Loading...
HomeMy WebLinkAbout01-24-2002 City Council Study Session: . _ MINUTES - . CITY COUNCIL STUDY SESSION CITY OF LAKE ELSINORE 130 SOUTH MAIN STREET LAKE ELSINORE, CALIFORNIA THURSDAY, JANUARY 24, 2002 :~*~~~~~~**:~:~:~~~~*:~~~*~~~~~~~~*~~:~~~:~~*:~~~~~~~~*:~~*:~~~~~~~~~~x CALL TO ORDER Mayor Kelley called the City Council Study Session to order at 334 p.m. ROLL CALL PRESENT: COUNCILMEMBERS: BRINLEY, BUCKLEY HICKLMAN, SCHIFFNER KELLEY ABSENT: COUNCILMEMBERS: NONE Also present were: City Manager Watenpaugh, Assistant City Manager Best, City Attorney Leibold, Community Development Director Brady, Community Services Director Sapp, Finance Manager Magee, Chief of Police Walsh, Information/Communications Manager Dennis, City Treasurer Ferro, and Deputy City Clerk Paredes. DISCUSSION Mid Year Budget Review. (F:30.1~ City Manager announced that there was a meeting of the Student Advisory Board at the Cultural Center at 5:00 p.m. with a speaker from Irvine. City Manager Watenpaugh explained that the Council adopted the Budget on July 15` based on projections and assumptions. He noted that the City did not get the actual assessed value from the County of Riverside, until the end of August. He further explained that the Mid- Year Budget Review provided a snapshot of the fiscal state of the City and not a line-by-line PAGE TWO - STUDY SESSION - JAN. 24, 2002 revision of the budget. He presented an overview of the goals and objectives of the City as follows: Goals 2001-2002 -Improve City Services and staffing levels. Status: Ongoing/added Code Enforcement. -Increase fire protection services by implementing 3.0 staffing. Status: Completed upon opening new station. -Complete a Regional Recreation Area concession agreement. Status: Complete. -Support increases in traffic enforcement & police services through grant funding. Status: Ongoing/add motorcycle position. -Evaluate revenue alternatives Status: Park Assessment Review January 24, 2002. -Implement Traffic Uniform Mitigation Fees to offset development impacts. Status: Study in progress. -Increase energy efficiency and conservation measures at City facility. Status: Ongoing. -Secure Proposition 12 and Proposition 13 funding. Status: One application filed. Three more in progress. -Advance the Economic Gardening Strategy by increasing business participation. Client Listing: California Skier, Totally Themed/Totally Wired, GBC Concrete and Masonry, Near-Cal Construction, Robbins Pest Management, Security Ideas, Wieland Precision, Cougar Tools, Dr. Myatt Dental Associates, Lake Elsinore Storm, Metals Distributor, Extreme Sports Retailer, Private Property Owner for Auto Sales Site, Lakes Cafe', and International Auto Crafters. PAGE THREE - STUDY SESSION - JAN. 24, 2002 City Manager presented a Budget Overview and addressed the General Fund, Lighting and Landscaping, Lake Park & Rec., RDA and Capital Projects. He noted that the budgeted amount was $28,181,500; the approved adjusted amount was $918,200; the combined total was $29,100,600; and the projected expenditures were $28,914,700. He noted that the General Fund Adjustments were as follows: $20,000 - Psomas Contract for Water Engineering assistance. $21,200 - Harrison Associates for Park Ballot Assessment. $20,000 - Lake Elsinore EDC/Southwest Riverside County Alliance $150,000 - Capital Projects (Fire Station) City Manager Watenpaugh indicated that the adjustments to the Lighting and Landscape were $177,000 for the Tuscany Hills Homeowners Landscape Maintenance and the Lake Park and Recreation Fund had an adjustment of $160,000 for Campground Operations. He noted the adjustment made to the Redevelopment Agency in the amount of $370,000 for Legal costs/Low and Moderate Income Housing Contract. He presented an overview of the graph for the Projected Operating Budget and explained that there was a need to use $776,100 of reserves to balance the budget. He noted that in FY 99-2000, $1.2 million was used to balance the budget and in FY 2000-2001, $1,8 million was used to balance the budget. Mayor Pro Tem Schiffner asked if the reason that the amount necessary to balance the budget was less than previous years was because of increased revenues. City Manager Watenpaugh explained that it was not because of an increased revenue, but rather litigations that were paid in the last fiscal year as well as a lower operating budget this year. He noted that there were revenues in a one-time account and that was why revenues were higher last year as well. He noted that the City was becoming more fiscally stable. Councilman Buckley asked what the projected reserve was for FY 2002- 2003. City Manager Watenpaugh noted that it would be $2.6 million. Councilman Hickman asked if that was a low amount for PAGE FOUR - STUDY SESSION - JAN. 24, 2002 reserves. He stated that he knew of