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HomeMy WebLinkAboutCC Min 1990-05-21 5-21-90 Seal Beach, California May 21, 1990 The city Council of the city of Seal Beach met in regular adjourned session at 6:02 p.m. with Mayor Wilson calling the meeting to order with the Salute to the Flag. ROLL CALL Present: Mayor Wilson Councilmembers Forsythe, Hastings, Hunt, Laszlo I Absent: None Also present: Mr. Nelson, City Manager Mr. Thomas, Finance Director Mr. Archibold, Assistant to the City Manager Mr. Whittenberg, Director of Development Services Chief Stearns, Police Department Captain Garrett, Police Department Captain Maiten, Police Department Mr. Jue, Director of Public Works/ city Engineer Mr. Osteen, Recreation Director Chief Dorsey, Lifeguard Department Mrs. Yeo, City Clerk WAIVER OF FULL READING Laszlo moved, second by Forsythe, to waive the reading in full of all ordinances and resolutions and that consent to the waiver of reading shall be deemed to be given by all Councilmembers after reading of the title unless specific request is made at that time for the reading of such ordinance or resolution. I AYES: NOES: Forsythe, Hastings, Hunt, Laszlo, Wilson None Motion Carried BUDGET WORKSHOP The City Manag~r commenced introduction of the proposed 1990/91 fiscal year budget, a balanced document with expenditures less than anticipated revenues. He noted that although the budget has been balanced for the past four years, circU1llstances have resulted in mid-year adjustments that has caused expenditures to exceed revenues, and as a result of the necessity to use certain reserve monies, year- end balances are declining, the principal reason being that the cost of doing business is increasing at a greater rate than are revenues, revenues barely meeting the area CPI. The City Manager reported the proposed budget reflects expenditures of $16,318,620, a 4.7 percent increase over the last fiscal year yet less than the cost of living, and a projected revenue increase of 5.3 percent. He noted that while most Orange County cities are anticipating increased population and revenues, Seal Beach is among the few cities that are primarily builtout and facing severe revenue I constraints. Mr. Nelson advised that proposed adjustments to the schedule of fees for services will be forthcoming for Council consideration, that by January 1991 staff will be providing reports with regard to the requirements of the Air Quality Management Plan and enforcement of those policies, and implementation of the mandated Integrated Waste Management Plan and Recycling Program. The city Manager presented an overview of the budget message with regard to General Fund revenues, Water and Sewer Fund revenues, Gas Tax, and the Redevelopment Agency, specifically pointing out that sales tax revenues have flattened, with approximately forty-two percent of the purchasing power being spent outside the City. He stated although there is no proposal 5-21-90 I to increase water rates at this time, costs continue to rise, that an analysis of the water system revenues and costs will need to be made during the next year and presented to Council if it is felt necessary that adjustments are needed, one area of consideration possibly establishing a base level of usage and impose penalties for use over that level. He noted the budget reflects the position of Administrative Aide in the Development Services Department, the position proposed to maintain current services and workload while allowing planning staff to focus on the numerous projects that will be forthcoming such as revision of the various Elements of the General Plan, the Air Quality Plan, Waste Management Program, Congestion Management Plan, etc. He explained that the position is presently filled by an intern and compensated on a part-time basis. Mr. Nelson reported all other departments are proposed to operate at the current level of staffing, that the negotiation process with the two recognized employee organizations is underway, and that the budget reflects a PERS credit of $404,426, a credit that may not be available in future years. He noted that the Council has traditionally budgeted a percentage share of the Leisure World/Rossmoor bus, that there has been recent notice of a five percent increase to continue that service, which he would recommend the budget be amended to reflect. He added that staff recently completed an analysis of expanding this bus service to College Park East and Old Town which showed the increase of cost would be $63,300, that the cost to include College Park West had not been determined, and since the expanded service would result in eliminating the interior circulation of Leisure World, it is felt the expanded service should not be given further consideration. The city Manager explained that the Agency budget of $1,156,800 covers the annual debt service of previous projects and interfund transfers to the General Fund to cover operation costs, that there is a current $711,224 deficit in the twenty percent low/moderate housing set aside, and since revenues are not sufficient to meet the deficit at this time it may be possible to make up the deficit from development of the Hellman, State Lands and DWP sites, and if those properties