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HomeMy WebLinkAboutMinutes - City Council - unsigned - 1993-06-25 - Adjourned Regular Meeting1 06/25/93 City Council, Adjourned Regular Meeting City Hall Conference Room A Redding, California June 25, 1993 12:00 Noon The meeting was called to order by Mayor Arness with the following Council Members present: Anderson, Dahl, Kehoe, Moss, and Arness. Also present were City Manager Christofferson, Assistant City Manager McMurry, City Attorney Hays, Director of Public Works Galusha, Police Chief Blankenship, Electric Utility Operations Manager Ryan, Assistant City Attorney Calkins, Police Captain Byard, Director of Finance Downing, Public Works Operations Manager Russell, Director of Recreation and Parks Riley, Director of General Services Masingale, Director of Information Systems Kelley, Director of Personnel Bristow, Assistant Finance Director Sundin, Airports Director Ruff, Director of Utilities/Customer Service Vokal, Assistant Director General Services Kohn, City Treasurer Linville, Budget Services Officer Starman, City Clerk Strohmayer and Secretary to the City Council Rudolph. AWARD OF BIDS RE BUCKEYE WATER PLANT PROJECT (B-050-020 & W-030-600) Public Works Director Galusha related that the construction of the Buckeye Water Treatment Plant was divided into three bids: the treatment plant, instrumentation and control, and transmission main. Staff is recommending that the bids be awarded as follows: 1) Bid Schedule No. 2731, treatment plant, be awarded to Auburn Constructors, Inc. in the amount of $6,037,000. This represents only the award of Schedule A of the subject bid schedule; 2) Bid Schedule No. 2732, instrumentation and control, be awarded to Control Manufacturing Co., Inc. in the amount of $553,000; and 3) Bid Schedule No. 2733, transmission main, be awarded to Contri Construction Company in the amount of $3,531,100. He noted that the staff report incorrectly lists the total contract amount of Bid Schedule No. 2731, thereby, making the total contract price incorrect, as well as the individual contingencies listed. Mr. Galusha explained that three additional contracts are required for engineering services during construction. It is recommended that the following contracts be approved: 1) Engineering services during construction - Boyle Engineering in an amount not to exceed $310,000; 2) Construction surveying/staking - Sharrah Dunlap Sawyer, Inc. in an amount not to exceed $38,500; and 3) Construction testing services - MTI in an amount not to exceed $47,500. Mr. Galusha stated that construction management would be provided by the Public Works Department Construction Division at an estimated cost of $445,770. Mr. Galusha noted that a five percent contingency on the total project cost is requested to provide for unforeseen problems or situations. Funds for these contracts are available from the Water Utility Fund and the sale of revenue bonds on June 23, 1993. It is the recommendation of staff that Council award the above-referenced contracts with contingencies, waive the formal selection process for the construction surveying/staking services contract, and adopt the necessary resolutions authorizing the engineering services during construction. Mr. Galusha acknowledged the following individuals for their work on this project: Assistant City Manager Sam McMurry, Finance Director Linda Downing, Assistant Finance Director Karen Sundin, Public Works Operations Manager Bob Russell, Assistant Civil Engineer John James, and Bob Young of Boyle Engineering. MOTION: Made by Council Member Anderson, seconded by Council Member Kehoe, that Bid Schedule No. 2731, Buckeye Water Treatment Plant, be awarded to Auburn Constructors, Inc. in the amount of $6,037,000, and that a contingency in the amount of $301,850 be appropriated. The Vote: Unanimous Ayes 2 06/25/93 MOTION: Made by Council Member Anderson, seconded by Council Member Kehoe, that Bid Schedule No. 2732, Buckeye Water Treatment Plant Instrumentation and Control, be awarded to Control Manufacturing Co. Inc. in the amount of $553,000, and that a contingency in the amount of $27,500 be appropriated. The Vote: Unanimous Ayes MOTION: Made by Council Member Anderson, seconded by Council Member Kehoe, that Bid Schedule No. 2733, Buckeye Water Treatment Plant Transmission Main, be awarded to Contri Construction Company in the amount of $3,531,100, and that a contingency in the amount of $175,000 be appropriated. The Vote: Unanimous Ayes MOTION: Made by Council Member Anderson, seconded by Council Member Kehoe, that Resolution No. 93-243 be adopted, a resolution of the City Council of the City of Redding approving and authorizing the Mayor to sign the following Boyle Engineering Corporation Task Order in connection with performing additional tasks relating to the Buckeye Water Treatment Plant: Task Order No. 9 in an amount not to exceed $310,000 for engineering services during construction; and authorizing the appropriation of an additional $15,500 (five percent) for contingencies. 