HomeMy WebLinkAbout05-11-2009 City Council Study session MinutesMINUTES
SARATOGA CITY COUNCIL BUDGET STUDY SESSION
MAY 11, 2009
Mayor Page called the Budget Study Session meeting to order at 6:OOPM.
ROLL CALL
PRESENT: Councilmembers:
Susie Nagpal, Howard Miller, Jill Hunter, Vice Mayor Kathleen
King, Mayor Chuck Page,
ALSO Dave Anderson, City Manager
PRESENT: Barbara Powell, Assistant City Manager
Mary Furey, Administrative Services Director
John Cherbone, Public Works REC
John Livingstone, Community Development REC
Ann Sullivan, City Clerk
Monica LaBossiere, Human Resource Manager
REPORT OF CITY CLERK ON POSTING OF AGENDA FOR MAY 5, 2009
Ann Sullivan, City Clerk, reported that pursuant to Government Code Section 54954.2, the
agenda for the meeting of May 11, 2009, was properly posted on May 8, 2009.
COMMUNICATIONS FROM PUBLIC
Priscilla Ho addressed the Council regarding Planning Commission appeals of proposed house
designs and how information is acquired and stated.
ORAL COMMUNICATION and COUNCIL DIRECTION TO STAFF
None
Mayor Page noted tonight's Budget Study Session is informational only, for Council, staff and
the public to better understand the budget process.
City Manager Dave Anderson began the meeting by providing an overview of this budget
season. He stated the General Fund forecast indicated a decrease in revenues, primarily from
decreased development activity and that this could continue for some time. He also noted
concerns that the State could suspend Proposition 1A enabling them to take funds from the City
to help the State balance its budget.
1
In addition City Manager Anderson noted:
Significant drop in revenue in CDD and Recreation since October 2008.
Budget assumption is to take the projections between last October and now, project those
figures forward; this would be the new revenue base line until the economy turns around.
General Fund is relatively stable due to slight increase in property taxes as opposed to the
two fee for services departments.
Have seen some drop in sales tax and Transient Occupancy Tax (TOT).
During this time we have had normal cost increases, and increases in Public Safety and
Parks due to new facilities coming on line. (Fellowship Hall at the North Campus and
Kevin Moran Park improvements)
City Manager Anderson also noted steps have been taken to reduce operating costs by
implementing the following:
Elimination of some staff positions and reductions in hours worked:
Community Development Department
o Planner
o Building Inspector
Recreation Department
o Recreation Coordinator
o Account Clerk Reduction to .25 FTE
Office of City Manager
o Executive Assistant Reduction to .25 FTE
Other Reductions:
Reduced Internal Services Fund charge- backs.
Community Development Department consulting contract services.
Closing the Community Development Department counter every Friday.
Reduction in Recreation excursion trips.
Some youth activities.
Reduced city -wide operating expenses whenever possible (including those in the General
Fund) in order to compensate for increases.
City Manager Anderson concluded by noting the implementation of these actions has reduced
the FY09 /10 operating budget by $450K.
Administrative Finance Services Director Mary Furey provided a brief overview of the proposed
budget.
Councilmember Nagpal asked how the fee for service allocation for Community Development
and Recreation Departments were derived.
Administrative Services Director Furey explained that Community Development Department is a
cost recovery basis because the City provides services for businesses and homeowners.
2
City Manager Anderson added that two years ago we implemented the Advance Planning fee,
and the General Plan fee in recognition that not all activities of the depa tment are directly
related to development applications; that some activities of the department benefit development
in general; and as development of the General Plan, zoning codes and other ordinances.
Vice Mayor King inquired about the Recreation Department cost recovery.
City Manager Anderson replied Council adopted this policy last year in conjunction with the
FY2008/09 budget.
In FY2008 the Recreation Department noted that a survey of several other cities indicated that a
65% fee recovery rate was a reasonable benchmark. Council adopted the policy, which was
included in the "Budget Policies" section of the FY2008/09 budget, and was used as a
benchmark in developing the current budget proposal.
