HomeMy WebLinkAboutMAY 23,1995
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CITY COUNCIL PROCEEDINGS ARE TAPE RECORDED AND ON FIll! IN THE OFFICE OF THE CITY
CLERK
MINUTES
CITY COUNCIL OF THE CITY OF ARCADIA
and the
ARCADIA REDEVELOPMENT AGENCY
ADJOURNED REGULAR MEEnNG (BUOGET SESSION)
MAY 23. 1995 '
The City Coone' and the Arcadia Redevelopment Agency met In an adjourned regular
meeting (budget session) at 5:30 p. m., Tuesday, May 23. 1995..
ROll. CALL PRESENT: Counc'memberw Kuhn. Young and loIes1d
ABSENT: Councilmemberw Chang and Marg811
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On MOTION by Counc.member Younq. seconded by Mayor Pro tem Kuhn and CARRIED.
Counc:iImembefa Chang and Matgett weru exCUSED.
SUPPlEMENTAL INFORMATION FROM STAFF REGARDING AGENDA ITEMS
1.
2.
3.
4.
03.!:l \',
Non.
AUOIENa! PARTICIPATION
None
MATTERS FROM ELECTED OFFICIALS
NOlllt
REPORT AND DISCUSSION ON THE 1996-98/199H7 OPERATING BUOGET
The City Manager pr8WIted the prOjlOS8d 1995-98/199N7 Operating Budget. stating that
) the budget before Councl II baP:aJly . re-formatl8d budget In that. for the flrst time. it Is
a two YeaI budget. The pia to make it easl8r for the staff to woric on and for the Cound
to l8YIew. so there wiI be less time spent SlUdyfng detaia, and more time for consideratlon
at major projecrs and policy. The budget wu prepered based upon the Work Program
wtlldt CouncI recendy revl8wed. and which WU l'r<Ilaed. based upon the Counci's Input.
Seven goals were estatlIlahed: FlscaI ResponaIbIIlly: Public Safety; Economic Development;
High Quality City Government; Good Quality 01 Ute; Good TranspofllItIon and Good Public
InfrasIruclur8. Each 01 these goals was broken down Into specillc objectlves with
depaltJT1ents lnvolIIed and due dates. This become8the '108d map and guide for the next
fIscat yeat'. The deplltm8l1tl then prepared their budQeta based upon thesa work
program&. In response to . quesdon /rom Mayor loIes1ct. the Clry Manager replied !haC
when the Counci adoptl the budget. the Work Program wiI also be adopled. One 01 the
purposea 01 the budget II to provide some guarant_ that wtIat CouncI adopll as Mission
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Statement gools and objectives are met. Throughout the next fiscal year the priorities can
change, but that would mean that if a new project or program Is added, one has to be
given up or rescheduled. This is predicated upon the exact amount of work the City staff
can do. If we change priorities, we change the document. Also, the document will be
available at each Council meeting, so if citizens want some study done. they can be asked
what they want to give up.
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At this time last year, we were struggling with a significantly upsidedown budget After
many study sessions, CouncU adopted a balanced budget by raising some revenue and
making some service cuts. This year, the City Is doing fairly well. At mid-year the City was
~lIghtly In the black - $150,000 In January. Since that time the budget has been affected
by a pending change In State Law concerning auto leasing companl&s, which wUI cost the
City $500,000. At this point, we have a thinly balanced budget. The departments'
operating, supplies and services accounts are at a 1991-1992 level. The departments
turned In flat line budgets which were thinned further by another 1 % from all the operating
budgets. So nothing Is left. If the City goes one more per cent Into the budget to save
money, we wUl have to cut personnel. However. the budget Is balanced. Every single City
employee basically played a part. Since the budget was put together we have had five
separate budget briefings for all City employees with opportunities for questions. Every
labor association/union received a presentation, and a copy of the budget At least half of
the employees have come to one of the briefings. The Important thing Is, where Is the City
golng In the next five years? These years wUI be critical to our revenue enhancement
programs.
