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HomeMy WebLinkAbout01-27-2003 Jt Adj Reg Mtg Minutes - MCCMINUTES MAYOR AND COMMON COUNCIL AND COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO JOINT ADJOURNED REGULAR MEETING JANUARY 27, 2003 ECONOMIC DEVELOPMENT AGENCY BOARDROOM 201 NORTH "E" STREET 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 1:30 p.m., Tuesday January 21, 2003, in the Council Chambers of City Hall, 300 North "D" Street, San Bernardino, California. The City Clerk has caused to be posted the order of adjournment of said meeting held on Tuesday, January 21, 2003, and has on file in the Office of the City Clerk an affidavit of said posting together with a copy of said order which was posted at 3: 30 p .m., Wednesday, January 22, 2003, on or near the door of the place at which said meeting was held. 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/Chairman Valles at 4:44 p.m., Monday, January 27, 2003, in the Economic Development Agency Boardroom, 201 North "E" Street, San Bernardino, California. Roll Call Roll call was taken by City Clerk Clark with the following being present: Mayor/Chairman Valles; Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Suarez, Anderson, Mccammack; City Attorney Penman, City Clerk Clark, City Administrator Wilson. Absent: None. 1. Budget workshop -review Fiscal Year 2002/2003 City and Economic Development Agency (EDA) budgets Mayor/Chairman Valles stated that the purpose of the meeting was to discuss the budget challenges the City is facing and to develop specific strategies for dealing with the issues . City Administrator Fred Wilson stated that it was important to note that with all the uncertainty at the State level it is clear that the City will have to make some type of reduction in services, the big question is to what degree. 1 01/27/2003 David Pruitt, Executive Assistant to the Mayor, stated that the Governor had announced that the State budget deficit is $34 billion. He stated that the good news is that the legislators are actually pulling for the municipalities and pushed for legislation that clarifies the existing trigger mechanism for the reinstatement of the Vehicle License Fee (VLF) to the pre-1998 levels, which will definitely save the cities quite a bit of money if the bill passes. Mr. Pruitt stated that the City would probably not be able to recover booking fees and noted that the Governor's proposal also included an effort to transfer the unencumbered balances in the low and moderate income housing funds to the Education Augmentation Revenue Funds (ERAF) accounts, which would have a dramatic affect upon the Economic Development Agency . City Budget The following City documents were submitted into the record: City of San Bernardino Projected General Fund Balance, Fiscal Years 2002-2003 to 2004-2005 (State Vehicle License Fee (VLF) cuts included) (green sheets); City of San Bernardino Projected General Fund Balance, Fiscal Years 2002-2003 to 2004-2005 (State VLF cuts not included) (goldenrod sheets); and an interoffice memorandum from Barbara Pachon, Finance Director, to the Ways and Means Committee, dated January 24, 2003, regarding FY 2002-2003 Budget Report, including the General Fund Revenue Report (blue sheets), the General Fund Expenditure Report (pink sheet), the General Fund Overtime Report (yellow sheet), and the General Fund Personnel Report (lavender sheet). Barbara Pachon, Finance Director, reviewed the Projected General Fund Balance (green sheets), which reflected the loss of VLF revenue to the State in the amount of $3,548,500. She noted that the loss of revenue would reduce the budget reserve from $6,761,700 to $3,213,200. Ms. Pachon stated that she assumed no other adjustments to this fiscal year, but noted that for next fiscal year the City will have a shortfall of $18,346,300. She stated that if the City uses the remainder of its reserve, the bottom line shortfall would be $14,947,900 for 2003-2004. Ms. Pachon then reviewed her revenue and expenditure assumptions for fiscal years 2003 through 2005. Ms. Pachon reviewed the Projected General Fund Balance (goldenrod sheets), which did not include State VLF cuts. She stated that there would still be a shortfall in 2003/2004, but it would not be severe. Ms. Pachon reviewed the Ways and Means Committee FY 2002-2003 Budget Report covering the period of July through December, which included revenue, expenditure, overtime, and personnel reports. 2 01/27/2003 EDA Bud get The following EDA document was submitted into the record: Economic Development Agency, City of San Bernardino, 2002-03 Fiscal Year Revenue and Expenditure Summary Worksheet, Mid-Year Budget Review, Combined Redevelopment Project Areas/Federal Grant Programs/Low-Moderate Housing Fund (brown sheets); and Economic Development Agency, City of San Bernardino, Tax Increment Fund Projections (green sheet). Barbara Lindseth, Administrative Services Director, reviewed highlights of the mid- year budget review (brown sheets). She stated that the Agency expects a cost savings in salaries and benefits, but noted that they may exceed projections in legal fees due to legal costs associated with the HUB project. Gary Van Osdel, Economic Development Agency Executive Director, stated that the Governor is proposing a cut that would have redevelopment agencies pass through to school districts 100 percent of the property tax they would