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HomeMy WebLinkAbout07-18-2012 Jt. Adj Reg Mtg Minutes WAR D�MO City of San Bernardino Mayor Patrick J. Morris 300 North "D" Street Council Members o San Bernardino CA 92418 Virginia Marquez M Robert D. Jenkins Ar http://www.sbcity.org John Valdivia Fred Shorett E �o�'�oO i v�o Chas A. Kelley Rikke Van Johnson Wendy J. McCammack MINUTES JOINT ADJOURNED REGULAR MEETING OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACTING AS THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACTING AS THE SUCCESSOR HOUSING AGENCY TO THE REDEVELOPMENT AGENCY AND MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO ACTING AS THE HOUSING AUTHORITY JULY 18, 2012 COUNCIL CHAMBERS The joint adjourned regular meeting of the Mayor and Common Council of the City of San Bernardino was called to order by Mayor Patrick J. Morris at 5:11 p.m., Wednesday, July 18, 2012, in the Council Chambers, 300 North "D" Street, San Bernardino, California. Roll Call Attendee Name Title Status Arrived Virginia Marquez Council Member, Ward 1 Present 5:00 p.m. Robert D. Jenkins Council Member, Ward 2 Present 5:00 p.m. John Valdivia Council Member, Ward 3 Present 5:00 p.m. Fred Shorett Council Member, Ward 4 Present 5:00 p.m. Chas A. Kelley Council Member, Ward 5 Present 5:00 p.m. Rikke Van Johnson Council Member, Ward 6 Present 5:00 p.m. Wendy J. McCammack Council Member, Ward 7 Present 5:00 p.m. Patrick J. Morris Mayor Present 5:00 p.m. James F. Penman City Attorney Present 5:00 p.m. Georgeann "Gigi" Hanna City Clerk Present 5:00 P.M. Andrea Travis-Miller City Manager Present 5:00 p.m. Mayor and Common Council ofthe City of San Bernardino Pagel Printed 11/112012 Joint Adjourned Regular Meeting Minutes July 18, 2012 C1. 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. Reading of Resolutions and Ordinances Deputy City Clerk Sutherland read into the record the titles of all the resolutions and ordinances on the agenda. Pledge of Allegiance The pledge of allegiance was led by Mayor Patrick J. Moms. 2. Public Hearings 2A. City Manager RES. 2012-205 — Resolution of the Mayor and Common Council of the City of San Bernardino Declaring a Fiscal Emergency in the City of San Bernardino. (Continued from July 16, 2012) The hearing was opened on July 16, 2012. Public Comments: John Magness, director of Hillwood Development Company, San Bernardino, CA, stated that the market will be cautious and will be watching to make sure that all avenues are addressed to restore financial credibility to the City. He stated that no responsible developer including Hillwood would risk its relationships by trying to get its users to ® locate in a city with such dire financial challenges unless the next important step is taken. He stated that as a leader in the business community he believes the Chapter 9 proceedings will create an efficient and motivating forum for serious, collaborative hard work to achieve the best results for its citizens. I Mayor and Common Council of the City of San Bernardino Page 2 Printed 111112012 Joint Adjourned Regular Meeting Minutes July 18, 2012 Mike Potter, San Bernardino, spoke against public employee unions and premium health care and retirement benefits; read an excerpt from an article regarding public safety spending; and urged the Council to declare the fiscal emergency and proceed with Chapter 9 bankruptcy if it will help the City's current financial situation. Scott Beard, co-developer of the proposed Home Depot project in Arden Guthrie, encouraged the City to declare the fiscal emergency and file Chapter 9 to correct the wrongs of the past, move the City in a positive direction, and cure internal ills that have inflicted this City for many years. The City has been in a downward spiral for many years and this will provide an opportunity to turn the corner and create a phoenix in this community. Stephen N. Johns, City employee and resident of San Bernardino, CA, questioned the $3.5 million shortfall in the Refuse Department; stated that there have been rumors about Fleet Services being authorized to charge higher labor rates for enterprise accounts such as sewer and integrated waste versus other general fund issues; and if the City does choose to file bankruptcy, he asked that local vendors get paid first because the loss of revenue for them could create a worse downward spiral for the City. Larry Sharp, Redlands, CA, encouraged the Council to make the tough decisions. He stated that the action that needs to be taken is not political, it is not something that comes out of blame, it is not taking sides, it is preserving the City. He urge the Council to ^ consider that Chapter 9 and the bankruptcy is protection from debtors and acting quickly [v, would give the City an opportunity to get out of this much faster. He encouraged the Mayor and Council to come together and agree on a plan that would take the City out of bankruptcy and get it back to being an "All American City." Tom Brickley, San Bernardino, CA, urged the council to vote to continue with the Chapter 9 proceedings and whatever it takes to get out of this mess. He stated that if any Council Members vote against this it means that they are not for San Bernardino, they are for the public safety unions, and that's wrong. The concessions need to be made for everybody and the public safety unions have to come to the table. Richard Iaria, Lyndon LaRouche Political Action Committee, Los Angeles, CA, stated that the policy of cutting the budget is a policy of murder; these cuts mean that people die. He stated that in 2007 Lyndon LaRouche predicted that the crisis in the banking system at that time would lead to these types of cuts and one city after another is going bankrupt because of the collapse of the economy. He stated that anyone interested in working with the government to implement the Glass-Steagall Act relative to investment banking should contact Representatives Joseph Baca or Jerry Lewis. Jane Hunt Ruble, Muscoy, CA, spoke of her sadness about the City's state of affairs; stated that the City's best assets are its people and the mountains so she questioned why nothing has been done with Arrowhead Springs; and stated that the City needs to be rebuilt with a better tax base that would draw more businesses and upscale people into the community. Mayor and Common Council ofthe City of San Bernardino Page 3 Printed 11/112012 Joint Adjourned Regular Meeting Minutes July 18, 2012 Rory Murray, spoke in support of keeping libraries open,providing lighting at parks and places for kids to play, and reducing the perks and pensions for public employees. He spoke in opposition to the new courthouse, the sbX Project, helicopters overhead 24/7, and the crackdown on pot dispensaries. He asked the Mayor to stop the childish bickering with Mr. Penman and stop hiring more consultants on the City's dime. Anna M. Hines, San Bernardino, CA, stated that she has seen the City of San Bernardino change and that it is about 30 years behind. She stated that she wanted to loan monies for the west side and central areas of the City. Warner Hodgdon, San Bernardino, CA, argued that he should not be limited to speak for only three minutes; questioned whether filing Chapter 9 is wise; stated that it is not just Police and Fire that are out of line—everything needs to be brought into line; and stated that Council meetings should be held on Saturday mornings so everybody would be able to attend. Jim Smith, San Bernardino, CA, stated that the City has to move forward with the declaration of fiscal emergency and the Chapter 9; stated that he was pleased to see some of the leading developers at the meeting because they are the people who will get the City back on track; and spoke about the need to change the form of government from a charter city to a general law city. Margaret Hill, Highland, CA, stated that the Council will have to live with whatever decision they make. John Matley, San Bernardino, CA, spoke about Councilman Shorett speaking to the media against two council members and the police and fire unions. Sharon Blechinger, San Bernardino, CA, stated that she lives in a good neighborhood but is afraid to walk the streets in San Bernardino and is considering closing the doors to her restaurant, which has been open for 60 years, if cuts are made in the Police Department; stated that she is tired of everyone berating Council members who receive support from public safety employees; and noted that something has to be done to reduce crime and the number of homeless people in the City. Roxanne Williams, San Bernardino, CA, member of Save Our San Bernardino, stated that the City is in a fiscal emergency and needs solutions right now. This City Council and prior City Councils had their chance and now it is time to hear from the citizens. She asked when the public would be able to give input regarding the bankruptcy. Larry Quiel, San Bernardino, CA, stated that when he spoke a few days ago he encouraged the Council not to go in the direction of bankruptcy. He stated that he hated to see the City go in that direction and he hated to think that every opportunity has not been taken to prevent it. He stated that if the City chooses to go in the direction of filing bankruptcy, he hoped that expenses would be micromanaged