some cities that had a$20 million reserve. City Manager Watenpaugh commented that some cities have very small reserves and some have very large reserves. He stated that there was no set standard, however the City of Lake Elsinore was trying to maintain a reserve of around 20%. He indicated that a$1.8 million was not too bad for this City. He noted that 5 or 6 years ago the City had less than a million dollars in reserve. Councilman Hickman stated that the City had never paid off a bond issue, but rather refinanced. City Manager Watenpaugh agreed. He explained that the only way a bond issue could be refinanced was if the interest rate was lower than the original bond issue. He noted that the bond could not be refinanced and money taken out and placed in the General Fund. He further explained that the reason that the City refinanced the bonds 4 years ago was not to save the General Fund from the debt payment, but rather to restructure the bonds as "stand alone" bonds. He noted that the original bonds were pooled and if one bond went bad, then there was a problem with all the bonds. Councilman Hickman questioned the amount of the debt. City Manager Watenpaugh noted that the debt was $165 million. Councilman Buckley asked that the debt be broken down individually. City Manager Watenpaugh indicated that he would provide the breakdown, however he did not have individual figures available at this time. Mayor Pro Tem Schiffner stated that the debt was not entirely the City's. Councilman Buckley stated that if the CFDs were eliminated how much of the bonds were General Fund debt. City Manager Watenpaugh stated that the General Fund debt was for the Lake Bond debt, which was an RDA debt and would eventually be paid by the RDA. City Manager Watenpaugh presented the Revenues of the City and commented that the City's property tax is back to where it was 10 years ago. He noted that it had taken 10 years to recover from the recession. Councilwoman Brinley asked that "Other Taxes" be PAGE FIVE- STUDY SESSION - JAN. 24, 2002 explained. City Manager Watenpaugh explained that "Other Taxes" were Business License Fees, Franchise Fees, Transit Occupancy Tax, and property transfer tax. He presented a bar chart and percentage pie chart that outlined the revenues by source. City Manager Watenpaugh presented an overview of the expenditures. He noted that there had been one budget adjustment and that was in the City Manager's Budget. He indicated that it was for the Psomas Transfer, the Harris and Associates Transfer, and the funding for the EDC/Alliance. He explained that the Special Studies was for the GASB for City inventory; the Lease Payment was for the debt payment on the Lake Bond; Transfer CIP Casino Improvement was the last reimbursement payment to the Ford Dealer for infrastructure; Transfer Lake O& M was the General Fund Support for Lake Operations; the Transfer to CIP City was for the road to the new Fire Station; and the Legal Settlement was the annual payment for the Hassen/Williams Settlement. Councilman Hickman asked how many years the City would have to pay on 0 the Settlement. City Manager Watenpaugh indicated that it was for 7 years. He explained that half of the Settlement was paid up-front and then $45,000 a quarter until it was paid in full. Councilwoman Brinley questioned the reimbursement payments. City Manager Watenpaugh explained that the first reimbursement payments made far infrastructure was to the Chevrolet Dealership and they had been paid in full, the current reimbursement was to the Ford Dealership and they have been reimbursed for the last two years for infrastructure. He noted that the money comes from the General Fund and not Sales T~ dollars. Councilman Hickman stated that it shows that the Auto Dealerships are extremely successful. 1Vlayor Pro Tem Schiffner noted that the Ford Dealership sold all the cars in the first month that they had expected to sell all year. PAGE SIX - STUDY SESSION - JAN. 24, 2002 He presented an overview of a bar chart and percentage pie chart of the expenditures of the City. Councilman Hickman asked how much the Stadium creates in revenue. City Manger Watenpaugh noted that there was a new agreement and would produce different figures. He noted that the Storm provides the City a lease payment of $225,000 annually. City Attorney Leibold stated the payment would adjust annually. City Manager Watenpaugh explained that previously the City did not have a concession agreement, and that would generate more income. Councilman Hickman asked if the Stadium would ever make money to offset some of the expenses. City Manager indicated that was Council's goal and staff was working on marketing brochures to promote the facility for other events. City Manager Watenpaugh presented a historical overview of the revenue of the City. He