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HomeMy WebLinkAbout01-16-1992 Minutes MINUTES MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ADJOURNED REGULAR MEETING JANUARY 16, 1992 COUNCIL CHAMBERS This is the time and place set for reconvening an adjourned regular meeting of the Mayor and Common Council of the City of San Bernardino. The adjourned regular meeting held at 8:00 a.m., Wednesday, January 15, 1992, was recessed at 4:14 p.m., to Thursday, January 16, 1992, at 5:30 p.m., in the Council Chambers of City Hall, 300 North "0" Street, San Bernardino, California. The adjourned regular meeting of the Mayor Council reconvened at 5:32 p.m., Thursday, January the Council Chambers of City Hall, 300 North "0" Bernardino, California. and Common 16, 1992, in Street, San ROLL CALL Roll call was taken by City Clerk Krasney with the following being present: Mayor Holcomb; Council Members Estrada, Reilly, Hernandez, Maudsley, Minor, Pope-Ludlam; City Clerk Krasney, City Administrator Clark. Absent: Council Member Miller, City Attorney Penman. INVOCATION The invocation was given by Phil Arvizo, Executive Assistant to the Council. PLEDGE OF ALLEGIANCE The pledge of allegiance was led by Council Member Maudsley. CLOSED SESSION - CONTINUED FROM The Mayor and Common Council session during this meeting. JANUARY 15, 1992 did not recess (1) to closed PUBLIC HEARING - BUDGET REVIEW - CONTINUED FROM JANUARY 15, 1992 (2) This is the time and place continued to for a public hearing to review the City of San Bernardino proposed budget reduction measures. Mayor Holcomb opened the public hearing. Mayor Holcomb explained that the purpose of this meeting was to discuss the possibility of raising revenue through adoption of 1 1/16/92 a utility tax increase, an entertainment tax, and/or a graffiti tax. COUNCIL MEMBER MILLER ARRIVED At 5:37 p.m., Council Member Miller arrived at the Council meeting and took her place at the council table. City Administrator Clark stated that the call-in phone lines were open at (714) 384-5122, and thanked those who took the time to call in. CITY ATTORNEY PENMAN ARRIVED At 5:38 p.m., City Attorney Penman arrived at the Council meeting and took his place at the council table. Shauna Clark stated that Ms. Jeane Kroeger, Project Manager, County of San Bernardino Animal Control, has estimated an annual net cost to the City of $350,000 to $400,000 for all animal control services. She stated that the gross cost would be reduced because the County would collect all licensing and redemption revenue. The cost of the City's Animal Control operations to the general fund is $390,879. She explained that she had requested that the County calculate estimated contract cost for shelter services only, as well as comprehensive animal control services, and that the information would be available within a week. City Clerk Krasney stated that the Business Registration Division of the City Clerk's Office had explored some revenue enhancement possibilities for consideration. City Clerk Krasney outlined an option relative to the proposed entertainment tax. She stated that if an entertainment tax was imposed, that consideration be given to including video rentals, which are a form of entertainment. She explained that there are currently thirty-two video stores in the City, and that based on their gross receipts, a 10% increase would generate an estimated $356,073 in revenue. She explained that this estimate does not include potential revenue from such retailers as record stores and other businesses that rent videos. City Clerk Krasney outlined an option relative to contractor's fees. She stated that her staff had surveyed seventeen cities and that there was no consistent rate structure in these seventeen cities. She stated that the City of San Bernardino's rates are comparable; however, if an increase was considered she suggested the following fees: an increase from $150 to $200 for general contractors, and an increase from $100 to $150 for subcontractors, which could generate an estimated $200,000 in revenue. City Clerk Krasney outlined an option relative to vending 2 1/16/92 machines. She stated that the current rate for vending machines is $60 plus $2 for each machine over twenty-five. She stated that if the fees were charged for vending machines in the same manne,r as game machines the fee would be $60 per machine per year, which could generate an estimated $70,000 in revenue. City Clerk Krasney explained that if these business registration recommendations were approved, the increases would not be completely implemented until after July 1, 1992 since they would require gradual phasing in due to varying renewal periods for different business registration categories. Mayor Holcomb stated that before any business registration fees would be considered for an increase, a public hearing would have to be held to allow public comment. Mayor Holcomb stated that no official action would be taken this evening, and that the tax which would raise the most money, be the easiest to implement, and the one in which the City tries to mitigate the impact on the low income residents is the utility tax. The utility tax is currently 8% and applies to all utilities in the City of San Bernardino, except water. He stated that a 1% increase would generate $1. 