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HomeMy WebLinkAboutCC Min 2000-06-06 5-22-00 / 6-6-00 ADJOURNMENT It was the order of the Chair, with consent of the Council, to adjourn the meeting to Monday, June .6th at 6:00 p.m. for a budget workshop. The meeting was adjourned by unanimous consent at 10:05 p.m. clerk I Approved: ~@;iJa.,~~ Ma or' Attest: Seal Beach, California June 6, 2000 The City Council of the City of Seal Beach met in regular adjourned session at 6:00 p.m. with Mayor Campbell calling the meeting to order with the Salute to the Flag. I ROLL CALL Present: Mayor Campbell Councilmembers Boyd, Doane, Larson, Yost Absent: None Also present: Mr. Till, City Manager Ms. Yeo, City Clerk Ms. Arends-King, Director of Administrative Services Ms. Hull, Finance Department CLOSED SESSION It was the order of the Chair, with consent of the Council, to adjourn to Closed Session pursuant to Government Code Section 54957.6 to confer with the City's Labor Negotiator with regard to the Orange County Employees Association, Non- Represented Employees, Seal Beach Police Officers Association, and Police Management Association. The Council adjourned to Closed Session at 6:02 p.m. and reconvened at 7:08 p.m. at which time it was understood that no action was taken. I BUDGET WORKSHOP - FISCAL YEAR 2000/2001 Mayor Campbell asked that the budget review be reversed from last year and commence with the Capital Improvement Program. Councilman Boyd recalled last years budget review by line items which resulted in nearly missing the big picture, so perhaps the City Manager should make his presentation first, review the program of services and issues of importance, then the Council can make some broader policy decisions relating 6-6-00 to priorities, direct that money be found to accomplish those, and then review the detail. The Mayor mentioned that two College Park East residents were present to address a specific issue, therefore her preference would be to deal with the CIP first. It was suggested they present their comments at this time. I Ms. Doris Wagner and Ms. Kathy Tredway, College Park East, stated they were present to request that their street, Carnation Circle, be looked at for repair once again as it is badly in need. * It was explained that the streets have been categorized in the Pavement Management Plan, a plan for systematic street repair, the Public Works Department could be asked to survey that street again, last year there was some creative categorization but repairs are supposed to go by the Plan or it has no value, streets throughout the City are in need; * The Mayor pointed out that the cul-de-sacs along Almond Avenue have never been done and are looking quite bad after thirty some years, last year there were three streets done because of rapid deterioration, Dahlia, Iris, and Daffodil are rated as being in very bad condition as are Birchwood, Carnation, and Clover, these are expensive homes along roadways in disrepair, last year monies were taken from the parks and a State rebate was used; . I * As a policy, the City has traditionally only applied gas tax money to street repair, no General Fund money, a policy decision that is thought should be made is to allocate a certain amount of General Fund money to street, curb, gutter, sidewalk repair, that would also accelerate doing the top two or three streets identified by the Pavement Management Plan; * Following the Pavement Management Plan is a means of avoiding battles between the districts for repair monies; * To the comment of the speakers that it is understood that tax monies will be forthcoming from the State to cities, the response was that is not yet known for certain, also, it needs to be kept in mind that prior to 1991/92 the City received about thirty-one to thirty- three cents of every property tax dollar, today it is just over fifteen and a half cents, in 1995 the State budget was $48 billion, today it is about $92 billion, there is not a proportionate amount of return in any capacity, yet the City does lobby for State funds on its behalf; I * There will be additional sales tax money forthcoming from the new shopping center, however that money will not be spent until it is received; * This is the nicest city on the coast and the people should have streets that do not have holes; * City Manager - tried to reduce the decision points into three summaries, the budget, the capital improvement program, and staffing needs; 6-6-00 * General Fund revenues up 1 percent, operating expenditures up 2.86 percent, budget is balanced through postponement of further reserve funding and removal of new reserves of fund balance designated for the five year capital improvement program; * New capital improvement funds to be expended are approximately $225,000 less than previous year, new reserves designated for the CIP are zero compared to $123,000 last year, programs affected by the deletion of new reserves of fund balance for the five year CIP include storm drain master plan improvements, police department exterior painting, park and playground equipment, etc., Marina Drive greenbelt is funded through grant monies; I * Concentration this year will