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HomeMy WebLinkAboutJUNE 3,1996 38:0l70 tJIIO_;,-O o{,o,]';6 : c CITY COUNCn. PROCEEDINGS ARE TAPE RECORDED AND ON FILE IN THE OFFICE OF THE CITY CLERK I MINUTES CITY COUNCn. OF THE CITY OF ARCADIA and the ARCADIA REDEVELOPMENT AGENCY ADJOURNED REGULAR MEETING (BUDGET SESSION) JUNE 3,1996 The City Council and the Arcadia Redevelopment Agency met in an adjourned regular meeting at S:30 p.m., June 3, 1996, in the Community Center for the prillllllY purpose of reviewing the proposed two year operating budget for Fiscal Years 1996-1998. ROLL CALL PRESENT: CouncillRedevelopment Agency Members Chang, Harllicht, Lojeski, Young, and Kuhn ABSENT: None 2. SUPPLEMENT AI.. INFORMATION FROM STAFF REGARDING AGENDA ITEMS I 3. 4. None. AUDIENCE PARTICIPATION None. MA TIERS FROM ELECTED OFFICIALS CHANG CounciVAgency Member Chang reponed in depth on the financial condition of the City, (City's in particular, the approximate $1,000,000 deficit in the FY 1995-96 operating budget, financial which indicated no significant increase in expenditures but significantly reduced revenues. condit ion) The three largest sources of City revenue derive from sales tax, utility taX and property tax. 03 .:l <) . s<J The sales taX base could be increased with additional businesses in the City. Pbase n of the Downtown 2000 project is proceeding. The City should be more proactive and take a leading role in searching for new business to locate in Arcadia. The City Council, City staff. Arcadia Business Association.' Arcadia Chamber of Commer<:e and Downtown business representatives should fonn a Business Promotion committee for this purpose. N~i' I LOJESKI (Gen. Plan Update) Cutting City expenditures will also help to balance the budget. Twenty percent (200/0) of City expenditures are for supplies and costS and 80% is salaries and benefits. A 4% reduction in expenditures will balance the FY 1996-98 General Fund budget Further, adjustments must be made in the procurement for City services and goods. Member Chang noted the financial problems with Phase I of the Downtown 2000 project and the General Plan update and the related EIR and increased costS for these projects. He noted that balancing the budget is not easy. Staff is to be complimented for their hard work on the budget repons. Member Lojeski noted the Planning Commission has concluded" its review of the General Plan update and will adopt a resolution at their next meeting stating their findings and 1 6/3/96 LOJESKI (Leaf blowers) (SB 1590) HARBICHT (Gen. Plan update hrg.) KUHN (City Mgr. evaluation) 5. OJ:J<7-;;;-O 38:0l7l recommendation to the Council. Member Lojeski requested the City Council begin its public hearings on the General Plan in July. I Member Lojeski requested that the maller of noise and dust from leaf blowers be agendized for a future meeting. Mayor Kuhn and Member Young concurred. Member Lojeski noted that State Senator Mountjoy voted "no" on SB 1590. which is a bill that would help cities. Statr is expecting an explanation of Senator Mountjoy's vote from the League of California Cities. Member Harbicht agreed that the public hearings before the City Council regarding the General Plan update be held on consecutive evenings early in July. Mayor Kuhn requested the job performance evaluation for City Manager Kelly be agendized as soon as possible. Members Young and Chang concurred. PRESENT AnON OF FISCAL YEAR 1996-98 OPERATING BUDGET AND FISCAL YEAR 1996-2001 CAPITAL IMPROVEMENT BUDGET Consideration of the May 23. 1996 staff report setting forth the fact of a $1,000,000 deficit in the 1996-98 general City budget and modifications and effons of all City departments to close the gap between expenditures and decreased revenues. To achieve a ba1anced budget each department was required to submit additional budget cuts of 4% which, in many cases. resulted in a reduction of the work force, which corresponds to a reduction of service levels provided to the community. City Manager Kelly noted if the Council accepts the budget reductions listed by the departments Council will have initiated a permanent reduction in cost of service. Statr provided a list of potential revenue enhancements for Council's consideration also. I The Administrative Services Director, Jim Dale, explained that the current $1,000,000 shortfall in the budget is not something that has happened overnight.. in 1992 the City had a shortfall of $1.000.000 a.'u1 that budget was balanced with a one-time refund of $1,040.000 