noted tHe dip in revenue due to the reassessment of the property, which dropped the value of property, and reduced revenue. He noted that sales tax doubled. He explained the one-time funds received by the City in 1999 to 2001, which boosted the revenue in those years. He encouraged Council to review the Annual Report from the Joint Powers Authority. He noted that there was considerable difference between the small amounts paid out on behalf of the City of Lake Elsinore versus the other cities. Councilwoman Brinley asked that the loans on the parks and Library be discussed. City Manager Watenpaugh noted that in 1996/97 the City was in need of funds and took a loan from the Library and Parks Fund to be paid back at a latter time. He noted that there had been no schedule, however the General Fund must pay the money back to those funds. Councilwoman Brinley asked if there was a plan for repayment. City Manager Watenpaugh stated that a repayment plan would be examined for the new budget year. City Manager Watenpaugh presented a Historical Overview of the Expenditures for the City and noted that the revenues for 2001/2002 Were not actual figures. He noted that the increase in expenditures was due mainly to Legal Settlements. PAGE SEVEN - STUDY SESSION - JAN. 24, 2002 Councilwoman Brinley asked if staff had heard from LEAF and what they currently proposed to make consideration for the budget. City Manager Watenpaugh indicated that staff had heard nothing further, since the item for the Animal Control Shelter was brought before Council. He explained that the City paid on a month-to-month basis per the existing contract. Mayor Kelley stated that she had received a letter from General Manager Ann Washington asking for a meeting to discuss Animal Control. There was general discussion regarding Animal Control. Mayor Kelley asked for a Study Session. Mayor Pro Tem Schiffner agreed to the need for a Study Session. City Attorney Leibold gave an overview of the items that LEAF would address prior to another meeting. Councilman Buckley commented that he had talked to the people at LEAF and they felt that they had complied with the City's demands and that they City had not responded. Mayor Kelley commented on the amount of issues that were raised at the last Study Session with LEAF and stated that she felt that there was some misunderstanding between General Manager Washington and Council regarding the new shelter. She indicated that they had been directed to come back to Council with some solutions and they had not been in contact with Council since. Community Services Director Sapp stated that he had met with General Manager Ann Washington and she had provided copies of contracts that she had with other cities for services provided by LEAF. Councilman Hickman stated that if the City went by Service Fee base the City would pay $150,000, if the City were to go with the one lump sum the City would be paying $85,000, however they would canvas. Mayor Kelley stated that was the sticking point at the last Study Session. She noted that there was a difference of opinion of the Sitting Council at that time, whether or not LEAF should canvas. She explained that the Council suggested that they could canvas if they canvassed people who had already purchased licenses, however Council was not supportive of LEAF knocking on every door and writing tickets for people who had not licensed their dogs. City Attorney Leibold stated that the discussion centered on whether it would be a primary function or an ancillary function. There was general discussion regarding canvassing. PAGE EIGHT - STUDY SESSION - JAN. 24, 2002 Councilman Hickman questioned the Lease Payments on the Historical Overview for FY 2001/2002. City Manager Watenpaugh noted that it was the first payment on the Lake. Councilman Hickman clarified that it was an RDA responsibility. City Manager Watenpaugh stated that it was an RDA responsibility, however the RDA did not have the money to make the payment, therefore the City General Fund paid the debt as a loan to the RDA. Councilman Buckley asked for a breakdown of the benefits paid for City Council. City Manager Watenpaugh stated that he would pull the information and provide it to Council. Councilman Buckley questioned the amount charged for Weed Abatement. City Manager Watenpaugh presented an overview of the Weed Abatement Program and noted that the City did not want to be in the Weed Abatement business therefore the City charged an administrative fee to recover staff time. Councilman Buckley noted the difference in expenditures from FY 1989/90 and commented that the amount has almost doubled. He noted the different categories that have almost doubled and noted that the services levels have not. There was general discussion regarding the cost of living and the raise in