HomeMy WebLinkAbout06-15-2010 Minutes CITY OF SAN BERNARDINO Mayor Patrick J. Morris
�� Council Members:
Q 300 N. "D" Street Virginia Marquez
San Bernardino, CA 92418 Jason Desiardins
Website: www.sbcity.org Tobin Brinker
Fred Shorett
Chas Kelley
San Bernar ino Rikke Van Johnson
sM Wendy McCammack
MINUTES
MAYOR AND COMMON COUNCIL AND
COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO
JOINT ADJOURNED REGULAR MEETING
JUNE 15, 2010
ECONOMIC DEVELOPMENT AGENCY BOARDROOM
201 NORTH "E" STREET
SAN BERNARDINO, CALIFORNIA
This is the time and place designated 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 adjourned regular meeting of the Mayor and Common Council
and Community Development Commission held at 5:00 p.m., Tuesday, June 8, 2010, in
the Economic Development Agency Boardroom, 201 North "E" Street, San Bernardino,
California.
The joint adjourned regular meeting of the Mayor and Common Council and Community
Development Commission of the City of San Bernardino was called to order by Mayor
Morris at 5:13 p.m. on Tuesday, June 8, 2010, in the Economic Development Agency
Boardroom, 201 North "E" Street, San Bernardino, California.
Roll Call
Present: Mayor Morris; Council Members/Commissioners Marquez, Desjardins,
Brinker, Shorett, Kelley, Johnson, McCammack; City Attorney Penman;
City Manager McNeely; City Clerk Clark.
Absent: None
1. Closed Session
Pursuant to Government Code Section(s):
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A. Conference with legal counsel - existing litigation - pursuant to
Government Code Section 54956.9(a).
B. Conference with legal counsel - anticipated litigation - significant
exposure to litigation - pursuant to subdivision (b) (1), (2), (3) (A-F) of
Government Code Section 54956.9.
C. Conference with legal counsel - anticipated litigation - initiation of
litigation - pursuant to subdivision (c) of Government Code Section
54956.9.
D. Closed Session - personnel - pursuant to Government Code Section
54957.
E. Closed session with Chief of Police on matters posing a threat to the
security of public buildings or threat to the public's right of access to
public services or public facilities - pursuant to Government Code Section
54957.
F. Conference with labor negotiator - pursuant to Government Code Section
54957.6.
G. Conference with real property negotiator - pursuant to Government Code
Section 54956.8.
City Attorney Penman announced that the following cases would be discussed in
closed session:
San Bernardino City Professional Firefighters, Local 891 v. City of San
Bernardino and San Bernardino Fire Department - San Bernardino County
Superior Court, Case No. 1007708.
San Bernardino City Professional Firefighters, Local 891 v. City of San
Bernardino and San Bernardino Fire Department - San Bernardino County
Superior Court, Case No. 1007709
2. Budget Workshop and Deliberations - Fiscal Year 2010/11 - City, Capital
Improvement Program, and EDA Budgets
Mayor Morris stated that this meeting is the first of several meetings over the
next four weeks concerning the 2010/2011 budget, the CIP, and the EDA budget.
He explained that for the first time in the City's history we will be looking at a
program-based budget and also looking at a study of the Integrated Waste
Management Division prepared by the Matrix Consulting Group.
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City Manager McNeely stated that the transition from a line item budget to a
program budget has begun this year. To start the budget kickoff, he asked
Finance Director Barbara Pachon to summarize a five-year projection as well as
assumptions for the 2010/11 budget. Following her presentation, representatives
from the Matrix Group would present their findings and analysis. Interim Public
Works Director Randy Kuettle would kick off the departmental presentations and
provide an overview of his department, followed by a presentation by City
Engineer Robert Eisenbeisz who would talk about the CIP.
Mr. McNeely stated that when he took on the assignment as City Manager for
San Bernardino, there was discussion about our budget document and making it a
more effective tool for our policy makers, the Mayor and Council, as well as for
staff and the community. His desire was to transform the line item budget into a
much more productive, informative document that provides a lot more
information about this city and about the operations of every single department.
Mr. McNeely explained components of the program-based budget and stated that
every single year the Mayor and Council will see in each individual department
what accomplishments they have been able to achieve, followed by what their
major issues are for the upcoming year. He asked the council members to pay
particular attention to performance measures, as that is where people are held
accountable.
Mr. McNeely noted that two budget documents will be submitted. The first
document, called Plan A, lays out the status quo budget that we currently have in
order for the City to maintain the same level of services that we have right now.
The caveat in making that statement is that the City is facing a $24 million deficit
so the only way to maintain the existing service levels is to balance the budget
and somehow make up that $24 million deficit. He stated that assumptions have
been made in the budget that incorporate revenue options for the Council to
consider in terms of balancing the budget.
After the departments present the budget outlined in Plan A, they will come back
with the second budget document which is an alternate budget, Plan B, and that
Plan assumes no revenue increases and no enhancements. Plan B calls for cuts in
service levels in order to address the deficit.
Finance Director Barbara Pachon stated that for years the City has had a
structural deficit, and that exists when expenditures are more than revenues. In
the past, budget shortfalls have been eliminated mostly by eliminating positions or
using one time revenues or increasing fees. Mrs. Pachon pointed out that in the
2009/2010 budget, 86 positions were eliminated and furloughs were implemented.
The current shortfalls, starting in FY 2008/09 to the current fiscal year, have
been even worse due to several factors occurring throughout the country:
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collapse of the financial industry, declines in housing values, skyrocketing
foreclosures, high unemployment rates, stock market losses, and the State of
California's billion dollar deficit.
She stated that here in San Bernardino, unemployment is up to 19.2 percent, sales
tax revenues are at their lowest in 15 years, major development revenues are
down over $3 million, utility users tax and property tax revenues are down from
their highest point, reserves are low and personnel costs are increasing. In
addition, there are unfunded retirement liabilities, equipment in decline, deferred
maintenance, and the City is in a weak borrowing position.
Mrs. Pachon reviewed the Fiscal Year 2010/11 Preliminary Budget and noted that
there are assumptions built into the budget, as follows: that the real property
transfer tax would be increased and bring in an additional $1.5 million of
revenue; an increase in the refuse, water, and sewer charge to 15 percent, which
would bring in about $6.2 million; an increase in the Fire Department's business
inspection fees that would bring in just under $400,000; and fee increases for
unauthorized sign fines and a yard sale permit fee. Another item under
consideration is the sale of the Convention Center to EDA for $2.4 million, based
on an appraisal that has been done.
Under the category of efficiencies, Mrs. Pachon explained that the Human
Resources Department will be doing H.R. functions for the Economic
Development Agency for a net savings of $50,000; a debt collection program and
audits are under way and they are factoring in additional revenues of about
$400,000; personnel costs assumed a $10.7 million savings, and she noted
additional savings from vacancy savings and grant credits.
3. Presentation and Discussion of Matrix Consulting Group's Management
Study of the Integrated Waste Management Division
City Manager McNeely explained that the Matrix Consulting Group had spent the
last three or four months working and meeting with staff, meeting with employees
and managers, and going through operations of the Integrated Waste Management
Division from top to bottom. He stated that Matrix Consulting Group had
prepared a report of their findings and their recommendations.
Mayor Morris introduced Gary Goelitz, Vice President of Matrix Consulting
Group, Palo Alto, CA. He noted that evaluation of solid waste collections is a
core business of their company and they have done work all across the country in
cities such as Spokane, Washington, Scarsdale, New York, Springfield,
Massachusetts, Scottsdale, Arizona, and Beverly Hills, CA.
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Mr. Goelitz explained that the study of the Integrated Waste Management
Division has resulted in an accountability-based plan of implementation that
assigns specific responsibility and timeframes for implementation. The study
includes 130 recommendations and it is posted on the internet.
Mr. Goelitz commented on the things that the Division does do right; i.e.,
residential services such as trash and yard waste and recycling are all delivered
with one-man crews and that is a best practice. Another best practice is using a
4/10 work schedule for collection of residential waste, because it reduces idle
time in terms of lunch breaks, getting ready, and cleaning up at the end of the
day. He also pointed out that in some cases the productivity of the commercial
front loader crews exceeds best practices and is resulting in a tonnage of the
trucks exceeding legal speed limits so they will have to increase route sizes for
one or two days. Another positive noted by Mr. Goelitz was that three or four
years ago, the Division was spending hundreds of thousands of dollars in
overtime. The collection of routes was reconfigured and overtime is now
required on a day-to-day basis to complete the collection of routes. As a result,
99.8 percent of the time collection of routes is completed on the day that they are
supposed to be collected.
