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HomeMy WebLinkAboutMinutes - April 26, 2016 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, APRIL 26, 2016 A. Roll Call by City Clerk An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, April 26, 2016, commencing at 7:01 a.m. Present: Council Member Johnson, Council Member Mounce, and Mayor Pro Tempore Kuehne Absent: Council Member Nakanishi, and Mayor Chandler Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo B. Topic(s) B-1 Receive Presentation Regarding Fiscal Year 2016/17 Budget (CM) Deputy City Manager Jordan Ayers provided a PowerPoint presentation regarding the Fiscal Year 2016/17 budget. Specific topics of discussion included overview, housing, development, employment, labor relations, California Public Employees Retirement System (Cal -PERS) projections, General Fund revenues, top ten General Fund revenue sources, sales tax, property tax, in -lieu franchise (PILOT), in -lieu - VLF, operating transfers, fund balance, and reserve status. In response to Mayor Pro Tempore Kuehne, City Manager Schwabauer stated that he expects the old Wal-Mart building will submit plans within the next six months and be completed within the following eight months. He stated that staff has a concept of what is in Wal-Mart, but beyond that, no specific numbers on how many jobs will be created. In response to Council Member Mounce, Mr. Ayers stated that staff does not have the exact number on the impact of sick leave for part-time employees. The part-time sick leave law went into effect July 1, 2015, and through March 31, 2016, part-timers used 480 hours of sick leave at roughly $7,000; however, the unknown component is how often another part-time employee covered those hours of the sick employee versus not covering the shift of the absent employee. Staff would need to meet with each department to ascertain those figures. At this time, there are part-time employees who have sick leave on the books, which is a potential liability of over $36,000. Part-time sick leave is on a use -it -or -lose -it basis, and if an employee returns, the leave can still be applied. In response to Council Member Mounce, Mr. Schwabauer explained that the Cal -PERS projections have increased, but staff has the five-year projection and is currently reviewing the data to see if the City can meet the higher rates. Council Member Mounce questioned how the City could have 179 new utility accounts, to which Mr. Ayers explained that the number is a combination of new houses and businesses, adding that a new business coming into town counts as a new one, even though there is a net zero. In response to Council Member Mounce, Mr. Ayers explained that Digital, Infrastructure, and Video Competition Act (DIVCA) funds are restricted to capital purchases used to get the City's message out to the public. For example, the funds could be used to repair the projector at the Carnegie Forum, but not to replace chairs or wallpaper. In response to Mayor Pro Tempore Kuehne, Mr. Schwabauer stated that DIVCA funding could be used for WiFi at Hutchins Street Square only if it is used to project a message to a televised audience. 1 Council Member Mounce stated there was a time when Council held some contentious meetings at Hutchins Street Square and suggested DIVCA funding could be used for something like that if the facility were used in that manner with greater frequency. Mr. Schwabauer stated there have been some improvements at the Square paid for with DIVCA funds as it is Council's secondary televised meeting point, but each project needs to be evaluated on its own merits. In response to Council Member Mounce, Mr. Schwabauer stated he believed there was no policing agency over the Act and use of funds. Parks, Recreation, and Cultural Services Director Jeff Hood stated that DIVCA money can be used to build secondary television studios or for access and stated that the fiber optic system from the Carnegie Forum to Comcast could be extended to include the Square if televised meetings were held there or for the broadcast of local content. It could also help pay for infrastructure for video contact at other facilities, such as the Grape Bowl and Lodi Lake, to enhance broadcast capabilities. In response to Council Member Johnson, Mr. Ayers stated the DIVCA fund grows annually by roughly $100,000. Council Member Johnson stressed that there needs to be a plan on how to use the funding because the account continues to grow rapidly. Mr. Hood stated that, when he served as the Communications Specialist, he was more involved in managing the program for local access, but since his reassignment four years ago, this program is not overseen by anyone. He stated that, if there is Council interest, staff can do a team approach and develop a plan on how to use the funding. Council Member Mounce stated that the sound from televised Council meetings is poor and it should be improved to ensure the broadcast is consistent. Mr. Hood stated that some of the sound issues can be attributed to operator error. Council