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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