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HomeMy WebLinkAboutMinutes - City Council - 2009-06-11 - Special Meeting 127 City Council, Special Meeting City Council Chambers 777 Cypress Avenue Redding, California June 11,2009,9:00 a.m. The meeting was called to order by Mayor Bosetti with the following Council Members present: Dickerson, Jones, McArthur and Stegall. I Also present were City Manager Starman, Assistant City Manager Tippin, City Attorney Duvernay, Electric Utility Director Hauser, Police Chief Hansen, Development Services Director Hamilton, Transportation & Engineering Director Crane, Fire Chief Kreitman, Community Services Director Niemer, Support Services Director Kersten, Finance Director Strong, City Treasurer Detwiler, City Clerk Strohmayer and Assistant City Clerk Mize. I RESOLUTION - Adopting the City of Redding Biennial Budget for Fiscal Years 2009-11 [B-130-070] City Manager Starman related that the proposed biennial budget encompasses both General Fund and Enterprise Fund departments. He recalled that much of the information had already been reviewed during the past few months, especially during the May budget reduction workshop, and that the proposed budget resolution would finalize the budget process. Mr. Starman acknowledged the difficult decisions facing the City due to the downturn in the global economy and the importance this Council and prior Councils have placed on maintaining fiscal responsibility by reducing expenditures to match revenue sources, rather than increase taxes. He commented that the Governor and State Legislature have not been as diligent in balancing the state budget and may determine to declare a fiscal emergency and suspend portions of Proposition lA (2004), which was instituted to protect local government coffers from state confiscation. Mr. Starman cautioned that if that occurs, it may be necessary to revisit the City's budget, noting that the state may take as much as $1.8 million in City revenues, theoretically to be paid back in three years. The Legislature may also "borrow" the Measure A or Highway Users Tax Account (HUTA) gasoline tax revenue allocated to the City, estimated at $1.1 million. He pointed out that, although it would not directly impact services such as police and fire, it would significantly limit road repairs and construction. Additionally, implementation of Assembly Bill (AB) 32, referred to as the California Global Warming Solutions Act (passed in 2006), will significantly impact Redding Electric Utility and the Development Services Department. He noted that this, and other state mandates imposed without funding sources for implementation, will adversely affect the City's budget. Mr. Starman explained that the proposed budget was based on assumptions that the City's anticipated property tax revenue growth rate for Fiscal Year (FY) 2010-11 was 2.5% and the anticipated sales tax revenue growth rate was 0%. He advised that the total budget for FY 2009-10 is $306,644,790 and for FY 2010-11 is $284,570,710. He noted that nearly two- thirds of the budget represents enterprise funds and the remaining one-third represents the General Fund. For FY 2009-10, the General Fund budget is estimated to be $68 million, with more than half allocated for public safety. I According to Mr. Starman, recent concessions from Redding Police Officers' Association and Redding Police Managers' Association enabled the department to retain seven positions for one year. Additionally, funds for retention of a Fire Prevention Specialist position are available because the Fire Department will assume the duties of Operations Director for the Shasta Cascade Hazardous Materials Response Team (SCHMRT). In response to a letter from McNeill Law Offices representing Shasta County Taxpayers' Association that maintained that the "in-lieu property tax" paid by Redding Electric Utility (REU) is not legal, Mr. Starman related that the in-lieu tax is not unusual, is legal, and noted that the fee has been assessed for approximately 20 years. Although the City ceased charging its other utilities an in-lieu fee due to Proposition 218 in 2005, electric and natural gas utilities are exempt. The letter also opposed directing late fee revenue to the General Fund and insisted that the late fees go to REU. Mr. Starman recalled that this topic has been discussed on numerous occasions and will be addressed again by the Utility Billing Review Committee. He stated that existing case law upholds the practice of directing late fees to ~he General Fund. 6/11/2009 128 Mike Quinn, Redding resident, believed the City and State budgets could be balanced ifthe state collected amounts owed by delinquent taxpayers. He stated that