Member Johnson agreed that there is an issue with the sound of the televised meetings and further suggested using DIVCA funding to upgrade the City's website, which is a communication tool that would benefit the community. Mr. Ayers stated this issue is on staff's radar to update, but there is no in-house talent to design a website and it would need to be a scheduled project. Mr. Schwabauer added that DIVCA funds may not be the source for this project, but staff would look into it. The purpose of DIVCA funds is to get the message out to the public via cable communication and comes from a fee to the cable companies as a result of their impact on the community. Council Member Mounce requested that staff break down the in -lieu franchise increase and what the methodology was behind the 179 new accounts and send her the information. She further requested once again that staff look into the League of California Cities accounting software and plug in the City's numbers to see if it mirrors staffs projections. Mike Lusk suggested that DIVCA funding could be used to televise Shirtsleeve Sessions as many of the topics presented are detailed, only to be glossed over at the televised Council meeting. With regard to sick leave for part-time employees, he questioned how much money was spent in overtime to cover those shifts. Mr. Ayers explained that, in the case of part-time employees, those shifts that were covered would be at the same rate of the part-time employee because they do not accrue overtime. Alex Aliferis questioned if the City has considered using private services for various functions, stating that many states have successful private -public relationships to manage city functions and bring down costs. He expressed concern over the Cal -PERS projections, particularly if the economy worsens. Mike Carouba suggested the City should include growth rate and general fund information from other communities and compare them to Lodi to assess the needs. If a community is growing at a small percentage but drawing down at double the rate, the growth is on the top end and additional funding is needed. He believed this analysis would help the public understand why the City does not have all of the things it wants. Council Member Mounce stated that the public voted for the 2 percent growth rate and, in comparison to other cities that had high development, when the economy crashed Lodi did not 2 suffer as greatly as others. Lodi was at the bottom on foreclosures. Mr. Carouba stated he was comfortable with a 2 percent growth rate, but, in reality, the growth rate is 0.1 percent, and Lodi needs to discover a way to get more money. C. Comments by Public on Non -Agenda Items None. D. Adjournment No action was taken by the City Council. The meeting was adjourned at 7:37 a.m. ATTEST: Jennifer M. Ferraiolo City Clerk 3 TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM AGENDA TITLE: Receive Presentation Regarding Fiscal Year 2016/17 Budget MEETING DATE: April 26, 2016 PREPARED BY: Deputy City Manager B-1 RECOMMENDED ACTION: Receive presentation regarding Fiscal Year 2016/17 budget. BACKGROUND INFORMATION: The Fiscal Year (FY) 2016/17 budget is built on a number of basic economic assumptions. The draft budget is on schedule to be released for public review in mid-May, with adoption of the document scheduled for early June. In advance of publication of the document, staff is planning a series of presentations that will provide Council and the public with the basic parameters that form the foundation of the budget. Today's discussion will focus on general economic parameters and general fund revenues. FISCAL IMPACT: General Fund revenues are expected to be $46,916,020, an increase of $207,760 over the prior year. JA/ja APPROVED: Jordan Ayers Deputy City Manager Stephen Sch auer, City Manager [LFiscal Year 2016/17 Budget1 Presentation City Council Shirtsleeve Session April 26, 2016 [Overview General Economic Conditions General Fund Revenue Fund Balance [Housing Property values holding o No change from 2015 o Highest values since 2007 Foreclosures lower than surrounding areas 0.03% in Lodi; 0.10% in San Joaquin County; 0.08% in California; 0.08% nationally Source: RealtyTrac [Development Impact fee program assumes 50 units per year for next 5 years Residential Rose Gate under construction (232 units) Reynolds Ranch (227 units) Van Ruiten (200 units) Vintner Square (57 units) [Development Commercial o Reynolds Ranch New junior majors Dick's Sporting Goods (under construction); PetSmart; Boot Barn; Ross; Home Goods o La Quints Opening in 2017 [Development Commercial (cont.) o Lodi Shopping Center WalMart opening late June/early July Other pads Ulta Cosmetics, Buffalo Wild Wings; Jamba Juice; Panda Express; Blaze Pizza; McDonalds, KFC WalMart reuse ---Hobby Lobby, Party Store, Petco [Employment Unemployment down over prior year o 8.3%forLodi o 5.4%forState o 8.8% for San Joaquin County (March 2016, Employment Development Department) [Labor Relations All bargaining groups under contract through 12/31/2017 Budget includes