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HomeMy WebLinkAbout05-21-2009 SS Page 1 of 8 _ CITY OF LAKE ELSINORE SPECIAL JOINT BUDGET STUDY SESSION CITY COUNCIL / REDEVELOPMENT AGENCY MEETING MINUTES May 21$ , 2009 CALL TO ORDER - 5:00 PM Mayor Magee called Joint Study Session of the Lake Elsinore City Council, and Redevelopment Agency to order at 5:00 p.m. on Wednesday, May 21St, 2009 in the Cultural Center, located at 183 N. Main Street, Lake Elsinore, CA 92530. PLEDGE OF ALLEGIANCE The pledge of allegiance was led by Mayor Pro Tern Melendez. ROLL CALL: Staff members present included Acting Administrative Services Director Riley, Acting Community Development Director Weiner, Public Works Director / City Engineer Seumalo, Director of Lake and Aquatics Kilroy, Parks and Recreation Director Gonzales, Police Chief Cleary, Fire Chief Hendershot, and Information / Communications Manager Dennis. Also present: City Manager Brady and City Clerk Thomsen. STAFF OVERVIEW CITY OPERATING BUDGET Mayor Magee addressed everyone present noting the budget discussion or decisions made today would not be a popular subject due to the fact the easy decisions were previously made. He noted the City's revenue has declined 16 percent since 2007. He requested Acting Administrative Services Director Riley to give an overview of the current situation. Acting Administrative Services Director Riley stated the City is looking at a projected $3.0 million budget deficit for Fiscal Year 2009 - 2010. He further stated this budget shortfall is the net result of a $4.2 million decrease in revenue, offset by a $1.2 million decrease in expenditures. A continued decrease in sales tax and property taxes, along Lake Elsinore Joint City Council / Redevelopment Agency Special Joint Budget Study Session Meeting Minutes of May 21st, 2009 Page 2 of 8 with the use of one-time funds to cover the unexpected budget shortfall in Fiscal Year 2008 - 2009 are the primary contributors to this deficit. Mr. Riley continued stating this is the third fiscal year the City has had to reduce the budget to compensate for declinin Y 9 revenues, noting the following issues have contributed to the revenue shortfall for Fiscal Year 2009 - 2010. I~ • Local Sales tax revenue is down by $505,330. or 8%0, due to laggard auto sales and the reduction in consumer spending; and • Property tax revenue in Riverside County continues to decrease due to reassessment of property values downward, translating to a %336,800. or 5% decline in revenue to the City; and • One-time money in Fiscal Year 2008 - 2009 from non-general fund sources and the sale of property are not available for Fiscal Year 2009 - 2010, and account for $1.3 million in reduced revenue; and • Supplemental revenue of $1,015,000. was used in Fiscal Year 2008 - 2009 to cover that year's budget shortfall. These funds were used from a "rainy day" reserve fund, which currently has a balance available of $2.8 million. Mr. Riley noted an expenditure we have due to the State of California. Lake Elsinore -i stated the City contracts with Cal-Fire, the State Fire Service. The Governor in May implemented in May, 2009 implemented 2 furlough days a month, in which this funding has been passed down to the City. Mr. Riley noted the California Statewide ballot Propositions 1A through 1E were not approved. In May, the Governor's revised budget included a contingency plan in the event the State were to barrow money from local government. He reminded everyone in 2004 the voters did pass Proposition 1A which was a fail-safe for municipalities limiting the state to borrow up to 8 percent and included other initiations. If the State were to take the funds the impact would be a $685,000. reduction increasing our deficit. Mr. Riley continued stated there are expenditures which should be addressed which will impact the budget: • The operating cost of the new Rosetta Canyon fire station is estimated at $1.2 million annually. An increase in development in the future would provide funding to offset that annual cost; and • The City would be responsible to resume its contribution to the Lake Management Fund. The City has received verbal agreement with Eastern Valley Municipal Water District in regard to forgoing the Fiscal Year 2009 - 2010 payment. This payment amount is $650,000. annually; and • The Animal Friends of the Valley new animal shelter is scheduled from completion in mid 2010. The City's cost for animal services will increase from $90,000. to $600,000. annually; and Lake Elsinore Joint City Council / Redevelopment Agency Special Joint Budget Study Session Meeting Minutes of May 21s% 2009 Page 3 of 8 i • In Fiscal Year 2011 - 2012 the employer contribution rate to the California Public Employees' Retirement System (CALPERS) is anticipated to increase by 15 to 25 percent to offset the significant losses in the pension investment revenue that occurred in Fiscal Years 2007 - 2008 and 2008 - 2009. The City's current employer