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2011-06-28 Special CC ARRA CIC Minutes MINUTES OF THE SPECIAL JOINT CITY COUNCIL, ALAMEDA REUSE AND REDEVELOPMENT AUTHORITY (ARRA), AND COMMUNITY IMPROVEMENT COMMISSION (CIC) MEETING TUESDAY- -JUNE 28, 2011- -7:00 P.M. Mayor/Chair Gilmore convened the meeting at 7:01 p.m. Councilmember/Board Member/Commissioner deHaan led the Pledge of Allegiance. ROLL CALL – Present: Councilmembers/Board Members/Commissioners Bonta, deHaan, Johnson, Tam and Mayor/Chair Gilmore – 5. [Note: Councilmember/Board Member/Commissioner Johnson arrived at 7:08 p.m.] Absent: None. ORAL COMMUNICATIONS, NON-AGENDA (11-338 CC) Jennifer Solomon, Alameda, discussed finding stolen goods in an abandoned bike trailer. (11-339 CC) Adam Gillitt, Alameda, discussed the Crown Memorial Beach drowning incident and budget. (11-340 CC) Frances Montell, Alameda, discussed open political discourse. CONSENT CALENDAR Mayor/Chair Gilmore announced that the resolution [paragraph no. 11-342 CC] was removed from the Consent Calendar for discussion. Councilmember/Board Member/Commissioner Tam moved approval of the remainder of the Consent Calendar. Vice Mayor/Board Member/Commissioner Bonta seconded the motion, which carried by unanimous voice vote – 5. [Items so enacted or adopted are indicated by an asterisk preceding the paragraph number.] (*11-341 CC/11-053 ARRA/11-029 CIC) Minutes of the Special Joint City Council, ARRA and CIC Meetings of May 31, 2011; and the Regular ARRA Meeting of June 1, 2011. Approved. (11-342 CC) Resolution No. 14580, “Approving the Purchase of a Replacement Disk Storage Solution and Implementing Server Virtualization, at a Cost Not to Exceed Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 1 June 28, 2011 $230,000.” Adopted. Councilmember Tam requested an explanation for the urgency to purchase a replacement disk storage solution. The Information Technology Manager stated systems have been running on servers and the EMC Storage Area Network system for a number of years; storage has been depleted because of email growth and graphics; email is 90% full; messages cannot be retrieved when a server is out of disc space; disk space has not been increased over the last six years. Councilmember Tam stated the staff report notes that the current system does not have the ability to recover lost information if the system crashes. The Information Technology Manager stated system backups are stored on unreliable legacy magnetic tapes; multiple tapes are needed as disk space continues to grow; space is not available to hold all of the data. Mayor Gilmore stated storage space is cheap; inquired why the Replacement Disk Storage Solution is so expensive. The Information Technology Manager responded the Storage Area Network allows everyone to share data and provides fault tolerance. Councilmember Johnson inquired whether the proposed storage platform is the best price. The Information Technology Manager responded four proposals were submitted; stated Compellent, Dell’s midrange system, is the fastest growing vendor in the industry; price is not the only issue; technology is important; Compellent provides options and provides more disk space for the money; Compellent uses 60% disk drive versus other vendors using 50%. Councilmember deHaan inquired what type of on-going support would be needed. The Information Technology Manager responded the vendor would provide a three-year warranty; stated training would be provided to allow staff management of many features. Councilmember deHaan inquired whether a support contract would be needed, to which the Information Technology Manager responded definitely. Vice Mayor Bonta inquired how long the City’s needs would be met with the proposed solution. Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 2 June 28, 2011 The Information Technology Manager responded staff assumed that the current solution would last ten years when purchased seven years ago; forecasting is very difficult and depends upon use; hopefully, the solution will last five to six years. Councilmember Tam moved adoption of the resolution. Vice Mayor Bonta seconded the motion, which carried by unanimous voice vote – 5. AGENDA ITEM (11-343 CC) Public Hearing to Establish the Proposition 4 (Appropriations) Limit for FY11-12 and Resolution No. 14581, “Establishing the Appropriations Limit for FY11-12.” Adopted; (11-343A CC) Resolution No. 14582, “Approving and Adopting the Operating and Capital Budget for Fiscal Year 2011-2012.” Adopted; (11-054 ARRA) Resolution No. 54, “Approving and Adopting the Operating and Capital Budget for Fiscal Year 2011-2012.” Adopted; and (11-030 CIC) Resolution No. 11-182, “Approving and Adopting the Operating and Capital Budget for Fiscal Year 2011-2012.” Adopted. (11-343B CC) Public Hearing to Consider Resolution No. 