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HomeMy WebLinkAbout03-02-1999 Minutes MINUTES MAYOR AND COMMON COUNCIL AND COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO JOINT ADJOURNED REGULAR MEETING MARCH 2, 1999 ECONOMIC DEVELOPMENT AGENCY BOARD ROOM This is the time and place set for a joint adjourned regular meeting of the Mayor and Common Council and Community Development Commission of the City of San Bernardino from the joint regular meeting held at 8:03 a.m., Monday, March 1, 1999, in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. The City Clerk has caused to be posted the notice of adjournment of said meeting held on Monday, March I, 1999, and has on file in the Office of the City Clerk an Affidavit of PostingINotice of Adjournment of Meeting which was posted at 4:00 p.m. on Monday, March I, 1999, on the bulletin board located near the place at which said meeting was held. The joint adjourned regular meeting of the Mayor and Common Council and Community Development Commission was called to order by Mayor Valles at 4:06 p.m., Tuesday, March 2, 1999, in the Economic Development Agency Board Room, 20] North "E" Street, San Bernardino, California. ROLL CALL Roll call was taken by City Clerk Clark with the following present: Mayor Valles; Council Members Estrada, Lien, McGinnis, Schnetz, Devlin, Anderson; City Attorney Penman, City Clerk Clark, City Administrator Wilson. Absent: Council Member Miller. City Attorney Penman announced that the following case would be discussed in closed session under Government Code Section 54956.9(a), Conference with legal counsel- existing litigation: (Continued from March 1, 1999) Manta Management Corporation vs. City of San Bernardino - Court of Appeals Case No. EOl9635 (Superior Court Case No. SCV 18157). RECESS MEETING - CLOSED SESSION At 4:07 p.m., the Mayor and Common Council and Community Development Commission recessed to closed session. COUNCIL MEMBER MILLER ARRIVED At 4:09 p.m., Council Member Miller arrived at the Council meeting. CLOSED SESSION At 4:09 p.m., Mayor Valles called the closed session to order in the conference room of the Economic Development Agency. 3/2/1999 ROLL CALL Roll call was taken by City Clerk Clark with the following being present: Mayor Valles; Council Members Estrada, Lien, McGinnis, Schnetz, Devlin, Anderson. Miller; City Attorney Penman; City Clerk Clark, City Administrator Wilson. Absent: None. Also present: Senior Assistant City Attorney Carlyle and Administrative Operations Supervisor Edna Anderson, City Attorney's Office. ADJOURN CLOSED SESSION At 4:24 p.m., the closed session adjourned to the Economic Development Agency Board Room. RECONVENE MEETING At 4:27 p.m., Mayor Valles reconvened the joint adjourned regular meeting of the Mayor and Common Council and Community Development Commission of the City of San Bernardino. ROLL CALL Roll call was taken by City Clerk Clark with the following being present: Mayor Valles; Council Members Estrada, Lien, Schnetz, McGinnis, Devlin, Anderson, Miller; Senior Assistant City Attorney Carlyle, City Clerk Clark, City Administrator Wilson. Absent: 'Jone. DISCUSS AND TAKE POSSIBLE ACTION - FISCAL YEAR 1998/99 MID-YEAR BUDGET REPORT - CITY AND ECONOMIC DEVELOPMENT AGENCY (1) Mayor Valles provided opening remarks, stating that some very tough decisions would have to be made in order to keep the City and the Economic Development Agency solvent beyond her tenure and the tenure of the current Council members. She stated that the Council members needed to ask themselves what the function of city government really is. What is a city supposed to do? What is the core function of a city municipality? What are we all about? The Mayor continued by stating that one of the things she has learned is that in a city municipality there are some functions which are centralized. She used the Finance Department as an example, pointing out that there is a Finance entity in the City, another in the Economic Development Agency, and yet another in the Water Department; and logic would say that only one is needed. She stated that this was the kind of hard decision that the Council would need to make, and it would not be easy. City Administrator Wilson stated that the primary goals for this workshop would be to discuss EDA's alternative budget proposals and to discuss potential approaches to balancing the City's budget. Mr. Wilson added that the scenarios to be presented were developed as a result of meetings among EDA Executive Director Van Osdel, EDA Administrative Services Director Lindseth, City Director of Finance Pachon, and himself. EDA Executive Director Van Osdel distributed a handout titled, "Economic Development Agency ofthe City of San Bernardino - Alternative Budget Proposals for the Fiscal Year 1999-2000" that presented the currenl budgel, and three budgel proposals labeled "A" Workshop; "B" Caretaker; and "c" Compromise. He stated that both City representatives and EDA representatives believed the proposal labeled "c" Compromise was a workable scenario. Mr. Van Osdel asked EDA Administrative Services Director Lindseth to review the alternative budget proposals. 