contribution rate is 16.485 percent. Mr. Riley stated the goal of this meeting is to determine how to cover the 3.1 million deficit shortfall. Staff has prepared 3 alternatives (Page 5 of 7 in handout) based upon discussion with the Budget Committee, Council, Department Directors, and the employee's Labor Union. He noted this morning, the Labor Union has offered a 4th alternative, and copies will be arriving shortly. Mr. Riley then stated his presentation was complete and he would be available for any questions as needed. Mayor Magee thanked Mr. Riley for his overview, and stated the meeting would move forward to the Public Comment portion of the meeting. PUBLIC COMMENTS Ron Hewison representing Help our People in Elsinore (HOPE) stated he recognized the tough situation the City was in due to the slow economy. He noted his organization is dependent upon financial assistance from various government sources, such as CDBG grants but noted it is the assistance from the City that carries them through the lean months. Mr. Hewison stated he has reviewed the documentation available and did not specific funding for organizations, and wanted to let the City know he would be I greatly appreciative of any continued support. Kathy Delgado, representing the employee's Labor Union stated she felt at a disadvantage since the Council does not have Alternative No. 4 to review as she is referencing the proposal. She recommended they look at Alternative No. 3, eliminate the employee's PERS contribution out, foregoing Cost of Living Adjustments (KOLA) and Merit increases. The Alternative leaves the furlough day at 1. She noted the purpose of this was to keep the current situation as it is now, with the goal to maintain City Services and the workforce while this financial crisis exists. Employees would not gain or lose (except a 5 percent pay cut from what they would not be receiving). Ms. Delgado noted this would require approximately $1,368,338. to be taken from the rainy day fund. She noted if this Alternative is not acceptable, then the employees preferred choice is Alternative No. 2; to take 2 fixed furlough days a month, on Fridays. Ms. Delgado noted this is idea is becoming a popular choice for many cities, noting 26 cities throughout Riverside County are enacting this with their new budgets, including the State of California. She closed by stating another city who had chosen to reduce F1 their hours informed their community it was due to the fiscal emergency situation, and they were being fiscally responsible to lack of funds. Lake Elsinore Joint City Council / Redevelopment Agency Special Joint Budget Study Session Meeting Minutes of May 21SI, 2009 Page 4 of 8 r Jess Culpeper, City employee, spoke stating he wanted to reaffirm staff's commitment to the City of Lake Elsinore and to the residents. He noted staff's preference is Alternative No. 4, which keeps service levels at present and avoids layoffs. He noted staff would like the best solution for all, and wanted management to know they can count on staff for support regarding any decision. Shawn Slater, City employee stated he had been elected as one of the staff spokesperson. He informed the Council any decisions made by staff were not easy, many hours have been spent weighting different suggestions, both positive and negative. Their decisions do not come lightly; they have analyzed and have decided Alternative No. 4 is their recommendation to the Council. Mr. Slater noted the employees are deeply committed and have been demonstrating this by their existing actions. Many turn the lights and electricity on and off when needed to save costs, many work additional hours yet do not take additional pay, many sign up for needed training yet do not request reimbursement from the City. Everyone is committed and will continue to give their best. There were no other Public speakers; the Mayor brought the discussion to the dais. I DISCUSSION ITEM NO. 1 FISCAL YEAR 2009-10 CITY OPERATING BUDGET STUDY SESSION CITY COUNCIL COMMENTS / REDEVELOPMENT AGENCY Mayor Magee thanked the Budget Committee, City Manager Bob Brady, and Acting Administrative Services Director Riley for their time and commitment to analyze and determine what could be done to balance the budget deficit. He noted this process began in January, when it became apparent the City would be up against another difficult situation. He noted Management along with staff has worked together to resolve deficits in the past. He noted time was going to be needed to rebound from this deficit. The current contract with the employees has 2 years remaining. Previously, when layoffs were needed and did take effect, Management committed to staff to maintain. When service levels had to be increased for Public Works, the Parks Department and the Lake, the Council pulled 1 million dollars from the rainy day fund. The Mayor discussed Public Safety, since 2003, a second and third Fire Station was opened, and the fourth Station, (Rosetta) is