7 million in additional revenue. He stated that the exemption currently applies to an individual with a gross income of less than $15,000, and for a family with a gross income of less than $18,000. He expressed concern that families of two and three members are receiving the same exemption as families with six or seven members and felt that the exemption for low income residents should be revised to assist larger families. Mayor Holcomb read a quote from Oliver Wendell Holmes, that "taxes are the price that we pay for civilization". He stated that the number one priority in the City is public safety, and that public safety was not just a question of response or suppression, but also prevention. He felt that prevention works best when it starts with the youth and that was why the City spends so much money for youth programs. He stated that the City spends money for beautification in order to attract businesses. He urged all residents with suggestions on how to solve the budget problems to phone the call-in line at 384-5122. James Lynas, 1160 E. Sonora Street, San Bernardino, CA, spoke in opposition to refinancing City Hall, and stated that if the utility tax was increased it should have a sunset clause which would return it to 8% in one year, and that the City's budget should be audited by an outside accountant. Discussion ensued regarding the City's annual financial audit performed by Arthur Anderson Company. 3 1/16/92 Council Member Estrada made a motion, seconded by Council Member pope-Ludlam, and unanimously carried, that the procedure utilized this evening would be to allow public comments, and if the speaker had a specific question of the Mayor and Council, the question would be asked, and the individual would respond. Jean Stephens, Vice President of Governmental Affairs, San Bernardino Chamber of Commerce, 546 W. Sixth Street, San Bernardino, CA, spoke in opposition to an increase in the utility tax without a cap. She felt that a utility tax without a cap would encourage businesses to leave San Bernardino to other communities. She expressed support for an entertainment tax if the tax would restrict cuts in other City services. She felt that the safety of citizens must be first, and is a higher priority than lower entertainment fees. She stated the Chamber's support for an entertainment tax and believed that it would not severely harm businesses, and urged that funding from an entertainment tax be used to restrict the cuts made in other services. The Chamber's decision to support an entertainment tax is due to the fact that the income being spent is discretionary income. Dave Harps, P.O. Box 2486, San Bernardino, CA, expressed support for a utility tax increase or an entertainment tax if the funds generated would prohibit the City from charging youth sports program, such as Little League baseball, for lighting costs. He felt that the added expense of paying for lighting would close many programs. Lynn Diamond, 2485 N. spoke in opposition to the for lighting costs. Shauna Clark explained that the City has reduced vehicle usage by City officials, and continually reviews vehicle usage. She stated that many City officials or employees are in City vehicles because they are on-call and their vehicles carry special equipment used in emergencies. Those individuals are allowed to take City vehicles home and when called out they go straight to the area of the problem which saves time rather than them having to come down to the City yards and get the necessary vehicle. Belle Street, San Bernardino, CA, City charging youth sports programs Council Member Minor stated that the purpose of the meeting this evening was to discuss the possibility of a utility tax increase, an entertainment tax or a graffiti tax. He felt that the public comments should concern these topics, and that additional negative comments from the public about City officials and employees on issues that have already been discussed was non productive. Ruben Lopez, 631 W. 16th Street, San Bernardino, CA, spoke 4 1/16/92 in support of a 2% utility tax increase, a 10% entertainment tax, and a tax on spray paint cans and felt tip pens, if these taxes would retain all City services at their current level. He felt that the tax on spray paint cans and felt tip pens should be used to fund graffiti removal. Mark Diamond, 2485 N. Belle Street, San Bernardino, CA, President, Porterfield Little League, expressed opposition to the City charging youth sports organizations for the cost of lighting. Maclyn Abbott, 5945 Orange Knoll, San Bernardino, CA, First Vice President, San Bernardino Valley Community Concert Association, stated that the Concert Association