be on completing the projects that have been started or on the drawing board through grant monies and monies designated in prior years, the regional bike trail, Marina Drive traffic calming, North Seal Beach Community Center repairs, Old Town sewers and alleys, and the Marina bridge; * There is no deficit spending, continue to appropriate a small amount to the self-insurance mandated reserve, the $1 million Cash Basis is reserved, maintaining a $250,000 employee benefit reserve at $250,000, and continue to strive to attain the 25 percent General Fund reserve, there are no new programs but there may be a desire to shift monies from one capital project to another; I * The Marina Drive greenbelt, it can be accomplished given the grant monies received from OCTA which then removes the need to use the CIP reserve; * Projects such as the storm drain master plan improvements, Police Department exterior painting, and park and playground equipment are not being cut but merely postponed, there is more than enough work to do; * There is now confidence that the departments are submitting tight budgets with regard to office supplies, maintenance and repairs, the basic functions, there is very little leeway and held to about one to one and a half percent per year, that less than the cost of living, certain vehicle replacements have been cut to achieve a balanced budget and address the employee groups, do some capital programs without deleting on- going capital maintenance programs; * There has never been General Fund money made available for street rehab, with the exception of the one-time money from the State last year; I * Suggestion for consideration was that given the desire to repair streets which means expediting the Pavement Management Program, the desire also to do downtown alleys, sidewalks, curbs and gutters, with emphasis on Main Street, possibly the direction to staff should be to go back through the budget line by line to find additional General Fund monies to be transferred to streets, sidewalks, etc., this needs to be a policy directive; I I I 6-6-00 * There are questions with regard to how to deal with the utility users tax, it was found that there is a $1.5 million General Fund transfer to the Recreation and Tideland funds, that offsets the amount of money that is not collected for recreation programs, beach parking as well, even though beach parking revenue helps, the lifeguard services are not self-sufficient, although it has been a policy decision to subsidize the recreation programs with General Fund monies to some degree, possibly that Department should be asked to look at their fees to determine how much they could marginally be increased yet not to the degree that families in the community can not participate; * with regard to whether the revenues derived from the volleyball tournaments goes to Recreation it was stated that they are not restricted funds, they become a transfer; * Rather than a line by line review, suggestion that the bigger picture be looked at, revenues are projected to be up about 1 percent, expenses are up by 2.86 percent, the question is does the Council want to transfer funds from the General Fund for street repairs, sidewalks, curbs, and gutters; * Suggestion that staff prepare three plans, current status quo, no shift of General Fund monies, and a plan should a relatively small amount of money be shifted to make a little more street repair headway; * Mention was made of the prioritization of street projects as set forth in the Pavement Management Plan; * The 2000/2001 budget, with minor modifications, is pretty well set in place because there are no significant changes in available resources or change in expenditures; * with regard to the Capital Improvement Program, it is time for the Council to commence thinking in terms of for the first time in twenty years the City will start accumulating new resources, that is addressed by starting now with a five year CIP, earmark what is to be done, for instance a tax relief program, restoring lost staffing levels, etc.; * There are no new reserves for future capital improvements this fiscal year, beginning the following year the capital program accelerates with the new revenue, at this point the plan is to put money into the storm drain system, money for pavement rehab, curbs, gutters, and sidewalks, maintenance and upgrading of City buildings, the pier, seawall, and beach facilities, the library as well the City's responsibility; * That would be consistent with the Strategic Financial Plan showing the categories of infrastructure backlog in the area of $30 million, the City is now looking at a $1.5 million new investment beginning 2001/2002 assuming that the shopping center revenue commences; * The five year Capital Improvement Plan is being updated to reflect that assumption, which is consistent with the fiscal impact report for the Bixby Center project, to 6-6-00 show the revenue stream and net income stream. over the five year period, taking into consideration how to pace the funding of the backlogged projects, the income steam is projected to be a steady $1.5 million per year for the next ten years; * The estimated five year