ready to open, yet funding for the staff has r- become a problem. Negotiations with the County including Supervisor Bob Buster has r not brought a resolution, therefore, staffing this station is now a sacrifice. Referencing I the Police Station, he noted the City has decreased the crime rate by adding more Lake Elsinore Joint City Council / Redevelopment Agency Special Joint Budget Study Session Meeting Minutes of May 21 2009 Page 5 of 8 boots on the streets, boats on the Lake, and 2 Motor Patrols. He noted the proposed cuts from Police include 2 motor patrol, 2 Community Service Officers, 1 Gang Task Force Officer and a reduction of response time. If no changes are made and the Police remain as is, there will be a half-a-million increase to their budget, due to the existing contracts, increasing the shortfall. He noted a reduction in services would have to be made. Mayor Magee stated the Police had turned in an additional Alternative this afternoon for consideration. Mayor Magee noted with each Alternative and Negotiation, the answer is always to withdraw money from the rainy day fund, however, this is not a solution but a sacrifice; there is not enough money and nothing is resolved. The Mayor stated Alternative No. 1 seem to be both fair and equitable. It called for a 10 percent salary reduction for all employees, both full and part time. By choosing this option, the employees keep their jobs and the community maintains their services. He went on to say additional furlough days will need to be taken, but closing every Friday was not an efficient tool. The Mayor thanked the employees for always giving their best, and wanted them to know they are valuable and their commitment does not go unnoticed. His hope is not to have to eliminate jobs. He regretted there was not more residents from the community present, stating the goal is to protect and serve the community without raising taxes. Councilmember Buckley stated he would of appreciated reviewing Alternative No.4 earlier than when received. He noted he preferred Alternative No. 2 with the exception of closing City Hall every Friday. He preferred the option of clumping furlough days off with holidays including the seasonal adjustments. He noted tomorrow decisions regarding the Animal Shelter would be made, which would affect the budget. Regarding reducing Police positions, he would like to keep the Narcotic Task Force Officer and asked Police Chief Cleary how many members the Force had. Chief Cleary stated there were a total of 5 officers; however, these are not all Lake Elsinore officers, the County. He stated if other cities make this same choice, then as a whole body, this Task Force may no longer exist. Councilmember Buckley noted the motor patrols were needed, stating if they were cut, Alternatives No. 5 and 6 would be too deep. Councilmember Buckley noted he would consider cutting COLA's. Councilmember Hickman thanked Management, Staff and the Police Department for a job well done. He noted he did not want to lay anyone off in these tough economic times, it ruins families and lives. He stated his preference was Alternative No. 2 noting if employees were wiling to take an additional day off Friday was acceptable. He noted he is also in favor of closing between Christmas and New Years. He stated Scenario No. 6 from the Police Department was the best choice. He noted he is willing to take funds from the rainy day fund, however, the City needs to be concerned regarding future decisions the State will make, taking money from cities to balance their State budget. Fill Lake Elsinore Joint City Council / Redevelopment Agency Special Joint Budget Study Session Meeting Minutes of May 21't, 2009 Page 6 of 8 F1 Councilmember Bhutta stated in her profession they were going to be taking furlough days also. She noted her 1St preference is Alternative No. 3 with the pre-tax deductions, however, after listening to tonight's discussion; her 2nd choice is Alternative No. 2. She requested staff if Alternative No. 2 was the final decision, to please take this day to make personal appointments on Fridays and not on working days when possible. Mayor Pro Tern Melendez thanked everyone present, especially those who are making sacrifices, especially because they are committed to their jobs and to the community. She thanked the employees for offering to contribute to CALPERS. She noted the State is projected to take an additional $700,000. from Lake Elsinore, noting this is not a definite number yet, any funds they receive would increase our deficit. She stated she is not in favor of closing every Friday, or of the clumping of furlough days with holidays and seasons, this is too confusing. She noted if the City were closed on Friday, and Monday was a holiday, then the City would not be available for service to the community until Tuesday. She reminded everyone the City has an obligation to be there for business owners too and stated she is against closing every Friday. Mayor