the collection policies must be changed to reduce the deficit by enforcing tax payments. Marjy Cantrell, Redding resident, contended that when the apartment complex was constructed at Browning and Chum Creek Road, Browning Street should have been expanded to four lanes. She thanked the City for recently putting the work out to bid. Ms. Cantrell suggested fuel saving measures, such as public safety or call-out personnel should be the only employees authorized to use a City vehicle after hours; eliminate overtime; change landscaping rules; privatize the Convention Center; and begin programs to change or overturn state mandates that are not funded. Citizen's Budget Committee Members' Comments Citizen's Budget Committee Member Gary Gerhard thanked the City Council and City Manager Starman for allowing him to participate in the budget process. He advised he was impressed with City staff s knowledge and willingness to provide assistance. He expressed concern that budget assumptions are an educated guess based on past experience, future projections and the information available at the time. Mr. Gerhard noted that they are subject to change from outside sources such as the world recession, state intervention and other occurrences over which the City has no control. He cautioned that due to these factors, the proposed budget may require future reduction and noted that additional cuts to staffing would significantly and negatively impact services to all citizens of Redding. He suggested a study to evaluate outsourcing some City services, such as payroll, street maintenance, licensing, and garbage. He also suggested reducing supplies and materials, staff overtime, and participation in events that require staff overtime. Additionally, he suggested modifying work week schedules and foregoing some maintenance projects. I Citizen's Budget Committee Member Charles Menoher, concurred with much of Mr. Gerhard's comments, adding that much of the current dilemma is directly related to the actions of the state legislature and their attempt to rectify their b.udget shortfall by taking revenue from cities and counties. He stated that the Council has worked diligently to make the difficult decisions necessary to keep the City financial strong. However, he felt the City has contributed to the problem over the years by approving long-term employee contracts, agreeing to excessively high health benefits, paying employee retirement health contributions, and approving excessive overtime. I Community Services Department Community Services Director Niemer related that the department's proposed budget for FY 2009-10 is $5,674,650 and for FY 2010-11 it totals $5,681,050. She explained that the Community Services Department includes the Recreation Division, Park Capital Grant Projects, Park In-Lieu Fee Projects and Park Development Fee Capital Projects. Ms. Niemer provided a brief presentation highlighting the many programs offered to the community through the Department and future plans for the Youth Action Council (Y AC). Ms. Niemer explained that 100% of the cost of most recreation programs are covered by fees collected from participants, noting that even during these difficult financial times, the removal ofthese programs would not result in savings. Council Member Jones expressed concerned regarding the $4 million in the Park Development Fund (PDF) stating that $2.5 million was not derived from park fees and could be transferred to the General Fund. Ms. Niemer responded that the loss of funds would be devastating to the PDF, especially in light of the reduced amount of development funds received, and would jeopardize the PDF's ability to cover outstanding debt service and she did not recommend reducing the PDF. There were no other significant issues. I Development Services Department Development Services Director Hamilton provided a brief PowerPoint presentation highlighting the numerous functions of the department including the Permit Center, Planning, Building-Construction, Code Enforcement and GIS-mapping. Mr. Hamilton noted that during the last budget cycle the department had 54 employees and will have only 40 by the end ofthis budget cycle. He stated that the department's proposed budget for FY 2009- 10 is $6,252,920 and for FY 2010-11 it totals $6,259,000 and accounts for approximately 9% of the General Fund budget. 