cost for the Capital Improvement Plan $7.7 million, the revenue source over the first five years, in that it takes several years to reach the $1.5 million plateau, is $1.1 million, $500,000 was added to that because the current annual investment in the CIP is about that, when added together that is about $1,640,000 per year for the next five years on average that can be applied to capital investments, these are targets based on the fiscal impact study; I * Question was posed if relief from the utility users tax was considered, the response was that the average annual remaining available $100,000 could be used for that purpose, yet that is not even a percent, taking one and half points off would drop the income by about $436,000; * With regard to the total cost and number of years to accomplish, the total cost for storm drain upgrade would be about $7 million and take fifteen years, $12 million and twenty-six years for street maintenance however there is grant money and outside sources being pursued for that purpose, $1 million over ten years would upgrade the public buildings, parks and beaches, including curbs, gutters, and sidewalks probably a ten year program with a $5 million cost in that a large portion of the curbs, gutters, and sidewalks in the City need to be replaced; I * This presented now to allow for consideration of prioritizing when the first fusion of new resources occurs, this needs to be kept in mind if consideration is given to reduction of the utility tax as well, because as the utility tax is reduced the pace of the improvements are slowed; * The entire program can not be focused on just the capital program and tax relief - in 1980 the total employee count was one hundred sixty-four, in year 2000 it is ninety-nine, some of that is due to out-sourcing, there were sixty-eight employees in the Police Department in 1980/81, today it is forty-four, a lot of that came from administrative, non-patrol people, Police are probably closer to the right size today but not necessarily an optimal level; * The City went to County Fire in 1983 - the cost of fire services last year was up about $90,000, this year it is around $123,000, that basically the result of the equity study, however a ten year service agreement will be executed that will cap what can be charged of contract cities, which is expected to bring a long term saving; I * It was noted that of the previous employee count there were thirty-three Fire employees; * Suggestion was that for future years, in addition to a strategic plan for capital, that there be a plan developed for staffing needs; 6-6-00 * Of the nine personnel positions listed, the need to hire a Deputy City Clerk in this budget was mentioned, the Assistant Planner/Code Enforcement Officer was questioned, it was thought that the current Assistant was to take on the duties of Code Enforcement - the response was that the Planning staff consists of two staff persons that are overwhelmed with work, and two building inspectors; I * A comment was made that it does not seem necessary to hire a person at the same level as the current Assistant to do Code Enforcement, to that another city was mentioned that utilized two part time persons at about twenty-four hours a week doing Code Enforcement only; * A priority for this budget year was mentioned as being the position of a Deputy City Clerk at about $55,000, it takes four years or more to learn the responsibilities of the City Clerk, this can not be delayed, it also takes time to hire; I * To the proposal to hire an additional Police Officer, question was if that salary would be covered by the citations issued, and would that be the same with a Code Enforcement person - response was that there would likely be some cost recovery and possibly fines associated with code enforcement, the Planning employee would be more of a professional planner position having planning capabilities, interpretation of the Zoning Code, etc.; * The goal of code enforcement is not revenue enhancement, it is compliance; * This year staff is to find $55,000 for a Deputy City Clerk, by the time the process is completed that entire amount will not be spent, possibly $40,000 to $45,000 would suffice this year; * Part of the problem with code enforcement is that sometimes there is misinformation given to residents, they do something and find out it is wrong after-the- fact then needs to be corrected, that does not happen when someone has been in employ long enough to know and understand the laws; * A response was that a work force can not be reduced by about thirty-five people and not have some compromise in service levels and performance, that is a reason the staffing level component was suggested; * A comparison of a personnel plan was made to a staff to beds ratio in a medical facility, also methods of compiling statistics for comparison to other such facilities - a response was that a medical facility is a single function situation where a city is a multi- service function and performance type budgeting is preferred, it becomes more difficult to do that type of plan with privatization, the ultimate threshold for a city is customer service; I * It was stated