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HomeMy WebLinkAboutMinutes - City Council - unsigned - 1992-06-11 - Adjourned Regular Meeting1 6/11/92 City Council, Adjourned Regular Meeting 1313 California Street Redding, California June 11, 1992 5:15 p.m. The meeting was called to order by Mayor Moss with the following Council Members present: Anderson, Dahl, Kehoe, and Moss. Council Member Arness was absent. Also present were City Manager Christofferson, Assistant City Manager McMurry, City Attorney Hays, Director of Public Works Galusha, Director of Planning and Community Development Perry, Electric Utility Operations Manager Ryan, Electric Utility Engineering Manager Russell, Director of Finance Downing, Assistant City Engineer Aasen, Police Captain McKinnie, Director of General Services Masingale, Director of Recreation and Parks Riley, Director of Information Systems Kelley, Building Official Voges, Senior Planner King, Police Services Manager Primrose, Assistant Finance Director Sundin, Risk Manager Mlinarcik, Assistant Director of General Services Kohn, Streets Foreman Druse, Budget Services Officer Starman, Lead Systems Analyst Erwin, Public Information Officer Bachman, Foreman Wastewater Tasello, Management Analyst Anderson, City Treasurer Linville, City Clerk Strohmayer, and Assistant City Clerk Moscatello. BUDGET STUDY SESSION (B-130-070) Director of Finance Downing indicated that budgets for the Internal Service Fund Divisions will be reviewed. Ms. Downing reviewed the budget for the Reproduction Services Division. Council Member Kehoe asked if there were any opportunities to make reductions in this division. Noting that Council receives mail three times a week, he questioned if the amount of reproduction Council receives could be reduced. City Manager Christofferson conveyed that staff will be making one last sweep through each department to look for budget reductions. Ms. Downing stated that the City Clerk is reviewing this area. Ms. Downing reviewed the budgets for Records Management, Information Systems, Public Information Office, Print Shop, General Services Administration, Warehouse, Fleet Management, Building Maintenance and Construction, Risk Management, Employee Benefits, Communications Division, Utility Customer Service, Mail Room Courier, and Utility Field Service. UNRESOLVED POLICY ISSUES (B-130-070, P-100-200, C-050-100-040 & P-050-600-200) Cost of Living Adjustment Budget Services Officer Starman stated that per Council's direction, the proposed budget assumes there will be no cost of living adjustment in fiscal year 1992-93. It is the recommendation of staff to continue to meet and confer with employee bargaining units on this issue; and if it is not possible to eliminate step increases where employee contracts exist, staff recommends that a cost of living adjustment (COLA) be budgeted for unrepresented employees. Mr. Starman conveyed that staff included a restricted reserve of $822,000 in the budget, and part of that money could be dedicated to a cost of living adjustment if negotiations are not successful. To the extent that cost of living increases are allowed, a 1% cost of living increase for all general fund employees would cost approximately $161,000. Council Member Anderson recommended that staff continue to negotiate with bargaining units, and he expressed support for maintaining a contingency fund. He pointed out that eliminating COLA's and step increases is least damaging to employees. Mayor Moss asked if Council is going to give unrepresented employees what Council is able to negotiate with bargaining units. 2 6/11/92 Council Member Anderson stated there is a downside to layoffs; however, if staff is unable to negotiate a reduction in COLA's, that will tie into layoffs. Council Member Dahl suggested that staff continue to negotiate, and hopefully everyone will understand that there is a real problem and cooperation and sacrifice are necessary. He said the public will not tolerate enhancing revenue through taxation; thus, the City has to live within its means. If the bargaining units do not cooperate and demand their COLA's, reductions will have to be made elsewhere. Mr. Christofferson clarified that Council's direction is to continue to meet and confer with each of the bargaining units and try to resolve these issues. Mayor Moss stated that if bargaining units want a COLA, furloughs and layoffs in that particular department will be necessary. Mr. Christofferson said that statement places staff in a contrary position. Last night Council directed staff not to lay off employees in the Fire Department; however, an automatic COLA in the Fire Department begins in the new fiscal year. With this guidance, staff has nowhere to go. Mr. Starman conveyed that the Fire Department COLA amounts to approximately $250,000 in this fiscal year. Council Member Dahl reiterated that five more people in the Planning Department cannot be laid off so the Fire Department receives a COLA. Mayor Moss stated that Council can revisit its discussion regarding the Fire Department. Council will not implement a furlough program and not cut personnel in the Fire Department if the COLA is relinquished. However, if the Union insists on keeping the COLA, Council will reexamine its position to recover those