HomeMy WebLinkAboutMAY 10,1994
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CITY COUNCIL PROCEEDINGS ARE TAPE RECORDED AND ON FILE IN THE OFFICE OF THE CITY
CLERK
ROLL CALL
1.
2.
OPERATING
BUDCET
PRESENTATION
(IT 1994-95)
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MINUTES
CITY COUNCIL OF THE CITY OF ARCADIA
and the
ARCADIA REDEVELOPMENT AGENCY
ADJOU&~ED REGULAR MEETING (STUDY SESSION)
May 10, 1994
The City Council and the Arcadia Redevelopment Agency met in an
Adj ourned Regular Meeting (Study Sess ion) on Tuesday, May 10,
1994, at 5:30 p.m. in the City Hall Council Chamber.
PRESENT:
ABSENT:
Councilmembers Chang. Kuhn, and Young
Councilmembers Lojeski and Margett
It was MOVED by Councilmember Kuhn, seconded by Mayor Pro tern
Chang and CARRIED to EXCUSE the absence of Councilmember H,.'i.., ~~
and the absence of Councilmember Lojeski. ~q~,~n'
ORAL COMMUNICATIONS
None.
Acting City Manager. William Kelly, stated in part that the budget
review process presented at this meeting was the beginning of an
information exchange between staff and the City Council. The
Council requested that all City employees be invited to this budget
meeting and all future budget reviews so that employees may be
aware of the process; the issues involved; and to observe the
discussion of the alternatives within the budget process; and to
acquire an overview of the proposed budget for IT 1994-95.
In his opening remarks the Acting City Manager noted that past
City Councils have balanced previous budgets by utilizing reserve
funds. Because of the expected decrease in funds from the state,
at the January 1994 mid-year review, the City Council discussed
the possibility of having to utilize reserves or reduce services
and/or staff cuts. In the current fiscal year revenues have been
decreasing while expenditures have somewhat increased. Last
January projected expenditures exceeded revenues by $2.6 million.
Some of the overall causes of this fiscal problem are the current
recession and its impact on the City; state fiscal problems and
the reallocation of Arcadia property tax to the state budget
process; salary increases to multi-year contracts; increased
health insurance costs; and increased liability and workers
compensation claims and costs.. .a11 of which have had a
significant impact on the budget.
Mr. Kelly further explained that the proposed 1994-95 budget, as
presented, has been balanced and incorporates reductions in
expenditures for supplies and services; proposes revenue
enhancement programs; proposed changes in staffing operations; and
suggests utilization of reserve funds. It was noted that 80% of
the General Fund budget is salaries and employee benefits, and 20%
is supplies and services.
The proposed budget for each department was reviewed with
department heads and cuts made wi thin each department for an
approximate total reduction of $345,000 from the General Fund for
supplies and services; transit and redevelopment funds were
reduced; and approximately $500,000 from the Water Fund by using
a different cost analyses. In addition staff did more detailed
cost accounting this year. In total, from the initial budget
review. and cost allocating process, over $500.000 was cut from
the General Fund budget.
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In reference to the proposed Capital Improvement Plan (CIP) and
Capital Outlay Program the Acting City Manager explained in detail
that the crp is a general financial plan for capital improvements
and the proposed means of financing, rather than a budget. The
proposed crp has a different format than prior years and has been
reorganized. In this year's budget $5,000,000 was allocated
toward renovation and reconstruction of the City library. Mr.
Kelly suggested that the Council might prioritize all of the
public buildings before authorizing expenditure of funds for the
library project. A new police station should be considered; Fire
Stations 1 and 3 need renovations and/or reconstruction, as well
as City Hall and the library. Depending upon the type of work to
be done at all of these facilities, it could cost approximately
$15 million to upgrade all of these buildings. Staff recommends
that the Council hold off the library renovation until priorities
are established for improvements to all public buildings. A new
reserve fund needs to be created for public buildings similar to
the Equipment Replacement Fund. The Capital Outlay Program. which
is referred to as the Equipment Replacement Fund, provides for
office equipment, computer software. field equipment, vehicles and
communication equipment. and has a balance of $9 million. Staff
suggests that the life of such equipment be extended. and that the
Equipment Replacement Fund not be funded in the coming fiscal
year. This plan would then help to keep the General Fund in a
positive cash flow position.
