HomeMy WebLinkAboutAUGUST 26,1997
I
I
I
4.
'.
'.' -
::.
t) 110 D ~-O
39:0193 (ja) 6C17
c.c..
CITY COUNCIL PROCEEDINGS ARE AUDIO AND VIDEO TAPE RECORDED AND ON FILE
IN THE OFFICE OF THE CITY CLERK
MINUTES
CITY COUNCIL OF THE CITY OF ARCADIA
and the
ARCADIA REDEVELOPMENT AGENCY
ADJOURNED REGULAR MEETING (BUDGET SESSION)
AUGUST 26, 1997
The City Council and the Arcadia Redevelopment Agency met in an Adjourned Regular
Meeting (Budget Session) on Tuesday, August 26, 1997 at 7:00 p,m. in the City Council
Chambers.
1.
ROLL CALL
PRESENT: CounciVAgency Members Chang, Kovacic, Kuhn, Young and Harbicht
ABSENT: None
2.
SUPPLEMENTAL INFORMATION FROM STAFF REGARDING AGENDA ITEMS
None
3.
QUESTIONS FROM CITY COUNCIlJREDEVELOPMENT AGENCY REGARDING
AGENDA ITEMS
None
AUDIENCE PARTICIPATION
Kirt Kine. 31 California Street, Apt D, President, Arcadia Chinese American
Association, stated in part that the Association supported the Fire Suppression
Assessment District because they did not want City services cut Now that the Fire
Suppression District bas been defeated he believes Council should use reserve funds this
year and consider an increase in the Utility Tax next year and let the voters decide the
issue.
Lvle WilsolL 1701 South Sixth Avenue, expressed his opinion that the City's newer
budget process with a straight line budget system prepared by various department heads
does not give the Council adequate information about where the money is being spent
and allocated within City funds. The continuing budget shortfall should not rest totally
on Councilmembers because of this system. He believes Councilmembers are not
adequately informed about the fiscaI impact of such allocations or some of the personnel
rec1assifications and/or new jobs which have been added to the City since this
streamlined budget process was implemented. Mr. Wilson noted the change in a
secretariaI position in the Police Department.. the secretaJy to the Chief was reclassified
to Administrative Assistant at an increased saIary, and later reclassified to Management
Analyst His research bas shown there are five Management Analyst' in City service.
Referring to the Police Departmeut Mr. Wilson believed other police personnel can
perform many of the tasks of the Management Analyst In excess of $47,000 a year in
saIary alone could be eliminated from the Police Department budget Mr. Wilson noted
that saIary levels of the administrative secretaries in the Monrovia and EI Monte Police
1
'8/26/97
39:0194
Departments are considerably lower than the Management Analyst salaries in Arcadia.
. Drew Krvnicki. 321 Leroy Avenue, stated in part, there are five budget figures he would I
cut back on: $200,000 to remodel City Hall; $300,000 from the Facility Replacement
and Capital Improvement Funds; $450,000 to remodel Fire Station No.3; 10% or
$330,000 in City reserves from the Emergency Fund; and $750,000 from the
Redevelopment Agency... all of which add up to $2 + million, which will balance the
1997-98 budget Mr. KIynicki urged Council to give careful analysis to the budget before
making any cuts.
Dorothv Denne. Arcadia resident, encouraged Council to work together with staff and
City residents to maintain Arcadia as one of the finest. Mrs. Denne recommended that
Council file suit against the Slate of California to Uy and recover funds taken from the
City by the Slate. Mrs. Denne spoke in support of the DARE. program and noted the
program only costs $161 per 5th grade student for materials and the salaries of two police
officers for one year. This, when compared with the cost of incarcerating one adult or
juvenile for one year makes the $161 a real bargain that the Council cannot afford to pass
up.