6/11/2009 129 Mr. Hamilton described the proposed Integrated Land Management and Activity Tracking System (ILMA TS), which was identified as a Council priority. The system will require approximately 18-24 month to implement and will be a vital tool when the economy rebounds. He stated that ILMA TS will cost approximately $1.3 million over 5 years, with $170,000 coming from the General Fund. I City Manager Starman clarified that this purchase is not built into the budget at this time, but if the City Council wishes to move forward it will be brought back for further discussion. Council discussion ensued, resulting in conceptual approval to move forward. Council Member Jones did not support utilizing General Fund monies to obtain the ILMA TS system unless the department makes corresponding budget reductions. There were no other significant issues. Electric Utility Department Electric Utility Director Hauser provided a PowerPoint presentation regarding increased energy costs driven by changes in the Western hydro contract, dry hydro conditions, and reduced retail sales due to the depressed economy. He stated that 70% of the factors that impact energy costs (lack of rain for hyrdo power, market spikes, etc.) are beyond REU's control; therefore it is difficult for the utility to mitigate shortfalls through cuts to the remaining budget items. Mr. Hauser reported that the proposed departmental budget for FY 2009-10 is $136,999,560 and for FY 2010-11 it totals $140,789,850. There were no other significant issues. I Fire Department Fire Chief Kreitman stated that the proposed budget for FY 2009-10 is $16,329,000 and for FY 2010-11 is $17,031,830. While the department has several unmet needs, the highest priority is additional fire fighters on engine companies. He pointed out that although the proposed budget allows for mandated and legally required equipment, it does not provide any reserves for emergencies or loss of equipment. It is an extremely lean department with eight stations, of which five are staffed with only two firefighters, which is unusual for a city of Redding's size. He related that the proposed budget will not including funding for extra personnel during the "high-risk" fire season. Chief Kreitman recalled that four positions have already been eliminated. Council Member Jones inquired how the department would absorb additional cuts if the financial downturn continues and further reductions become necessary. Chief Kreitman 'advised that the City's fire staff continues to decline in relation to the population, noting that the current ratio is 1.76 firefighters per 1,000 population, and observed that the ratio was 1.97 per 1,000 in 1980. He stated that further staff reductions will present serious challenges and hamper the ability to provide adequate services to the citizens of the community. There were no other significant issues. I GENERAL GOVERNMENT City Manager Starman explained that General City Government is comprised of the City Council, City Manager's Office, Finance Department, Community Development Program, City Clerk's Department, City Treasurer's Department, City Attorney's Office, and Non- Departmental. City Council City Manager Starman reported that the City Council budget for FY 2009-1 0 is $168,940 and for FY 2010-11, it amounts to $175,070, and there were no other significant issues. City Manager's Office City Manager Starman said that the City Manager's proposed budget for FY 2009-10 is $636,350 arid for FY ~01 0-11 the budget totals $677,950 and there were no other significant Issues. 6/11/2009 130 Community Development Mr. Starman explained that the Community Development budget is funded through grants from the Community Development Block Grant (CDBG) program and the Home Investment Partnerships (HOME) program. Each year the grant amounts vary, but it is anticipated that grant amounts for FY 2009-10 will be $2,124,930 and for FY 2010-11 will be $2,124,930. There were no significant issues in the budget. Finance Department The Finance Department's proposed budget for FY 2009-10 totals $1,321,330 and for FY 2010-11, it totals $1,379,290. Full-time employees were reduced from 14 to 11. He stated that the Department is committed to managing and safeguarding the City's resources, facilitating the effective and efficient use of City resources, providing high quality financial information and support services for decision makers, and protecting and enhancing the City's financial well-being. I There were no significant issues in the budget City Clerk's Department The City Clerk's proposed budget, which includes the Records Management Division, for FY 2009-10 is $907,910 and for FY 2010-11, it totals $940,420. Mr. Starman said the decrease in personnel is attributed to the retirement of the City Clerk and the elimination of a full-time Clerk III position. There were no other significant issues. City Treasurer's Department The City Treasurer's proposed budget for FY 2009-10 is $540,090 and for FY 2010-11 the total is $567,330. Mr. Starman related thatthe City Treasurer' s