In response to a question frorn Mayor Lojesld, the City Manager replied that In the event
CouncR Is satisfied with the budget as presented this evening, a public hearing will be
scheduled for June 20, 1995. In r&sponse to another question, the CIty Attorney said three I
CouncB votes wil be required to adopt the budget It wUI not be necessary for CouncY
to select any revenue enhancements prior to July 1, according to the City Manager.
The Administrative Services Director then presented slides and reviewed the budget In
considerable detaU. At this point, the budget Is balanced. Last year's budget was very
dlfflcult. and CouncJI had to make a number of very hard declsJons. Mayor LojesJd said
everyone has cooperated to help balance the budget at a difficult time. Councllmember
Young said staff has done a wonderful Job In developing a two year budget The
Administrative Services DirectOr further stated that economists are saying that California Is
corning out of the worst economic downturn California has experienced In sixty years -
since the great depression. In addition, It has been difficult for Arcadia, not only because
of the recesslon which Impacted reta. sales which generate the sales tax - the City's
number one Income source - but the State also took 25% cj the City's property tax In the
amount of $1.5 mU110n dollars.
The proposed City budget Is of the order of $47.5 million dollars for FY 1995-96. The City's
General Fund provides funding for most of the services the City enjoys. By far the largest
allocation cj r9S:QUfC9S Is devoted to Public Safety which Includes Are and PoIlca. T olal
General Fund expenditures for 1995-1996 and 1996-1997 respectively amount to
$25,725,983 and $26,964,055. The City has approximately $46 million dollars Invested,
however, most of those funds are restricted funds. I. e. narcotic seizure funds, gas tax
funds. transportation funds, water and sewer funds. redevelopment funds, etc. The City
presently has the money to accomplish the downtown revitalization project; those funds can
only be used lor redevelopment projects. Water funds will be utilized to lay some water
lines, and gas tax funds lor street resurfacing. Also some funds are designated lor speciflc
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purposes, I e. Insurance, workers' compensation, generalllabUlty, emergency reserve, etc.
The $I.2M shown In the Capital Outlay Fund Is the balance at June 30. 1995, after deduction
of $4.7 million dollar library reconstruction funds. The Equipment Replacement Fund was
originally set up with the goal that enough money be placed In the account so that the
Interest generated would pay for necessary equipment each year. Next year It Is estimated
that equipment replacement will be of the order of $1.4 - $1.5 million dollars so some
readjustment wDI be necessary. Services and Supplies have been cut each year recently
In order to balance budgets, and we cannot continue those cuts.
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Council will also receive a report concemlng the water fund and water fund rate Increase.
The cost of providing water Increases each year; therefore water rates tend to Increase.
A 7% Increase Is suggested next year. The City's three top revenue sources are 1) sales
tax - $6.3 million projected for next year. Sales tax revenue was flat for about ten years.
This year there has been a big Increase because of the opening of Nordstroms. Sales tax
revenue will decline next year because of a potential change In the law which means the
City will lose the revenue generated from an automobDe leaslng company. 2) The second
largest revenue source Is the utility tax - $4.2 million dollars There has been a steady
Increase because the City Imposes a flat rate and, as the utility rates Increase, It generates
more money for the City. However, Edison just announced a deregulation In that
residential and business rates will be held steady for the next couple 01 years, and actually
decline In future years. That will Impact the City's revenue. 3) Property tax - $4.1 million
dollars. Two years ago this was the second largest source of revenue. However, the state
took $1.5 million dollars that was growth revenue. Also, there has been notification from the
county that property tax assessment values will decrease this year. 4) Motor Vehicle
license fees. $ $1.75 million dollars. 5) Transient occupancy tax . $850,000. 6) Business
license fees. $715,000. This generally provides a regular revenue Increase because each
year It Is adjusted to the CPI.
