HomeMy WebLinkAboutJUNE 3,1996
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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
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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'
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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
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LOJESKI
(Leaf
blowers)
(SB 1590)
HARBICHT
(Gen. Plan
update hrg.)
KUHN
(City Mgr.
evaluation)
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recommendation to the Council. Member Lojeski requested the City Council begin its
public hearings on the General Plan in July.
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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.
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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.
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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.
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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.
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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.
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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.
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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-
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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.
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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.
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Member Young felt that Council may have to implement a mix of revenue sources and
some budget cuts to achieve. a balanced budget
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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.
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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.
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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
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6/3/96.
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6.
CLOSED
SESSION
01'/0. -10
ADJOURN-
MENT
ATTEST:
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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
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