are not developed it will be a number of years before the set aside requirement is satisfied. Mr. Nelson reported the Capital Improvement Program includes capital projects of $749,700, property and capital equipment purchases, for a total budget of $1,336,500, the budget remaining small given the lack of discretionary revenues to fund needed projects, the pier groin repair/extension and sand replenishment remaining the largest unfunded capital need, and noted this budget does not include a College Park East street improvement project. He advised that the Administration Building Authority has approved release of approximately $65,000 to replace the heating, ventilating/air conditioning system, and replacement of roof tiles of the Administration Building, and reviewed the requests from outside organizations that have not been funded. He noted one unlisted request is from Rossmoor Center to reconstruct a portion of the Rossmoor alley and gutters, the cost of which is undetermined at this time. Mr. Nelson reported it has been determined the budget in is compliance with the Gann limit, noting however that if Proposition III is approved in June, that could effect the appropriations limit. The City Manager concluded that service demands continue to increase while the cost of providing service also increases, that general revenues are not increasing at the level they should, yet an increase of the transient occupancy tax has been realized, and that Federal, State and Regional programs are impacting the community without corresponding revenues to fund those mandated programs. I I 5-21-90 Mr. Thomas, Finance Director, commenced review of the estimated fund balances, the General Fund estimating revenues of $16.4 million, expenditures of $16.3 million, the proposed reserve, which is the Cash Basis Fund, of $1 million, and an unassigned balance of $221,000. He gave a brief explanation of the various funds, the source of revenue to the funds, and allowable expenditures. He noted the Tideland Beach Fund is mandated through the lease with I the state for the beach, the revenues generated from parking, the restaurant lease, pier activities, etc., and ,- expenditures for beach related costs such as lifeguards, beach maintenance, etc., that fund requiring a subsidy from the General Fund of approximately $400,000 each year to meet state requirements. He also pointed out the Sewer Fund is minimally sufficient, with a moderate plant and equipment program, the same comments applicable to the Water Fund, that it is felt the 1988 water rate increase will be sufficient to cover one more year, and it is believed the assessment for street lighting will be reduced slightly for the second consecutive year. Mr. Thomas noted a past Council direction that an attempt be made to set aside $10,000 annually for eventual groin repair, and this budget proposes to meet that goal by transferring that amount from the Environmental Reserve Fund to the Groin Repair Fund, making the balance of that fund, after a period of four years, $57,000. He explained that a large percentage of the Riverfront Agency Fund relates to the value of the Zoeter property under lease, that the Agency is deficient in its twenty percent set aside and debt repayment to the city, and that $96,000 of the $105,000 Surfs ide Agency Fund is encumbered for the twenty percent set aside. In response to Council, Mr. Thomas confirmed that no anticipated monies I from the Mola development were included in the budget, and Mr. Whittenberg explained that $80,000 of the Park and Recreation Fund is attributed to the four-unit Watson condominium project. Mr. Thomas said he felt five percent of the general budget figure would be a reasonably adequate General Fund reserve, and with regard to the PERS credit and potential that the PERS fund would need to be en~anced at some point, staff advised that would most likely be accomplished through a small percentage contribution over a period of time. Mr. Thomas clarified that the specific Funds can only be spent for the purpose which they were intended, and in the case of cash Funds, the interest earned flows to the General Fund unless there is a restriction on the interest to revert to the specific Fund. with regard to Sanitation District hook-up fees, the city Manager said the City collects the fee and passes it directly to the District, and he did not believe the city even realizes an administrative charge. He also explained that Surfs ide Redevelopment monies over and above the low/moderate housing set aside could be used for any project that would benefit the project area, and it is felt to be unlikely those monies could be used on the main beach unless substantial findings could be made. The Finance Director made reference to the three year revenue comparison, noting the increase of revenues from 1988/89 fiscal year, $14,523,004, to the I 1990/91 anticipated revenues of $16,429,400, and for the first time a projection of revenues for the following year, 1991/92, of $17,326,000. In response to Council, the Director explained that a number of elements are considered in projecting property taxes, evaluations based on building permit activity, state estimates, three to five year average growth rates, the two