14583, “Amending Master Fee Resolution No. 12191 to Add and Revise Fees.” Adopted The Controller gave a brief presentation on the Proposition 4 Limit. Councilmember deHaan moved adoption of the Proposition 4 resolution. Councilmember Tam seconded the motion. A vote on the motion was held until after the budget resolutions were discussed. The Assistant City Manager and Controller gave a Power Point presentation on the operating and capital budget. Mayor/Chair Gilmore stated staff would begin to work on next year’s budget in July; concepts should be brought to the public in the fall if significant services might be cut, such as the Animal Shelter; the public should have the opportunity to prioritize the nice to haves versus the need to haves; receiving input in January or February might be too late. The Assistant City Manager stated getting information out sooner rather than later would be better. Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 3 June 28, 2011 Councilmember/Board Member/Commissioner Tam stated non-departmental expenditures grow from $550,000 in 2010 to $1.3 million for next year; the driver is not clear, other than ACAP. The Assistant City Manager stated in previous years, the City owed the County money for property tax administration; the money was not budgeted; this year, $221,000 has been budgeted; retiree vacation payouts were also not budgeted in the past. Councilmember/Board Member/Commissioner Tam stated the Fire Department generates $2 million in revenue; the Police Department generates $1.3 million; inquired whether the Fire Department revenue is primarily generated from Fire Prevention Bureau services. The Controller responded said revenue is primarily generated from ambulance transport services; stated Police Department revenue is generated from parking citations, traffic operations, patrol, court fines, and special grants. Councilmember/Board Member/Commissioner Tam inquired whether Police Department costs $2 million more but generates $1 million less in revenue than the Fire Department. The Assistant City Manager responded in the affirmative; stated the Police Department has fewer sworn staff. Councilmember/Board Member/Commissioner Johnson stated the Police Department role is different than the Fire Department; the Police Department does not have the opportunity to generate revenue; the Fire Department would not generate revenue without ambulance services; inquired what type of contractual services would be eliminated and who would pick up the duties. The Assistant City Manager responded it would depend upon the department; stated the City Manager’s office has money for contractual services which has not been used because contracts have been ratcheted back for a variety of reasons. Councilmember/Board Member/Commissioner Johnson stated the City should not put itself in a position of needing to hire extra staffing because of contractual services. The Assistant City Manager stated part time staff performs a variety of duties; every department has money for contractual services; the budget has a City Manager contingency; money could be taken out of the non-departmental fund to pay for hiring a professional polling firm to poll for possible revenue measures. Councilmember/Board Member/Commissioner Johnson inquired whether all non-sworn Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 4 June 28, 2011 Fire Department staffing would be eliminated, to which the Assistant City Manager responded in the negative. Councilmember/Board Member/Commissioner Johnson stated playground staffing should be kept if possible. The Assistant City Manager stated the Recreation and Parks Department organizational changes are pretty deep; that she does not think the Recreation and Parks Department could still offer all programs and keep the sites; staff has reviewed reducing the number of special events in favor of keeping program sites; special events benefit the entire community; staff thinks that it would be better to put limited resources into special events and keep half of the free sites available; paid program sites are still available. Councilmember/Board Member/Commissioner Johnson stated fee programs are great but do not accommodate the same children that are served by having free directors at the playground. Mayor/Chair Gilmore inquired what type of police vehicles are leased, to which the Chief of Police responded undercover vehicles. Mayor/Chair Gilmore stated the City has significantly improved its position with regard to workers compensation and risk management over the last two years. The Controller stated a new section [R76 and R77] has been added to the budget, which provides more detail for each fund; reserves need to be built for workers compensation and risk management. In response to Mayor/Chair Gilmore’s inquiry, the Controller stated the budget