the cost of providing services. City Manager Watenpaugh noted that a number of services are now done by contract and that some of the services that were paid for by the LLMD are no longer under that fund and must be absorbed by the General Fund. City Manager Watenpaugh presented an overview of the Redevelopment Agency budget. He stated that staff had suggested that the RDA allocate an additional $220,000 for Legal Costs and $150,000 for Legal Settlement. He explained that the cases involved are Liberty, Civic Partners and Jack Shine. Councilwoman Brinley asked if the RDA would be responsible for the damages that occurred at the Stadium during the Fire Storm. City Manager PAGE NINE - STUDY SESSION - JAN. 24, 2002 Watenpaugh explained that unless it was part of the FY 00/O1 Stadium O& M it would not. He indicated that unless it was included as a specific line item, the City would not try and recover it from the RDA budget. Mayor Pro Tem Schiffner commented that he thought the incident was covered by insurance. City Manager Watenpaugh stated that only a small amount was covered. Councilwoman Brinley asked how the RDA would stand during 2002/2003. City Manager Watenpaugh stated that if the debt payment on the lake remained at $850,000, the total would be $7,739,478. He noted that this was part of the RDA strategy. Councilman Buckley questioned the RDA debt to the City. City Manager Watenpaugh noted that the debt service to the City would be $6,429,478 and would increase by the debt interest and payment. Councilman Buckley asked what the RDA owed to itself by not putting aside the 20%. City Manager Watenpaugh stated that it would be another $7.4 million. Councilwoman Brinley stated that as part of the financial strategy that debt was being addressed. City Attorney Leibold stated that the 20% had been addressed, as part of the bond issue there was an Inter-Fund Market Agreement and a Housing Fund Loan Agreement between the 80% Fund and the Housing Fund. She explained that the money was set aside in the Housing Fund and then lent out for debt service; therefore there was an accruing debt back to the Housing Fund. She further explained that as the RDA had sufficient revenues that exceeded the day-to- day debt service, those excess revenues needed to be allocated in some proportion to repay the City debt and to repay the housing fund. Councilman Buclcley asked how long the City would be able to borrow from the 20% set aside. City Attorney Leibold stated that the State made no comment as to the Housing Fund Loan Agreement, which was to have been an arrangement that was part and parcel of the overall bond issue that borrowed funds from the Housing Fund; recognizing that the RDA had documentation evidencing the debt. She further stated that oddly enough HCD's bigger concern was what happened 10 years ago, which exceeded the scope of their audit. She explained that the debt service spoke far itself and so long as there was debt service that could not be met by the 80% funds, the 20% was immediately PAGE TEN - STUDY SESSION - JAN. 24, 2002 loaned out from the Housing Fund. City Manager Watenpaugh clarified that the $6,429,478 was the correct amount as of June 2001 and the $7,7 million would be correct at the end of June 30, 2002. City Manager Watenpaugh presented an overview of the Projects Areas I, II and III, the pass through for each Area, and the debt service including the transfer amount. He noted the revenue cap for Area I, which was $3 million; and Area II, and Area III, which have higher caps. City Attorney Leibold noted that there was a portion of Area I that did not receive any increment. Councilwoman Brinley asked if there was any way to reinstate the area to receive the increment. There was general discussion regarding Pass Through. Mayor Pro Tem Schiffner asked if Area I included Tuscany Hills. City Manager Watenpaugh stated that Tuscany Hills was in Area II. COUNCILMAN BUCKLEY LEFT THE TABLE AT 4:55 P.M. Councilwoman Brinley asked if a new RDA map could be made with different colors. City Manager Watenpaugh stated that it could be discussed during the RDA strategy meeting. Councilman Hickman asked where the Habitat was located. City Manager Watenpaugh noted that there would be a Study Session next Thursday that would define the Habitat by map and an information presentation would be made by Mr. Lashbrook. City Manager Watenpaugh presented an overview of the budget for the Lake Operations. He noted that next year there would be no expenditures for the Campground, however it would reflect revenue. City Manager Watenpaugh presented an overview of the Capital Improvement Projects and noted the changes as follows: PAGE ELEVEN - STUDY SESSION - JAN. 24, 2002 CFD 88-3/McVicker Debris Basin was not from Capital Improvements Funds, but rather from the CFD 88/3 