3 06/25/93 Voting was as follows: Ayes: Council Members - Anderson, Dahl, Kehoe, Moss and Arness Noes: Council Members - None Absent: Council Members - None Resolution No. 93-243 is on file in the office of the City Clerk. MOTION: Made by Council Member Anderson, seconded by Council Member Kehoe, waiving the formal selection process and adopting Resolution No. 93-244, a resolution of the City Council of the City of Redding approving entering into a contract with Sharrah Dunlap Sawyer, Inc. and authorizing: (1) The Mayor to sign the contract for services between the City of Redding and Sharrah Dunlap Sawyer, Inc. for the Buckeye Water Transmission Main/Miscellaneous construction surveys, in an amount not to exceed $38,500; and (2) The appropriation of an additional $3,850 (ten percent) for contingencies. Voting was as follows: Ayes: Council Members - Anderson, Dahl, Kehoe, Moss and Arness Noes: Council Members - None Absent: Council Members - None Resolution No. 93-244 is on file in the office of the City Clerk. MOTION: Made by Council Member Anderson, seconded by Council Member Kehoe, that Resolution No. 93-245 be adopted, a resolution of the City Council of the City of Redding approving entering into a contract for professional services with MTI Testing Laboratory Inc. and authorizing: (1) The Mayor to sign the contract between the City of Redding and MTI Testing Laboratory Inc. for testing services relating to the Buckeye Water Transmission Main, in an amount not to exceed $47,500; and (2) The appropriation of an additional $4,750 (ten percent) for contingencies. Voting was as follows: Ayes: Council Members - Anderson, Dahl, Kehoe, Moss and Arness Noes: Council Members - None Absent: Council Members - None Resolution No. 93-245 is on file in the office of the City Clerk. SELECTION OF UNDERWRITER - re Financing of Various Capital Projects (D-050 & S-020-300 & S-020-650 & C-050-100-040) Assistant Finance Director Sundin related that staff has circulated a Request for Proposals for underwriting services for the Transfer Station, Landfill Cap, and Corporation Yard Projects. Selection of the underwriter at this time would enable staff to obtain assistance in analyzing and estimating the cost of issuance, bond ratings, and interest rates, but would not commit the Council to proceeding with all or any of the projects. This information, plus project information currently being developed by the departments involved, would put Council in a better position to evaluate the feasibility and cost- effectiveness of each of the projects, and ultimately, the advisability of proceeding with any or all of them. Ms. Sundin stated that the proposal submitted by J. P. Morgan Securities, Inc. would result in the least overall cost to the City. This conclusion is based primarily on the creative debt structure proposed. Preliminary discussions with bond insurance companies and bond counsel indicate that the City could reasonably expect to receive bond insurance with the structure proposed by J. P. Morgan, resulting in significantly lower interest rates and lower overall cost of the debt issue. It is the recommendation of staff that Council select the firm of J. P. Morgan Securities, Inc. as underwriter for the proposed debt issue. Council Member Kehoe related that Council had authorized staff to proceed with the working drawings for the corporation yard, however, he was not aware that Council had approved its construction. City Manager Christofferson replied that the selection of the underwriter would not commit the City to proceeding with all or any of the projects noted. Ms. Sundin stated that J. P. Morgan does not object to any of the projects being eliminated from the proposed debt issue. 