costs. Council Member Anderson stated that if the Union decides to keep the COLA, personnel could be reduced to the extent of that cost, but not beyond that. Salary Step Increases Mr. Starman recalled that Council directed staff to eliminate salary step increases in fiscal year 1992-93. However, due to the difficulties and time lags in the meet and confer process, staff recommends that salary step increases be budgeted for unrepresented employees. Mayor Dahl questioned if staff will continue to meet and confer and ask the Unions for assistance. Mr. Starman responded affirmatively; however, he pointed out it is difficult to negotiate if all the bargaining chips are gone. Staff does not have a lot to bargain with in the first place, and to continue asking for concessions with nothing to offer in return is difficult. Council Member Anderson said it is not a great deal of money if it improves staff's bargaining position. Council Member Dahl conveyed he would like to stay with the original budget assumption and continue to review the budget on a monthly basis and stay flexible. He reiterated that the City has a real problem; and cooperation, good faith, and a little sacrifice is the message Council should convey. Mr. Starman clarified that Council's direction is to continue the meet and confer process with bargaining units and not budget for step increases. Furlough Program Mr. Starman asked Council if the furlough program should apply equally to all City departments. He stated that if Council wishes to implement a furlough program, it is the recommendation of staff to apply the furlough to all City departments. Mr. Starman explained it is a matter of equity and maintaining morale, as well as keeping rate increases in the utilities to a minimum. He pointed out that 3 6/11/92 lower rate increases could be facilitated by implementing a furlough program in the enterprise funds. Council Member Kehoe stated that most, if not all, of the enterprise funds are financially stable. Rate payers pay established rates with the expectation that service will be provided at optimum levels; and if cuts are made in the enterprise funds, service levels will be reduced. He said equity may demand that furloughs are applied across-the-board; however, the expectation of the ratepayer must balance this equation. Mr. Christofferson questioned the difference between the expectations of the ratepayer and the expectations of the tax payer. He pointed out that the taxpayer expects first class service even if they are not paying an amount sufficient to provide such service. Council Member Kehoe said his position is based on the recognition that ratepayers pay certain rates and they expect in-kind service levels. If those divisions are in the black, why should those employees furlough and reduce service levels. Council Member Dahl questioned the logic of an across-the-board furlough program. He acknowledged that employees are not going to be happy with a 10% pay reduction even though they understand the rationale behind the action. However, he opined that general fund employees will not feel any better knowing that employees in enterprise utilities will also take a 10% pay cut. Mr. Christofferson conveyed that morale is not the primary reason. He explained that there is an overlap from general fund departments to enterprise fund departments to the extent someone who is senior in a general fund department over an enterprise fund employee may bump the enterprise fund employee out. Director of Finance Downing stated there are also accounting issues to consider. Some general fund departments/divisions were designated internal services for accounting purposes and the tracking of services. The creation of internal services provided a mechanism by which designated internal services could be funded through the charge back against other general fund departments. Noting that internal service fund departments have been excluded from the furlough program, Ms. Downing pointed out that other divisions within the general fund could have justifiably been designated internal services also. Ms. Downing explained that departments cross charge and there could be employees in the same department who furlough and others who do not furlough. In addition, the Public Works Department has employees who charge time to the water utility, wastewater utility and the general fund. Council Member Dahl asked if difficulty administering the program would be the primary reason for not implementing a furlough program. Ms. Downing replied no; however, she emphasized there will be inequity in some departments. Council Member Dahl stated that if enterprise funds are providing an adequate level of service to the public, and the rates were established after considerable debate and scrutinization by the public and Council, personnel cuts have to be looked at closely because service could be reduced. Not only would employees in enterprise funds be punished, but the public is punished by reducing service levels when it is not necessary. Mr. Christofferson qualified that there are rate increases proposed in several of the utilities and a furlough program would help depress those proposed rate increases. Council Member Dahl asked to what extent a furlough program would avoid a rate increase, and to what extent would service levels be depressed. He cautioned that any rate increase will incur considerable debate. Mr. Starman estimated the decrease in the electric utility rate would be 1 1/2%, and he opined there would be an effect on service levels. 