from the Public Employees Retirement System. Since that time each succeeding budget was balanced with reserve funds and/or budget cuts including the year the employees voluntarily opted to defer salary increases, which amounted to $500,000. Mr. Dale presented an overview of the decrease in City revenues from the City utility tax, which was due to deregulation of utility companies; property taxes declined this year due to devaluation of property values. He noted that property tax revenue should increase next year. Sales tax n:ceipts have remained fairly Oat and are not expecied to increase; the Transient Occupancy Tax has a significant increase this year, but is expected to flatten out next year; business license fees have declined slightly; motor vehicle in-lieu fees hove increased over time. Expenditures for FY 1996-97 are expected to increase 3.8% over FY 1995-96. The 3.8% increase included negotiated salaJy increase for police and fire personnel. The shortfall in the 1996-98 budget was approximately $1.5 million. This deficit was reduced to $1.02 million following budget reductions by each department at the review process with the City Manager and Administrative Services personnel; miscellaneous revenue from the Public Employees Retirement System excess. reserve account, and an adjustment of BuildingIPlanning revenues. I 2 6/3/96 ':'!'. ", 38:0172 I The City Manager continued the budget presentation. After reducing supplies and services each department was then asked to reduce its budget by 4%. Since 80% of the budget is salaries and benefits. the 4% represents a reduction in City personnel and programs. The 4% budget reductions by department follow. with the impacts of such reductions listed in the May 23,1996 staff report: Administrative Services City Attorney City Clerk City Council City Manager Development Services Fire Department Library Maintenance Services Police Department Recreation - 4%= $ 57,650. Net reductions listed - $ 60,000 - 4% = $ 10,050. Net reductions listed - $ 10,000 - 4% = $ 10,050. Net reductions listed - $ 4,000 - 4% = $ 3,640. Net reductions listed - $ 4,000 - 4% = $ 17,510. Net reductions listed - $ 18,000 - 4%= $ 73.150. Net reductions listed- $ 74,000 - 4% = $ 300.370. Net reductions listed - $ 305,000 - 4% = $ 57,860. Net reductions listed - $ 58,000 - 4% = $ 129,150. Net reductions listed - $ 129,000 - 4% = $ 339.810. Net reductions listed - $ 341,500 - 4% = $ 43.050. Net reductions listed - $ 43.000 Totals: $1.042.290 $1,046,500 City Manager Kelly noted the 4% reductions, if implemented, would result in reduction of personnel and services as presented. If Council approves these budget reductions for City departments the positions listed would come out of the budget and would only go back in the budget in the future if Council approved them. I In reference to revenue enhancements, the May 23, 1996 staff report contained a chart of Potential Revenue Sources provided by the Administrative Services Director. Mr. Dale briefly went over the list: POTENTIAL REVENUE SOURCES Increase City fees/charges Paramedic service fee - residents Increase property transfer tax Implement a City-wide lighting and landscape assessment district Increase utility tax (1%) Increase uansient occupancy tax Develop and adopt a library assessment district or parcel tax Develop and adopt a police and/or tile safety ass-~.nt district Adopt a mandatory paramedic subscription program ADDmONAL ANNUAL REVENUE $ 100.000 100,000 100.000 to $200,000 $1.000,000 800,000 95.000 1,500,000 1,000,000+ 200,000 Fire Chief Gardner spoke on behalf of Paramedic services. Staff recommends that Council increase fees to non-residents for Basic Life Support (BLS) from $125 to $250, and Advanced Life Support (ALS) from $225 to $250. And. referring to City residents who do not pay for Basic Life Support services, a charge for Advanced Life Support of $\25 per trip. These fees would generate an additional $100,000 per year. In response to Council's questions. Chief Gardner said there are currently 3400 subscribers in the Paramedic Subscription Program. It will take one year or more to achieve full potential of this program. I 3 6/3/96 38:0173 Treasurer Gerald Parker presented an overview of the fee study and the potential increase in revenue as a result of an increase in City fees and charges. An indirect overhead rate of 10% to 15% was applied to the actual fee for providing services such as plan check. etcetera, resulting in an additional $100,000 per year 10 the General