Funds and had been completed. Main St. @ Sulphur Decontamination had a requirement to be monitored and would have a small amount of funding. Grand/Lakeshore Landscape Improvements expenditure should read $82,400. Swick/Matich Parking Lot expenditure should read $410,000. McVicker Cyn. Fire Station Road should read $400,00. Railroad Cyn. Pavement Improvement had been completed. Franklin/Cyn Estates Dr. Engineering should be changed to $285,000. Lake Street Pavement Rehabilitation should read $1,150,000. Outflow Channel Projects combined two projects and should read $617,000. McVicker Skate Park should read $426,000. Collier Avenue Rehab (74-Chaney) should read $366,000. Lincoln Rehab. (Machado-Terra Cotta) should read $366,000. Grand Ave. Rehab (Lake-Lincoln) should read $183,000. Stickland Ave. Overlay had been completed. PAGE TWELVE - STUDY SESSION - JAN. 24, 2002 Swick/Matich Improvements had been completed and the amount shouldread $24,481. Greenwald Project should be added to the list. City Manager Watenpaugh noted that there had been discussion regarding additional funds for HOPE and stated that he wpuld be glad to bring the item back to Council. Mayor Kelley stated that the discussion was for the amount of $2,500. It was the consensus of Council that the City Manager find an area to do a budget transfer of $2,500 to assist in Funding H.O.P.E., and bring the item before Council for consideration on February 12~`. Chris Hyland questioned where the money would come from for the purchase of water and why was it not included in the information provided. City Manager Watenpaugh stated that what Council had been discussing was the Mid-Year Budget and the review and consideration of the purchase of water would have to be done in the coming budget for FY 2002/2003. COUNCILMAN BUCKLEY RETURNED TO THE TABLE AT 5:15 P.M. City Manager Watenpaugh concluded that on a positive note the Council had privatized all of the Park Landscape Maintenance; all of the Tree Trimming; Plan Checking that is part of cost recovery; two planning positions that are on contract; and three positions in Engineering. Councilman Hickman stated that with so many contract personnel there had to be quite a cut back. City Manager Watenpaugh stated that in 1993 the City employed 79 employees and now there are 54 employees. Councilman Hickman asked how the City Manager would anticipate next years budget. City Manager Watenpaugh stated that staff would be asking Council to look at a variety of alternative revenues and if the City was to stay exactly as it was, and roll the budget over as it is right now, the City would be looking at $1,9 million in the hole. Councilman PAGE THIRTEEN - STUDY SESSION - JAN. 24, 2002 Schiffner asked if that included water. City Manager Watenpaugh stated that it did not include water. He suggested that it could be possible to look at buying water from Metropolitan Water District. He indicated that Eastern just bought a billion gallons (3,000 acre feet) for $700,000. He commented that he did have mare information regarding next years budget, however he felt that this time was not appropriate to present the information. He stated that Council should be proud of their accomplishments. Will Bennett, The Californian Newspaper, stated that at the Water Quality Control Board a permit was issued that stipulated that there would be 5,000 acre feet of well water that would be required as part of that agreement. He asked if the City expected to participate in the projected $2 million to bring the wells on line as well as the $200,000 of O& M. City Manager Watenpaugh stated that the Council action taken was to generate a letter in support of the project has no fiscal impact based on the proposal submitted to the City Council from the Water District. He noted the litigation between the City and the Water District and part of what was being worked on by both entities was the resolution of a settlement. City Attorney Leibold stated that the City had never defaulted in any of its obligations. She indicated that as far as the water was concerned the City had always complied with all of the City's requirements under all of the applicable agreements and would continue to do so. City Manager Watenpaugh stated that as agreed, the litigation did not play out in the press. He noted that the letter submitted was to support reclaimed water and 5,000 acre feet of well water. He stressed that it did not say how it was funded, which was between the City and the Water District. PAGE FOURTEEN - STUDY SESSION - JANUARY 24, 2002 ADJOURNMENT The City Council adjourned the Study Session at 5:20 p.m. G E KELLEY, MAYOR CITY OF LAKE ELSINORE Respectfully submitted, ~ ~~ A' L. Paredes, Deputy City Clerk ATTEST: ~~~~J'~e-r>`. VICKI KASAD, CITY CLERK/ HUMAN RESOURCES DIRECTOR CTTY OF LAKE ELSINORE