and problems in the Charter ^ figured out. He stated that when he first spoke, he was trying to protect the money that was owed to him for the services that his company has provided to the City. Mayor and Common Council of the City of San Bernardino Page 4 Printed 1111/2012 Joint Adjourned Regular Meeting Minutes July 18, 2012 City Attorney Penman advised that the declaring of a fiscal emergency is an action that does not have to be taken before you file a petition under Chapter 9 unless you do not have the financial resources to get you through 60 days of negotiations with the labor unions, and the City Manager and the Finance Director have indicated that we do not have enough money to do that. He stated that a motion was passed last Monday instructing the City Manager to begin a parallel process of meeting with employees. Andrea Travis-Miller, Acting City Manager, distributed to the Mayor and Common Council and submitted into the record a document titled, "City of San Bernardino, California, Staff Report, July 18, 2012, regarding Declaration of Fiscal Emergency." She stated that if the resolutions are approved, staff will present a Pendency Budget or an Interim Budget to the Council next week that will attempt to maintain the cash flow for the next 60 days. She stated that over the next week or so they will be hosting meetings throughout the organization at various locations to address the questions from the employee groups. Council Member Marquez asked where the bankruptcy was going to be filed, whether the public would be able to attend the proceedings, and when the first hearing will take place. Mr. Penman stated that anyone would be allowed to attend and they hope to be in the Federal Bankruptcy Court in Riverside; however, the date of the first hearing would be set by the court. He stated that it is anticipated that it will take at least 30 days to file as j there is a lot of work that has to be done before that time. One of the biggest problems is that they have to get a list of all the City's creditors, and under the bankruptcy law, any event that occurred before the City files or during bankruptcy court, the City could have liability for it. So they are going to have to cover every claim they can possibly find. They could amend the pleadings later and add more things as they find out about them, but they don't want to miss something, go into court, finish with the Chapter 9 Reorganization and then find someone has a big claim against the City that wasn't dealt with in the bankruptcy court. Council Member Kelley asked if there was a plan. Mrs. Travis-Miller stated that staff will be coming back to the Council with an interim plan in two weeks and they are in the process of developing a longer-term plan which would be required whether the Council votes to file bankruptcy or does not. She stated that either way they need a restructuring plan to deal with the structural deficit and the short-term cash insolvency. Council Member Jenkins stated that they need to set the following goals: 1) The City must pay its employees; 2) San Bernardino businesses and vendors need to be paid; 3) Regional vendors need to be paid; and 4) everyone else needs to be paid. Council Member Valdivia encouraged the City Manager to continue the public disclosure process to involve the public to make sure that people in our City are kept informed and have every opportunity to voice their concerns regarding the bankruptcy proceedings if that's the wish and desire of this Council. Mayor and Common Council ofthe City of San Bernardino Page 5 Printed 111112012 Joint Adjourned Regular Meeting Minutes July 18, 2012 Mayor Morris stated that they have received a set of proposed findings, the budgetary analysis and recommendations for budget stabilization, and a selected monthly cash flow analysis that shows that in the month of July the deficit will be $5,144, 805, in August it will be $2,060,352, and in the month of September it will be $5,676,506. He read into the record the information contained in the staff report dated July 18, 2012. Motion: Close the hearing; waive full reading; and adopt the Resolution. RESULT: ADOPTED [5 TO 21 MOVER: Rikke Van Johnson, Council Member, Ward 6 SECONDER: Virginia Marquez, Council Member, Ward 1 AYES: Marquez, Jenkins, Shorett, Johnson, McCammack NAYS: John Valdivia, Chas A. Kelley 2B. City Manager RES. 2012-206 — Resolution of the Mayor and Common Council of the City of San Bernardino Authorizing the Filing of a Petition Under Chapter 9 of the United States Bankruptcy Code. (Continued from July 16, 2012) I The hearing was opened on July 16, 2012. Public Comments: l Warner