sells memberships not tickets and therefore should be exempted from any entertainment tax. Annette Cook, 3982 Genevieve *2, in support of raising taxes if it employees from being laid off. San Bernardino, CA, would prevent any spoke City Alice Maddaleno, 739 W. Olive, San Bernardino, CA, spoke in support of raising taxes if it would prevent any cuts in the Fire or the Police Departments, and felt that the City should establish an ambulance service. Tina Morin, 2887 Serrano Road, San Bernardino, CA, voiced her opposition to raising any new taxes. She explained that she had gone through a recruitment process for a position in the Police Department, and that after many appointments and a uniform fitting she was told no positions were available. She felt that solutions could be found to the City'S financial difficulties by correcting problems in the hiring process. Ms. Clark stated that there had been recruitment problems in the Police Department. She explained that recruitment was now under the supervision of the Personnel Director and the Civil Service Director, and that through a cooperative effort with the Police Department many operations have been changed and streamlined. She felt that Ms. Morin had gone through recruitment under the old system before these streamlining measures were implemented. COUNCIL MEMBER HERNANDEZ EXCUSED At 6:28 p.m., Council Member Hernandez left the Council meeting. Tom Parlett, 3173 Cactus Circle, Highland, CA, stated that revenue from a utility tax was not a constant revenue source as utility usage fluctuates due to the weather. He suggested that a better option would be to implement the City employee retirement system tax. He explained that the City employee retirement 5 1/16/92 system tax stated that "the City shall tax the citizens of the City of San Bernardino for the retirement system", and had been previously adopted by the citizens of San Bernardino in 1946; however, in approximately 1980 the City stopped levying for this tax. He felt that if this tax were levied it could generate $5- $6 million annually, and he estimated that since the City had stopped levying this tax $75 million in revenue had been lost. Don Henley, 1229 W. 5th Street, San Bernardino, CA, stated that he would support a utility tax, if the voters could direct its funds to specific programs. He expressed concern that the number of Community Service Representative employees in the Police Department had not increased in several years. Mayor Holcomb explained that the utility tax was implemented for general fund purposes, such as libraries and parks. He stated that Assessment District No. 994 (city-wide street sweeping and street lighting) generated approximately $3 million annually, to provide twice a month street sweeping services, and that any surplus revenue would go to the Police Department. Shauna Clark stated that the Police Department has Community Service Representatives which provide sworn officers with support such as taking reports and field work. She stated that the Police Department currently has ten Community Service Representatives assigned to the desk, with one vacancy; that fourteen Community Service Representatives are assigned to field or patrol, with two vacancies. She stated that the Police Department has a total of forty-six Community Service Representatives authorized, twenty-three Community Service Representatives II's and twenty-three Community Service Representative I's. Lynda Kuehn, 1926 N. Waterman Avenue, San Bernardino, CA, President, San Bernardino Valley Community Concert Association, spoke in support of a utility tax increase. She stated that as a non-profit organization, the association should be exempted from any entertainment tax. Vern DeVore, 2945 W. Irvington Avenue, San Bernardino, CA, stated that the only way the City can attract residents and businesses, is to provide services. He spoke in support of raising taxes to fund and improve City services. He felt that instead of funding the Police and Fire Departments through the general fund that assessment districts be formed to fund these two departments. Jeff Wright, P. O. Box 2341, San Bernardino, CA, presented the following options for solving the city's budget problems: suspend the vehicle abatement program, continue the O.A.R.E. program as an audio-visual program only, cut back to once a week 6 1/16/92 trash pickup, and generate revenue from recycling. He expressed concern regarding the loan made to the Carousel Mall. Mayor Holcomb explained that some of the City's funds are restricted and cannot be used for general fund purposes. He explained that the restricted funds are solvent and have surpluses. He stated that trash pickup is not paid for out of the general fund, it is paid out of the refuse fund. He stated that if trash pickup was cut back to once a week some savings would be generated, but the cost of providing services would not be cut in half as the City would still be collecting the same amount of trash. City