4 06/25/93 In response to Council Member Anderson, Ms. Sundin explained that if the financing is not finalized, no compensation would be due to the underwriters. MOTION: Made by Council Member Moss, seconded by Council Member Anderson, selecting the firm of J. P. Morgan Securities, Inc. as the underwriter for the proposed debt issue concerning the Transfer Station, Landfill Cap, and Corporation Yard projects. The Vote: Unanimous Ayes RESOLUTION - re Annual Renewal of Employee Benefit Program Contracts (P-100-150-030 & P-100-150-055 & P-100-150-060) Personnel Director Bristow announced the achievement of one of the lowest insurance renewals in recent years. Specifically, the only increase for the 1993-94 fiscal year is for specific stop loss coverage with all other elements of the City's employee benefits program remaining at current levels. Mr. Bristow highlighted the Report to City Council dated June 16, 1993, incorporated herein by reference, and indicated that the only increase for the 1993-94 fiscal year is for specific stop loss coverage with all other elements of the City's employee benefits program remaining at current levels. He explained that the City currently purchases specific stop loss insurance to cover exposure for specific medical claims above $100,000 and in the aggregate for claims exceeding $4,712,154. Current insurance premiums for this protection are $155,439 and $15,000 respectively. The approximate ten percent increase in the specific stop loss premium is lower than what had been anticipated. Mr. Bristow stated that with the increase in the specific stop loss premium and the other elements of the City's group insurance premium holding constant, the City's overall fixed cost increase would only go up 5.4 percent, representing an increase significantly below the medical inflation rate which has greatly exceeded the consumer price index. Mr. Bristow updated Council relative to negotiations on the non-exclusive preferred-provider organization discussed in March 1993. Discounts of between 25 and 50 percent, based upon the medical procedure, have been negotiated with the major medical facilities in Redding. The package will be presented for consideration once contract language has been received and reviewed by the City Attorney. It is the recommendation of staff that Council adopt the necessary resolution approving the necessary contract renewals with The Acordia Company for life insurance benefits and the excess health and dental policy, The Unum Life Insurance Company of America for long-term disability, Coresource for administration of the health care plan, and Charles E. Bertolina, dba CEB Business Insurance Services, for business insurance consulting services. Council Member Anderson questioned whether there would be a net savings realized in the 1993-94 budget. Finance Director Downing replied that while staff anticipated increased premiums, it was not budgeted for in 1993-94, thereby resulting in a shortfall of approximately $15,000. While staff budgets $4,400 per employee for medical and health insurance, there are also add-on categories to cover such things as medical reinsurance and life insurance which flow into the employee benefit account. Monies in this account are utilized for payment of insurance claims and premiums and the $15,000 shortfall should be covered by savings realized in these employee benefit areas. MOTION: Made by Council Member Kehoe, seconded by Council Member Dahl, that Resolution No. 93-246 be adopted, a resolution of the City Council of the City of Redding approving entering into and authorizing the Mayor to execute renewal contracts with the following companies for the period July 1, 1993, through June 30, 1994: 1) The Acordia Company for insuring employee life and dependent life insurance benefits, as well as the City's excess health and dental policy; 2) The Unum Life Insurance Company of America for long-term disability; 3) Amendment to agreement to administer health care plan with Coresource (change of name from Concept Administrators, Inc. effective April 1, 1993); and 4) Business insurance consulting agreement with Charles E. Bertolina, doing business as CEB Business Insurance Services. Voting was as follows: Ayes: Council Members - Anderson, Dahl, Kehoe, Moss and Arness Noes: Council Members - None 5 06/25/93 Absent: Council Members - None Resolution No. 93-246 is on file in the office of the City Clerk. REBALANCING OF CITY BUDGET RELATIVE TO STATE BUDGET (B-130-070) City Manager Christofferson provided an overview of the Report to City Council dated June 23, 1993, incorporated herein by reference, concerning possible action to meet City obligations relative to the State budget and to rebalance the City's budget. Mr. Christofferson explained that the court has dismissed that portion of the Sierra Club's lawsuit that impounded the Local Transportation Funds due the City, so the $252,000 which had been budgeted for the 1992-93 fiscal year should be received by year's end. More importantly, funds ranging from $250,000 to $350,000 will be available in 1993-94. He noted that this money had not been budgeted for due to the uncertainty of the suit. Mr. Christofferson discussed the following alternatives for possible utilization in rebalancing the City's budget: 1) Local Transportation Funds; 2) Building Reserve Fund; 3) Transfer of Street Lighting Responsibility; 4) Storm Drain Utility; 5) Insurance Reserves; 6) In-Lieu Franchise Payment; and 7) Public Safety Assessments. Mr. Christofferson highlighted his memorandum dated June 24, 1993, incorporated herein by reference, which discussed possible impacts with regard to the State's budget. 