Hodgdon, San Bernardino, CA, stated that the deficit is probably significantly *✓ more than the reported $45 million because of Economic Development Agency properties and referred to a letter dated April 20, from John Chang, California State Controller, which demanded that all properties that were transferred from the Redevelopment Agency to other entities be returned; and advised that none of the backup materials were made available to the public, and just because they were posted on the website didn't make any difference. Hans Vandertouw, San Bernardino, CA, spoke about Economic Development Agency's debt; low income housing that has attracted more non-productive, non-taxpaying, dysfunctional and dangerous individuals; public safety spending; and reduced tax revenues. Kim Carter, Time for Change Foundation, San Bernardino, CA, stated that she was offended by the negative comments about low income people because everyone who lives in San Bernardino is low income, and local businesses that do not provide higher wages are to blame. Council Member Johnson asked staff to clarify what Chapter 9 is. Mr. Penman stated that Chapter 9 is the Chapter of the United States Bankruptcy Code that provides for reorganization for municipalities. Chapter 9 protects the City. It does C not give a lot of protection to the creditors. Unlike Chapter 11, the bankruptcy court cannot appoint a trustee to take charge of our assets and make decisions. The Federal Court has to respect any state or local laws or statues that have been approved by the voters, such as Proposition 218. The City Charter will be respected. The proceedings of Mayor and Common Council ofthe City of San Bernardino Page 6 Printed 111112012 Joint Adjourned Regular Meeting Minutes July 18, 2012 the bankruptcy court are open to the public. The City Council has to adopt a budget and a plan and the public has the right to voice their points of view. The bankruptcy court requires us to sit down with all of our creditors and try to work out solutions. Our creditors include our employees, people we owe money to, people we have agreements with. All of those individuals, corporations, and the citizens of San Bernardino have the right and the opportunity to be part of the process. The lawsuits that have been filed against the City will all automatically be stayed, which will save the City a lot of money. Any new lawsuits that are filed will be stayed and they will go into the bankruptcy settlement process. The City will have the opportunity, as will the plaintiffs in the lawsuits, to ask the bankruptcy court to permit their certain cases to go ahead, and those cases that have already come to judgment, or the settlements have already been entered but not paid,will become creditors of the City. Mrs. Travis-Miller stated that in addition to the plan they are required to prepare, now that a state of fiscal emergency has been declared, they will be required to provide a quarterly update to the Council and those updates will all be available online and residents will be able to participate in those discussions. Motion: Close the hearing; waive full reading; and adopt the Resolution. RESULT: ADOPTED 15 TO 21 MOVER: Wendy J. McCammack, Council Member, Ward 7 SECONDER: Virginia Marquez, Council Member, Ward 1 AYES: Marquez, Jenkins, Shorett, Johnson, McCammack NAYS: John Valdivia, Chas A. Kelley 3. Public Comments Warner Hodgdon, San Bernardino, CA, stated that if the employees decided to challenge this action he would support it; and submitted into the record his memorandum (including attachments) addressed to Jim Moms, Mayor's Chief of Staff, dated Friday, February 11, 2011, regarding the meeting held on Thursday, January 20, 2011. Richard Valdez stated that the die has been cast and just like a soldier or marine in combat is faced with odds that seem insurmountable, they had a motto, which was to "improvise, overcome, and adapt,"but you can't do that without being a team. He stated that he expects the City Council to work as a team to put together a strategic plan to pull the City together and get on the right track. Mayor and Common Council ofthe City of San Bernardino Page 7 Printed 11/112012 Joint Adjourned Regular Meeting Minutes July 18, 2012 4. Adjournment The meeting adjourned at 7:33 p.m. The next joint regular meeting of the Mayor and Common Council and the Mayor and Common Council Acting as the Successor Agency to the Redevelopment Agency is scheduled for 1:30 p.m., Monday, August 6, 2012. GEORGEANN"GIGP'HANNA City Clerk Bye,&d& Linda Sutherland Deputy City Clerk 0 Mayor and Common Council ojthe City ojSan Bernardino Page 8 Printed 111112012' 111120 12