Tom Shriver. Pastor, Assembly of God Church at 23 West Foothill Blvd. and Arcadia
Police Department Chaplain, mentioned the discrepancy in the budget deficit figures of
some $800,000, which would cover the salaries of those City positions that may be cut
Rev. Shriver also mentioned the time and stress on the Police officers related to false
burglar alarms. Also, he urged Council to retain the DARE. program in place... it is
well worth the monies spent
Katv Zabel. 1647 Loganrita, urged Council to retain the DARE. program and
mentioned the positive affect officer Caylor and others are having on the children. Mrs. I
Zabel stated also that the vacant commercial buildings in the City are why the City has a
revenue problem. The City Council should get some ideas from Monrovia personnel who
are successful in bringing business into Monrovia She also suggested Council answer
critical allegations made at the August 19th Council meeting. Mrs. Zabel thanked
Councilmember Chang for asking pertinent questions of staff regarding the actual
amount of the budget deficit to which he did not get an answer.
Manruerite Soencer. 1008 South Mayflower, suggested Council could raise revenue by
doubling the admissions tax at the race track. Mayor Harbicht advised that the City
receives revenue from one-third of one percent of the wagering total at the track and not
from an .rlmi<.ions tax. This is provided by the "Tucker Bill". The City Attorney
commented that if this bill should be repealed the City would then return to collecting an
admissions tax from Santa Anita. The admissions tax did not produce as much revenue
to the City as the cunent process under the "Tucker Bill".
Lonell Soencer. 1008 South Mayflower, quoted a phrase from the Brown Act regarding
open meeting law. In Mr. Spencer's opinion the Arcadia Redevelopment Agency did not
place an agenda item on the July I, 1997 agenda regarding repayment of City loans to
the Agency followed by a Council agenda item to accept the loan repayment from the
Agency. Also, an agenda item to extend the loan period was not on the agenda. Mr.
Spencer felt these items and otheIS were omitted because Council wanted the Fire
Suppression District to pass and did not want the Redevelopment Agency to payback the
loans to the City. Mr. Spencer wanted to know what happened to the money?
James Romo. 651 Hampton Road, cautioned the Council to reduce budget expenditures I
and not use City reserve funds to balance the budget, which could eventually lead to
bankruptcy.
2
8/26/97
39:0195
I
Vincent Folev. 300 block of Cambridge, advised Council to utilize City reserve funds to
balance the budget and then look for ways that City government can become more
efficient while maintaining a proper level of service. Sub-standard services are not
acceptable. Government exists to take care of health and safety.
Dick Scott. West Santa Anita Terrace, mentioned he had reviewed the video tape of the
August 19th Council meeting and was dismayed that with all the potential budget
reductions listed the department heads did not list their proposed cuts in priority order.
" Further, the actual amount" of the budget deficit was not clarified... over time several
numbers have been mentioned. The question of Redevelopment funds has come up over
and over again and other questions from citizens with no response from Council.
At the conclusion of public comment, Mayor HaJbicht noted there has been several
meetings where Council has listened to comments about the budget and there had been a
lot of facts quoted of which some were not true. Council tried not to be argumentative or
to pick at things being said or rebut them. Council may have erred on that point Mayor
HaJbicht related some of the telephone calls from misinformed citizens at which he had
answered questions regarding the City Manager's City car. the Capital Improvement
Program, the Eqnipment Replacement Fund; the Water Division, Redevelopment, and
the General Fund which is separate from Water and Redevelopment funds.
I
Mayor HaJbicht, in response to persons who spoke at the August 19th meeting, explained
also the need to replace the old water pumps which was a routine item on the City
Council agenda to award the bid for the pumps. AJso, the remodeling of the Mayor's
office which basically added a hallway to access a conference room and provided efficient
use of the space. The Mayor responded to negative statements which centered on
investment in the City's future; the perception that Council is not pursuing revenue and
not business friendly... which is not the case at all; the development of Fashion Park
Mall, which many citizens did not want, or the Target store which was voted down by the
Council because of all the controversy; the proposed Santa Antia development on the race
!Iack southerly parlcing lot which some people said Arcadia did not need the revenue this
development would produce.
