2008-10-21 Joint CC ARRA CIC MinutesMINUTES OF THE SPECIAL JOINT CITY COUNCIL,
ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY (ARRA), AND
COMMUNITY IMPROVEMENT COMMISSION (CIC) MEETING
TUESDAY- - OCTOBER 21, 2008- -7:25 P.M.
Mayor /Chair Johnson convened the Special Meeting at 7:36 p.m.
Councilmember /Board Member /Commissioner Gilmore led the Pledge of
Allegiance.
ROLL CALL - Present: Councilmembers / Board Members /
Commissioners deHaan, Gilmore, Matarrese,
Tam, and Mayor /Chair Johnson - 5.
Absent: None.
CONSENT CALENDAR
Vice Mayor Tam moved approval of the Consent Calendar.
Councilmember Matarrese seconded the motion, which carried by
unanimous voice vote - 5. [Items so enacted or adopted are
indicated by an asterisk preceding the paragraph number.]
( *08- 438CC /ARRA) Recommendation to authorize execution of a Payment
Plan for Sales Tax Guarantee between the City of Alameda and
Auctions by the Bay, Inc. Accepted.
AGENDA ITEM
(08- 439CC /ARRA /08- 54CIC) Recommendation to accept the Year End
Financial Report for the period ending June 30, 2008.
The Interim Finance Director gave a presentation.
Mayor /Chair Johnson stated the equipment replacement fund is $2.5
million, which is too much; there should be a discussion on what
the equipment replacement is for and why there is so much money in
the fund.
The Interim Finance Director stated the revenue is generated by
depreciation, which departments have as an expense; how quickly the
funds are used depends on budget decisions made each year; the
depreciation rate is based upon the schedule adopted as part of the
audit and is pretty much the IRS's depreciation schedule.
Mayor /Chair Johnson inquired whether the number represents real
dollars, to which the Interim Finance Director responded in the
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Improvement Commission
October 21, 2008
affirmative.
Mayor /Chair Johnson stated the amount is too high.
Councilmember /Board Member /Commissioner deHaan inquired how much
was added last year, to which the Interim Finance Director
responded $400,000.
Mayor /Chair Johnson stated the amount in the fund increased last
year when 4% to 5% cuts were made in department budgets; the matter
should be reviewed.
The Interim Finance Director stated staff would provide Council
with information on what auditors would expect.
Councilmember /Board Member /Commissioner Gilmore inquired whether
the $1 million sales tax overpayment would come from the General
Fund.
The Interim Finance Director responded in the affirmative; stated
the amount would not be included in the last Fiscal Year; provided
background information on the State Board of Equalization's claim
that the City was overpaid $1.1 million in sales tax.
Mayor /Chair Johnson inquired about the ambulance service bill from
the County.
The City Manager responded the City returned the bill to the County
because the City does not have a Contract.
Mayor /Chair Johnson inquired the amount, to which the City Manager
responded over $1 million.
Mayor /Chair Johnson inquired what the bill is for.
The City Manager responded the bill is for the County providing
regulation for ambulance services; stated the City pays the amount
from the General Fund because the City does not assess residents
for the service; the City has been negotiating with the County
since 2005.
Mayor /Chair Johnson stated the City Fire Department provided back
up to American Medical Response (AMR) approximately 600 times; the
number of times AMR backed up the City is much, much less; the City
should send the County a bill for the disproportionate amount of
mutual aid; the City should not provide backup for AMR, a private
company; taxpayers should not support AMR; the County should
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Redevelopment Authority, and Community
Improvement Commission
October 21, 2008
receive a $1 million bill for the service.
The City Manager stated staff would follow up; the City made
changes to avoid the situation in the future.
Mayor /Chair Johnson stated the bill should be sent for past mutual
aid.
Councilmember /Board Member /Commissioner Matarrese inquired whether
the $1 million sales tax overpayment and $1 million bill from the
County are outstanding, to which the City Manager responded in the
affirmative.
Councilmember /Board Member /Commissioner Matarrese inquired the
likelihood of the City prevailing on the outstanding County bill.
The City Attorney responded the City is in good shape; stated the
amount relates to an expired Contract that the City has been trying
to negotiate; the county refunded the City when the Contract has
expired in the past.
Councilmember /Board Member /Commissioner inquired how outstanding
amounts are captured on the balance sheet.
The Interim Finance Director responded the amount is captured as a
liability at the time the process is concluded and the amount is
real.
Councilmember /Board Member /Commissioner deHaan requested a
breakdown of the $6 million in IOUs [owed to the General Fund].
The Interim Finance Director stated the three large amounts are
$2.2 million from Alameda Reuse and Redevelopment Authority (ARRA),
$2.4 million from Alameda Power and Telecom (AP &T), and $1.2
million from Alameda Point.
In response to Councilmember /Board Member /Commissioner deHaan's
inquiry regarding repayment of the $6 million loaned out from the
General Fund, the Interim Finance Director stated the principle is
not being retired; ARRA is paying interest only, which is booked as
$130,000 in General Fund revenue.
Councilmember /Board Member /Commissioner deHaan inquired whether
there is a funding mechanism for repayment.
The Interim Finance Director responded the matter would be visited
in more detail in the future; stated some housekeeping paperwork
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Redevelopment Authority, and Community
Improvement Commission
October 21, 2008
needs to be done to make it [loans] more formal; continued the
presentation.
Mayor /Chair Johnson requested the outstanding bonds debt balance.