Discussion continued regarding expenditures and income.
Vice Mayor King asked if we are spending more than we are taking in.
City Manager Anderson stated not in operations; we have a balanced budget in operations.
Vice Mayor King noted that we have always had money left over that went into Capital
improvements in the City.
City Manager Anderson stated that staff generally doesn't forecast surplus funds in the budget;
these funds have been the results of under estimating revenues and over estimating expenses
each year.
Vice Mayor King asked who decided to put these funds into this new Economic Stability Fund.
City Manager Anderson stated that was recommended by the Finance Committee.
Vice Mayor King asked where the $2.2 million went?
Mayor Page responded that $200K went to repay the Economic Uncertainty borrowing; $750K
for three to four years of Economic Mitigation; $500K allocated to CIP projects leaving a
remaining Undesignated Fund Balance of $516K.
Vice Mayor King asked about the Economic Mitigation Account.
Mayor Page noted that based upon the analysis of the Finance Committee and the uncertainty of
the economy there was a recommendation to create a savings account in order to maintain our
operating expenses.
3
City Manager Anderson noted there is a strong possibility that the bond issues will not pass in
the upcoming election and the governor may suspend Measure 1A and begin taking part of our
property tax revenue $650K for next Fiscal Year. Council needs to provide direction as to how
we cover that revenue loss.
Vice Mayor King noted we usually cover that from the Economic Uncertainty Fund.
City Manager Anderson responded that real issue is that somewhere in the budget we need a
buffer account to cover that $650K so that it will be paid back over the next three years, as
required by the State Constitution. He added that we've always been fiscally prudent and never
have taken funds out of the Economic Uncertainty Fund and as a result he doesn't count on that
fund for this type of situation.
Vice Mayor King responded that you can cut the budget more.
City Manager Anderson noted that is what we have already done by implementing cutbacks and
inquired how Council would fund this if the State takes an additional $650K.
Councilmember Miller asked which additional positions would be cut.
Vice Mayor King noted that we have seven and a half people that are temps and that accounts for
13% of your budget.
City Manager Anderson responded that if that is what Council recommends we can do that;
however, it doesn't cover the $600K difference.
Councilmember Hunter commented that the cuts have been done appropriately for this year.
Vice Mayor King noted that in the past we have been very conservative by cutting staff and have
not taken it out of funds that was left over for Capital Improvement.
Councilmember Miller noted that only $25K has been taken out of Capital Improvement Funds
to pay for operations.
Councilmember Nagpal asked that by placing money into the Economic Mitigation Fund, are we
saying that you can use it for operations.
Mary Furey noted that Council would have to approve the use of those funds.
Vice Mayor King suggested not adding a new column in the budget called Economic Mitigation
Fund.
Councilmember Hunter noted that part of the problem is that we don't have a Finance
Commission with citizenry discussion and involvement in the finance meetings.
4
Councilmember Miller noted the Finance Committee meetings are noticed public meetings
where the public can provide input.
City Manager Anderson stated Council can change this proposed budget anyway they prefer and
put all the funds into the CIP or keep it as undesignated. The real issue that we have to address is
Measure 1A and the likely hood that the budget will be out of balance by $650K in three weeks;
we need direction from Council on how to address this.
Vice Mayor King stated when we borrow from the Economic Uncertainty Fund it is to be paid
back in three years.
City Manager Anderson noted that we could use the Economic Uncertainty Fund the way it was
intended to be used and Council can decide what they want to do with the fund balance issues
separately.
DIRECTION TO STAFF:
o Use the Economic Uncertainty fund if State suspends Measure lA and pay it back
over the next three years with repayments from the state as required by the Sstate
Constitution.
FURTHER DEPARTMENTAL ITEMS NOTED:
City Council Office:
Councilmember Jill Hunter questioned the department's spending on food for meetings prior to
council meetings.
