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HomeMy WebLinkAboutMAY 23,1995 I I I 37:0l4l OIN).. ""v O~-':)3 qr- cc 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 , \ 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 5/23/95 37:0142 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. I 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 2 5/23/95 I 37:0143 I 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. I 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 I 3 5/23/95 37:0144 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 . 5/13/96 I I I I I I 5. 37:0145 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. , City of Arcadia J~f~d~~~k 5 5/23/95