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. CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Councilman Frederick J. Curlin, M.D.
Subject:
Blue Ribbon Budget Reduction Recommendation
Committee
Dept: Council Office
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Date: April 8, 1997
Synopsis of Previous Council Action:
March 31, 1997 - Vote to form Blue Ribbon Budget Reduction Recommendation Committee.
Recommended Motion:
To discuss and take possible action on the following motions relating to the mission of the City's Blue Ribbon Budget
Reduction Recommendation Ad Hoc Committee voted on March 31, 1997 to review the City Budget:
1. That the Committee be instructed to carefully examine the budgets and most recent audits of each City departtnent,
without exception, with a view towards recommending the cutting of any waste discovered.
2. That the Committee be instructed to study and review the fiscal impacts of constant staffing of fire personnel.
3. That the Committee convene within one week of its formation and meet once a week for a 60-day period at which
time it will present its findings to the Mayor and Council.
4. That the Committee voted for in the March 31 meeting consist of 0 NL Y San Bernardino residents, one each
appointed by each Councilmember and one appointed by the Mayor.
ADiQl~4.,OFFrcel
8 pFR 97 4: 5}
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Signature
Contact Person:
Councilman Frederick J. Curlin. M.D.
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Supporting Data Attached:
Ward:
FUNDING REQUIREMENTS:
Amount:
Source:
IAcct.No.)
(Acct. Description)
Finance:
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Tabled
ITEM NO. It,
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Fred Wilson
Acting City Administrator
Dept:
Subject: Proposed Funding Alternatives to
(, dUliiArasure "s"
Date: March 25, 1997
Synopsis of Previous Council action:
2/27/97 -- Ways and Means Committee reviewed mid-year Budget Report.
FORM IIOTIONS:
1. That the Director of Public Works be authorized to proceed
with the establishment of a city-wide assessment district for
the purpose of funding street lighting, street sweeping,
traffic signal maintenance, and graffiti abatement.
2. That staff be directed to develop budget reduction
alternatives in the amount of $4.3 million. This is in
addition to the $2.9 million that will be reduced from the FY
1997-98 budget based on the mid-year budget report.
3. That the Acting City Administrator be directed to pursue the
feasibility of privatization of city services that are
outlined in the attached staff report, and instruct the
Director of Personnel to meet with the appropriate bargaining
units to discuss staffing considerations and imp t jobs
performed by unit employees.
Contact person: Phone:
Supporting data attached:
Ward:
FUNDING REOUIREMENTS:
Amount:
Source: (Acct. No.)
(Acct. Descriotionl
Finance:
Council Notes:
Previously #-( 03/3/ /17
. I
75-0262
Agenda I tl
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STAFF REPORT
Since Measure S was not approved by the voters, and Assessment
District 994 expires July 1, the city is faced with a projected
budget deficit of $7.2 million for FY 1997-98.
In order to reduce the projected deficit, all departments (except
Police and Fire) have been asked to submit proposed budgets for
next year that include a 5% reduction. The Police Department is
also considering the feasibility of privatizing certain operations
in the department. If the Mayor and Council approve all these
reductions, the deficit will be lowered to $4.3 million.
Several options have been identified for the consideration of the
Council that would potentially close the remaining budget gap.
OPTION 1:
Propose a new maintenance assessment district to
fund street sweeping, traffic signal maintenance,
street lighting, and graffiti abatement.
AD 994 currently generates approximately $4.2 million per year to
fund these services. Indirectly, 65 Police Department positions
are paid for using money from the General Fund that would otherwise
be needed to provide for these services. A new assessment district
could be created that would continue to pay for street sweeping,
traffic signals, street lighting, and graffiti abatement.
It should be noted that assessment district funds could not be used
for general government services, such as police, fire, or parks and
recreation. Under Proposition 218, property owners can only be
assessed for the "special benefit" that each parcel receives.
Since these general government services are not "special benefits",
they can only be funded through the General Fund or through a
special tax (as was proposed with Measure S).
Also, with the passage of Proposition 218, the requirements for how
the district would need to be structured have changed. The
assessment calculation methodology would use zones of benefit for
each service provided. Rather than a simple set of assessments per
type of parcel, the assessments will vary because each property
would be assessed only for the special benefit it receives from the
services.
Proposition 218 also mandates that any "general benefit" portion of
an assessment district's services must be paid for out of the
assessing entity's General Fund. It is estimated that
approximately 10% of the services currently provided by AD 994 will
be considered "general benefit". Therefore, using FY 1996-97 as a
baseline, the new district would collect $420,000 less per year
than AD 994. The remaining $420,000 needed would be paid for
through the General Fund or another source of funds.
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If this option is to be considered by the Mayor and Council, it
will require a slightly different process than what has been used
in the past due to Proposition 218. In their March 21, 1997,
letter, attorneys from the law firm of Nielsen, Merksamer,
Parrinello, Mueller, and Naylor state:
" . . . new and increased assessments must be approved by the
majority of owners in the affected area...The principal
method for securing owner approval of an assessment is by
submitting ballots to the record owners of each parcel
identified as receiving a special benefit from the
proposed assessment...However, each vote is to be
weighted 'according to the proportional financial
obligation of the affected property' . "
Provided in
between AD
Attachment B
At tachment A
994 and the
is a proposed
is a summary of the key differences
new city-wide assessment district.
schedule for reference purposes.
OPTION 2:
Make significant reductions in City services.
Over the past six years, the total number of City employees has
been reduced by over 120 positions. This year, departments have
already been asked to make a 5% reduction in the budget they will
submit for FY 1997-98, which will reduce the deficit by $2.9
million.