2 3/2/1999 Ms. Lindseth briefly reviewed proposals "A" and "B" and indicated that the compromise scenario (Budget Alternative "C") would consist of the following: 1. Commencing in the 1999-2000 fiscal year, the Master Services Agreement/City expenses funded by the EDA will be reduced by $600,000; an additional $600,000 will be reduced in the 2000-200 I fiscal year; and a final reduction of$599,225 will take place in the 2001-2002 fiscal year. 2. The EDA will refund the existing South Valle COP's 10 reduce the annual debt service payment from approximately $283,000 to $240,000 per year. The City will refund the existing Police Station COP's to additionally produce $4,000,000 of cash to the EDA for deposit into EDA restricted reserves. The City will make the new debt service payment on the refinanced Police Station COP's. 3. The EDA will continue to pay the debt service on the tax allocation bonded indebtedness attributable to the baseball stadium, the $10 million of State College 1994 Parity Bonds used to fund a portion of the Police Station construction, and the Patton Farms Soccer Complex. 4. The EDA restricted reserves in the amount of $4 million to be generated from the refinancing of the Police Station will be combined with $2.5 million of EDA cash on hand to be invested with the trustee/fiscal agent by a formal investment agreement so that the EDA retains on deposit with the trustee/fiscal agent sufficient funds to meet the short-term cash flow requirements of the EDA during the months of July to December of each fiscal year. The combined balance of $6.5 million invested with the trustee/fiscal agent may not be applied towards EDA operating deficits. Interest earnings will be transferred from the trustee/fiscal agent to the EDA and will be considered as general revenues of the EDA. 5. Based upon actual positive cash flows in any given fiscal year (excluding land sales and note repayments), the EDA will share with the City 25 percent of the positive net available surplus. It is estimated that the EDA will have a positive nel available surplus beginning in the 2001-2002 fiscal year based upon Alternative "c" as outlined above. Council Member Estrada commented that it seemed to her that the EDA is a very complex agency requiring specialized knowledge, and she did not know what the Council would do if anything happened to Barbara Lindseth. Mayor Valles pointed out that the systems used for budgeting the City and the EDA are different and they should be centralized. In fact, it would help if all three systems (City, Water and EDA) were on one system. She stated that other cities that have centralized systems have one section that deals specifically with EDA. The Mayor stated that making a change from the current budgeting system(s) to a more centralized system is one of the hard decisions discussed earlier in the meeting. Mayor Valles suggested that the Council Members just throw out their ideas and staff would make a note of them. Staff would then do an evaluation, including all of the ramifications, and then bring the ideas back to the Council for further consideration. 3 3/2/1999 Barbara Pachon, Director of the City's Finance Department, reviewed the handout titled, "Projected General Fund Balance - FY 1999-2000." Ms. Pachon stated that the City's budget deficiency of $4,157,900 included $925,000 for items coming back to the City from EDA. She stated that bottom line, by adding the $925,000 from the EDA, the City's projected budger deficit would increase to $4,157,900. She added that the Projected General Fund Balance Sheet assumes that at the end of the fiscal year, June 30, 2000, the City would have $1.2 million in budgeted reserves. City Administrator Wilson pointed oul that the City is spending $2 million more than it is bringing in; however, under Proposition 218 the City can charge for the cost of services, and staff needed Ihe Council's direction in updating these fees. Mr. Wilson reviewed budget options shown under Option 1 (green handout) that listed proposed changes to the user fees charged by several City departments. He stated that Option I would depend on an analysis of the fees, with staff looking at proposed fee changes and at other fees as well. City Administrator Wilson continued with a review of "Option 2: One-time Measures," stating