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HomeMy WebLinkAboutCC Min 2007-06-11 I Seal Beach, California June 11, 2007 The City Council of the City of Seal Beach met in adjourned budget session at 5:30 p.m. with Mayor Larson calling the meeting to order with the Salute to the Flag. ROLL CALL Present: Mayor Larson Council members Antos, Levitt, Shanks, Ybaben I Also present: Mr. Carmany, City Manager Mr. Barrow, City Attorney Ms. Yostuya, Assistant City Manager Mr. Beaubien, Interim Director of Administrative Services Mr. Whittenberg, Director of Development Services Mr. Vukojevic, Director of Public Works/City Engineer Chief Kirkpatrick, Police Department Captain Bailey, Lifeguard Department Lieutenant Pierce, Lifeguard Mr. Bolin, Lifeguard Mr. Crumby, Deputy City Engineer Mr. Papa, Associate Engineer Mr. Spitz, Associate Engineer Ms. Gonzalez, Administrative Services Manager Ms. Jacobson, Budget Analyst Mr. Miura, Technical Accounting Services (contract) Mr. Watson, Maintenance Service Manager Mrs. Devine, City Clerk I BUDGET WORKSHOP: Copies of the Budget in Brief, proposed Budget for Fiscal Years 2007/08 and 2008109, the proposed 5-year Capital Improvement Program, and presentations are on file in the Office of the City Clerk until final adoption. The Interim Director of Administrative Services reviewed the process in preparing the proposed budgets and agenda. Overview of Proposed Budaet Fiscal Years 2007/08 and 2008/09 . Budget was prepared to maintain the existing levels of service; there were no proposals that would change the day to day operations and services provided to the community. . Without the Capital Improvement Program (CIP) the growth of the operational part of the budget is 6% in the first year and 3% in the second year of the budget - this is a reasonable growth factor while continuing the same levels of service. . The growth in the proposed CIP is within the revenue sources in the City - other than the proposed sand replenishment project there are no other proposed projects that would require the use of a large amount of the reserves. . Highlighted the changes to the budget from the previous budget: City Clerk - I increase personnel by 1/2 a person (time equivalent) to institute the scanning of permanent document program citywide; Lifeguards - increase the activity in the Jr. Lifeguard Program; Recreation - increase personnel by 1/2 a person to cover additional recreation programs; Police Department - increase personnel by 1 1/2 for disaster preparedness support and the reserve officer stipend (from $100 to $200 per month) and the number of officers (from 6 to 10) be increased; detention facilities agreement and service is still undecided - this will need to be considered under a item after the adoption of the budget. · Not included in the proposed budgets are the labor costs associated with the police expired labor contracts. Page 2 - Budget Workshop 06-11-07 I · Economic/Development Assumptions: Limited growth in property taxes due to the large number of pre-proposition 13 property owners; Boeing company is moving manufacturing out of Seal Beach and becoming more office type work; building activity revenues. will be less but cost of staff will remain; not included in the proposed budget revenue is the additional bed tax revenue from the Hampton Inn & Suites (will need to re-evaluate the sales tax revenue once the data from new businesses are established). · General Fund Revenues: Decrease in revenues by 1 % in 2007/08 and only increases by 2% in 2008/09 (this is not alarming - need to be cognizant that expenditures not increase higher that the revenues over the years); not a good policy to change programs and services just on budget assumptions; top three revenue sources continue to be utility user tax (21%), property tax (27%), and sales tax (15%) - over a three year trend the revenues for the utility user tax and property tax are flattening out but the sales tax will be increasing because of the adding of new commercial developments and retail businesses - sales tax revenues could surpass the other tax revenues. · General Fund Expenditures: Increase in 2007/08 is 15% - includes the one time $3 million CIP sand replenishment project; police and fire services consume the largest portion of the budget (about half); Tidelands Beach Fund for services (lifeguard, pier, and beach) is subsidized by the general fund every year (approximately $600,000); top three expenditures are police (32% - $8 million), fire (15% - $4 million), and general administration ($3 million). · City's Fiscal Health: Without the sand replenishment project the fiscal 2007/08 budget has a surplus of about $400,000; the undesignated fund balance exceeds the City Council fiscal goal; the City is maintaining its fiscal health while making a considerable investment in the City's infrastructure; this is a testament to good planning and management of the City Council. · Undesignated Reserves: This is a fund for economic uncertainties that may occur; the amount exceeds