Fund. I Mainlenance Services Director Pat Malloy stated the Waler Division is proposing a 5% water rale increase to help fund the Division's Capital Improvement Program. Over the next four years the proposed expenditures are in excess of $12,000,000 for major projects, such as, reservoir storage, land acquisition and major pumping system improvements. If the proposed waler rate increase is approved the City will be able to continue transferring $1.400,000 from the operating budget 10 the Facilities Replacement Fund. Statf recommends that council approve the rate increase from 92t per 100 cubic feet 10 97t. Considerable discussion ensued among Council of the 4% budget reduction recommendations provided by City departments and Council policy decisions regarding programs. Mayor Kuhn noted she would like to discuss: I) A City hiring freeze until further notice; 2) Promoting from within; 3) Reassignment of duties; 4) Job absorption; 5) Less overtime; 6) Less or zero consultants; 7) Longer life andlor elimination of unnecessary equipment And, on the revenue side: 8) Use of a volunteer program. Mayor Kuhn is in favor of raising user fees; employee and public education of the serious budget problems the City is facing and lower service expectations; retraining employees for reassignment; economic developmentlbusiness growth. Mayor Kuhn is against new taxes in any form; however, this is always an option as a last resort. Mayor Pro lem Harbicht said he would like 10 discuss, on the cost savings side: I) The current employee medical/dental insurance cost of approximately $2,000.000 per year; 2) Employee vehicle allowances as opposed to City owned cars; 3) The tuition reimbursemenl program; 4) A less expensive format for the City Newsletter; 5) Freezing saJaIy step increases. And on the revenue side: I) Institute a Library card charge for non-residents. I Member Young concurred with Mayor Pro tern Harbicht on the non-resident fee for library cards and felt the Library Assessmenl District or Parcel Tax would assure library services, although this would require a vote of the people for a 2/3 majority. Member Lojeski felt the City could use more contract services to be cost effective, such as, print shop services and City elections. Member Chang felt equipment leasing would save money as opposed to purchasing equipment, Mayor Pro tern Harbicht felt that Council should make a commitment to economic development and to solving the budget problems long term. It was therefore MOVED by Mayor Pro tern Harbichl that the policy is, that the City Council. as a policy matter make a commitment to long tenn economic development in the City with an eye towards revenue generating businesses which will provide the funds that we need to get this budget back in balance and hopefu1ly get back into a plus budget where we were for so many years. And that we so infonn staff and the communitY that that is our policy. Seconded by Member Young and CARRIED on roll call vote as follows: AYES: Counci1lRedevelopment Agency MembelS Chang. Harbicht, Lojeski, Young and Kuhn None None I NOES: ABSENT: The budget discussion then continued on the appropriation for medical/dental insurance and the deductible. Mayor Pro tem Harbicht believes that a low deductible encourages frequent medical/dental visits. The PPO plan covelS 90"10 of charges and 70% for non- 4 6/3/96 ,. . 1'1-1. . '! ;': "I' .. 38:0174 I PPO plans after the deductible has been met Different insurance systems are set up for different employee groups. There was some concern expressed of the way to approach the employee units with a proposal to change the plan design. In the discussion it was noted that the 1996-97 budget reflects an expenditure of approximately $21,000,000 for employee services, which includes salaries, medical/dental, etcetera. Workers Compensation expenditures are projected at approximately $1,000.000. This figure reflects claims incurred many years ago. Staff funher explained the workers compensation program which requires staff to provide the employee with claim fonns when injured on the job. The injured employee is no longer actually required to file a claim, which was the case for sometime. The City's risk manager is making a concerted effort to lower the workers compensation claims and encourage employees to retUrn to work in a more timely manner. Training programs to prevent on the job injuries have been enhanced also. In the discussion Member Young said she is against cutting the DARE. program for the Police Department budget