have been receiving had there not been redevelopment. He indicated that in the City of San Bernardino, that is projected to be around 33 percent of the tax increment. Mr. Van Osdel stated that the Agency's gross increment is projected to be $17,278,000, and realizing that approximately $16,267,597 goes to service the debt and pass-through obligations to the County, the Agency would have $1,010,403 to cover whatever plan the Governor chooses to pursue. He noted that if the Governor is successful in holding school districts harmless, then over time the Agency would be looking at sharing over one- third of its tax increment with the school district, meaning that the Agency could come close, or could actually default, on its bond indebtedness. Mr. Van Osdel stated that the Agency would still be able to cover next year's projected ERAF at $622,600, and could come close to being able to handle the $1,800,000 in 2003-2004, but both scenarios would require the Agency to borrow money from the Low-Mod Fund. He stated that if the Governor goes forward with his new ERAF and adds the limitation that agencies can only borrow 50 percent from the Low-Mod Fund, the local body will have to make up for it and that will make it even worse for the City's General Fund. Mr. Van Osdel stated that this would be extremely detrimental to both the Agency and the City and would drive the Agency out of business. Council Member/Commissioner Mccammack asked if the Council had discussed pension obligation bonds or working on variable rates as opposed to fixed rates on some of the City's finance mechanisms. Fred Wilson, City Administrator, stated that the issue was discussed at the budget brainstorming session. He indicated that he received a letter from the League of California Cities recently that they are exploring the formation of a Statewide 3 01/27/2003 organization that will help cities look at issuing pension obligation bonds because of a proposed significant increase in pension rates. Mr. Wilson stated that there has been an outcry to put together a financing pool to help cities even out the PERS rates. Council Member/Commissioner Estrada stated that she could not see how they could borrow Low-Mod monies if that is the last bit of money they have to operate the Agency on because the whole purpose of the Agency is to create money and opportunities and to stimulate the local economy. She stated that her concern was having to operate on borrowed money to keep the Agency's doors open and not having money to attract development. Mr. Wilson stated that the City has taken steps to develop strategies to deal with the budget deficit. He stated that a budget brainstorming session was held with the Mayor, department heads, and some of the Council Members and they came up with several good ideas relative to revenue enhancement proposals and efficiency improvements that will be categorized and explored further. Mr. Wilson stated that they are looking at both short-term and long-term issues that will be brought before the full Council in the near future. Mr. Wilson stated that at a minimum the City is looking at budget cuts in the range of $4 to $5 million in spite of what happens at the State level. He noted that if the worse case scenario plays out, the City would be looking at some significant cuts in service. Mr. Wilson stated that the City has been fiscally prudent, but will have to fight hard at the Sacramento level. Mayor/Chairman Valles requested that the information from the brainstorming session be provided to those Council Members who were not in attendance as well as to those who were and also requested that the City Administrator prepare a report of the costs, implications, and the ramifications of any actions that were taken. Council Member/Commission Estrada stated that the education of the community is vital because they, as residents of San Bernardino, will be impacted by the decisions that are made. She recommended that the City should consider developing some type of public relations program, hold forums, or take a survey in order to receive input from the community relative to the City's situation. 4 01/27/2003 2. Public hearing -reallocation of Community Development Block Grant (CDBG) funds for Downtown "E" Street Median Project -award of construction contract and Old Towne Streetscape Plan (Continued from December 16, 2002) Resolution of the Mayor and Common Council of the City of San Bernardino authorizing execution of a contract to International Pavement Solutions, Inc. for the construction of the Downtown "E" Street Median Project. The hearing remained open. Council Member/Commissioner Mccammack made a motion, seconded by Council Member/Commissioner Estrada, that the matter be continued to the Council/Commission meeting of March 3, 2003. The motion carried by the following vote: Ayes: Council Members/Commissioners Estrada, Longville, McGinnis, Derry, Suarez, Anderson, McCamack. Nays: None. Absent: None. 3. Adjournment At 6:06 p.m., the meeting adjourned. The next joint regular meeting of the Mayor and Common Council and Community Development Commission is scheduled for 1 :30 p.m., Monday, February 3, 2003, in the Council Chambers of City Hall, 300 North "D" Street. The public portion of the meeting will begin at 3:00 p.m. No. of Items: 3 No. of Hours: 1.5 5 RACHEL G. CLARK City Clerk n~J,,a;r~/ Linda Sutherland Deputy City Clerk 01/27/2003