The City Council has taken some vel)' positive steps to encourage business activity in the
City; the expansion of Fashion Park, for example, for which the City is reaping the
benefits of the City's investment in that project Other projects will be developed in the
Redevelopment project area... an Extended Stay Hotel and a potential Hilton Gardens
Hotel, all of which will increase revenues from the Transient Occupancy Tax, which
currently stands at $1 million a year. The comer of Fifth Avenue and Huntington Drive
is a joint on-going project with the City of Monrovia to redevelop both sides of North
Fifth Avenue. In reference to the Foulger Ford and Arcadia Lumber sites, Mayor
HaJbicht noted the owners of these private properties will do what is in their best
interests with these properties. With regard to the suggestion that the City Council bring
snit against the State for the return of property tax monies... there are no simple answers
to this complex problem... it is related to educational issues which the voters approved.
The funds taken from cities were originally "bail-out" funds from the State, which the
State took back from cities and gave to education. The Mayor stated he did not think the
City has a legal basis to sue the State for these funds. Referring to the question of the
budget shortfall, Mayor HaJbicht stated the actual figure is $1. 9 million.
I
The Mayor explained the confusion over the actual amount of the shortfall. The City was
recently informed by the State that the State overpaid the sales tax to the City, and staff
had to revise the deficit accordingly to take into account the $200,000 which the State
will recover from the City. Regarding City policy for reserve funds, these funds are
3
8/26/97
5.
BUDGET
MODIFICATIONS
(FY 1997-98-
Continued from
August 19)
O:J-<() ~t.'
39:0916
allocated to various restricted accounts. The actual funds are invested by the City
Treasurer and earn interest for the City through the various instruments. The City
follows a very conservative investment policy. Some of these funds are Redevelopment I
monies. The Agency pays the City interest on the City loans. If these funds were paid
back to the City it would have no impact on the GenernI Fund which supports City
operations.
Consideration and discussion of alternatives and direction regarding modifications to the
Fiscal Year 1997-98 Budget City Manger Kelly provided background chronological
information leading to the current deficit in the FY 1997-98 budget In FY 1992-93 the
State's reallocation of revenue took place and that is when the City began to experience a
budget problem. The next year, FY 1993-94, supplies and services were cut and with a
one-time funding opportunity, cost aIlocations and the use of reserve funds the budget
was balanced. This eliminated employee salmi increases. Last year, FY 1996-97 very
severe measures were taken to balance that budget.. supplies and services were cut by
$500,000 and the work force reduced by 11.5 positions. Not all of these reductions were
very noticeable to the public. This year the City faced a larger gap between revenues and
expenditures of approximately $1.9 million. Five more positions were cut out of the
budget and there were more cost cutting options down to the minimum. Certain fees
were increased at Council's direction. The City does not have an expenditure problems...
it is a revenue problem. The City Manger stated unless long tenn permanent revenue
sources are found the City will face the issue of permanent long term reductions in City
expenditures. The City Manager reviewed the many programs underway to stimulate
economic development within the City and the efforts of staff to lobby Sacramento:
telephone calls, letters and meetings with State legislators regarding a flawed structural
State finance system.
I
In reference to the D AR.E. program funding. the City Manager stated in part that asset
seizure monies are restricted funds and cannot be used to balance the General Fund,
which is in violation of federal law. With regard to public safety, the issue is police
officers on the street or in the c1assroom. If cuts are to be made, the Police Chief listed in
priority order the need for police officers on the street over officers in the classroom.
Referring to the Los Angeles County survey for fire protection services at the same level
as provided by Arcadia fire services, the City Manager reported County has begun the
process. It may be six months before the survey is completed and returned to the City,
and negotiations started after which a decision must be made whether or not to contract
with County Fire.
The City Manager reported staff has been looking into a Joint Powers Authority (JPA)
with neaIby cities regarding fire services. Further, at Council's request the process will
soon begin to examine the operations of the Arcadia Fire Department to see if good
business practices are being followed.
The CitY Manager explained the difficulties experienced by Administrative Services in
the budget forecasts which were based upon incorrect information received from outside
sources.
