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HomeMy WebLinkAboutFEBRUARY 8,1994 I I 0110- -,,0 r) ;.) () ), (I <I 36:0040 t e, CITY COUNCIL PROCEEDINGS ARE 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 (STUDY SESSION) FEBRUARY 8, 1994 The City Council and the Arcadia Redevelopment Agency met in an Adjourned Regular Meeting (Study Session) at 5:30 p. m. on Tuesday, February 8, 1994 in the Conference Room of the City Hall Council Chambers. PRESENT: Councilmembers Fasching, Harbicht, Lojeski, Margett and Ciraulo None ABSENT: 1. ORAL COMMUNICATIONS Johanna Hofer, 875 Monte Verde Drive, referred to the memorandum from the City Attorney concerning the Project Manager, Library expansion project, and inquired how much money has been paid to this date. Staff responded that no money has been paid. Mrs. Hofer expressed concern about the proposed tile roofing on the library and wondered what kind of damage such a roof might sustain in an earthquake. Her comments were duly noted by Council. Mayor Ciraulo congratulated Fire Department Battalion Chief Don Little for his twenty-five year service to the City on the occasion of his retirement. Mayor Ciraulo congratulated the City Attorney on the successful outcome of the court action in the Matthews case. 2. PROJECT On December 21, 1993 the City Council formally approved a MANAGER contract with Construction Management Resources Inc. as Project LIBRARY Manager for the library renovation. The actual proposal for this RENOVA- contract was in the name of Construction Control Group, a sole TION proprietorship of Lisa Sachs, the primary party to perform the ;, ; ~d <> OJ J1contract. Subsequent to Council action, information was r) . received from Ms. Sachs representing her resignation from Construct Management Resources Inc., and affirming her ability to perform the contract as Construction Control Group. All key team members identified in the original proposal were either already independent contractors, or are no longer Construction Management Resources Inc. employees, and are able to perform the services as outlined in the Construction Control Group proposal submitted to the City, subject to assurances required by the City Attorney, The City Attorney presented an agreement with Lisa C, Sachs, A, LA., Principal of Construction Control Group for Council consideration and approval. 1 2/8/94 36:0041 In response to a question from Councilmember Margett, the City Attorney stated that all insurance requirements would be in place. It was MOVED by Councilmember Harbicht, seconded by Mayor Pro tem Lojeski and CARRIED on roll call vote as follows to APPROVE the AMENDMENT to the City contract with Construction Management Resources (CMR) as Project Manager for the Library renovation, changing Construction Management Resources to Construction Controls Group (CCG)" SUBJECT to additional contract clauses as deemed necessary by the City Attorney in view of the disassociation of CCG from CMR; and final approval as to form of the contract by the City Attorney. AYES: NOES: Councilmembers Harbicht, Lojeski, Margett and Ciraulo Councilmember Fasching (Voted "no" because he believes the cost is excessive.) None I ABSENT 3. MID-YEAR The Acting City Manager, Bill Kelly, stated in part that the goal FINANCIAL of the Mid-Year Financial Report is to present current REPORT information of the City's financial posiiton, and what is FY 1993- projected to the end of fiscal year 1993-94. No Council action 94 is requested this evening. Last year's budget was balanced by ;'}:, _~o -/0 the judicious use of reserves, as well as the deferral by City employees of approximately $500,000 in salary increases. Costs were controlled and reserve funds were used to compensate for the monies taken from the City by the state. All of this was done with no reduction in services or change in the level of employees, and Council balanced the budget. Presently, California has still not come out of the reGession. The federal government is not giving California any funds. The League of California Cities informed the cities that the Governor's budget assumed a three billion dollar grant to balance the state's budget; therefore, the Governor would not expect funds from counties, cities or redevelopment agencies. Now, with the lack of federal funds, the state will probably again take money from the City this year to help balance the state budget. The Finance Director noted that last year after Council adopted the city budget, the state's budget was adopted, which in effect passed the state's fiscal problems back to the cities. Approximately one million dollars has been taken from the city property taxes this year. In addition to the state wide recession, Arcadia has had its own financial problems because it has lost several large businesses. However, later this year when the Santa Anita Fashion Park renovation is completed and the new Nordstrom store is opened, there will be an increase in sales tax revenues. The Finance Director then reviewed the Estimated Total Fund I Balances