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HomeMy WebLinkAboutMinutes - City Council - unsigned - 1991-11-26 - Adjourned Regular Meeting1 11/26/91 City Council, Adjourned Regular Meeting City Hall Conference Room 760 Parkview Avenue Redding, California November 26, 1991 5:15 p.m. The meeting was called to order by Mayor Dahl with the following Council Members present: Arness, Moss, and Dahl. Council Member Fulton was absent and Council Member Buffum was absent due to a family emergency. Also present were City Manager Christofferson, Assistant City Manager McMurry, Assistant City Attorney Calkins, Director of Public Works Galusha, Chief of Police Blankenship, Director of Finance Downing, City Treasurer Linville, Director of Information Systems Kelley, Investigative Sergeant Mundy, Public Information Officer Bachman, Assistant City Clerk Strohmayer, River & Waterways Commissioner Johnson, and Secretary to the City Council Moscatello. BUDGET EXPENDITURE REDUCTIONS (B-130-070) City Manager Christofferson recalled that City Council directed staff to develop a list of possible expenditure reductions to address the prospect of a revenue shortfall by the end of fiscal year 1991/92. Mr. Christofferson submitted a list 16 possible budget cuts; however, he made six recommendations that City Council could now implement in the approximate amount of $410,700.00. Mr. Christofferson recommended that City Council impose a selective hiring freeze for an estimated savings of $100,00.00; work to reduce the reserve for compensation allowed under existing agreements by $150,000.00; defer further expenditures on the firing range project for the remainder of the year or until revenue estimates are healthy enough to justify reinstatement (savings in the amount of $44,900.00); defer construction of curb, gutter and sidewalk on East Cypress Avenue for a savings of $25,800.00; institute measures to reduce General Fund overtime by $80,000.00; and reduce education and travel costs by $10,000.00. Mr. Christofferson noted that there is the possibility of a Public Employee Retirement System (PERS) rebate. He cautioned, however, that the rebate is subject to a Court decision, and the case will probably not settle until June or July, 1992. He said Council may not want to count on those funds. Mayor Dahl noted that staff is alerting the City Council in advance of the revenue shortfall so Council can take corrective action now. He noted that revenues are declining. Director of Finance Downing explained that there has been some growth in property tax revenue, but it is far short of expectations. In response to Mayor Dahl's question, Ms. Downing stated that the City has no way of determining if the City is being allocated its fair share of property tax without reviewing the County records. Mr. Christofferson conveyed that Municipal Resource Consultants (MRC) has a property tax audit program, and he asked MRC to send a proposal. After MRC conducted the sales tax audit, the City's sale tax revenue was increased by $125,000.00 and that money will be realized every year. Ms. Downing added that Shasta County does the billing, collection, and allocates the City's share of property tax and does not receive an accounting from Shasta County. Mayor Dahl said he would like to move forward with a property tax audit. Noting that staff's methodology for forecasting property tax revenue was off, Mayor Dahl conveyed that Council and staff need to know that information. Council Member Moss agreed with Mayor Dahl. 2 11/26/91 In response to a question from Council Member Arness, Mr. Christofferson stated that the City has the capacity to conduct the audit, but a third party who is objective and experienced in the field would be preferred. Council Member Moss pointed out that staff is forecasting a $1.4 million budget shortfall, but that does not take into consideration leaving any funds in the general fund reserve. He suggested that Council make further cuts in order to create a reserve, and he suggested that if the City receives a rebate from PERS, that money should go into the reserve. Council Member Arness recalled that he voted in support of the feasibility study for expansion of the Convention Center because it will bring in more conventions and conferences which increase revenue. He also indicated that cost cutting should extend to the enterprise areas. Council Member Arness noted that the only place to really make long range cuts is in personnel because salaries take up most of the general fund. Mr. Christofferson agreed and pointed out that police and fire personnel salaries make up over half of the general fund. Therefore, staff looked at a selective hiring freeze and work furloughs. Clarifying that he prefers not to implement a work furlough program, Mr. Christofferson pointed out, however, that monetary gains from a hiring freeze are subject to chance because it is unknown when an employee will leave the City. He said that only really significant reductions can be made through work furloughs. Mayor Dahl stated that the recommendations are a good start, and City Council should call another general session within the next 30 days to review the budget. Noting that these budget cuts only address the general fund, Mayor Dahl conveyed that he would like a report on how cuts could be made in the enterprise fund areas. He supported Council Member Moss' suggestion to place any rebate the City receives from PERS into the general fund reserve. Mr. Christofferson asked which budget cuts Council would like to implement now, and staff will work on more budget cuts for Council's consideration at the December meeting. He questioned if City Council would still like to meet in January for a mid-year review of the budget. Council Member Moss suggested that Council make budget cuts in the amount of $400,000.00 now and make an additional $400,000.00 cut in December. He added that if City Council makes the budget cuts and receives a PERS rebate, the City will end the year with a reserve. Council Member Arness agreed that if the City receives money from PERS, it should be placed in the reserve. MOTION: Made by Council Member Moss, seconded by Council Member Arness, to accept the City Manager's six recommendations to cut the budget in the approximate amount of $410,700.00 as follows: impose a selective hiring freeze designed to develop maximum unfilled positions for a maximum period of time this fiscal year with minimum adverse impact on service; work to reduce the reserve for compensation allocated under existing agreements by $150,000.00; defer any further expenditures on the firing range project for the remainder of the year or until revenue estimates are healthy enough to justify reinstatement; defer construction of curb, gutter and sidewalk on East Cypress Avenue; institute measures to reduce General Fund overtime by $80,000.00, and reduce education and travel costs by $10,000.00. The Vote: Unanimous Ayes MOTION: Made by Council Member Moss, seconded by Council Member Arness, directing staff to make another $400,000.00 budget cuts for City Council's consideration in December or January. The Vote: Unanimous Ayes ADJOURNMENT There being no further business, at the hour of 5:45 p.m., Mayor Dahl declared the meeting adjourned. APPROVED: _____________________________________ Mayor 3 11/26/91 ATTEST: ____________________________________ Assistant City Clerk