again that direction needs to be given to find the money for a Deputy City Clerk, one percent of the increased operating expenses need to be cut, that is $139,000, suggestion too that line by line items not be 6-6-00 dealt with at this workshop; * with regard to the utility users tax reference was made to an April 21st memorandum from the City Manager relating to that issue, a summary of that is that Bixby is coming into being, the utility tax is 11 percent now, excluding cable and water, the recommendation was that if the intent is to cut the UUT it should be from 11 percent to 9.5 percent contingent upon the issuance of the Bixby Old Ranch Towne Center Certificate of Occupancy, that would equal $436,000; I * A personal recommendation was that the UUT be cut 1 percent in the first year, in the second year do a mid- year budget review of revenues and where the City is in the Capital Improvement Program, at that time determine if another percentage can be reduced; * Question was what does that do to capital improvements, also, once reduced the UUT percentages can not be reinstated, this is a significant source of revenue, this carried the City when the State commenced the take- away; * Mention was made that reduction of the utility tax was a significant issue in the last election, of concern however is that the COP is issued a considerable time before revenues are seen, preference would be to base a UUT reduction on the first receipt of revenues from the State; I * Caution was that the revenue not be spent before it is received; * It was stated there was not necessarily a concern with tying a reduction to the COP as there are means of covering a shortfall pending receipt, it is likely that the first receipt of revenues would be realized within ninety to one hundred twenty days, also, a 1 percent UUT cut by March 1, 2001 would not be an instant loss of $350,000 rather the reduction would be spread throughout the year, a 1.5 percent cut also would not be a $436,000 instant loss but maybe about $20,000 to $30,000; * Suggestion was made to base a reduction on sixty to ninety days after the issuance of the COP, there may be some loss of the utility tax but there will also be new utility tax revenue from the development that is currently not being paid, a policy decision should be made that a 1 percent cut of the utility users tax should be done within ninety days of the COP issuance; * There is about a six month delay in the receipt of sales tax, received quarterly; I * In doing the analysis, the framework was how the Council could retain and restore the confidence of the electorate to show that the City does not automatically receive and spend new revenues, it has been said that the utility users tax would only be kept for as long as it is needed, the question then is to what degree is the need to take points off the utility tax so that the public will feel that the Council has done something meaningful, Seal Beach is 11 percent, some are at 10 percent; I I I 6-6-00 * Suggestion was made that the City pursue lowering the utility tax to 9.5 percent; * Lowering the UUT becomes more difficult when one looks at the capital improvement needs, people do not see the correlation between higher taxes and fixing streets, this becomes a logical versus political decision; * Explanation was given again of the proposal to lower the UUT by 2 percent, phased, 1 percent following the Certificate of Occupancy for the major retailers at the Towne Center, do a mid-year budget review in January, 2002, make a determination to reduce another percent at that time, although that is nota guarantee, this would phase the reduction over a longer period of time; * If the intent is to lower the UUT by 1.5 percent there could be pressure to lower it again in a year; * Mentioned again that the COP is hoped to be issued about March of 2001; * If the 2 percent were the goal, a proposed 1 percent reduction at June 30, 2001 would be the only thing that could be included in this budget, anything else is just speculation; * If there were a Council consensus, the City Attorney could be requested to draft an ordinance that could be adopted now however would not affect this budget and become effective only after the issuance of the Certificate of Occupancy, and, the public would become aware that the Council took action to reduce the UUT; * Concern was expressed with legislating something now that does not take effect until some time much later, the impact of something that could happen in the interim is unknown; * Suggestion was made that an ordinance be prepared, receive first reading, and that second reading be postponed until the issuance of the Certificate of Occupation. It was the consensus of the Council to direct the City Attorney to prepare an ordinance to reduce the Utility Users Tax by 1.5 percent, the effective date of said ordinance contingent upon the issuance of the Certificate of Occupation for the major retailer of the Towne Center. * It was noted that nothing seems to be moving forward relating to the Krenwinkle house bed and breakfast proposal or the development of the property at Main Street and Pacific Coast Highway, both