Administrator Clark explained that sewer construction funds are generated from development impact and the general public does not contribute to that account. Council Member Estrada explained that at the time the loan was made to the Carousel Mall there were a number of employees who were going to lose their jobs at the mall because two anchor stores were on the brink of leaving the mall. She stated that the mall generates approximately $900,000 a year in sales tax. line fees, Phil Arvizo, Executive Assistant to the Council, read a written statement from Frank and Norma Cacka, who reside at 19110 Cajon Blvd., Devore, CA, and who own property at 741 E. Baseline, San Bernardino, CA. The statement read as follows: "Raise taxes as needed to pay the shortfall in the budget. Don't balance the budget at the expense of the employees. To layoff people will only deepen this depression we are in, and some young peoples career will never recover." Jack Schmitz, 1605 Hudson, San Bernardino, CA, Treasurer, Inland Dance Theater, spoke in opposition to an entertainment tax because he felt that it would bankrupt the organization. Montie Howard, 6290 Arden Avenue, San Bernardino, in opposition to an entertainment tax, and felt that programs should be exempted from any entertainment tax. a tax of this nature would cause many fine arts programs the community to other cities. CA, spoke fine arts She felt to leave Tim Warner, 116 N. Robertson Blvd., Suite F, Los Angeles, CA, President, National Association of Theatre Owners of California, spoke in opposition to an entertainment tax. He submitted to City Clerk Krasney a letter dated January 16, 1992, addressed to James Penman, City Attorney, which outlined the successful legal challenges made to other cities with an entertainment tax, and include an information sheet on the current legal status of the admissions taxes that have been passed, and repealed in the State of California. 7 1/16/92 City Administrator Clark stated that an entertainment tax was not necessarily a tax on the person purchasing a ticket, but that many times the tax incident is borne by the theater itself. Phil Arvizo, Executive Assistant to the Council, read an anonymously written statement that read as follows: "I would be willing to pay an increased utility tax and entertainment tax but am concerned about those on fixed incomes." Bill Lemann, 215 N. "0' Street, #100, San Bernardino, CA, spoke in support of an entertainment tax if the additional revenue was used to support cultural and fine arts programs, and specifically the Sturges Auditorium. Richard Rodriquez, 1554 W. 15th Street, San Bernardino, CA, spoke in support of a utility tax increase if it would prevent any city employees from being laid off. Shauna Clark reported on the breakdown of the telephone calls received that evening: 13 support a utility tax or entertainment tax 2 support a entertainment tax 14 oppose any additional taxes 3 prefer a sales tax increase because it would be more equitable Ms. Clark explained that the City would not be able to take any action relative to sales tax because the City would be preempted by the State of California. She also explained that sales tax must be used for specific purposes and cannot be used for general fund purposes. She stated that the City was attempting to broaden its tax base so that it would not be so reliant on anyone particular type of tax. The Council requested that the City Administrator prepare a status report tallying all straw votes and actual votes, and their financial impact, along with the proposals discussed this evening relating to business registration fees, so that a decision can be made as to what budget reduction measures to take. Mayor Holcomb recommended that the City Administrator present a status report on Tuesday, January 21, 1992, at 2: 00 p.m., and that the Council at that time decide when to discuss the report and take action relative to budget reductions. A discussion was held relative to the budget problems that may be encountered in the next fiscal year due to the loss in revenue from development fees and sales tax. City Administrator Clark explained that if a 2% utility tax 8 1/16/92 increase was implemented that in four months approximately $1,173,333 in revenue would be generated. Ms. Clark thanked everyone who called in on the call-in lines, and stated that anyone interested in calling in suggestions or comments could call in anytime after 7:30 a.m. the following day. Ed Katronak, a resident of San Bernardino, expressed support for a tax increase if it prevented layoffs of City employees. ADJOURNMENT ( 3 ) At 7:27 p.m., Council Member Minor made a motion, seconded by Council Member Reilly, and unanimously carried, that the meeting be adjourned to 8:30 a.m., Tuesday, January 21, 1992, in the Council Chambers of City Hall, 300 North "0" Street, San Bernardino, California. RACHEL KRASNEY City Clerk By ~.a;~ Melanie ale Deputy City Clerk No. of Items: 3 No. of Hours: 2 9 1/16/92