and Reserves at June 30, 1994 which amount to approximately $30,000,000. These are monies which are available after other monies have been budgeted or appropriated. There are three categories: (1) Undesignated Funds which are available, spendable resources as Council may direct. The Finance Director further explained that the Facility Construction Fund shows a balance of $49,300 because the construction funds for the new fire station and for the library renovation have been appropriated. (2) Designated funds are funds that this or a previous Council has designated for specific purposes, Council can change these designations if it wishes. An example is the Equipment Replacement Fund which will have a balance of almost one million dollars at the end of this fiscal year. The interest earned on this money pays for most of the equipment purchases. The original goal in setting up this fund was to be able to fund equipment purchases from the interest earned. The Emergency 2 2/8/94 .. 36:0042 Reserve Fund of $3,000,000 is a designated fund set aside for a catastrophic event. The last category is that of (3) Restricted Funds which have been restricted either by contract or legal requirement. An example of this is the State Gas Tax Fund. Those funds received from the state are specifically required to be used for maintenance and operation of the streets. A reserve of four months worth of claims is recommended for the categories of Workers' Compensation/Liability and Medical/Dental. I In response to questions from Councilmembers about funds for Facility Construction, the Finance Director explained that race track proceeds are placed in the Capital Outlay Fund. Next year it is expected that the City will have $1. 7 million to $2 million dollars in that fund. Also, from time to time funds are transferred from the General Fund to Facility Construction Fund. Because of the fire station construction and library renovation, this fund is very low. But these funds will eventually be built up again to be used for Facility Construction. The Finance Director proceeded to discuss the General Fund appropriations, pointing out that 59t of such appropriations are for public safety, i. e., the Police and Fire Departments. He also pointed out that Personnel Costs from the General Fund indicate Salaries & Benefits to be 80t with Service & Supplies at 20t. The Finance Director also presented graphs and charts showing indicated revenues for this fiscal year. These indicated loss in sales tax revenues because of loss of several large businesses in the City. This sales tax revenue is expected to increase by the next fiscal year with the completion of the Fashion Park renovation and the Nordstrom opening. The major loss was that of the property tax which was taken by the state. There is little doubt that this will occur again this year. At this time there is no way to know what the amount of lost property tax will be. The Finance Director presented a brief summary of revenue projections: Sales Taxes decreased due to recession, loss of businesses. The City's major source of revenue. Increase in revenue is expected next year. Property taxes decreased due to State's grab of property taxes to balance state budget, decline in property values. Utility taxes decreased due to decline in Edison billings. This is based on 5t and has been a very predictable source of revenue for the City. I Motor Vehicle in lieu increase, a result of the receipt time revenue from Transportation and Development Funds state as part of the State Budget balancing process. also impacted by the economy. of a one, from the This is , , Occupancy Tax was increased last year from 8t to lOt. Due to earthquake damage, the City lost occupancy from one hotel for about a year. The revenue should increase because the hotel business is doing well. Business License fees have almost doubled since 1987-88 and are now tied into the CPI so each year these fees will increase. Building permits have shown a decrease generally, A small recent increase has been primarily due to permits associated with the Santa Anita Fashion Park project. This revenue will probably be very flat for next year. 3 2/8/94 36:0043 Franchise fees declined on the utilities side because of some businesses leaving the city. The franchise fees are based upon 2% of gross sales for certain utility companies. Interest earnings decreased due to low rates in the market place. Premium/discounts increased due to favorable price conditions in the market place. As an example, when the city buys a government security investment, for instance, that yields 6% and tomorrow the interest rates drop significantly, technically that investment could be sold at a premium amount of money. The city could sell such investments prior to the maturity and generate premium amounts of money. This has been a benefit for the General Fund. We expect this category to be down again next year because the interest rates will not decline any further. I In summary, the estimate is a shortfall of approximately two