Referring to Redevelopment funds owed to the City, staff is preparing a pay-back
proposal which is fairly conservative. Recent funds received from the County will
upgrade the pay4lack to $100,000. This may not always be true of future pay4lacks since I
some Redevelopment projects need some form of assistance in order to get them started.
The Capital Improvement Program, Equipment Replacement and actual Capital
4
8/26/97
39:0197
I
Construction budgets previously presented to Council were broken down into three
categories by the City Manager. The funds for these expenditures are available,
In the discussion following the City Manager's opening statement, City Councilmembers
stated their overall general comments regarding personnel reductions and/or reductions
in supplies and services. Counci1member Young stated in part the budget deficit problem
is not pennanent, however, something needs to be done right now until additional
revenue is generated. Reserve funds have been used the past two or three years and now
the City must really tighten up instead of just using these funds to balance the budget
Councilmember Kuhn stated in part that she has carefully studied the proposed budget
reductions; listened to public comments, and has concluded she would not like to see any
cuts to services or direct programs unless the cuts would cause minimum impact Using
reserve funds is not a good financial practice, however, Council needs to keep the essence
of what makes Arcadia what it is... and that is a high level of service and expectations.
Health and safety are primary concerns and the quality of life. Councilmember Kuhn
believes that, with the goal to aggressively increase revenue Council needs to focus on
business growth and retention.
,
Councilmember Chang reported on the wa1king-tour of the Downtown area enjoyed by
the City Council and the Planning Commission on August 23rd, and stated in part that
additional business' are important to the success of Downtown Arcadia and the increase
of sales tax revenues. Contracting out City fire services to the County may solve the
budget deficit in the long term. Since 1992 City reserve funds have been used yearly to
balance the budget Referring to the discrepancies in the budget deficit figures,
Councilmember Chang stated. consistency is needed in staff reports, particularly in
budget reports... this is one area that needs to be improved. He would delegate all the
power to the City Manager to balance the budget if it were left up to him... that is what
the City Manager is paid for. Counci1member Chang would like to count on the City
Manager. The City Manager's first choice should be the welfare of the citizens, and
second the benefit of employees. City government is primarily for the service to our
citizens, nothing else.
I
Mayor Pro tern Kovacic gave a brief recital of his appointment to the City Council, also
the budget process of which he had vel)' little knowledge while on the Planning
Commission. He feels the Council has not done a good job in communicating with
Arcadia residents about the City's fiscal problems, especially noting the fiasco of the Fire
Suppression District Mayor Pro tern Kovacic was appreciative of the comments from the
public at the August 19th Council meeting and the letters also. He did not think the
Council should balance the budget by just using reserVe funds... a combination of
expenditure reductions and reserve funds would be his recommendation. Mayor Pro tern
Kovacic was firmly against cutting the DARE: program or closing Fire Station No. 3 or
cutting the paramedic program. He believes the decisions made to resolve the budget
deficit will benefit Arcadia
I
Mayor Harbicht stated in part, the progression of the budget deficit began in 1993. Over
the years the budget has been balanced by using City reserve funds and other one-time
revenue sources and various reductions in City expenditures. It is time to get the City's
fisca1 house in order and deal with this budget problem which has long existed. The
Mayor noted that Arcadians have come to expect the existing high level of services. If
the budget is cut the City would still have a high level of services but the City cannot
continue to spend $2 million a year more than the City is receiving in revenue.
Government should not operate that way. Using all reserve funds is not the right way to
balance the budget. He also does not think Council needs to solve the budget problem in
one year. Council has to take some funds out of reserves to keep the City operating but
5
8/26/97
39:0198
this has to be coupled with responsible cuts in spending. He is hopeful that City revenues
will increase in the next year or two.