4 6/11/92 Council Member Dahl indicated there should be more empirical evidence and further consideration to assure something is really being achieved. At this time, Council Member Dahl recommended that across-the-board furloughs not be implemented. Council Member Kehoe said no benefit to the general fund has been demonstrated by applying furloughs to enterprise funds. He said it could be argued that it is punitive to apply furloughs to enterprise funds when there appears to be no need to do that. Council Member Anderson said he can support the Council majority, but he hesitates to oppose staff's recommendation. He does not want to tie staff's hands and deny them some flexibility. Mayor Moss stated that Council has given staff flexibility in terms of furloughs and layoffs, and it is punitive to cut departments who are doing a good job and where revenues are adequate. He pointed out that Council is continuing to hold the line on hiring new employees. Mayor Moss opposed the concept of applying a furlough program across all City departments; however, he conceded that if it was possible to give furloughs to all employees and reduce the furlough time allotted to general fund employees he would agree, but that is not the case. Mr. Christofferson said there is no punitive aspect toward the enterprise funds, there is no difference in terms of employee productivity, and there is no difference in terms of what employees are doing. To attribute the need for furloughs to the general fund employees is not the case--it is a fluke having to do with income this year. Council Member Dahl reiterated that applying furloughs to healthy enterprise funds to make everything equal will not achieve anything. Council Member Dahl questioned if an across-the-board furlough which included healthy enterprise funds would create surplus funds. Mr. Christofferson conveyed that any surplus would be reflected in a decrease in rates. Assistant City Manager McMurry stated that rates have been kept at levels sufficient to generate enough revenue to provide the level of service we now have. Council raised those rates according to staff's recommendations, and that has not happened with the general fund revenue stream. Rates have been raised, but general fund revenues have not. Mayor Moss stated that Council's direction is clear. Mr. Starman summarized his understanding as follows: the furlough program applies to general fund departments only, and does not and will not apply to enterprise funds. Mayor Moss concurred that only the general fund is involved. 5 6/11/92 Corporation Yard Mr. Starman recalled that Council considered eliminating design work for the Corporation Yard ostensibly to save money for the general fund. Noting that staff determined there will be no benefit to the general fund by canceling the design work, Mr. Starman asked if Council would like to restore funding for the Corporation Yard. Mr. Starman explained that funds for design work are available in the form of loans and through the assets fund. If Council does not proceed, the money must be returned to those funds, and none will be returned to the general fund. Council Member Anderson favored leaving the funds in the budget on hold until Council authorizes the project. He explained that if the funds are returned to the enterprise funds, it will be a problem getting the funds back when it is time to move ahead with the project. Council Member Dahl said he does not see a problem returning the money to the enterprise funds. He explained that if the funds are set aside for working drawings, Council has committed to the project, and it will impact the general fund. The whole project should be put on hold until the City is healthy enough to move forward. Stating that the Electric Utility is considering a rate increase, Council Member Dahl suggested the funds be returned to the utility. Council Member Anderson said he is not suggesting that the working drawings be prepared, only that the funds remain in the project fund. He pointed out that Council will have the flexibility to use the funds anytime during the year. Park Development Fund Mr. Starman asked if Council would like to use funds from the Park Development Fund to reimburse the general fund for park capital projects completed in prior years. He conveyed that the general fund picked up the bill for several park projects where park development funds could have, or should have, been used. Mr. Starman explained that the City was trying to accumulate money for the sports complex and staff was reluctant to tap those funds. Mr. Starman noted that the sports complex may become privatized; but, the Enterprise Community Park and other park projects are still viable. He wanted Council to know that from an accounting and policy perspective, those funds are available and can be transferred. Council Member Dahl asked if the general fund allocations were individual policy decisions Council made. He pointed out that revenues to build the softball complex would be reduced by $1 million. Mr. Christofferson pointed