HomeMy WebLinkAboutMinutes - February 10, 2009 SMLODI CITY COUNCIL
SPECIAL CITY COUNCIL MEETING
CARNEGIE FORUM, 305 WEST PINE STREET
TUESDAY, FEBRUARY 10, 2009
A. Roll call
The Special City Council meeting of February 10, 2009, was called to order by Mayor Hansen at
7:35 a.m.
Present: Council Member Hitchcock, Council Member Johnson, Mayor Pro Tempore Katzakian,
Council Member Mounce, and Mayor Hansen
Absent: None
Also Present: City Manager King, City Attorney Schwabauer, and City Clerk Johl
B. Reaular Calendar
B-1 Fiscal Year 2008-09 Mid -Year Budaet (CM)
City Manager King provided a brief introduction regarding the mid -year budget presentation.
Deputy City Manager Jordan Ayers provided a PowerPoint presentation regarding the Fiscal Year
2008-09 mid -year budget. Mr. Ayers specifically discussed the General Fund summary, projected
fund balance, proposed adjustments, expenditure reductions, workforce reduction via early
retirement, statement of changes in fund balances, electric fund summary, community
development fund summary, public safety special revenue fund summary, and the library fund
summary.
In response to Council Member Hitchcock, Mr. Ayers stated the key issue with respect to the
deficit is expenditures in the area of personnel costs.
In response to Council Member Mounce, Mr. Ayers stated the reason for the disparity in the
personnel costs is because a certain amount was budgeted for a cost of living increase for
police and the increase was larger than the budgeted amount.
In response to Council Member Hitchcock, Mr. King stated that some of these contracts were
multi-year contracts entered into in 2007 and they do not have language reflecting the General
Fund tie in. Mr. King stated the increases were larger than the budgeted amount and the
revenues declined dramatically resulting in the disparity.
Council Member Hitchcock requested information regarding the current and future increases for
personnel and the effect of the same in the current year budget and future years.
In response to Council Member Mounce, Mr. King and Mr. Ayers confirmed that the credit card
related allocation will be distributed to the water, wastewater, and electric utility funds.
In response to Council Member Mounce, Mr. Ayers confirmed employee concessions include
executive management, management, and related staff.
In response to Council Member Mounce, Mr. Ayers stated American Medical Response (AMR) is
one consideration and nothing has been decided. Council Member Johnson stated he brought up
the subject in light of the possible $180,000 in savings. A brief discussion ensued between
Council, Mr. King, and Mr. Schwabauer regarding possible AMR dispatch for cost savings and the
dispatch service delivery to the community. Council Member Mounce, Council Member Hitchcock,
Continued February 10, 2009
and Mayor Hansen suggested AMR dispatch not be given further consideration in light of the fact
that any decision would be permanent based on the County's position as set forth in the
settlement agreement.
In response to Council Member Hitchcock, Mr. King stated the goal is to maintain the
budgeted position as indicated on June, 30 2008, for the ending fund balance.
In response to Council Member Hitchcock, Mr. Ayers stated a 1 % per person cost savings across
the board would be approximately $460,000 per year.
In response to Council Member Hitchcock, Mr. King stated it is also a goal to ensure that Police
and Fire, which make up approximately 60% of the General Fund budget, hold that number and
do not go higher. A brief discussion ensued between Council Member Hitchcock and Mr. King
regarding the policy to pay competitively and at market value versus paying toward the lower end
of the ranges, and reducing the overall workforce.
In response to Council Member Mounce, Mr. Ayers stated a one day per month furlough will be a
consideration. Mr. King stated the target date is March 1 and staff will be bringing the matter for
Council decision at the next regularly scheduled meeting.
In response to Council Member Johnson, Mr. Ayers stated staff has met with all the bargaining
units.
In response to Mayor Hansen, Mr. King and Mr. Ayers explained that the vacancies through early
retirement and related CalPers rules could be interpreted to read a vacancy is indefinite and/or
for a minimum of two years.
In response to Council Member Hitchcock, Mr. King stated it will be important to reduce the
workforce over this year and the next year and the early retirement program is one way to
achieve it based on position as other communities are doing the same; although, it will be
important to balance this with service delivery to the community.
In response to Mayor Hansen, Mr. King stated CalPers is not opposed to reorganizations and the
two-year time period has become a standard of sorts because that is when the payments start for
the City.
In response to Mayor Hansen, Mr. King stated hypothetically if 15 employees were to retire, the
cost to the City beginning in 2 years and continuing over 20 years would be $69,000 annually.
Mr. King stated staff is currently in the process of identifying who this program may be made
available to and it would be offered in a time period that is consistent with the mid -year budget
amendments.
In response to Council Member Hitchcock, Mr. King stated the program does allow for a short-
term savings for long-term costs by way of early retirement in lieu of layoffs.
In response to Council Member Mounce, Mr. Ayers stated he is familiar with zero based
budgeting and it is a great tool to force the City to look at what it really needs, although it would
be a huge cultural change.
In response to Mayor Hansen, Mr. Ayers stated he is also aware of the criticism of zero based
budgeting.
In response to Council Member Johnson, Mr. Ayers stated the projections included anticipated
downturns in revenue and there is some cushion built into the projects.
2
Continued February 10, 2009
In response to Council Member Hitchcock, Mr. King confirmed the City does use some form of
modified zero based budgeting because it looks at the need for programs, people, and
equipment.
In response to Mayor Pro Tempore Katzakian, Mr. King stated the third quarter numbers will be
provided approximately a month after third quarter closes.
In response to Council Member Mounce, Mr. King stated the amount of the in lieu transfer from
the Electric Utility is a matter of policy for the City Council. Mr. King confirmed the current in lieu
transfer amount is approximately $500,000 at ten percent.
In response to Council Member Johnson, Electric Utility Director George Morrow confirmed that
the California average is approximately five to ten percent and the City is running approximately
ten percent. Mr. Morrow stated this amount is relevant to the financial rating agencies as well.
Fire Division Chief Aimee Murray stated that the dispatch transfer is set to go live in ten days and
the resources have been expended accordingly. Mayor Hansen stated general direction has been
given to staff to not consider the AMR dispatch further for mid -year budget adjustments.
In response to Mayor Hansen, Mr. King confirmed that mid -year budget recommendations will be
provided at the next regularly scheduled meeting of February 18 to go into effect on March 1.
C. Adwournm,-nt
There being no further business to come before the City Council, the meeting was adjourned at
8:31 a.m.
ATTEST:
Randi Johl
Citv Clerk