million dollars. This takes into account the projected revenue, assuming that overall revenues will increase $300,000 to $400,000; that the Nordstrom store and new Fashion Park facility will generate another $600,000; the 1/2 percent increase in sales tax will generate another $300,000. Also, estimating a loss of revenue from the state on property taxes of $1,000,000. On the expenditure side, $410,000 represents AFSCME and Fire Department groups which have deferred some salary increases. This does not take into account any other salary increases, any increase in service/supplies, or increase for health, medical costs or retirement benefits. In reply to a question from Councilmember Harbicht, the Finance Director agreed that within the next three years up to $1,000,000 in sales tax revenue should be generated by Nordstrom and the other mall stores. The Finance Director pointed out that $2.2 million dollars is a significant amount from a budget of 24 - 25 million dollars. This means a loss of 10% and this loss will grow bigger if the state takes more of the City's revenue. Also the City has been out of balance the last two years and has used one million dollars of reserves. In order to get even, we have to make up a million dollars. The 2.2 million does not take into account using any of the reserves -- that is a decision for Council. The Acting City Manager stated, in part, that in meetings with department heads, the employee associations and all the employees it was emphasized that the City employees of Arcadia have a challenge to meet. Employees need to start saving money; to hold the line. This means no proposals for changes in personnel or programs that are General Funded. It means to 'try to be creative in saving dollars, to look at every asset and every program we have to determine if we can be more fiscally conservative; to determine how we can generate more revenue. The Acting City Manager has asked the department heads to submit budgets which I do not show any personnel or program cuts per se to try to bring in a level budget while we are waiting to see how our revenue projections come out. We may come out better than we anticipate if we save money from now until the end of the year. Closing a gap of $2.2 million dollars will not be easy. This is a very conservative community in terms of a very high level of service with what, in his opinion, is not a large staff size or a large supply/services account. The budget schedule calls for the department heads to present their budgets to the Finance Director and the Acting City Manager by the end of March, with a presentation to the City Council at the end of April or early May. Between now and then, the City employees will be trying to create money to close that gap of 2.2 million dollars. No Council action is required at this time; the Mid-Year Financial Report has been presented to provide an update to Council. 4 2/8/94 I I 4. LOJESKI (Appeal of C.U.P. Market- place Properties) CIRAULO (Appeal of C.U.P. Market- place Properties) FASCHING (Political Survey) (/1 ,,'\ '~I V~:'J ...(- \. VII.., CLOSED SESSION O/(O - "V ADJOURNMENT ATTEST: 36:0044 HATTERS FROM ELECTED OFFICIALS Mayor Pro tem Lojeski said that an appeal is coming before the Council regarding the approval of a Conditional Use Permit for Marketplace Properties. One of the persons involved with this appeal has stated that, following discussions with Mayor Pro tem Lojeski and Mayor Ciraulo, he was told that there is a good chance of overturning the decision of the Planning Commission. Mayor Pro tem Lojeski is going on record that he did not make such a statement with regard to this appeaL After being approached with an inquiry, he outlined the appeal process, stating that the Planning Commission is an advisory body and that, following a public hearing, a final decision is made by the City Council. Mayor Ciraulo stated that he had given the same information regarding the appeal process' and the public hearing before the City Council. Councilmember Fasching stated that a telephone survey has been conducted in the City asking the residents what they know of or thought about certain policies and actions of the current City Council. The company named by the persons conducting the survey does not exist. Also, some of the surveys have implicated the Political Science Department of Claremont Colleges, which has no knowledge of any survey. Councilmember Fasching requested that the City Attorney make complaints to the appropriate agencies regarding alleged misrepresentation by a telephone survey. The City Attorney announced that, "Council will adjourn to a Closed Session, pursuant to Government Code Section 54956.9 (a) (1) to discuss the Matthews case, and to discuss a personnel item with the Acting City Manager". At 6:40 p. m. the Council entered the CLOSED SESSION, RECONVENED and ADJOURNED at 7:13 p.m. to 8:30 a.m., February 11,1994 in the City Manager's office to tour and view the Rodeffer Quarry site at 12321 Lower Azusa Road, Arcadia with City staff. ~ 5 2/8/94