impact of agreements o Planned drawdown of General Fund reserves in excess of reserve target in 2016/17 and 2017/18 Minimum wage increase effective 1/1/17 [PERS Projections 2016/17 2011/18* 2018/19* 2019/20* 2020/21* 2021/22* Miscellaneous 21.797% 23.1% 25.6% 27.4% 27.7% 28.3% Safety 44.754% 41.1% 50.7% 53.7% 54.5% 55.2% Estimated Cost $9,2M $10.2N $11.2M $12.3M $12,8N $13,4V *projected rates from PERS actuarial report [General Fund Revenue FY 2016/17 $46,916,020 FY 2015/16 $46,708,260 Increase $207,760 [Top Ten General Fund Revenue Sources Description FY 2016/17 FY 2015/16 Difference 51031 Sales & Use Tax $11,526,070 $11,774,880 ($248,810) 51011 Property Taxes $9,496,810 $9,200,030 $296,780 51081 In -lieu Franchise $7,131,330 $7,082,070 $49,260 56003 In -lieu - VLF $4,896,230 $4,746,120 $150,110 50001 Operating Transfers In $4,000,000 $4,000,000 $0 54361 Rent $1,525,000 $1,508,210 $16,790 53207 Late Pmt -Utilities $1,165,000 $1,200,000 ($35,000) 51036 Business License Tax $1,150,000 $1,100,000 $50,000 51051 Waste Removal Franchise $1,040,000 $1,025,000 $15,000 51034 Transient Occupancy Tax $650,000 $600,000 $50,000 [Sales Tax Budgeted year over year decrease of $248,810 o 2.1 % decrease from prior year budget o 3.5% increase over prior year estimated receipts Net increase of $518,190 over prior year base Prior year included $767,000 one-time triple flip close-out payment [Property Tax Year over year increase of $296,780 o 3.2% increase over FY 2015/16 budget o 3.8% increase over FY 2015/16 estimated receipts [In -Lieu Franchise (PILOT) Year over year increase of $49,260 2007 Council adopted formula based upon increase in accounts 0.70% increase (179 accounts) [In -Lieu - VLF Year over year increase of $150,110 o 3.2% increase over FY 2015/16 budget o 3.5% increase over FY 2015/16 estimated receipts [Operating Transfers Same as prior year [Fund Balance Reserve Policy places 8% of revenues into Catastrophic Reserve Next 8% of revenues into Economic Reserve Available through Council action [Reserve Status Estimated Fund Balance, June 30, 2016 $10,359,298 Net Revenues/(Expenditures) (1,564,090) Estimated Fund Balance, June 30, 2016 $8,795,208 Allocation of Estimated Fund Balance June 30, 2017 Catastrophic Reserve $3,753,282 Economic Reserve 3,753,282 Total Target Reserves 7,506,564 Settled Labor Agreements (through 12/31/17) 943,350 DIVCA 345,294 Total Fund Balance $8,795,208 18 CQuestions? Jennifer Ferraiolo From: Steve Schwabauer Sent: Tuesday, April 26, 2016 4:25 PM To: City Council Cc: Jennifer Ferraiolo Subject: FW: Jobs Created Attachments: Super-Walmart.pdf In response to Council member Kuehne's question this morning... From: Craig Hoffman Sent: Tuesday, April 26, 2016 2:31 PM To: Jordan Ayers Cc: Steve Schwabauer Subject: RE: Jobs Created Reynolds Ranch Dick's will generate 75 new job. Boot Barn will generate 25 — 30 new jobs. Super-Walmart looked at retail sales not jobs. 111 million in first years in retail sales. Let me see what Aaron or Vic have to say at Reynolds Ranch. Thank you, Craig Hoffman City Planner City Of Lodi - Community Development 221 West Pine Street P.O. Box 3006 Lodi CA, 95241-1910 Tel: 209-333-6800 Ex. 2649 From: Jordan Ayers Sent: Tuesday, April 26, 2016 1:47 PM To: Craig Hoffman Cc: Steve Schwabauer Subject: Jobs Created Craig 1 Do you have any information about the number of jobs that will be created by the new commercial developments at Reynolds Ranch and Lodi Shopping Center? Council asked about this in the shirtsleeve today. Jordan Ayers Deputy City Manager/Internal Services Director City of Lodi 221 W. Pine Street Lodi, CA 95240 Phone (209) 333-6700 Fax (209) 333-6807 E -Mail jayers,r7a lodi.dov 2 Jennifer Ferraiolo From: Jordan Ayers Sent: Monday, May 09, 2016 12:04 PM To: City Council Cc: Steve Schwabauer; Janice Magdich Subject: Follow-up from 4/26 Budget Shirtsleeve Councilmembers I had two questions to follow-up with Council from the 4/26 shirtsleeve. 1. How many jobs will the new businesses bring? Staff estimates that the new businesses will bring about 200 jobs to Lodi. 2. What are the calculations behind the PILOT number? The formula is as follows: Prior year Pilot x (6-30-15 total electric accounts billed/6-30-14 total accounts billed) For FY 2016/17, the numbers are: $7,082,070 x (25,912/25,733) = $7,131,330 It should be noted that the metric used is `total accounts billed' in the month ofJune for each year, This metric will generate a number that is higher than our actual customer count as a single location could account for 2 accounts billed during a month (example: customer leaves in June and receives a final bill and new customer starts in June and receives a first bill for the same location; this would yield a count of 2 accounts billed for the month). This methodology has been used consistently since the PILOT was established in 2007, Let me know if you need further information. Jordan Ayers Deputy City Manager/Internal Services Director City of Lodi 221 W. Pine Street Lodi, CA 95240 Phone (209) 333-6700 Fax (209) 333-6807 E -Mail jayersCcr7,lodi.gov 1