that this is not the recommended approach, as it involves transfers from trust accounts and other funds. He stated that staff would have to analyze the utility fund and the M.I.S. fund, and that the savings realized by utilizing one-time measures could be as high $1-1.8 million. Director of Finance Pachon indicated that Option 3 involved ongoing reductions such as increasing the vacancy factor to 1.9 (which means that departments thai have vacancies would have to keep those vacancies open), looking at reducing lowest-priority programs based on the citizens' survey, and considering the contracting of services. Mr. Wilson commented that everything has implications, and it was staff's belief that some programs would have to be cut. He stated that staff needed some direction from the Council on the budget reduction options presented thus far (increasing fees, use of one-time measures, on-going reductions); and wanted to discuss one more option with the Council-the feasibility of contracting out certain City services. Council Member Schnetz stated that one of the obvious things would be the Refuse Department; however, since the Refuse Department generates revenue, he would hate to see the City give that up. He suggested that staff look at some of the non-revenue things such as contracting out work done at the City yards and renting out the yards. He added thai the City should look at correlating the items on the citizens' survey to budget line items to see how much the City is spending on items of low priority on the survey. He suggested looking at the TV station to see if the same programming could be accomplished by joining with KVCR, and looking at the police and fire departments to see what staffing levels the City can afford based on the yearly increases mandated by the Charter. City Administrator Wilson stated Ihat an appraisal of the City's refuse system had been done last year, and suggested that staff bring this back to the Council to look at all the issues and implications that go along with privatization. Council Member Miller mentioned the allocation for Ihe Convention and Visitors Bureau, stating that promoting conventions and tourism had ranked 60.6 on the citizens' survey. 4 3/211999 Mayor Valles pointed out that when she had mentioned quantitative and qualitative earlier in the meeting, this is what she meant by qualitative. She pointed out that if it weren't for the CVB there would be no Route 66 Rendezvous and the resulting national recognition. COUNCIL MEMBER ESTRADA EXCUSED At 5:33 p.m., Council Member Estrada left the Council meeting. Council Member Miller mentioned providing services lm line through the Internet, which ranked 50.8 on the citizens' survey. Council Member McGinnis suggested that maybe the City could contract out for refuse service in those areas that are farther out and closer to another hauler. Council Member Schnetz suggested that the City try to find new ways to encourage new business and development. Council Member Lien suggested several Ihings such as the City contracting to do County code enforcement duties, a library tax (because that is one area where voters tend to agree), eliminating supplemental life insurance to all city employees, and decreasing what the City pays to PERS. She stated that the Council must look at things that are penn anent. Council Member McGinnis stated that at one time his homeowners association had discussed taking over the City park and City baseball park in their tract, wherein they would do the upkeep and maintenance. The parks would still be available to people, but a fee would be charged. He wondered if there were any other things that the City spends money on that someone else might want to buy from the City or operate for the City. Council Member Anderson suggested combining Management Infonnation Services with another department, and the Mayor noled that staff was looking into possible centralization with the County. Mayor Valles summed up by saying that when she first came on board and was briefed by Barbara Lindseth, she knew that if the City/EDA stayed on the same course they were currently on, they would not stay open another three years. She stated that some drastic steps have already been taken, that the situation is not insunnountable-she has been in situations where it has been much worse---but we do have our marching orders. ADJOURNMENT (2) At 5:51 p.m., the joint adjourned regular meeting of the Mayor and Council and Community Development Commission was adjourned to 3:30 p.m., Thursday, March 4, 1999, in the Economic Development Agency Board Room, 201 North "E" Street, San Bernardino, California. a~J b.~ '- RACHEL G. CLARK, CMC City Clerk No. of Items: 2 No. of Hours: 2 5 3/2/1999