Office has reduced a full-time position to part-time. City Attorney's Department The City Attorney's proposed budget forFY 2009-10 totals $1,002,820 and forFY 2010-11, it is $1,030,670. The City Attorney's Office has eliminated a part-time Administrative Assistant I position. I There were no other significant issues. There were no other significant issues. Non-Departmental Mr. Starman explained that the non-departmental budget covers issues/items that are not the sole responsibility of anyone department or division such as Animal Regulation, General Fund Debt Service, General Fund Capital Projects and General City Projects, the FY 2009-10 total is $4,725,020 and for FY 2010-11 the total is $4,689,470. There were no significant issues. Municipal Utilities Department Assistant City Manager/Municipal Utilities Director Tippin stated that the Municipal Utilities Department includes five divisions; Solid Waste, Storm Drains, Water, Wastewater, and Administration, with a proposed budget for FY 2009-10 totaling $195,281,500 and for FY 2010-11 the total is $147,755,260. Mr. Tippin recapped upcoming capital projects and water conservation efforts specifically related to the increasing number of Landscape Maintenance Districts (LMD's). He advised that the proposed budget includes the addition of one Customer Service Representative specializing in account audits. I There were no other significant issues. Personnel Department Mr. Starman noted that with the exception of increased group health insurance and Public Employee Retirement System (PERS) contributions, the Personnel budget is status quo. The total budget for FY 2009-10 is $46,094,620 and for FY 2010-1, the amount is $48,020,460. He recalled that the Risk Management Division assumed responsibility for administration 6/11/2009 131 of Workers Compensation claims last year, and recent changes to Workers Compensation regulations require additional personnel. The department also oversees personnel benefits such as retirement, PERS, and Public Agency Retirement System (PARS). There were no other significant issues. I Police Department Police Chief Hansen related that the proposed budget for FY 2009-10 is $24,780,340 and $25,792,010 for FY 2010-11. He reported that since July 2008 the department has lost 30 positions (7 sworn and 21 non-sworn), reduced some positions to part-time, and reduced the cadet program. He related that concessions made by Redding Police Officers' Association, Redding Police Managers' Association, and Redding Police Officers' Association- Miscellaneous will result in an addendum to the proposed budget which will restore 7 of the non-sworn positions for 12 months. Chief Hansen noted that in addition to the budget cuts, Shasta County has reinstated booking fees and there have been reductions in grant funds. He indicated that with the loss of positions, response times will suffer especially for lower priority calls that were formally the responsibility of Community Service Officers. Chief Hansen noted that work continues in the search for an appropriate replacement for the aging and inadequate police facility and referred to a substantial list of unmet needs within the department. There were no other significant issues. Council Member Jones thanked the police unions for agreeing to concessions that allowed positions to be restored. I Support Services Department Support Services Director Kersten provided an overview ofthe Department comprised ofthe following divisions: Information Technology, Reprographics, Convention Center and Visitor's Bureau, Tourism, Fleet Maintenance, Parks Maintenance, Facilities Maintenance, and Purchasing, with approximately 88 full-time employees. He highlighted a list of challenges facing the department and reported that the proposed budget for FY 2009-10 is $13,989,470 and for FY 2010-11 is $13,999,110 and includes one additional position. Mr. Kersten noted that the proposed budget is within the guidelines with two exceptions~ It is recommended that the convention center facility fee be raised from $2 to $5 in order to bring the fee more in-line with the current average fee of $9. Additionally, it is recommended that the Fleet Maintenance Division purchase an $80,000 automated tracking system to manage fuel costs, maintenance and related expenses more efficiently. There were no other significant issues. In response to Council Member Jones, Mr. Kersten stated that the addition of new parks would be difficult unless there are corresponding increases in maintenance personnel. I Council Member Jones noted that he would like Council to discuss looking at privatizing the Convention Center and asked Mr. Kersten to comment on the feasibility of privatizing. Mr. Kersten