City Manager Anderson explained that the funds are spent on food as a result of the timing of the
meetings (the meetings are scheduled prior to City Council meetings, which occur at "dinner-
time). City Manager Anderson said it's fiscally beneficial for the City to provide the food so the
staff and City Council can be productive during this period; otherwise everyone would have to
interrupt work to go to find a meal. The cost of the meal is more than made up for in increased
productivity. (He also noted that City Hall does not have any restaurant options close by to run
out and get something to eat quickly).
Council Members confirmed that they are supportive as long as the food is ordered in Saratoga.
Vice Mayor King requested that Administrative Services Director Mary Furey provide an in
depth description of the internal services charges to the department (to assure the department
isn't charged for something they shouldn't be paying for) as well as an explanation in variations
of charges within the departments.
5
City Manager's Office:
City Council requested a breakdown of expenditures in the City Managers Department regarding
all department personnel expenditure increases from FY05 -06 to present.
Note: The Human Resource Division (HR) has had HR temporary assistance since FY03 -04;
and the history of hours budgeted for FY05 -06 and FY06 -07 for HR temporary assistance
services were not included (see pages C -29 and B -27). Staff researched this and discovered that
the hours were charged to a `general fund account" that the previous Administrative Services
Director budgeted for temporary hours but had not included this in the published budgets in
FY05 -06 and FY06 -07. The budget has been updated to reflect the actual hours used for Human
Resources Assistance in FY05 -06 and FY06 -07.
Councilmember Nagpal asked if we are we willing to reduce services.
Councilmember Miller commented that, "at some point the Council needs to have a discussion
on how it can transition to a more minimum services City.
Community Development Department:
In light of the economy and its impact on the department's revenue, Council recommended staff
implement a process that provides "real time" revenue information; tracking revenues and
expenditures monthly, following trends and using statistical analysis for revenue forecasting.
In addition, Council asked that they be informed of the financial status of the Community
Development Department on a regular basis and to be informed immediately of any anticipated
or unexpected dips in revenue.
Public Works Department:
Council requested staff to prepare a very brief information sheet that Council Members can hand
out to citizens highlighting the City's top 5 or 6 CIP Projects, including the funding source(s) for
each project.
Council inquired about the proposed decrease in expenses for Code Compliance.
City Manager Dave Anderson explained to Council that Code Compliance over -time hours will
be decreased.
Mayor Chuck Page noted we need to give it a try and see how the reduction in over -time works
out.
Director Cherbone added that he will work with Director Livingstone to manage the over -time of
the Code Compliance Specialist.
6
If the reduction in over -time expenses results in the City not meeting its needs on the weekends,
the issue could be resolved by the following suggestions:
o Alternating the Code Compliance Specialist's schedule as needed to avoid over -time
scheduling.
o Assign an alternative position to address park user issues on the weekends as needed
(parks department staff was suggested).
o Councilmember Hunter reminded Council that the Sherriff's Office can be called.
o City Manager Anderson noted the issue cap be re- evaluated mid -year if need be.
Council requested staff to schedule a CIP meeting to discuss the year -end disposition of prior
year -end fund balance of 1.2 million ($500,000 undesignated; $725,000 economic mitigation
reserve and to review the existing Capital Improvement projects.
Public Works Director Cherbone confirmed that there would be no solicitation of new projects;
only a discussion of current projects.
Finance and Administrative Services Department:
City Council requested that the budget include significantly more footnotes in order to follow the
information presented more clearly as well as capture history, when applicable.
Council requested a breakdown of the IT projects that are currently being budgeted for.
DIRECTION TO STAFF:
Schedule a CIP Study Session in June.
Put a mechanism in place that provides "real time" revenue information; tracking
revenues and expenditures monthly, following trends and using statistical analysis for
revenue forecasting.
Keep Council informed of the financial status of the department on a regular basis and
inform them immediately of any anticipated or unexpected dips in revenue.
The Budget Study Session meeting concluded at 10:30 p.m.
Respectfully submitted,
Ann u Ivan
City Clerk
7