out that if the softball complex is privatized, it may not be necessary to use all the funds. He noted that some of the charges were not so much in accordance with a Council policy decision, but simply flukes charged to the general fund that should have come from Park Development. He said Council never made a conscious decision to use one fund or the other. In response to Council Member Kehoe's question, Mr. Starman said the biggest project which utilized general fund monies was the Sacramento River Trail. Council Member Anderson asked how much money is in the Park Development Fund. Ms. Downing said there is $1.5 million which brings in approximately $300,000 a year in interest. Mayor Moss said Council would be giving up on the sports complex if it made this move; and although the City is in a bad economic situation, he does not want to take this step backward. He does not feel there is a lot of hope for privatization of the softball complex. Council Member Dahl said this is a one-time bailout that will eliminate all the money for the sports complex. Mr. Starman pointed out that the money could be used for capital projects and to restore street maintenance programs. 6 6/11/92 Council Member Kehoe noted that the funds are available and Council could tap the funds if necessary. Stating that the funds should not be used to solve the budgetary problems Council is facing, Council Member Moss said the funds should be placed in the general fund as an additional reserve, and only used if maintenance money is needed. He noted that the money could also be left where it is, and Council can make a decision later on. Council Member Anderson preferred to leave the money where it is, and Council can tap the money any time. He emphasized that a spirit of cooperation is necessary to solve the City's problems, and if Council found itself $200,000 short, he would strongly consider using some of this money. Council Member Anderson clarified that Council should proceed on the course already set and see what kind of cooperation is received from employee groups before using the funds. Mayor Moss said Council must be very careful of the public's perception of using funds set aside for parks for personnel matters. Mayor Dahl stated that the funds should remain where they are, and the general fund should only be reimbursed after thorough scrutinization that funds are needed for a capital project. Mr. Christofferson conveyed that staff's intention was only to inform Council the funds are available. It was concurrence of City Council to consider adoption of the budget at its next regular meeting of July 7, 1992. PUBLIC COMMENT Legal Secretary Ana Diaz stated that she and her husband are both City employees, and when considering the budget, she asked Council to take into consideration the families being affected. She explained that the City is a big employer, and under the current economic picture, Council has a responsibility not to add fuel to the fire by laying off employees. She opined that keeping jobs and spending dollars in the community is the answer. Stating that employees are concerned, Ms. Diaz noted that employees are talking about organizing. Ms. Diaz invited Council to City Hall to see what employees are doing and what services are being provided. She stated that utilities will be affected if furloughs are not implemented City-wide. She explained that a general fund employee senior to a utility fund employee could bump that person; thus, utilities will spend time training new employees. Police STOP Office Don Ostendorf, Redding Police Department, acknowledged that the City is having problems; however, he conveyed that he is troubled by Council's direction to set aside money for parks for future use. Noting that Council's basis for making that decision was not to fall behind in something that was already set aside, Officer Ostendorf pointed out that crime in this community is not decreasing, it is increasing. The statistics say Redding area youth are using more drugs and alcohol than any other community in California, and gang influence is developing in this area. Officer Ostendorf explained that the Police Department has a handle on it now, but if the Department pulls back, they will loose control. He cautioned that other Police Departments which have lost control warned there is no getting it back. He agreed that maintaining funds for a future park project is important, but the overall good for the community is in providing critical services. If the City falls behind, they may never catch up. Council Member Dahl said no one disagrees, but where does the money come from to maintain the services, the employees, and the library. Officer Ostendorf reiterated that providing critical services is much more important than playing softball someday. Noting that this would be a one-time bail out, Council Member Dahl asked what will happen next year. 7 6/11/92 Officer Ostendorf responded, "you have to do the best you can by taking care of right now because it is unknown what tomorrow will bring. Next year may not be a problem." ADJOURNMENT There being no further business, at the hour of 6:45 p.m., Mayor Moss declared the meeting adjourned. APPROVED: _____________________________________ Mayor ATTEST: ____________________________________ City Clerk