1) AB8 reduction would be $842,000 for the 1993-94 fiscal year, with a $19.31 per capita cap; 2) A $263,000 credit would be received from the Transportation Planning and Development account; and 3) A $290,000 credit would be received as a result of the sales tax extension. He believed it prudent to assume that the City may receive sales tax for the first half of the year, but that the election in November will fail and that the $290,000 figure should be reduced in half. Absent additional information being developed, he believed a reasonable solid total loss figure, given the above information, would be $435,000. This is all contingent upon the Governor's signing of the budget. Mr. Christofferson stated that because the amount of the potential state budget impact is as low as it is relative to the City's reserves and other resources, it is possible, if Council desired, to delay action regarding this matter. Council Member Anderson concurred with the concept of deferring action on the matter given the state of the City's reserves and other resources. He indicated that he did not strongly support transferring the street lighting responsibility to the Electric Department, but if necessary, he could possibly consider a lower rate or a shared arrangement. Budget Services Officer Starman clarified that the $252,000 relative to the Sierra Club lawsuit was taken into consideration when the 1993-94 budget was prepared and cannot, therefore, be used to offset the impact of the State budget. Council Member Dahl also concurred with deferring action on the matter. He questioned how much was budgeted for storm drain activity in the 1993-94 budget. Mr. Christofferson replied that $400,000 had been budgeted for 1993- 94, however, the amount of savings realized would vary depending on when or if a storm drain utility district were approved. Council Member Moss viewed this as an opportunity to rectify decisions made by previous Councils and to determine actual General Fund responsibilities. He recommended that Council give strong consideration to transferring the street lighting responsibility from the General Fund to the Electric Department. The transfer of the responsibility equates to approximately $880,000 and would result in an electrical rate increase of about 1.65 percent. He stated that this increase could be included in the November rate increase and the overall increase would still be less than the anticipated 7.1 percent increase. He objected to deferring any additional maintenance and indicated that some of these additional funds could be utilized for that purpose. He also opined that the General Fund could not be depended upon to provide future monies for 6 06/25/93 storm drain maintenance and favored considering the establishment of a storm drain utility. Council Member Kehoe noted that deferring action on the matter would not alleviate the anxiety of the City employees, as it would still not be known what would occur four to six months from now. Based upon the known figures, Council Member Anderson did not view layoffs as being necessary in the 1993-94 fiscal year. He indicated that work is still required, however, in the area of attrition and requested the cooperation of all employees. In response to Council Member Kehoe, Mr. Christofferson concurred that he did not believe layoffs would be necessary in the 1993-94 fiscal year. Council Member Dahl maintained that the City's organization has been reduced to a point where any further reductions would be detrimental to the community. He concurred that if difficult decisions were to be made, monies could be made available to improve streets, etc. He indicated that assurance needs to be provided that there should be no reasons for additional layoffs even with the impending State action. He also saw no reason for not providing employees with proper incomes, such as step increases and pay-for-performance increases. He noted that the private sector has continued to provide salary increases. Mayor Arness concurred with the concept of addressing which funds should be made responsible for certain items and the fact that layoffs would not be required in 1993-94. He did, however, favor maintaining the existing hiring freeze. It was the consensus of Council to maintain the status quo at the present time with regard to the hiring freeze. Staff may request Council approval concerning the