One of the challenges that the Division has is contamination of the recycled waste
stream. Based on data from July 2009, it looks like there is a 25 percent
contamination rate which exceeds the benchmark and actually costs money
because the recycling facility pays less for recycled goods based upon that
contamination rate. Consequently, there are two issues that need to be addressed.
The first is educating consumers and the second is that the consumer is not
listening to provide financial incentives.
Mr. Goelitz stated that the City is receiving a much higher level of support from
integrated waste than it would have if it had been outsourcing this service.
He stated that he views the Integrated Waste Division as an underperforming asset
which means that the operators and supervisors of that division are capable of so
much more than they are delivering right now. In the past, the management of
that division has not adequately challenged staff to do their best and management
of that division needs to work together with supervisors and operators to get the
best. Mr. Goelitz indicated that route sizes for residential trash, yard waste and
recycling collection are lower than benchmarks. He found that there is significant
unused capacity of approximately 26 percent for residential trash; 33 percent for
residential recycling; and 56 percent for residential green waste. He stated that
management is ineffectively balancing routes.
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�- Mr. Goelitz suggested that use of the one-person crew has become common
practice in solid waste collection and management needs to focus on converting
most routes, if not all, to one-person crews.
With regard to recycling, the division has not yet developed an effective
education program for businesses and residences. Recycling services are not
provided for multi-family dwellings and recycling services for businesses are
extremely limited. Mr. Goelitz stated that the salary is set too low for recycling
specialist positions and salaries for those positions need to be increased so that the
right kind of staff can be attracted.
He stated that the Integrated Waste Division has actually implemented only 12
percent of the recommendations in the R3 Consulting Report. One of R3's
suggestions was to add ten positions to the Integrated Waste Division; however,
Matrix suggests that the City head in the opposite direction by consolidating
utility billing centers and reducing staff. He also recommended that the division
conduct a cost allocation study, a cost of service study, before increasing the
franchise fee to 15 percent or whatever amount is deemed appropriate. The cost
allocation study will verify the amount of support provided by the General Fund,
Water Fund, and Fleet Fund to the Refuse Fund or Integrated Waste Fund.
Also noted was the fact that a formal skills assessment and training plan for each
employee has not been done in the division. Matrix is recommending the addition
�.r.+ of two positions to be paid for at least initially by the Integrated Waste Fund.
One is an accountant position as a way to transition dependency on the consultants
as it relates to cost of services study and cost allocation study. The second
position is a performance auditor to work in the Office of the City Manager to
make sure that these recommendations get implemented and identify further
opportunities for cost savings. He commented that positions such as a
performance auditor should be able to pay for themselves three or four times over
on an annual basis.
Another observation made by Mr. Goelitz was that in his 37 years of being in the
business, he had never seen two utility billing centers in two different
departments. He commented that effective collection procedures are not in place,
and if someone refuses to pay the bill, the Division does not try to get the money
owed. As a consequence, there are seven figures worth of outstanding debt that
is largely uncollectible because of ineffective collection procedures. He noted
that the Water Department and Integrated Waste are using two different versions
of utility billing software with two different databases. It's not a one-stop shop
that you would expect from utility service. The percentage of calls abandoned by
Integrated Waste exceeds benchmarks. In essence, on abandoned calls the
customer simply gets tired of waiting so they hang up. The level of accounts per
customer service representative also exceeds benchmarks.
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Mr. Goelitz stated that the Water Department has submitted a proposal to provide
billing services at a cost that is $519,000 less a year than the Integrated Waste
Division currently incurs and they can provide the services without any additional
staff.
Mr. McNeely indicated that they have been in conversations with the Water
Department and they have agreed to enter into a Memorandum of Understanding
that would consolidate billing operations. Assuming the City Council approves
moving forward with that, the consolidated billing operation could be operational
as soon as August and would save roughly $500,000 on an annual basis. Mr.
McNeely noted that regarding consolidating the billing operations, it is a meet
and confer item so they will meet with the bargaining groups.
Following Mr. Goelitz' presentation, discussion continued and he responded to
questions posed by members of the City Council.
Public Comments:
Raymond Crawford, San Bernardino, CA;
Paul Munz, San Bernardino; CA;
Tom Ramsey, San Bernardino, CA;
Joe Bonadiman, San Bernardino, CA;
Charles Greenwood, San Bernardino, CA;
Ricky Parker, San Bernardino, CA;
`••r Joe Arnett, San Bernardino, CA;
Ray Allende, San Bernardino, CA.
Roger Edmonds, San Bernardino.
City Engineer Robert Eisenbeisz gave his presentation on the Capital
Improvement Program (CIP) for FY 2010-2011/2014-2015. Mr. Eisenbeisz
noted 2009/10 accomplishments, explained funding sources for the projects, and
then spoke about the 2010/11 proposed budget and highlights of significant
projects planned for the coming year. Discussion followed and Mr. Eisenbeisz
responded to questions from the Council members.
Council Member/Commissioner Kelley made a motion, seconded by Council
Member/Commissioner Johnson, that the recommendations submitted by Matrix
regarding solid waste and refuse services be approved. The vote was taken
following further discussion.
City Manager McNeely suggested that the motion include language that staff be
directed to work with the City Attorney's Office to address all legal issues.
City Attorney Penman requested that the motion be subject to the approval of the
City Attorney's office on Proposition 218 issues.
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r Council Member/Commissioner Kelley amended his motion, seconded by Council
Member/Commission Johnson, that the recommendations presented by Matrix
Consulting Group's Management Study of the Integrated Waste Management
Division be approved; that staff be directed to take all actions necessary for
implementation of the recommendations, with the exception of proposed revenue-
generating measures subject to Proposition 218; and, that the City Attorney
confer with the City Manager and come back to the Council before a decision is
made on revenue-generating measures. The motion carried unanimously.
Council Member/Commissioner McCammack requested that the record reflect
her protest to the hiring of any additional staff until the Council has a full
understanding of the implementation of the revenues that will or will not be
generated. She noted that she did not want to vote against the whole proposal
because it is a good proposal, but she did not believe it would be prudent to hire
additional staff.
Randy Kuettle, Acting Director of Public Works proceeded to give a PowerPoint
presentation of his department's preliminary budget. He reviewed the
department's top accomplishments for FY 2009/10 and highlighted major issues
for FY 2010/11, including issues such as deferred maintenance/replacement of
street lights, sidewalks, curbs, gutters, pavement, sewers and facilities, the
installation and inspection of four energy efficiency projects in City buildings,
and coordination of major transportation projects.
Council Member/Commissioner Kelley asked if the city recoups dollars from an
insurance carrier when a vehicle strikes a pole in a car accident and the pole is
knocked down. Mr. Kuettle stated that the pole knockdowns are referred to the
Risk Management Division and insurance companies are then contacted to collect
for the cost of replacing the poles. Mr. Kelley asked if once those dollars are
collected, do they go into the General Fund or are they specifically allocated to
replace the knocked down poles. Finance Director Barbara Pachon explained that
there is a separate revenue account called damage claim revenue.
In response to a question from Council Member Kelley, Mr. Kuettle indicated
that there are about 70 knockdowns citywide. Mr. Kelley suggested that it would
be prudent to ensure that when the money is collected to replace a pole that it's
not thrown into an account that's going to be spread all over the place.
Council Member/Commissioner Kelley made a motion, seconded by Council
Member/Commissioner McCammack, that a separate Finance Department
account on pole replacements be established and that the poles be replaced as
monies for knockdowns are recovered. The motion carried unanimously.
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Public Comments:
John Valdivia, San Bernardino, CA.
4. Adjournment
At 9:20 p.m., the meeting was adjourned to 5 p.m., Wednesday, June 16, 2010,
in the Economic Development Agency Boardroom, 201 North "E" Street, San
Bernardino.
The next joint regular meeting of the Mayor and Common Council/Community
Development Commission is scheduled for 1:30 p.m., Monday, June 21, 2010.
RACHEL G. CLARK, CMC
City Clerk
Q
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