as proposed in the department's 4% budget cuts. This program has had a good year and it is necessary for the fifth graders to have this program. In response to Member Young's question, Police Chief Garner said the program requires twO police officers to run the program in order to reach the children. Also, uniformed officers are needed in the program to create relationship between police and the children to build confidence in the officers. Mayor Kuhn agreed she would not like to see this program cut. Member Young felt the School District should pay for one-haIf of the DARE. program. I Mayor Kuhn questioned the number of administrations personnel in the Police Department which appears top heavy when compared with Fire Department personnel. Chief Garner explained that trained personnel could not be replaced by volunteers. The nature of police work requires more supervision than fire personnel requires. Turning back to the list of Potential Revenue Sources, following a brief discussion, Member Lojesld MOVED to DIRECT staff to prepare the appropriate resolution for the next regular meeting to increase City fees and charges for a total of $100,000 annually; and implement the paramedic service fee to Arcadia residents for a Iota! revenue increase of $100,000 annually, seconded by Member Chang and CARRIED on roll call vote. AYES: CouncillRedevelopment Agency Members Chang, Hartlicht, Lojeski, Young and Kuhn None None NOES: ABSENT: City Manager Kelly commented that staff would take the direction of Council; however, public hearings may be required for City fees. Also, staff will give the information to the Board of Realtors and the Chamber of Commerce for their input. Mayor Pro tem Hartlicht commented, in reference to the list of Potential Revenue Sources, that the items listed are all just taxes. He suggested Council discuss whether the budget gap should be closed with additional taxes or service cuts. Most of the suggested programs .to be cut are very important services. .He believes the California economy will soon improve. Mr. Dale noted he does not see anything really major coming in the way of increased revenues unless the project at the race track comes through or significant businesses come into town. I Member Young felt that Council may have to implement a mix of revenue sources and some budget cuts to achieve. a balanced budget 5 6/3/96 38:0175 Mr. Dale commented that staff projected that revenues will increase 3% per year over a longer period of time. If the City could hold expenditures stable. in two or three years the City would be in good shape. assuming there would not be any salary increases. I Member Lojeski felt the two revenue increases in his motion were merely increases to cover services rendered. Mayor Kuhn said she looks at these fees as user fees. A lengthy discussion ensued on paramedic service fees 10 residents and the mandatory paramedic subscription program. Chief Gardner said the goal is to put the paramedic subscription program on a fully funded basis. Member Harbicht notl'.d, because everyone would have to pay into the mandatory program, this is not a user fee, it would be an out and out tax. A discussion of a freeze on salary increases and benefits as well as hiring and step- increases began. The City Attorney advised that these matters are eligible for closed session. The City Manager advised that staff would like to talk about the whole issue of salary compensation, hiring freeze. medicaVdental cost reduction, vehicle allowances and come back to Council with information on what this would mean... cost and related issues. The Council in reviewing the 4% budget requirement in the City Clerk's budget for 1996- 97 commented that the full 4% or $10,050, was not met Since the supplies and services budget was at a very low level. the Clerk stated that the reduction would have to be in personnel and suggested sharing an employee on a half-time basis. Half-time would reduce the Clerk's budget by $20,000. Council also questioned the Clerk's duties and felt that preparation of Council's agenda packets could be a Clerk's function. Counci1 also requested that detail in Counci1 meeting minuteS be reduced. Also, that information be provided on the savings and impacts on the Clerk's office and the City Manager's office if the Clerk takes over the agenda preparation and coordinating of staff repons. I Referring to the 4% reduction in the budget of the Library, the Mayor felt that volunteers could be utilized for some of the staff functions. Member