anticipated to be revenue generators, however the former Red Lobster facility is said to have been leased for a Chinese restaurant use; * A proposal is being made to change the method of collecting revenues at the beach parking lots, privatization of the collection, with could very well increase revenues by 18 percent; * Mention was made that a similar parking system in Huntington Beach was looked at, it works well, the only 6-6-00 argument is that one.has to retrieve the ticket and return it to the vehicle; * All of the ticket machines, etc., would be paid for by AmpCO, there will be a revenue guarantee of the average revenue over the past four years, an increase of revenue is also anticipated, revenue will be generated through the issuance of parking citations as well, the fee can be paid by cash, credit card, ATM, with no increase of the current parking fee; I * This is a sole source bid, staff solicited proposals from the three largest operators, the company providing the greatest detail of information was Ampco, which is the recommended operator, it would be impossible to develop specifications in that each system is so different; * Discussion - to have presentation by AmpcO at the budget workshop prior to the next Council meeting or a review of budget items only - determination was to have the Ampco parking lot presentation during the regular meeting; * with regard to the parcel of land next to the Fire Station at 8th and Central, the parking lot, over the years the use has varied between public parking, City employee parking, currently there are five spaces reserved for the Orange County Fire Authority, twelve to fifteen spaces are used by employees at City Hall, the remainder are authorized for use with the merchant stickers, it is understood that not many merchant stickers are being sold, and merchant utilization is about twenty to twenty-five at any given time; I * A proposed change to the use of that lot would be that the first two rows be for public parking with meters, the poles already exist and there is an existing collection service, the meters will also work on Sunday however there will be no enforcement with regard to church parking, that will be accomplished through an agreement with the church, this will segregate and more clearly define the parking for that lot, allow about twenty more public parking spaces and realize the revenue as well; * The intent is to have this parking in place for the summer months, suggested that this be considered at the June 26th meeting; * As an example, in the City of Laguna Beach there are no unmetered spaces, they also sell resident passes for $225 annually to exempt the meters, also, the meters go off at 8:00 p.m. in the summer and 6:00 p.m. in the winter months; I * It was again mentioned that $55,000 is to be identified for a Deputy City Clerk position, and that something in the range of $100,000 be identified for transfer from the General Fund, possibly $25,000 for sidewalks, curbs and gutters and $75,000 to $100,000 to accelerate the Pavement Management Program; * Question was raised as to where that money is proposed to come from, the response was that that would be the I I I 6-6-00 responsibility of the City Manager, also, that recommendations will be made relating thereto, concern was expressed with making such transfers from the General Fund; * Suggested that this would be easier next year where there may be new revenues, response was that this is wanted to be done this year; * It was noted that the Animal Control budget is going from $140,000 to $207,000; * The Program of Service is a request to provide certain services to the community, however the Council can reduce the requests and/or advise that the program be made to work with less; * Concern was expressed with the amount of $146,750 proposed for computer software; * It was explained that the expenditures are not all software, there are different elements involved, software maintenance in the amount of $10,000 is included in the Finance budget, that is paid every year, the current MOM software now charges about $10,000 to $11,000 per year for maintenance, a letter was received at the beginning of the year advising that MOM was raising their rates one hundred percent or $21,000, their reasoning is that it costs them more to maintain, they charge for calls when there is a problem as well, part of the $20,000 is applied to water because at least fifty percent of the data goes towards utility billing; * Question was posed if there has ever been an analysis of outsourcing the water billing - the response was that there has been discussion with the Public Works Director, the City of El Segundo is currently in the process of outsourcing their water billing, there are not too many cities that are known to do that, in Seal Beach the person who does water billing also processes business licenses, whether the computer software is changed or not there will still be the $21,000 maintenance fee for MOM; * Water billing is complicated, more so than payroll, not only is it the utility billing but there needs to be software from which the Engineering Department can access accurate information, for water