2007-02-20- Joint CC ARRA CIC MinutesMINUTES OF THE SPECIAL JOINT CITY COUNCIL,
ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY, AND
COMMUNITY IMPROVEMENT COMMISSION MEETING
TUESDAY- - FEBRUARY 20, 2007- -7:31 P.M.
Mayor /Chair Johnson convened the Special Joint Meeting at 9:46 p.m.
ROLL CALL -
AGENDA ITEM
Present: Councilmembers /Board Members /Commissioners
deHaan, Gilmore, Matarrese, Tam and
Mayor /Chair Johnson - 5.
Absent: None.
(07- 098CC /07- 005CIC) Recommendation to accept the Fiscal Year 2007
Second Quarter Financial Report and budget adjustments.
The Finance Director gave a brief presentation.
Mayor /Chair Johnson inquired whether reserve money is funding the
Golf budget, to which the Finance Director responded in the
affirmative.
Mayor /Chair Johnson inquired how much is being drawn from the
reserves.
The Finance Director responded the Fiscal Year would end with a
$500,000 loss; stated depreciation is part of the loss; the net
cash loss is approximately $250,000 to $300,000.
Mayor /Chair Johnson stated the money used to supplement the Golf
budget was set aside for the Clubhouse; finding a way to stop
spending reserve money is important.
The City Manager stated several options are being considered; the
Golf Commission recommended a rate increase be presented to Council
at the March 20 City Council meeting.
Mayor /Chair Johnson stated that she is interested in cost savings
rather than a rate increase; rounds are declining; budget controls
need to be put in place; alarms should have gone off when reserve
money was being spent; a separate, inaccessible account should be
set for a reasonable operating reserve; the money has not been used
for the intended purpose.
Councilmember /Board Member /Commissioner Gilmore stated a resolution
could be adopted that states that the Golf Commission cannot spend
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and Community Improvement Commission
February 20, 2007
more than a certain amount without Council approval.
Councilmember /Board Member /Commissioner deHaan inquired whether the
approved budget included reducing reserves, to which the Finance
Director responded in the affirmative.
Councilmember /Board Member /Commissioner deHaan stated Golf and
Alameda Power and Telecom funds were used to balance the budget in
2005; inquired whether the amount has been reduced.
The Finance Director responded the Return on Investment (ROI) has
been reduced from to to .30.
Mayor /Chair Johnson stated that she likes Councilmember /Board
Member /Commissioner Gilmore's suggestion; the budget should not use
the net asset balance as part of the regular operating budget; the
intended purpose is not to use the money for operations.
The City Manager stated the matter would be brought back to address
impacts and recommend budget adjustments.
Councilmember /Board Member /Commissioner deHaan stated a short -term
fix is needed; setting a benchmark would be a healthy start.
Mayor /Chair Johnson stated the budget would be set, not benchmarks.
Councilmember /Board Member /Commissioner Matarrese inquired whether
the [General Fund] reserve would be over 20% with the adjustment,
to which the Finance Director responded in the affirmative.
In response to Councilmember /Board Member /Commissioner Matarrese's
inquiry about the amount, the Finance Director stated $415,645.
Councilmember /Board Member /Commissioner Matarrese inquired whether
spending $400,000 on deferred maintenance would be better, to which
the Finance Director responded that she would not recommend using
the money for deferred maintenance; the matter could be considered
in the next budget.
Councilmember /Board Member /Commissioner Matarrese stated the matter
should be included in the next budget.
Councilmember /Board Member /Commissioner Gilmore stated discussions
should address whether and when to build reserves back up to 250.
Vice Mayor /Board Member /Commissioner Tam requested that the
discussion include a review of the reserve threshold needed to
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secure good bonding rates.
Councilmember /Board Member /Commissioner deHaan inquired why the
reserve target is 250.
The Finance Director responded 25% represents approximately two to
three months of payables; stated 25% has been memorialized as part
of the City's financial policies; the amount was temporarily
reduced in order to meet deferred maintenance goals.
Councilmember /Board Member /Commissioner deHaan stated the reserve
should get back to 250; including a to to 20 increase in the next
budget cycle would be nice.
Mayor /Chair Johnson stated the issue should be discussed; the 250
reserve was accumulated from deferring maintenance; the goal should
be 25% but not at the expense of accumulating deferred maintenance.
Councilmember /Board Member /Commissioner deHaan stated the deferred
maintenance backlog should be understood by the next budget.
The City Manager stated an infrastructure update would be
presented.
Councilmember /Board Member /Commissioner deHaan inquired whether the
ten -year forecast would be pursued.
The Finance Director responded the mid -year items would be added to
the ten -year forecast; past performance is no predictor of the
future.
Mayor /Chair Johnson inquired whether the sewer fund is lower than
expected to which the Finance Director responded the sewer fund is
lower because only a partial payment has been received from the
County.
Mayor /Chair Johnson inquired when the proposed Golf resolution
could come back, to which the City Manager responded 30 days.
The Finance Director stated the resolution could be addressed at
the March 20 City Council meeting.
In response to Councilmember /Board Member /Commissioner deHaan's
inquiry regarding Golf cost allocation charges, the Finance
Director stated Council could decide not to charge a particular
fund.
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and Community Improvement Commission
February 20, 2007
Mayor /Chair Johnson stated cost allocations reflect the cost of
doing business; the General Fund or other departments would be
subsidizing Golf operations if cost allocations were eliminated.
Councilmember /Board Member /Commissioner deHaan stated costs are
standard overhead costs that should be a burden against the
activity; the Golf Commission was under the interpretation that the
money was going to the General Fund and being used as discretionary
which is not the case; the Commission needs to understand that the
costs support operations.
The Finance Director stated the general administrative services are
a function found in any business; all operating departments need to
share in the costs.
Councilmember /Board Member /Commissioner deHaan stated that he did
not want any confusion.
Councilmember /Board Member /Commissioner Matarrese moved approval of
the staff recommendation with direction to bring a resolution
forward to mandate a balanced budget in the Golf Fund and to have a
discussion on Reserve funds at the next budget cycle.
Vice Mayor /Board Member /Commissioner Tam seconded the motion.
Under discussion, Mayor /Chair Johnson stated the
Council /Board /Commission requested that the resolution come back
within 30 days; a balanced budget could be implemented sooner.
On the call for the question, the motion carried by unanimous voice
vote - 5.
ADJOURNMENT
There being no further business, Mayor /Chair Johnson adjourned
the Special Joint Meeting at 10:18 p.m.
Respectfully submitted,
Lara Weisiger, City Clerk
Secretary, Community Improvement
Commission
The agenda for this meeting was posted in accordance with the Brown
Act.
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Alameda Reuse and Redevelopment Authority,
and Community Improvement Commission
February 20, 2007