percent growth initiative factor, etc. With specific reference to subsidy of the Tideland Fund, Mr. Thomas explained that there have been efforts to increase the generation of revenues, that last year consideration was given to raising the parking fees, the majority of which flow to that fund, the landing fees, and that the restaurant 5-21-90 I has increased Tideland Beach revenues significantly. The Director made reference to the statistical data set forth on the graphs for both revenues and expenditures, specifically General Fund revenues per capita and sales tax which has increased by about one percent annually. Mr. Thomas reviewed the revenue detail, noting that various categories of property tax have increased approximately seven percent, explained that trailer coach fees are basically a personal property tax on trailers, and that the SBABA refund shown under the Intergovernmental category are monies authorized for city Hall repair by the Administration Building Authority. He noted an anticipated six percent increase of utility Users Tax, felt to be due to its application to inter-state and international telephone calls, a projected increase of sales tax expected as a result of the Zoeter Place, Spagettini's, the Soup Exchange, and increased Main street business, a percentage increase expected for the Electricity Franchise, and an upward adjustment of Building Permit Fees largely attributable to improvements at the Rockwell facility. The City Manager pointed out that in 1983 the Pipeline Franchise was about $135,000, however with decreased oil production that tax is now approximately $50,000. Mr. Thomas said Municipal Violations are expected to increase by six'percent in the upcoming fiscal year since the Police Department is now at full compliment, with a like increase the following year, Offstreet Parking projected to increase nine percent this year and about eight percent the next, the state Motor Vehicle In Lieu reported by the state to be an approximate four percent increase, a per capita amount of $37.27. Mr. Thomas explained that the Interfund Transfers reflect overhead monies from the Water Fund, Sewer Fund, CRA Loan Repayment, the Workers Comp, Public Liability, Tideland Beach, and Groin Fund Transfers. The City Manager pointed out that the $180,000 reflected under Interest on Investments is the result of various investments by the Finance Director, and given the recent problems associated with certain financial institutions, most of the City's monies are conservatively invested with the State Local Agency Investment Fund rather than with local institutions. I I It was the consensus of the Council to declare a recess at 7:49 p.m. The Council reconvened at 7:58 p.m. with Mayor Wilson calling the meeting to order. Mr. Archibold referred to the Liability Reserve Fund projected 1990/91 balance of $380,000, and as a member of the Orange County cities Risk Management Association the reserve is to be three times the City's self-insured retention, or $900,000, and he stressed the importance of moving towards achieving that goal. He noted that staff continues to research the insurance market to verify that if the City's coverage is competitive, and reported a quote received from Penn State Mutual was for a $1 million deductible, therefore OCCRMA appears to be the most reasonable source at this time. Mr. Archibold stated most beach cities in the OCCRMA program have at least a $300,000 deductible. The City Manager pointed out that Seal Beach has been successful in the management of potential risk, prevention of claims, as well as litigation matters, ~ record much better than other coastal cities. Mr. Archibold reported the Workers Comp Fund has been reduced by twenty- one percent, and it is felt the reserve is adequate for that Fund. Mr. Nelson noted there is an active Safety Committee reviewing the operations of the City and the employees on an ongoing basis. Mr. Archibold referred to the three year comparison of expenditures which reflects a 4.7 percent increase for 1990/91 and projects expenditures for 1991/92 increased by five percent, with the approximate $400,000 5-21-90 PERS credit having been applied to both years. Mr. Thomas explained that if the PERS credit is not taken it remains in the PERS fund and gains interest. staff explained how the PERS credit as well as PERS expense is reflected within the budget for each of the departments. Mr. Archibold noted the PERS credit applied to all employees with the exception of sworn personnel who are under a different PERS contract. Mr. Archibold referred to the Fire Service contract for both I fire and paramedic services, reflecting a 11.75 percent rate " increase over the last year based on the existing formula, and at this time it is not known how the new paramedic subscription fees will relate to the current contract amount of $2,071,580. He advised that the paramedic subscription fee program is yet to be finalized, and at this point the Orange County city Managers are taking the position that under the new program cities or their citizens would be paying twice for paramedic services. Mr. Archibold referred to AB939 which mandates adoption of a Waste Management Plan, requiring the city to r~duce by twenty-five percent