the administrative policy requirement by about $4 million; the reserves may be necessary for future unfunded retiree medical, expiring fire contract (OCFA), older infrastructures, and other unpredictable circumstances. Percentage of what is in the reserve fund does not always give you the assurance that it would cover any disaster or economic uncertainty - costs of material and labor are rising. · Enterprise funds (water and sewer) are separate funds and by law can not be commingled. · Fleet Management - with aging fleet the City must continue to be replaced; total replacement cost would be $2.9 million; proposed for each fiscal year - $200,000; it is important to keep a fleet up to date and reliable. I Council Questions & Comments: There were no questions or comments at this time. I Deoartmental Budaet Review: General Fund Revenues (page 47 of proposed budget) (Shanks) - Rental of Detention Facility from $-0- to $98,000; Resoonse: (Beaubien) This line item was in the Public Safety section (024) and was not clear if there was any profit from the operation - the $98,000 is the projected revenue under a new operating program. The City Attorney indicated that a full report on this issue will be presented at the next Council meeting - jail was ran under an independent contractor and will recommend consideration of a lease operation. (Antos) - Orange County Fire Authority contract; ResDonse: (Larson) OCFA contract runs out in 2010; is a well run department and provides good service; OCFA is working with the City Manager's association to come up with some kind of agreement; and there are two fire stations located in the City. (Ybaben) - Shops at Rossmoor sales tax; Hampton Inn bed tax; and adjustment of sales tax from typing company discovered by auditors (Long Beach); ResDonse: (Beaubien) There are estimates for the shops that the City know about - at a medium range. Bed tax revenue does not reflect the new Hampton Inn - the increase shown is from the voted 9% increase - the actual in 2005/06 Page 3 - Budget Workshop 06-11-07 was low because the closing of Seal Beach Inn and Gardens. City of Long Beach is still protesting the findings - there is a back allocation of $500,000 to $900,000 with annual revenue of a net of $150,000 - still need to re-classify the allocation to Seal Beach for an ongoing basis. (Shanks) - In-lieu Parking Fees; ResDonse: (Miura) This fee is considered a general fund deposit not revenue until it is actually expended for a particular project - it is proposed to set up a separate fund for these fees and not include it in the general fund. The City Attorney stated there is currently a law suit from a I property owner who had a subdivision in 1993 and challenging how the $40,000 was spent - legally establishing a separate fund can be done at anytime. With no objection staff was directed to prepare an agenda item for Council consideration establishing a separate in-lieu parking fund. (Ybaben) - Surfside property taxes - County of Orange litigation; Resoonse: (Barrow) The county agreed they were misallocating property taxes and the City has received in the last two years a small amount - the City hired a firm to go back beyond three years to recover any funds but the courts ruled against the plaintiffs and the City will not be receiving any back funds only what was misallocated in the last three years and in the future years (current year received $109,000 for Surfside and will be included in property tax fund). Operating Departments: . Citv Council (010) - Council considered employees not contractors . Citv Manaaer (011) - PARS covers retirement for any permanent part-time employee - federal law requirement - administrative fee is divided between all departments and will vary according to the number of hours for part-time employment; types of Contract Professional Services - listed at the bottom of each department; Lobbyist - requested that the City Manager provide a report on the activity and the need to continue services (Del Smith); (Vukojevic) indicated that public works department is in contact on a monthly basis to help to get funds for the pier and other grants as well as the sand replenishment project. . City Clerk (012) - Part-time increase to start a more aggressive scanning program of official city documents to an electronic format; currently the assistant is a full-time position. . City Attornev (015) - General Prosecution is used for 90% code enforcement cases and 10% non-compliance of CUP's; Legal Contract Police is for special projects for the police department; Other Attorney Services is for things like the municipal code, local coastal plan, the zoning code, and other special projects; Retainer is a fixed cost; City Attorney stated that under the new agreement there will be changes in service to contain some of the costs that will not affect the current budget - retainer will cover more services, establish some caps on hourly billing rates, and provide further discounts - legal costs should be less than the proposed $437,000. . Administrative Services (017) - Increase in salaries are due to the agreed MOU's cost of living increases there is not an increase in the number of employees; there was a vacancy in the director's position in 2005/06; the proposed budgets reflects having a full staff including the director's position. . Risk Manaaement (018) - Relying on staff to provide the most cost effective services to manage worker's comp and liability claims. . Non-Deoartmental (019) - Office & Technology Resources is for equipment and Contract Professional Services is for Synoptek for IT maintenance and service of the City's computer system; Personnel section is for retiree benefits; Government Code has strict guidelines and limits as to what Councilmembers can receive as compensation - last Council raise was in 1990 and went from $125 to $300 per month. . Public Safety - Police (022, 023) - Full-time officers receive holiday pay instead of overtime pay (contractual agreement); Salaries reflect if the department ran with a full staff; Fire range - Naval Weapons Station, City of Cypress, and City of Corona; Support Services changes were done after the I I Page 4 - Budget Workshop 06-11-07 I study was done in 2004 to reorganize where the needs are; animal control is now contracted to the City of Long Beach - costs are budgeted under Intergovernmental. · Public Safety - Detention Facilities (024) - Will present an agenda item at the June 25th meeting rejecting all bids for jail services and will provide alternatives for Council at a future meeting. · Public Safety - Fire Services (026) - Contract rates are determined by the City's population - expires in 2010 - OCFA will be going through their budget and will add the increases to all the cities. . Public Safetv - Grants - All grants are specific and restricted on how the funds are to be used. . Plan nino (030) - Informed the Council that $1,100 was added to Contract Professional Services for Orange County Council of Governments annual demographic information service that would be beneficial to the Planning Department. Indicated the increase in the 2007/08 Contract Professional Services is to fund the cost to prepare a state required Housing Element (5 year cycle) and in 2008/09 expected to do some minor revisions to the City's General Plan. A revised version of the Local Coastal Plan was submitted by the consultants in May - staff is making some minor changes and then it will go back to the Coastal Commission staff for their review. · Buildino & Safetv (031) - Charles Abbott's contract services is based on a percentage of the revenue from permit issuance - the proposed budget reflects the projected decrease in building activity. The contract is in the 5th year of a 5 year agreement with yearly extensions unless notified by either party to terminate. With no objection Councilman Ybaben requested to have the City Manager provide a report reviewing the contract and service provided. · Communitv Develooment Block Grant (CDBG) - Funding from the county for Leisure World Housing Rehabilitation (bathroom modifications) for 2007/08. I With no objection Mayor Larson declared a recess at 7:15 p.m. and reconvened the workshop at 7:25 p.m. I · Public Works - Admin & Enoineerino (042) - Contract Professional Services 68% is for consultant to assist in finances and accounting in Capital Projects and 19% for West Nile notices sent out twice a year to residents. · Public Works - Storm Drain/NPDES (043) - Contract Professional Services is for water quality consultants; catch basin cleaning; and $30,000 Capital Outlay expenditure to add an additional water clarifier to the wash rack located at the Yard. · Public Works - Street (044) - Contracts are for any maintenance in the public right-of-ways; separated out a line item for landscaping for sidewalks, parkways and medians; increase in costs are due to the annual CPI index and price increases; and traffic light repairs and maintenance (response time is 2 hours). · Public Works - Landscaoe (049) - Consultant hired to manage contracted services. · Public Works - Fleet (050) - Results of improvements of the fleet over the years is a decrease in the number of staff time needed; changing from a leasing strategy to a purchase strategy because the fleet has been built up with newer vehicles to be able to determine what the replacement schedule can be and eliminates the burden of tracking leasing contracts. · Public Works - Refuse (051) - The contract is an evergreen contract with a 7 year notice before canceling the contract. · Public Works - Buildinos/Facilities (052) - This account deals with all the city facilities and buildings; majority use is for janitorial services, landscaping in front of the buildings, and specialized services like elevator maintenance and heating and air conditioning systems; Interest Payments are for the heating and air conditioning system that was purchased in 1999. Page 5 - Budget Workshop 06-11-07 . Public Works - Grant Funds - Air Quality Improvement Program is a match fund