The Interim Finance Director stated staff would provide the debt
service schedule, including a description of why the City went to
the market and what was financed.
Mayor /Chair Johnson stated the City needs to maintain what has been
built and cannot let assets deteriorate before they have been paid
off.
The Interim Finance Director stated one of the things that
government does not do very well is anticipate maintenance costs
and roll [maintenance] costs into operations; some cities adopt
policies.
Mayor /Chair Johnson stated the City should do so [adopt a policy].
The Interim Finance Director continued the presentation.
Councilmember /Board Member /Commissioner Matarrese stated $38
million in the sewer fund is the asset, not cash; inquired whether
$38 million is the amount it would cost to put in the sewer system.
The Interim Finance Director responded in the negative; stated GASB
34 requires that a value be placed on infrastructure; stated the
replacement cost would be a lot more than $38 million.
Councilmember /Board Member /Commissioner Matarrese stated the amount
should be grounded to reality; requested the matter be reviewed;
stated the value should be understood.
The Interim Finance Director stated a GASB 34 report could be
provided on the sewer and ferry systems.
Mayor /Chair Johnson stated the City is trying to catch up on
deferred maintenance for streets and sidewalks; the City needs to
have a plan and funding mechanism in place to deal with assets so
that they do not crumble away; the Council needs to know the
expected maintenance needs in the near and long term for all
assets, such as the sewers.
Councilmember /Board Member /Commissioner Matarrese stated a real
number is needed, not a number driven by an accounting standard.
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Alameda City Council, Alameda Reuse and 4
Redevelopment Authority, and Community
Improvement Commission
October 21, 2008
Councilmember /Board Member /Commissioner deHaan inquired whether the
$300,000 in the Golf due from ARRA fund would be repaid, to which
the Interim Finance Director responded staff would look into the
matter.
Councilmember /Board Member /Commissioner Matarrese inquired the
amount in the ARRA fund balance.
The Interim Finance Director responded in the aggregate, fund
balance is $10.3 million.
The City Manager stated staff would get back to Council because
there are differences between the amount and the cash flow.
Councilmember /Board Member /Commissioner Matarrese inquired whether
the [ARRA] fund owes money to the General Fund and Golf, to which
the Interim Finance Director responded staff would look into the
matter.
The Assistant City Manager stated some of the commitments are
pretty poorly documented.
Mayor /Chair Johnson stated the City needs to do a better job [of
documenting commitments].
The Interim Finance Director stated the [ARRA] funds might not be
available due to obligations in a Disposition and Development
Agreement or something else; the numbers would be broken down more
clearly; continued the presentation.
Mayor /Chair Johnson requested an explanation of the Workers'
Compensation fund.
The Interim Finance Director stated the fund has been set up to
include the potential liability similar to Other Post Employment
Benefits (OPEB).
The City Attorney stated both federal law and the City's
participation in a workers' compensation risk pool require that the
City show the actuarial loss reserve; the number is very high and
represents the worst case scenario; the City has to have the funds,
rather than just show the number on paper; the funds are held in
the General Fund; as claims come in during the year, money is
backfilled into the workers' compensation budget.
Mayor /Chair Johnson requested that the reporting be made clearer.
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Redevelopment Authority, and Community
Improvement Commission
October 21, 2008
The Interim Finance Director stated the amount is on the balance
sheet, not the profit and loss statement; the amount does not have
to be liquid and can be in an asset.
Councilmember /Board Member /Commissioner Matarrese stated the City
is federally required to have $5 million [for workers'
compensation]; inquired whether the $5 million is part of the $10
million that is cash in the [General Fund] fund balance.
The Interim Finance Director responded in the negative; stated the
number is recorded as a liability; however, the money is not
earmarked exclusively for workers' compensation.
The City Attorney concurred that the amount does not need to be
earmarked; stated there must be at least that much money in the
General Fund.
The Interim Finance Director stated if Council wanted to fund it,
the cash would be moved someplace.
Mayor /Chair Johnson stated the fund balance is $16 million, $10
million of which is cash; $5 million of the $10 million [in cash]
has to remain liquid [for workers' compensation].
The Interim Finance Director stated the federal requirement is that
the City has to have the capacity to pay.
The City Attorney concurred that the City has to demonstrate the
capacity to pay; stated the way the City does so is by keeping the
money in the General Fund.
The Interim Finance Director concluded the presentation.
Mayor /Chair Johnson requested that the amount budgeted for the next
fiscal year be included in another column in future reports; stated
some funds have significant balances and might need to be reviewed;
further requested that the police overtime Contract overtime be
reviewed to ensure that the amount charged fully funds all costs.
The Interim Finance Director stated contract overtime would be
handled differently; there would be an object code to show expenses
along with a revenue source by detail.
Mayor /Chair Johnson stated the amount charged needs to include the
amount of time a Captain spends overseeing contract overtime.
In response to Mayor Johnson's inquiry regarding the Meyers House,
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the City Manager stated the amount was removed from the Recreation
budget and was not funded.
Councilmember /Board Member /Commissioner Matarrese moved approval of
the staff recommendation.
Vice Mayor /Board Member /Commission Tam seconded the motion, which
carried by unanimous voice vote - 5.
ADJOURNMENT
There being no further business, Mayor /Chair Johnson adjourned the
Special Meeting at 8:54 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.
Special Joint Meeting
Alameda City Council, Alameda Reuse and 7
Redevelopment Authority, and Community
Improvement Commission
October 21, 2008