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The Finance Director. Jim Dale. offered a slide presentation of
multi-year financial forecasts for the City; the revenue
enhancement program; the proposed cost reduction program; and the
reserve funds that could be used to balance the $47 million plus
budget for FY 1994-95. An overview of the proposed General Fund
revenue and expenditure projections was explained in detail. All
major revenue sources for the General Fund are primarily derived
from taxes. Staff expects that $6,125,000 in ,ales tax will be
added to this fund this next year. which would amount to 26% of
the General Fund; property taxes, $4 million or 17%; utilities
tax. $3.8 million or 16%. These revenue sources comprise
approximately 60% of General Fund monies. Other revenue sources
mentioned were motor vehicle in-lieu fees of $1.7 million. or 8%;
business and other licenses and permit fees add another 3% to the
fund.
In preparation of a long range solution to budget projections over
the next five years, staff developed a revenue enhancement
program, which Mr. Dale briefly explained. A franchise fee could
be implemented on trash collection which would return $115.000
annually to the City; the Redevelopment Agency could pay interest
on City funds loaned to the Agency which would be paid back
annually to the City rather than adding this figure to the
principal; staff recommends a study of fees and charges to provide
services, and increases implemented which could amount to as much
as $100,000; imposing penalties for code enforcement
violations.. .$10,000; contracting out park maintenance to private
companies could save about $270,000. A medical subscription I
program for ambulance/paramedic service could be considered with
a flat rate imposed.. .this program could return about $270,000 to
the City; and the use of $ 712,000 in reserves this year. Also
mentioned was the possibility of raising the Transient Occupancy
Tax another 1% which would generate $95.000 annually. Other
considerations could be a City-wide street light and landscape
assessment under the 1972 Act for such assessments; and a library
assessment district could be considered also. Cost reductions
were also suggested, such as, not funding the request from the
Arcadia Tournament of Roses Association for $13,500 this year;
reducing City Hall hours.. .or going to flex hours such as the 9/80
plan; or implementing a five-day furlough program without pay for
all City employees for five days a year... this program would
amount to a savings of $300,000 and would not be permanent; a 2%
at age 55 retirement plan for all non-sworn employees could be
considered. Such a plan would generate a savings in the hiring of
a new employee at the A salary step; the vacation sell back
provision for management employees could be eliminated which would
save $30,000. reduce funding for the Arcadia Chamber of Commerce;
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eliminate employee support programs such as the awards banquet,
exceptional service awards and the employee picnic; eliminate
funding for police salaries at the Arcadia Band Review. Staff
also noted that Council could implement a hiring freeze or
postpone filling vacant positions.. .with benefits included, a
position would probably equal approximately $50,000... if staff
were reduced or layed off the savings would be the same. If
Council wanted to consider salary reductions. 1% would equal
$150,000, 5% would equal $750,000.
Mr. Dale concluded that, based on the assumption that certain
increases in revenues occur, and assumptions of further loss of
property taxes to the state over the next few years, the City may
still need to use reserve funds to balance the budget up to fiscal
year 1998-99.
The Acting City Manager stated, in par~, th~ the budget before 0,I)tL...
the City Council was constructed by the~El'af(flgef\'t:r management team u .
(EMT). The EMT first considered cost enhancements and then cost
reductions, which could be considered permanent in some cases, and
temporary in other cases. The budget, using the stated method,
was balanced with the judicious use of reserve funds. Mr. Kelly
noted that the most important message the EMT has to give to the
Council is that this is a multi-year financial problem which may
be resolved in one and one-half to two years if some reserve funds
are used.
At 6:13 p.m. the City Council Adjourned Regular Meeting (Study
Session) ADJOURNED to 7:00 p.m. on Tuesday, May 17. 1994. in the
City Hall Council Chambers for a Regular Meeting to conduct the
business of the Council and the Redevelopment Agency, and any
Closed Session neces~ary to discuss personnel, litigation matters
or evaluation of properties.
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