the waste presently transported to landfills by 1995 and fifty percent by the year 2000. He advised that the cities are meeting with the County to develop a strategy and plan to meet that goal, one aspect being that a curbside recycling plan be adopted, that Anaheim, Brea and Villa Park currently have recycling programs, either co-mingling or separated programs, as well as Rossmoor where sixty percent of the containers were stolen the first night. He reported that initial discussions have been held with the refuse contractor for Seal Beach, that estimated costs at this time are $1.50 per month under a five year recycling program with two barrels provided, and the recycling revenue split fifty/fifty between the City and the contractor. He noted I" that the cities that presently have such programs have contracted with their current franchisee. Members of the Council indicated it would be their preference to have an independent collector rather than pay the fee to the refuse contractor. The City Manager stated the pros and cons of the options will need to be discussed, that there is currently inadequate information and guidelines from the state with regard to the use of independent collectors, and noted that under the mandate the City must meet certain goals, and if not met there are penalties that can be applied up to $10,000 per day. Mr. Nelson confirmed that Briggeman Disposal has received rate increases nearly every year however those have been in response to increased gate fees at the County level. Mr. Archibold stated the program will consist of residential recycling initially, and in time composting, commercial and multi-dwelling recycling. The city Manager reported the city is working with the County towards a Waste Characterization study which will provide an estimate of what can and can not be achieved, and compostinq is one means that cities are looking to in order to reach their goals, which may be an area where Seal Beach will be impacted, particularly in the downtown area where the lots are small and have less compostable material. The departmental reviews commenced with the Recreation I Department, Mr. Osteen reporting the Recreation budget is approximately $10,000 less than the prior year, largely due to capital projects being funded by grant monies and fee funded programs. He stated personnel is unchanged, recreation programs have increased however are self-funded, as is the summer aquatics program. Mr. Osteen reported capital projects include the completion of the lighting system at Zoeter, funded by a grant and development fees, improvements to the Marina Center and handicapped accessibility and improve~ents of the North Seal Beach Center, also accomplished through State grant monies, and playground equipment for Heather Park, as shown in the 48 5-21-90 I Account. He explained that the procedures of the state for grant funds is that once the project is completed they will then reimburse the City, that they no longer issue the funds in advance, therefore the budget will be amended to reflect those monies when they are received. With regard to watering Gum Grove, the City Manager reported that as an exercise the Fire Department has watered the area on occasion, however the City could be at risk in doing that until such time as the site is public property or there is approval of the property owner. Mr. Osteen explained that by contract the City has the use of the van that serves the nutrition programs at the North Seal Beach Center and st. Anne's at a percentage of the cost, $9,000 per year, that $5,000 is allocated for the cost of the site managers, that the City also pays for the telephone and custodial services, and noted that there are more than twenty persons that serve the North Seal Beach Program on a volunteer basis. He clarified that the 51 Account reflects the funds that are realized from the City's contract instruction programs, that the 82 Account includes the payment to the Rossmoor Center for the Community Center parking spaces, also the annual Gum Grove Park property tax, that the television and VCR is proposed for use in conjunction with the summer youth programs, the cost of which will be paid through the fees from those sessions, and said the batting cage will be located at the Zoeter field. The Council indicated acceptance of the Recreation budget, however noted there may be questions at a later time with regard to the capital Account. I CITY COUNCIL ITEMS There were no city Council items. ORAL COMMUNICATIONS There were no Oral Communications. CLOSED SESSION The city Manager reported the Council would meet in Closed Session for the purpose of meeting of discussing labor negotiations and provide direction to staff regarding same. By unanimous consent, the Council adjourned to Closed Session at 9:00 p.m. The Council reconvened at 10:10 p.m. with the Mayor Wilson calling the meeting to order. The city Manager reported the Council had discussed the item previously announced, gave direction to staff, and that no other action was taken. ADJOURNMENT It was the consensus of the Council to adjourn the meeting until Tuesday, May 29, 1990 at 6:00 p.m. to meet in Closed Session. The meeting adjourned at 10:12 p.m. 'I Approved: ~ 1,. ~~ Mayor Attest: