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HomeMy WebLinkAbout01-18-2012 Jt. Adj Reg Mtg MinutesMayor Patrick J. Morris  Council Members  Virginia Marquez  Robert D. Jenkins  Tobin Brinker  Fred Shorett  Chas A. Kelley  Rikke Van Johnson  Wendy McCammack  MINUTES JOINT ADJOURNED REGULAR MEETING MAYOR AND COMMON COUNCIL AND THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO WEDNESDAY, JANUARY 18, 2012 EDA BOARD ROOM 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 Patrick J. Morris at 5:06 p.m., Wednesday, January 18, 2012, in the EDA Board Room, 201 North “E” Street, San Bernardino, CA. Call to Order Attendee Name Title Status Arrived  Patrick J. Morris Mayor Present   Virginia Marquez Council Member, Ward 1 Present   Robert D. Jenkins Council Member, Ward 2 Present   Tobin Brinker Council Member, Ward 3 Present   Fred Shorett Council Member, Ward 4 Present   Chas A. Kelley Council Member, Ward 5 Present   Rikke Van Johnson Council Member, Ward 6 Present   Wendy J. McCammack Council Member, Ward 7 Present   James F. Penman City Attorney Present   Rachel G. Clark City Clerk Present   Charles McNeely City Manager Present   Closed Session Pursuant to Government Code Section(s): 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. The Mayor and Council did not recess to closed session during this meeting. 2. Staff Reports A. City Manager Budget Workshop - Fiscal Year 2011/12 - City, Capital Improvement Program, and EDA Budgets City Manager McNeely explained that staff was not asking for a decision from the Council today-that they would be providing a financial update only. He explained that the midyear budget would still be coming to the Council-that there have been changes since adoption of the budget last year and staff would be seeking direction from the Council in late February or early March. However, tonight staff would provide a financial update, identify critical issues, and offer possible options for consideration in preparation of future budget discussions and actions. A hard copy of the PowerPoint presentation was distributed to the Mayor and Council, titled, City of San Bernardino, Financial Update, Charles E. McNeely, City Manager, January 18, 2012. Mr. McNeely began the PowerPoint presentation with an overview of the critical issues facing the City, followed by Barbara Pachon, former Director of Finance, presenting the financial overview. Mr. McNeely noted that the City of San Bernardino is a labor intensive organization and that the bulk of our costs are people costs. At the same time we have been faced with an economic downturn that has been historic, and we were ill prepared to deal with it. We simply did not have the resources to manage our way out of this. He noted that the City’s rank and file employees stepped up big time to work with management in making concessions, but even so, we are continuing to have problems. He stated it is not only the salary portion, but we have huge infrastructure issues in the city. So the question is, how do we manage this, where do we get the resources, how long do we get our employees to sign up for continuing give-backs, etc. Mr. McNeely reviewed the list of Options for Consideration included in the presentation, and asked the Council for any additional items they might want to add to the list between now and the budget workshop so staff could do the necessary analysis of those items. Council Member/Commissioner McCammack stated that it looked like the lion’s share of the jump in costs is a jump in salaries. She commented on the Writ of Mandate and the FLSA lawsuit, stating that if the Council had done things differently there would have been no lawsuits. She stated that with 300 positions already eliminated, workforce reductions can only come from public safety and there was not much chance of that. As far as outsourcing or privatizing, she stated that there are many other creative ways of gaining and creating additional revenue by doing a mixed use so to speak of privatization. She stated that the Council had talked about managed competition seven years ago, but it didn’t happen; however, there is still an opportunity for that. She stated that managed competition is a long-term fix, and that is what they need to look at; not one-time fixes that will not work. Ms. McCammack stated that there is no reason the Refuse Department should be in the hole. She noted that the last time the Refuse Department presented to the City Manager that they were in the hole, after a little bit of extra work and extra digging they found out it was not in the hole; it was actually profitable. She stated that for 7 out of 12 years she discussed implementation of a property transfer tax. She added that if they include some of the exemptions that she and Mr. McNeely have discussed it will not affect anybody that currently owns property here; and if it does, there was a cap to it. She also contended that the Economic Development Corporation (EDC) needs to transfer back properties to the City and the City needs to sell them—that for the most part they belonged to the City in the first place. Mayor Morris provided clarification regarding transferring EDC property back to the City, stating that it would result in that property ultimately being liquidated and the resources given over to other taxing agencies; i.e., the school district, special districts, the county, the state, etc. He stated that transferring those resources back to the City essentially feeds the needs of others, not the City. Council Member/Commissioner Marquez stated that she wants to explore termination payouts and retirements. She asked whether other cities have a cap on holiday and vacation time, and stated that she would like to see something in writing regarding payout of sick leave and vacation. Council Member/Commissioner Kelley stated that he would like an opportunity to review and digest the information they had been given. He stated that he would like