -11 3