replacement of vital positions. Council Member Anderson requested that department directors give careful consideration to all position vacancies. MOTION: Made by Council Member Anderson, seconded by Council Member Kehoe, to make no changes to the City's 1993-94 fiscal year budget at the present time. The Vote: Unanimous Ayes CITY/COUNTY/BUSINESS COALITION (A-050-060) City Manager Christofferson explained that the adoption of the State's budget concludes the work of the City/County/Business Coalition. The efforts of the Coalition, under the direction of the Greater Redding Chamber of Commerce, were extremely successful. He suggested that Council authorize the Mayor to send letters of appreciation to the organizations participating in the Coalition. MOTION: Made by Council Member Moss, seconded by Council Member Dahl, authorizing the Mayor to send letters of appreciation to the organizations providing support to the City/County/Business Coalition. The Vote: Unanimous Ayes RESOLUTION - Reactivating Pay-for-Performance Program and Elimination of Step Increase Freeze (P-100-320) City Manager Christofferson recalled that the matter of reactivating the Pay- for-Performance Program and eliminating the step increase freeze had been continued from the Council meeting of June 15, 1993, until such time as the State budget and its potential impact on the City's budget was clarified. Mr. Christofferson explained that eliminating the step increase freeze would cost approximately $28,222 for the 1993-94 fiscal year. The cost of reactivating the Pay-for-Performance Program is estimated at between $96,000 and $128,000, with $78,000 to $104,000 being attributable to the General Fund. Savings are anticipated in non-personnel areas to account for the cost of reactivating the Pay-for-Performance Program and eliminating the step increase freeze. At this time, no additional appropriation is required. 7 06/25/93 Mr. Christofferson recommended that Council authorize the action described in the memorandum dated June 17, 1993, incorporated herein by reference, thereby eliminating the step increase freeze and reactivating the Pay-for-Performance Program. Council Member Anderson recognized that existence of a very unfair situation which Council was somewhat forced to create because of the City's budget. He indicated that it appears the necessary funds are available and suggested that Council move forward with rectifying the situation. Council Member Moss concurred. Council Member Anderson stated that because the City has entered into negotiations with bargaining units and the fact that he is not familiar with the laws governing negotiations, he suggested that Council's action be implemented in accordance with the rules and regulations of collective bargaining. Mayor Arness did not favor retroactive increases, but suggested granting increases, effective July 1, 1993, to those employees who were eligible for increases but frozen in fiscal year 1992-93 and, if eligible, granting an additional increase on their anniversary date in fiscal year 1993-1994. This would assist in eliminating some of the pay differential created by the salary freeze. Council Member Anderson favored proceeding with staff's recommendation because of the tight budget situation. MOTION: Made by Council Member Anderson, seconded by Council Member Moss, directing staff to implement the following actions in accordance with the rules and regulations of collective bargaining: 1) Eliminate the step increase freeze; 2) Reactivate the Pay-for-Performance Program; and 3) Adopt Resolution No. 93-247, a resolution of the City Council of the City of Redding rescinding Resolution No. 93-196 as of Midnight, June 19, 1993, and establishing a new Executive Management Pay-for-Performance Salary Plan effective June 20, 1993, increasing all salary ranges ten percent. Voting was as follows: Ayes: Council Members - Anderson, Dahl, Kehoe, Moss and Arness Noes: Council Members - None Absent: Council Members - None Resolution No. 93-247 is on file in the office of the City Clerk. REO/SEIU President Ana Diaz thanked Council for its action and relayed that it would go a long way in improving employee morale. CLOSED SESSION (P-100) Mayor Arness stated that Council would adjourn to closed session pursuant to California Government Code Section 54957.6(a) to discuss personnel matters. At the hour of 1:00 p.m., the meeting was adjourned to closed session. At the hour of 1:54 p.m., the meeting was reconveyed to regular session. ADJOURNMENT There being no further business, at the hour of 1:54 p.m., Mayor Arness declared the meeting adjourned. APPROVED: ____________________________ Mayor ATTEST: _______________________________ City Clerk