and sewer rates as an example, if outsourced it would be necessary to use a company whereby that information can be downloaded; * Suggested that options could be considered, stated that the software increases productivity, an investment that pays for itself quite often; * Explained that the GAS software has nothing to do with the Finance Department, that is Planning and Building, the upgrades are of the PC units, the City was fortunate to have had grant money to outfit the City with computers but they are now three years old; * The request is approval of up to $100,000 to investigate an accounting software conversion and $60,000 to investigate utility billing software, explained that a 6-6-00 number of things were found out about the system when preparing for the sewer and water studies, it was difficult getting much of the information, the $160,000 is for software, includes installation, the other expenses are on-going annually, the software being looked at is Datamatic; * Question was raised as to who would be doing the conversion, the Finance Department is. basically part- time people; I * Preference was stated to look at this through the competitive bid process, obtain a good breakdown before any decisions are made; * Response was that it is necessary to request the funding first then look for the software package, and reference made to a memorandum from the City's computer consultant pointing out problems with the MOM software, there are problems with its integrity, noted that at one point there were 5,200 records created that were in error; * Mention was again made that there should be investigation of outsourcing both utility billing and business licenses; * with regard to costs, and with comparisons to what other cities are doing, to do the system right would cost about four times the proposed figure, this could actually be a return on investment; * If there is this much of a problem with the software it should be replaced, it is correct that to do an update right it would cost considerably more, it may be necessary to look into a partnership situation with someone who has more sophisticated capabilities before this is authorized, or if the software is replaced then it may be wise to spend a bit more money for an even better system; I * Mention was made also that some of the larger suppliers are now renting software - the response was that that is basically geared to the private sector rather than the public sector, it is understood there is not a big market, also when MOM was converted to windows it appeared that it was done without testing, even now the purchasing package does not work, even MOM could not fix it, with the windows conversion the system was shut down for four months, theydid..not update th~ business licenses, it took the City two months to do that; * This is something that, in the opinion of staff, needs to be investigated, there is no trust in the MOM system, they have done nothing to upgrade their product, there is concern with accuracy and accountability, there has been considerable money spent with that program; I * Investigation of outsourcing of water billing was again mentioned, the need for accurate data is crucial, it was noted that water billing might be a possibility but everything can not be outsourced; * A $200,000 expenditure for a revenue system is not out of line for a $30 million corporation, look at whether things can be done better, cheaper, faster; 6-6-00 / 6-12-00 * It was stated again that money has been requested and the amount needs to be known when talking to the vendors, there is no certainty as to the system at this point; * The indication was that the Council may be willing to spend a reasonable amount but would like to have more information as to what they are spending the money for, the vendors would be willing to provide their background data, response was that some vendors have been contacted, there are not a lot of choices; I * If utility billing was outsourced it may be possible to obtain a lesser priced software package; * It was pointed out too that there are no software packages that will do all of the functions, it is known what is needed in the Finance Department and there have been meetings with the other departments to discuss their needs, response was that the needs need to be identified before discussions with the suppliers. Conclusion, direction given to the City Manager to identify money for a Deputy City Clerk, General Fund monies for streets, sidewalks, curbs, and gutters, and prepare an ordinance to reduce the utility Users Tax by 1.5 percent. It was noted that the presentation relating to the automation of the beach parking lots will be agendized for the regular meeting of June 12th. I ADJOURNMENT It was the order of Chair, with consent of the Council, to adjourn the meeting until Monday, June 12th at 5:30 p.m. for a continued budget workshop. By unanimous consent, the meeting was adjourned at 9:20 p.m. ex-offi 0 of Seal Beach Approved: ~~Je~ Mayor Attest: I Seal Beach, California June 12, 2000 The City Council of the City of Seal Beach met in regular adjourned session at 5:34 p.m. with Mayor Campbell calling the meeting to order.