In addition to this 5% cut, the Mayor has proposed another list of
potential reductions in City services. These possible reductions
include the following (preliminary savings estimates are given
where available) :
Eliminate the Telecommunications Division ($413,800)
Reduce library funding by $350,000
Close all community centers ($651,500)
Close all senior centers ($206,700)
Close the Center for Individuals with Disabilities ($174,900)
Eliminate remaining crossing guard funding ($81,400)
Eliminate funding for Little League ballfield lights
($120,000)
Eliminate fee waivers for non-profit organizations
Reduce funding for civic and promotional events such as the
4th of July and other parades
OPTION 3:
Privatize city services.
Privatization of services has been discussed in past years, and is
being actively pursued by many other cities in the area. As
services are privatized, savings are achieved by reducing the
number of City employees. Areas for possible privatization
include:
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Police Records Bureau and Dispatch:
The Chief of Police has preliminarily examined the feasibility of
privatization of these functions. Preliminary estimates show a
significant annual savings could be achieved.
Park Maintenance:
Parks, Recreation, and Community Services would like to explore the
feasibility of privatizing some park maintenance operations.
Refuse collection:
The City of Colton. privatized its refuse collection services in
1996. Without a thorough appraisal of the worth of the operation
in San Bernardino, it is difficult to estimate the revenue that
could be raised by privatizing the city's refuse service..
Currently, the refuse operation contributes approximately $4.2
million annually to the city's budget through overhead charges,
internal service charges, Liability and Worker's Compensation
charges, rents, and refuse collection services for city
departments. These current contributions would need to be weighed
against the potential revenue from privatization.
In order to facilitate the exploration of this option, the Mayor
has directed that Public Services issue a RFP for an independent
consultant to undertake an appraisal of the refuse operation. The
appraisal is expected to be completed by mid-May.
Cemeterv Operations:
The sale of Pioneer Memorial Cemetery did not move forward due to
the buyer's concerns regarding debris in the undeveloped portions
of the cemetery. It is recommended that we continue to pursue
other alternatives for the operation of the cemetery by a private
entity. In the meantime, maintenance of the facility could be
considered for privatization.
Other services:
Other services that could be privatized include street sweeping,
traffic signing and striping, and print shop services. Further
analysis is required to determine if privatization is feasible for
these functions.
RecOImIIendations
It is recommended that the Mayor and Council approve one or more of
the following motions:
1. That the Director of Public Works be authorized to proceed
with the establishment of a city-wide assessment district for
the purpose of funding street lighting, street sweeping,
traffic signal maintenance, and graffiti abatement.
2 .
That staff
alternatives
be directed
in the amount
to develop budget reduction
of $4.3 million. This is in
4
addition to the $2.9 million that will be reduced from the FY
1997-98 budget based on the mid-year budget report.
3. That the Acting City Administrator be directed to pursue the
feasibility of privatization of city services that are
outlined in the attached staff report, and instruct the
Director of Personnel to meet with the appropriate bargaining
units to discuss staffing considerations and impact on jobs
performed by unit employees.
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Attachment A
Conwarison of AD 994 and the Proposed Assessment District
AD 994 New Assessment District
What does it fund? Street lighting, street sweeping (twice per Street lighting, street sweeping (twice per
month), traffic signal maintenance, graffiti month), traffic signal maintenance, graffiti
removal removal
Does it fund Police services? Indirectly, 65 Police positions are paid for No. Under Prop 218, assessments can only
using funds that would otherwise be used for pay for services that have special benefits to
assessment district services. the properties assessed.
How is it enacted? Council action; protest hearing process Council action; protest hearing process that
includes a weighted mail ballot procedure.
Requires majority of weight of ballots
responding to support the assessment
How much does it cost? $65 per assessment unit Varies, because each property is assessed for
$47.45 per apartment unit the special benefit it receives. Those
$58.50 per cnndo, PUD, duplex, and triplex properties receiving more benefits will pay
unit relatively higher assessments. The mailed
$20.15 per mobile home unit in a mobile notices for the assessment will state the
home park amount of the property owner's proposed
assessment on the ballot
How is the assessment Costs spread across all assessment units; Zones of special benefit created for each
calculated? assumes all residents benefit from all services service; any given property may be in one or
more zones. Assumes benefits vary from
property to property
How does the assessment Only if costs increase. If needed, increase Only if costs increase. If needed, increase
increase? cannot exceed CPI or 5%, which ever is less cannot exceed CPI or 5%, which ever is less
Does it have a sunset clause? Yes To be determined
What happens if there is a AD 994 sunsets on July I, 1997 Using last year's assessment as a baseline,
majority protest and the this would create a budget deficit of$4.2
assessment district does not million. City services would have to be
pass? reduced in order to balance the city's General
Fund budget.
What property owners are Government.owned properties, schools, all None. All property owners will be assessed,
exempt? other parcels not assessed property tax unless their specific property derives no
special benefit from district services.
Collection procedure would need to be
established with gov't agencies
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Attachment B
J
CITY WIDE ASSESSMENT DISTRICT FORMATION SCHEDULE
March 18 Measure "S" Vote
April 7 Authorization to Proceed to Council (Form motion)
April 16 Submit Agenda Item for May 5 Council meeting
May 5 Resolution of Intention, Setting Public Meeting and
Hearing and preliminary approval of Engineer's Report
(including proposed assessment roll)
May 23 Absolute last day to mail notices
June 4 Submit Agenda item for 06/16 Council
June 16 Public Meeting
June 25 Submit Agenda Item for 07/07 Council
July 7 Public Hearing --- all ballots must be received by the
conclusion of the public input portion of the hearing.
Matter continued to next Council Meeting to allow
tabulation of ballots.
July 21 Presentation of tabulation results to Council. Resolution
Ordering Work, establishing the district, approving the
Final Engineer's report and confirming the Assessment
Roll.
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