The Administrative Servtces Director also presented a ten year projection showing a
balanced budget this year and for the next two years. The budget will be In the positive
after that Since this Is encouraging, staff Is projecting a 3% salary Increase In 1996-97; and
a look at a 2% Increase for the following years; as well as a 4% Increase In services and
supplies. Staff also looked at revenues and trends and detennlned that the City must start
generating some positive surplus funds. The prospects seem encouraging. However staff
Is not anticipating any recurrence of the recession or any other relocations 01 any major
businesses outside of the City. Also, staff Is not antIclpatJng what may or may not happen
at the FouIger Ford property. It Is realistic that the City should set aside $1 million dollars
for Infrastructure and equipment purchases because we cannot continue to Ignore those
requirements. However, If the City starts setting aside those funds, the City would be back
In the red. What Is needed Is a long tenn solution; a ~ revenue source that will generate
funds that can be set aside. The Administrative ServIces Director presented some
recommendations, but cautioned that CooncU wUI face some tough decisions. It Is not
necessary that CooncY act on recommendations right away. but start discussing them.
REVENUE ENHANCEMENTS
Some suggested permanent financial planning tools Include: 1) Franchise fee on residential
refuse haulers. A 5% rate would generate approximately $120,000. Such a fee Is
authorized by law, and Is Included in the current Newco contract. 2) Utility tax on cable
TV. A 2% rate would generate approximately $75.000. Currently a 5% tax Is levied on
every utUIty except cable TV. The other utilities pay a 2% franchise fee; 5% utility tax. Since
cable TV pays 5% franchise fee, 2% utUIty tax might be appropriate. In response to a
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question from Councllmember Young, staff replied 13,600 0( 52% of Arcadia residents
have cable TV. 3) Increase the property transfer tax which would generate $100,000 -
$200,000. 4) Implement City-wide lighting and landscape assessment district which would
generate as much as $1 million dollars. This would mean an assessment of $71 per year
per parcel. 5) A 1 % Increase In utility taxes which would generate $800,000. 6) Increase
transit occupancy tax. This tax was increased In 1993 to 10%. Another 1 % Increase would
generate $95,000. 7) Develop a library assessment district parcel tax. 8) Develop a pollee
and fire safety assessment district 9) Adopt a mandatory paramedic subscription program,
Currently, the City has a voluntary subscription program In place. If the program were
mandatory, the rates could be reduced. 10) Develop and adopt an assessment In
conjunction with Implementation of the National Pollutant Discharge Elimination System
Program This is a new program and the law authorizes cities to charge fees for the
program. Such Items as street sweeping could be Included.
The City Manager reiterated that the budget has been cut until It is at the minimum. If
Council authorizes new programs 0( changes services In any fashion, then we will be
talking people. There Is no more cash to adjust. The budget Is balanced this year; the
concern is fO( future years and where the revenue will come from. If the race track project
moves ahead, that money won't flow until perhaps 1997-98 after construction Is completed
and people stan shopping. The City needs some new form 01 permanent revenue. Either
new revenue is raised 0( services have to be lowered to solve the problems. The budget
pUblic hearing can be scheduled fO( the June 20 Council meeting, and then new revenue
enhancements can be addressed.
Councllmember Young Inquired as to why the Offlclal Meetings Budget was doubled. Staff
responded the principal reason Is that the League of Callfomla CIties meeting will be held
In San Francisco this year, rather'than In Southern California. Mayor Lojesld noted that
sometimes easy things to cut are meetings and subscriptions, and frequently It Is more
Important to use these tools to learn how to solve problems. Councllmember Young
Inquired how staff can forecast the need fO( temporary help. Staff replied temporary help
Is primarily for the Ubrary and Recreation Depanment, and they know their programs and
costs In advance. The rest is fO( pan-time clerical assistance. In response to a question
from Mayor Pro tem Kuhn, staff eXplained that a cenaln percentage of the funds generated
from race track off-track belting Is available to the City when a wager Is placed at Santa
Anita. The City does not receive revenue when the wager Is placed at another race track.
