HomeMy WebLinkAboutFEBRUARY 8,1994
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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.
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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
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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
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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.
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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.
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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.
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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.
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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.
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