- I
Following the budget discussion of August 19th each City department head was asked to
prioritize their potential budget reductions for Council's consideration. Mayor HaIbicht,
after examining the priority reductions, noted that four Councilmembcrs listed a
combination of reductions in expenditures and the use of reserve funds. Councilmember
Chang chose to balance the budget with the use of all reserve funds. In response to this,
Councilmember Chang presented his position, in particular, the use of funds owed the
- City by the Redevelopment Agency. The City Council then proceeded to go through the
list of budget reductions and the following items were selected to reduce the deficit;
Deoartment
Administrative
Services
City Clerk
ProeramlOoerations
Reduce clerical support
Human Resources
Division
Fill secretarial position at
enlly level
City Council Official meetings
City Manager City newsletter
Development
Services
Fire
General City
Maintenance
Services
Reallocate secretaIy's
funding source
Contract dispatch with
Verdugo Dispatch Ctr.
Staff reorganization
Eliminate part-time staff
1997-98
Savinl!S
$ 14,835
15,354
5,000
24,500
14,490
Permanent
Savinl!S
Positions
Eliminated
$19,780
.05
5,000
32,000
19,315
I
Hold in abeyance pending receipt of
County Fire Survey
60,000
14,490
Reduce overtime by 277,500
changing from constant
staffing of 19 to
minimum staffing of 17
personnel
Reduce 911
communication staffing
Eliminate Commissioner's
annual dinner
Reallocate portion of
Assistant Engineer's
salary
Reduce landscape
maintenance contract
6
75,978
5,000
44,307
22,900
82,000
o
30,000
2p1t temp
370,000
101.302
2
5,000
59,064
35,000
I
8/26/97
39:0199
Reduce street tree 30,000 50,000
maintenance contract ~
I .
Police Rotate L.A. I.MPAC.T. 17,522 23,363
assignment
Total Expenditure $621,876 $831,824
Reductions
Miscellaneous Reserves . Emergency
Capital Outlay and
Equipment Replacement
Funds
(Approximately) 1,300,000
TOTAL ALL 1,921,876 $831,824
OTHER REDUCTIONS DISCUSSED
Police
Reduce/modify DARE.
program
109,556
146,074
2
Do not provide traffic
control for the Festival of
Bands at City expense
5,000
5,000
I
Eliminate crossing
guard program
75,000
100,000
17 pit
Council determined that the above three programs in the Police Department budget
would be discussed with the Arcadia Unified School District staff with the request that
the District share one-half of the cost for these programs. The City Manager will make
this contact. Mayor Pro tern Kovacic and Councilmembers Chang and Kuhn each
indicated they would not give up these programs regardless of whether or not the School
District would participate.
Councilmember Chang felt that Council has made several prudent reductions, and with
the $1.3 million in reserve funds the budget is balanced for FY 1997.98. Council has to
look at a long-term solution... possibly an increase in the Utility Tax. Councilmembers
Kuhn and Young stated they have been approached by a lot of people to put the Utility
Tax on the ballot
Mayor Pro tern Kovacic, in considering the future, stated he believed the Council should
appoint some City committees to study Fire services and economic development within
the City. Also, the City Commissions could be more proactive in advising the Council.
The City Manager advised that staff will do a multi-year projection on revenue and
expenditures to forecast the decisions this evening and where the City is heading. Some
of the actions this date require "Meet and Confer" with City bargaining units. Staff will
initiate changes in the budget beginning tomorrow.
I
The City Attorney advised that most of the "Meet and Confer" issues are on the affect of
Council's decisions and how they are implemented. Some will be timed in accordance
with the close of the contract, i.e., the Fire Fighters Association... subject to revision by
7
8/26/97
ADJOURNMENT
39:0200
Mr. Cassidy. Changes affecting the association may not be implemented until Janwuy,
1998. The City Manager concurred.
At 10:50 p.rn. the Adjourned Regular Meeting (Budget Session) ADJOURNED to
Tuesday, September 2, 1997 at 7:00 p.m. in the Council Chambers to conduct the
business of the City Council and Redevelopment Agency and any Closed Session
necessary to discuss personnel, litigation matters or evaluation of properties.
~~~~
Robert C. Hartlieh\, Mayor of the City of Arcadia
A TrEST:
8
8/26/97
'1
I
I