Lojeski mentioned revenuc could be raised by charging non-residents for Library cards. City Librarian Kent Ross explained in detail Library services and fees and the mutual sharing of services between libraries that belong to the Metropolitan Cooperative Library System (MCLS). The City is not allowed to charge most non-residents for basic library use because of MCLS regulations. Mr. Ross has obselVed that residents in areas south of Arcadia do not use the City Library too much. Further discussion centered on recommended 4% reductions in the Library budget and consequential impacts on Library services. Member Lojeski asked if any California cities have been successful with "city stores" that sell old street signs and street lights and those type of things. The City M2nager commented staff had analyzed such an operation and felt the City did not have items valuable enough to sell for such a store to be cost effective. Referring to the Maintenance Services Department, staff explained the recommended budget reduction for the street sweeping program. The sueets would be swept bi-weekly nine months of the year. Several Members mentioned that there would be increased complaints from residents. With regard to contracting for custodial services for City facilities, the City Manager commented that staff will study the matter of contracting with one company for City-wide service to reduce costs. Mayor Kuhn, in reference to the budget reduction for the tree trimming program, said that the City would be assuming a liability that to her may be penny wise and pound foolish. The City Manager commented that staff would advise the contractor to first keep traffic control devices clear, and do other trimming second. Maintenance Services Director, Pat Malloy, explained current use I 6 6/3/96. I I 6. CLOSED SESSION 01'/0. -10 ADJOURN- MENT ATTEST: I i "1 II , ,._ "1 38:0176 of City staff, in conjunction with the contractor, in response to complaints, stop signs. etcetera. Staff will address this issue if Council determines to cut back the tree trimming program. In response to Council's questions. Mr. Malloy replied that the City has over 15,000 trees in the program. The current cost to trim one tree is approximately S50 on average. Further, the new tree maintenance contract may be a multi-year contract; staff are hoping this will bring costS down. In response to Member Young regarding vehicle allowances as opposed to City assigned vehicles, the City Manager said staff will re-explore that issue if Council SO directs. Member Harbicht commented that the budget matters Council has discussed this evening, in particular the 4% cut in expenditures. make it clear that this is nol an easy task. This study session will help Council focus on those budget items which will have an impact on the community. There will be significant reaction 10 some of the proposed cutbacks in programs and services. Mayor Kuhn mentioned that she has serious reservations about raising taxes. Mayor Pro tem Harbicht noted that a one-year 1% increase in the utility tax could get the City past the revenue problems to the anticipated turn-around economy, and the City could continue to provide the services the residents want. Also, a year from now the City will at least know if Santa Anita will develop their property or not and whal the project will entail. He is nol proposing a I % increase in the utility tax; however, il could be an idea for Council's consideration. In reply to Member Chang, staff responded that a I % increase in utility tax would cost residents approximately S50 per year on average. At the conclusion of the budget discussion the City Manager suggested that consideration of the Capital Improvement Program and Equipment Budge!, Master Work Programs and Master Plans be taken up at 5:30 p.m. tomorrow, June 4, before the regular Council meeting at 7:00 p.rn. The City Attorney announced that the CouncillRedevelopment Agency will go into a Closed Session, "pursuant to Government Code Section 54957.6 for conference with labor negotiators Gary Rogers and/or Dan Cassidy regarding Teamsters Local 911, AFSCME, Management and non-represenled employees.. At 9: 12 p.rn. the City Council/Redevelopment Agency ENTERED the Closed Session, ADJOURNED and RECONVENED the Adjourned Regular Meeting (Budget Session) and at 10:15 p.rn. ADJOURNED to 5:30 p.m., Tuesday, June 4,1996, in the City Hall Council Chambers for an Adjourned Rellu!ar..Ml:etitllli (BudllCl Session). ~~ Y of Arcadia ~~~~ D. Alford, ty Clerk 7 6/3/96