remarked that it is prudent to research the issue and indicated many factors would need to be considered, noting that much of the budget is dedicated to fixed costs such as debt service and utilities and would not decrease through privatization. He stated that of the Convention Center's 20 employees, only 10 qualify for employee benefits. He explained that a complete study should factor in the benefits the Convention Center offers the community, including the current practice of subsidizing non-profits through lower rental fees and providing free parking. Council Member Stegall asserted that this topic is tentatively scheduled for the next Council meeting and, as liaison to the Community Services Advisory Commission, she supports studying the possibility of privatizing the Convention Center, noting the Commission has already indicated a desire to assume this duty. / / 6/11/2009 132 Transportation & Engineerin2 Department Transportation & Engineering Director Crane provided a PowerPoint overview of the department which is comprised of Engineering, Parking, Airports, Streets, and Administration. Mr. Crane pointed out that various administrative duties for Redding Area Bus Authority (RABA) are part of the department's work, however, as ajoint powers, quasi- autonomous agency, RABA is equipped with its own governing authority and develops a separate stand-alone budget. He said the proposed budget for FY 2009-10 is $19,036,990 and for 2010-11 it amounts to $14,054,540. There were no significant issues. Council Member McArthur asked if the parking meters from the downtown area should be removed since they operate at a deficit of$9,000. Mr. Crane responded that the department is researching that possibility. I In other matters, Ms. McArthur suggested forming a citizen committee to review privatization possibilities. She also suggested that GASB-45 be reconsidered and the contribution be increased by an additional 1 %. Mr. Starman responded that 2.2% is currently being set aside and if that amount was increased, additional budget reductions would be necessary to compensate. Ms. McArthur indicated she would not support the budget because of the GASB-45 issue. Council Member Jones expressed concern that the economy will continue to decline and additional budget cuts will be necessary, which will negatively impact the services the City is able to provide. He is also interested in a privatization committee suggesting perhaps a five person committee. Mr. Jones expressed appreciation for the unions that were willing to work with the City during these difficult times and offer concessions. Council Member Stegall stated her support for the proposed budget, agreed that studying privatization was warranted, and urged the unions to seriously consider concessions. Ms. Stegall emphasized that, while this budget does not recommend increased set-asides, this Council has not ignored GASB-45 and continues to seek ways to address this issue. MOTION: Made by Council Member Dickerson, seconded by Council Member Stegall adopting Resolution No. 2009-61, a resolution of the City Council of the City of Redding adopting and approving the Biennial Budget for Fiscal Years ending June 30, 2010, and June 30,2011 as presented including the addendums relative to the Police and Fire Departments. The Vote: AYES: NOES: ABSTAIN: ABSENT: I Council Members: Dickerson, Jones, Stegall and Bosetti Council Members: McArthur Council Members: None Council Members: None Resolution No. 2009-61 is on file in the Office of the City Clerk. At the hour of 12: 17 p.m., Mayor Bosetti announced that the City Council would adjourn to closed session to discuss the following: Closed session pursuant to California Government Code Section 54956.8: CONFERENCE WITH REAL PROPERTY NEGOTIATOR Property located at 4712 Mountain Lakes Boulevard (KMS Property) Assessor Parcel Number 114-320-034 Negotiating parties: City Manager Starman Under negotiation: City of Redding and UJB Investments, LLC and RHS Norcal Investments, LLC Under Negotiation: Price and Terms [C-070-010] I Closed session pursuant to California Government Code Section 54957.6: CONFERENCE WITH LABOR NEGOTIATOR Designated Agency Representative: Personnel Director Johnson Employee Organization: Local Union 1245 of International Brotherhood of Electrical Workers AFL-CIO - Electric Employees [P-100-050-070] 6/1112009 133 At the hour of 12:55 p.m., Mayor Bosetti reconvened the Special Meeting to open session and reported that there was no reportable action. ADJOURNMENT There being no further business, at the hour of 12:57 p.m., Mayor Bosetti declared the meeting adjourned. APPROVED I ~Gt ~-- Mayor ATTEST: !YcwJ~ ~ Assistant City Clerk I I 6/11/2009