for the senior bus program; Park Improvement Fund is Quimby Act developer fees; other funds will be covered under the CIP presentation. . Recreation (070 - 073) - To increase revenues and programs there is a need to increase the part-time staff time; the parking lot at the North Community Center is leased for $8,000 from Rossmoor; Leisure Programs are contracted recreation classes for the community; and Aquatic program is for the swimming pool. . Tidelands Beach Fund - Lifeauard (828) - (No questions regarding budget) . Tidelands Beach Fund - Beach & Pier (863) - (Sand replenishment $3 million - separate presentation) Beach maintenance, berm, pier repair, and Surfside sand cleaning. The general fund subsidizes this fund on the average of $1.1 million each year. State lease of the beach requires the City to set up a separate Tidelands fund. . Soecial assessment Districts - These accounts are restricted to specified purposes - Community Facilities Districts (CFD) formed under the Mello-Roos Community Facilities Act for capital improvements agreed upon by the developer. . Enterprise Funds - Water Ooerations & Caoital (900) - Salaries, contract services, testing of water system and water purchase from Metropolitan Water District of Orange County (213's of water City pumps). Water fund has a surplus of $3.7 million in operations and $2.1 million in capital fund. . Enterorise Funds - Sewer Ooerations & Caoital (925) - Major costs is in personnel and contract services (cleaning pipes and intergovernmental fees). . Redevelooment Aaencv - Low and Moderate Income Housing Fund - required set aside 20% for housing assistance (loans and grants) - contract with Civic Stone to manage the program. Riverfront project area is in Old Town - DWP property, River Beach town homes, Seal Beach trailer park, Oakwood apartments, Bridgeport, and the greenbelt. Surfside project area was disbanded last year. Current bond indebtedness is $370,000 a year - refinanced in 2000 with payoff in September of 2023. I I Caoital Proiect Budaet Review: .Sand Replenishment Project (presentation on file in the City Clerk's office) The Director of Public Works presented an in-depth power point presentation in three main areas: 1) History of the beach (pictorial) starting 1921 to present o 1950 - program known as back passing began (moving sand from the west beach to the east beach) o 1959 - 750 foot Groin built with City funds, Federal Government money, and State grant - damaged in 1983 and rehabilitated in 2006 o 1967 - Dredging San Gabriel River to west beach and continue by passing program o 1983 - Pier collapsed in storm; dredged sand from Anaheim Bay (material - small in grain size) o 1994 - Sand replenishment from Santa Ana River o 1996 - Desert sand rail project - City funds and State grant to rail sand from desert thru the Naval Weapons Station - delays in permit process o 1997 - Storm causing major flooding - Coastal Commission and other agencies immediately issued permit for sand project o 2000/2001 - Began permitting process for another desert sand project - additional money and studies delayed the process o 09-11-01 - Severely restricted use of the Naval Weapons Station and rail line was no longer available o 2001, 2003, 2005, etc. - Continue with large sand back passing - coarse sand material from west beach is very limited (samples of sand were passed out) Surfside - mini pebbles (coarse and high quality); East beach - medium grain; and West beach - fine more silty material - the coarser the sand the longer it stays in place o 2002 - Army Corp of Engineers - sand replenishment in Surfside all down the coast line to Newport Beach I Page 6 - Budget Workshop 06-11-07 o 2006 - Groin repair to slow down the migration of the sand from one side of the beach to the other ($800,000 grant - total cost of $1.3 million) o Continued annual berm project to protect property along the beach and bi- annual sand back passing from east side of the pier to the west side I 2) Proposed project with options for Council consideration o Army Corp of Engineers Surfside/Newport Beach Sand Replenishment Project - $16 million - dredge sand from a mile and a quarter off of Surfside through a pipeline - sand source is reportedly high quality o Federal government built the Anaheim Jetty causing the erosion along Surfside and will replenish the sand but feel that since the City built the groin Seal Beach should be responsible for the one mile stretch of beach o Piggy-back on the Army Corp project is a great opportunity to build a project quickly, cost effective, and limited mobilization costs o This would stream-line the environment permit process and other resource agencies requirements o Army Corp of Engineers is not able to include Seal Beach with their project - restrictions to the permit process requires the City do their own environmental permits - cost effect to the City to connect with the Army Corp project - put $1 million in reserves marked for the future sand project - there are a lot of variables and unforeseen