Pro Tem Melendez asked the Police Chief how much Scenario No. 6 would affect safety and traffic issues. Chief Cleary summarized the potential impact to traffic and safety, and stated losing 2 motor patrol officers would cause a grave impact. He noted crime has dropped due to the motor patrols, they are a pro-active enforcement. They have made 111 Driving Under the Influence (DUI's) arrests annually, have saved I a suicide due to their quick response. He noted losing the Narcotics Task Force officer would hurt also, since there was only 1 officer on the Narcotics Task Force. Mayor Pro Tern Melendez stated she doesn't prefer one option over the other. City Manager Brady gave input for each Alternative how much was proposed to be taken from the rainy day fund. Mayor Pro Tem stated she was having difficulty deciding taking half of the rainy day fund. Mayor Magee summarized what had been stated so far by Council, for Staff, Alternative No. 2 seemed the most popular, and for the Police Department, Scenario No. 6. He then stated in reference to Alternative No. 2, there are 365 days in a year, 104 days are Saturdays and Sundays, employees have 12 Vacation Days at a minimum, 13 Holidays, and then add 52 furlough days of Alternative No. 2, which equal 181 days off in total. The working days equal 184. The Mayor then stated if you add the 12 sick days, the count is 193 days off and 172 days on. The Mayor stated he is not in favor of Alternative No. 2. Councilmember Buckley stated possibly Scenario No. 4 for the Police would not cut too deeply. He stated there are new programs coming down from Washington DC, for a new COPS program, but details are not yet known. He suggested if this program was received by Lake Elsinore, then the Redevelopment Agency would not have to contribute 1.2 million as originally planned. City Manager Brady clarified the $500,000. is on top of Scenario No. 4. Lake Elsinore Joint City Council / Redevelopment Agency Special Joint Budget Study Session Meeting Minutes of May 21`t, 2009 Page 7 of 8 Councilmember Hickman stated he preferred Alternative No. 2; if the employees were going to take an additional pay cut / furlough day; then they should decide what day it is. Mayor Pro Tem Melendez stated she would prefer Alternative No. 4, due to taking so much money out of the supplemental fund is dangerous. Councilmember Hickman stated and again voiced his preference for Alternative No. 2. He stated the supplemental fund is to help and we should help our people, the economy will only get worse, Treasurer Baldwin, acknowledged this decision will be made with much effort and collaboration between all parties involved. He noted this is a result of the economy, and taking 51 percent of the budget is what the decision is. He noted changes in State government must be made, and it will require a ballot vote, there must be a constitutional change at the state level and until then, the State has to take the money from us. He stated Fiscal Year 2010 - 2011 won't be any easier to decide; decisions such as this are being made at all levels of government and private industry. The decision must be made to work together and to work better with less, and it can be done. ~I City Manager Brady asked the Mayor is he could give direction to staff without Council voting to enable Management to further negotiate with the Labor Union and possible revisions to the plans. Mayor Magee responded after listening to the Council, the predominate direction was Alternative No. 2 for City Staff and Scenario No. 6 for the Police Department. He noted that these options were not fully supported and debate would be held regarding what would be acceptable from each choice. Furlough days if and when to take them would be up for discussion along with Scenario No. 4, 5 and 6 for the Police. City Manager Brady also confirmed from the discussion it seemed that money available from the rainy day fund would be around 1 million. He noted for the Community Service Groups the City provides funds for, the proposed budget reflects a 5 percent reduction in funding. i Further discussion was held among the Council and Management regarding Alternative No. 2, taking every Friday off or the clumping of furlough days with holidays. Seasonal days off was discussed, what would be confusing to the public, and employees taking a fixed furlough day or banking the day and taking off when needed. Management stated the furlough days need to be a set day to assist in the operation of the City. ~i Lake Elsinore Joint City Council / Redevelopment Agency Special Joint Budget Study Session Meeting Minutes of May 21 2009 Page 8 of 8 ADJOURNMENT There being no further business to come before the City Council and Redevelopment Agency, Mayor Magee adjourned the meeting at 6:07 p.m. ob rt E. Magee, r City of Lake Elsin , California Z Thomas B ey, RDAthairman City of Lake ore, California Attest: Debora Thomsen, CM NV City Clerk, City of Lake Elsinore, California e i