to know what cost savings would be across the board if all bargaining units continued their 10 percent reduction. He also requested that the City create an account for the payout of sick leave and vacation time. He stated that this City must start preparing an economic strategic plan so it can get the revenue to come in to pay for the services that its residents are entitled to. Council Member/Commissioner Brinker stated that regarding retirement separation payouts, there was recently an article in the LA Times stating the mayor of LA froze those payouts as a budget balancing measure. Although he is not recommending that kind of approach, he is interested in the idea of perhaps smoothing that out by paying it out over time and making that a point of their negotiations to see if they can get that reduced to a reasonable amount so they know more or less what it will be each year. Relative to the 10 percent reduction, he noted that they are in the third year of furloughs, which are an okay budget strategy if you are looking at a really short downturn. But they are in the third year and looking at 3-5 years before things really start to turn around. He strongly urged his colleagues to reconsider the furlough approach to the budget and get that 10 percent through some other means. He added that he has made it clear that his preferred option would be to do some form of pension reform starting with the highest paid employees in the City-the people who earn over $100,000 a year. Mr. Brinker stated he was deeply concerned with the way that they set up the budgets—that the information that is put into the actual budget document is inadequate for helping the community to understand what is going on in the budget. He stated that he would like to see more transparency in describing what the budget items are. He added that there have been no good choices when the Council has had to make some very difficult budget decisions, and he would like staff to do a better job in providing this Council and future Councils with all of this information in the budget so that the community can understand the choices that the Council was given. Council Member/Commissioner Shorett stated that relative to separation payouts, he agreed they need to set up an account for this purpose, but they also need a new policy such as a “use it or lose it” or some sort of a cap. He stated that he believed that the policy needed to be reviewed. City Attorney Penman stated that many of the things talked about tonight have been discussed before. He noted that when people take off sick someone has to do their work; and in the Police and Fire Departments someone comes in on overtime, so you pay one way or another. He stated that one City function that has paid its way is Refuse, and one of the reasons other companies try to get the City to privatize the refuse operation is because they know they can make a load of money from it. He spoke regarding priority cuts versus cuts across the board, stating that across the board is a lazy way to handle it. He questioned whether in these lean economic times, and with so many parolees being released here, whether the Call Center is as important as police officers. Also, someone to defend lawsuits seems like more of a necessity than having someone answer the phone. Council Member/Commissioner Johnson noted that with minimum funds available the tendency is to pit one department against another to see which one is more valuable. They need to get into a position where they don’t have to do that, and he agrees that they need to look at an economic strategy. However, he knows that they are going to have to first look at some short term fixes that they cannot avoid that are going to bring some pain, but they do need to look for a long-term solution. City Manager McNeely stated that staff appreciated the valuable comments. He asked employees to submit their ideas and suggestions, knowing that ultimately it is the call of the Council. Council Member/Commissioner McCammack noted that a lot of employees are willing to offer information regarding revenue strategies, cost saving strategies, waste, and/or opportunities to save money; and many are willing to do this without being anonymous. However, there are those who fear for their jobs, and she felt there should be a way for them to bring their ideas forward anonymously, if they so desire. City Manager McNeely agreed, stating that in the past they have worked with IT to set up a site where employees can go in without a name; and they may be able to do that again. Employees can also contact individual Council members, if they prefer. Council Member/Commissioner Jenkins stated that one ingredient that had not been mentioned is the taxpayer/resident. The Council needs to know their priorities and keep them in the mixture. Public Comments: Warner Hodgdon, San Bernardino, CA. Mayor Morris stated that they had received a sobering report from Mr. McNeely and Ms. Pachon; one of the most sobering in many years. However, they have an obligation to balance the budget this year and the coming year, and it is going to be a Herculean challenge. No formal action was taken on this matter. Public Comments on Items Not on the Agenda Warner Hodgdon, San Bernardino, CA, spoke regarding Mr. McNeely’s 3-year contract with the City, which gives him 20 years in the State retirement system, with his retirement predicated on the last three years. Staff explained that a person’s retirement pay is spread among, and paid for, by all the entities an individual has worked for. Mr. Hodgdon requested that Mr. McNeely’s retirement figures be made available to the citizens of San Bernardino. 4. Adjournment The meeting adjourned at 6:51 p.m. The next joint regular meeting of the Mayor and Common Council/Community Development Commission is scheduled for 1:30 p.m., January 23, 2012. RACHEL G. CLARK, CMC City Clerk By:__________________________________ Linda E. Hartzel Deputy City Clerk