circumstances that are not able to be planned Options: o Anaheim Bay Dredging: Likely to be a project in the next few years; sand quality is reportedly poor and may not be suitable for the beach; prior river mouth projects have had limited success; and a great deal of unknowns o San Gabriel River Dredging: Likely to be a project in the next few years; sand quality and quantity is unknown; prior river mouth projects have had limited success; and a great deal of unknowns o Other Sand Dredging Projects: Bolsa Chica, Santa Ana River, Ports, Huntington Harbor, or Long Beach Marina - Likely to be projects in the future; sand quality in unknown; and a great deal of unknowns o Trucking Inland or Riverbed Sand: A possibility but still requires the environmental permits; sand may not be consistent; very disruptive to the community and damaging to the streets; and considered to be a last resort I 3) Staff recommendation o Budget $150,000 to start-up environmental permit process; budget is necessary for grant application (Opportunistic Sand Replenishment Projects) o Direct staff to connect with the Army Corp Surfside/Newport Beach Sand Replenishment Project o Set aside $1,000,000 in reserve fund for the sand project o Aggressively search for grants/sponsors/help; grant climate has been good o Council involvement is needed with State and Federal elected officials o Report to Council on updated information and recommendations; likely to take three to five years I Council Comments: (Antos) - Would like to contact Congressman Rohrabacher. Resoonse: Staff has a very important meeting with the Army Corp. and other parties on June 14th - it would be better to wait until that meeting before contacting any legislators so that Council would have the most up to date information about this project. (Ybaben) - Director of Public Works is too nice and needs to go into the meetings aggressively and point out the facts that the Jetty that was put in is causing a problem for Seal Beach and they ought to provide the same service they providing for the Surfside/Newport Beach Sand Replenishment Project - make them take some ownership and make them come back with some solution - shift the burden on them - do not go in asking permission for Seal Beach to spend $3,000,000 to borrow their equipment. Resoonse: There is a fine line that Seal Page 7 - Budget Workshop 06-11-07 Beach staff has to walk because there are other staff members that need to be dealt with and they will listen but not necessarily be available to help - but if the elected officials are dictating the project to happen it will be done that is how the Surfside project is being done. The best bet is getting a State Grant for this project. All the Council members are in agreement that they are willing to do their part in speaking with the legislators. It appears that Council would be asking the legislators to spend a lot of money to help a few millionaires. I (Levitt) - Rail line is not available through the Naval Weapons Station - trucking the sand from the desert is not feasible - is there another rail line alternative that will come 80% or 90% of the way and truck just a short distance. Resoonse: Trucking is difficult because it has a direct and immediate impact on the residents and businesses along Ocean Avenue and along Seal Beach Boulevard. The damage to the streets from one standard 18 wheeler truck has the equivalent between 6,000 to 8,000 cars of vehicle loading you multiple this times 12 or more and it adds up. The people that will benefit the most from getting the sand are going to complain the most. The people who have the property along the beach maybe should be assessed to pay the costs. (Larson) - Navy decided not to allow the use of the rail line - should look into lobbying the legislators to direct the Navy to allow the City the use for this project. A former Councilman use to surf with the Congressman and the City was able to obtain a lot of things. In hind sight the City should not have signed the agreement with the State that released them of all financial responsibility regarding the beach and pier in 1959. The Director responded that this project requires Coastal Commission approval. Back passing is only a house keeping measure to manage the sand - the quality of the sand is going down. I The Interim Director of Administrative Services explained that the strategy behind the recommendation was not to allocate the entire $3,000,000 just the $1,000,000 in reserves and the $150,000 to begin the environmental process - this will help in the negotiation process and to obtain grants that require matching funds. There is no obligation to do the project with the $1,000,000, it is only in reserve and can be reallocated to another project. This will give the Council options. Public Comments: None were taken - comments at the June 12th session With no objections at 9:25 p.m. Mayor Larson continued the Budget Workshop to June 12th at 5:30 p.m. tifc~ J~~ ity Clerk City of Seal Beach I Approved: Attest: ~~~ ~ City Clerk