The Santa Anita Race Track Is continually researching other means of raising revenues.
In response to a question from MayO( Lojeskl, staff replied the appropriation to the Senior
Citizens Commission is used for an annual volunteer luncheon. With atl depanments trying
to cut back, Mayor Lojeskllnqulred about what appeared to be a two person Increase In
personnel In the City Oerk's office since 1993. The City Oerk will provide a repon to the
Council regarding any personnel changes In her department
MayO( Lojeskl agreed that It Is now up to the Councll to develop some revenue
enhancements on a long tenn basis. because he does not want to see services for the
residents reduced. It Is absolutely Imponant that Council communicate properly with the
citizens. Eighty percent of the budget Is fO( salaries and benefits, and he does not think the
average cltlzen understands this. MayO( LojesJd said he thinks the public understands and
appreciates the dlffJcultles In balancing the City budget when the state takes funds from the
City. The City Manager said staff does not yet know If the state will take more funds this
year. MayO( Pro tem Kuhn Inquired If It would be likely that the revenue priO(ltles would
shift again such as happened wlth the sales tax now producing more revenue than property
tax. The City Manager responded lhal every year legislation Is Introduced In Sacramento
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to transfer the sales tax to a per capita basis, and ~ery year It gets closer to passing. If
that happens cities wil control only a minute portion of budgets. The League has formed
a sutH:ommittee this year to study state budgeting, and Is suggesting a complete budget
re-structurlng. Mayor Lojeskl noted that this year the City received a one-tlme only refund
of a surplus amount In the PERS retirement account In the amount of $325,473 which
enabled the budget to be balanced. The City Manager noted that Councllmember Chang
had studied the budget, made a number of Inquiries, and seemed to be satisfied with It;
Councilmember Margen did not have any comments on the budget.
It was the consensus of Counci that the 1995-1997 operating budget public hearing be
placed on the June 20,1995 Counell meeting agenda. '
CouncUmember Lojeskl requested that staff prepare a press release outlining some of the
budget highlights. A presentation will also be prepared for release by cable TV.
REPORT AND DISCUSSION REGARDING COUNCIL VACANCY APPOINTMENT PROCESS
01/0, 3l:.- Staff presented a draft of the citizen resume to be distributed to those citizens who might
be Interested In an appointment to the Interim position of couneUmember following the
departure of Counellmember Margett. The City Attomey suggested that a copy of the
required financial disclosure form be attached to the resume form for Information purposes.
An additional explanation sheet will also be attached. The City Attorney stated that the
thirty day time period for appointment of a new couneUmember will begin when
Couneilmember Margett Is sworn In as State Assemblyman. This Is presumed to be June
9. At the June 6 cooneY meeting staff can be directed to release the applications and
press releases the following morning, with a submittal deadline of one week. This will
allow time for applicant screening and also for a 'special meeting, If necessary. It was the
consensus of CouneY that the deadline for receipt of resumes will be 12:00 noon, June 13,
1995, with a CouneY meeting to be scheduled for Wednesday, June 14 at 5:30 p. m. An
announeement regarding the vacancy appointment Is to be published In the Sierra Madre
News.
O/I~ -o/{)
CLOSED
SESSION
ADJOURN-
MENT
(June 1,
1995)
ATTEST:
Staff requested that the June 6 couneY meeting commence at 6:00 p.m. for a Oosed
Sesslon prior to the regular meeting for discussion of labor relations.
At 6:55 p. m. the Adjourned Regular Meeting (Budget Session) ADJOURNED to Thursday,
June 1, 1995 at 7:30 a m. In the City Hall Council Chambers for an AdJoumed Regular
Meeting (Study SessIon) with County Supervisor Michael Antonovlch, and to conduct the
business of the Council and the Arcadia Red~e1opment Agency and any Oosed Session
necessary to discuss personnel, litigation matters and evaluation of properties.
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City of Arcadia
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