shows the workers compensation forecast for Fiscal Year 2011-2012 with an ending fund balance of approximately $1.2 million; as of last year, the estimated workers compensation future liability is approximately $6.2 million; the fund balance is only about 20% of what it should be; the fund was in the negative in Fiscal Year 2009-2010. Mayor/Chair Gilmore inquired whether risk management works the same way, to which the Controller responded in the affirmative. The Acting City Attorney/Legal Counsel stated the net negative has been on going for over six years. Mayor/Chair Gilmore inquired whether workers compensation and risk management are part of cost allocation. The Controller responded an estimate is made every year and allocated to each department; stated a temporary negative balance would result if claims come in higher; Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 5 June 28, 2011 staff reviews the issue every year and cost allocations are adjusted. Mayor/Chair Gilmore inquired whether adjustments have not been made for the last six years, to which the Acting City Attorney/Legal Counsel responded in the affirmative. Vice Mayor/Board Member/Commissioner Bonta concurred with Councilmember/Board Member/Commissioner Johnson regarding having an early preview workshop in the fall; inquired whether any plans are being made to increase ambulance billing collection. The Interim Fire Chief responded in the affirmative; stated that he cannot guarantee increased collection this year; staff has been working hard to improve record keeping. The City Manager/Executive Director stated another inspection concept would be coming to Council, which could generate approximately $100,000 per year. Councilmember/Board Member/Commissioner deHaan stated a conscious decision has been made to lease big apparatus over the last two years; inquired whether support vehicles are purchased, to which the Interim Fire Chief responded in the affirmative. Councilmember/Board Member/Commissioner deHaan stated procurement for the next two years is aggressive. The Interim Fire Chief stated a report was provided several months ago outlining financing options; fire trucks and engines need to be replaced on a scheduled basis to avoid passing their useful life. Councilmember/Board Member/Commissioner Johnson stated the former Interim Finance Director alerted Council to the workers compensation deficit; a policy needs to be established so that the same situation does not happen again. The Controller stated having a fund with a deficit for one year is okay, but becomes a problem over multiple years. Councilmember/Board Member/Commissioner Johnson stated a policy needs to be in place; a budget should not be balanced by not contributing to funds. The Assistant City Manager stated a policy could be brought to Council. Councilmember/Board Member/Commissioner deHaan stated Council wants to establish separate funding to build up revenue for vehicle replacement and workers compensation; getting away from leasing vehicles would be good. The Assistant City Manager stated staff would bring back a policy for review in September; the vehicle replacement fund would be completely wiped out if expensive Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 6 June 28, 2011 vehicles were purchased, not leased. The Controller stated the terms of a lease would not exceed the useful life of the equipment. Speakers: Barbara Kahn, Alameda; Honora Murphy, Alameda; Kate Quick, Alameda; George Phillips, Alameda; Rudy Rebago, Alameda; Robb Ratto, Park Street Business Association; Lois Pryor, Leslie Cameron, Bay Ship & Yacht; Mike Henneberry, Alameda; David Connolly, Alameda; Kathy Moehring, Alameda; Judi Friedman, West Alameda Business Association; Corinne Lambden, Alameda; Adam Gillitt, Alameda; Rosemary McNally, Alameda; Bruce Knopf, Alameda; and Alan Pryor, Alameda. The Deputy City Manager gave a brief presentation on the Façade Grant. Mayor/Chair Gilmore inquired whether there would be no guarantee for replenishment if the entire $250,000 were budgeted; further inquired whether three years would be covered by lowering the amount spent annually, to which the Deputy City Manager responded three full years and a partial fourth year would be covered [at the proposed lower budget amount]. Mayor/Chair Gilmore stated twenty projects are cued up; only half would be funded by splitting the money; businesses have already paid designers and architects. Councilmember/Board Member/Commissioner Johnson stated that she assumes the Chamber of Commerce and Greater Alameda Business Association are on the same page as other business associations; she supports accelerating the use of funds and continuing to look for funding sources. The Deputy City Manager stated twenty projects could be funded with the $250,000. Mayor/Chair Gilmore stated the City has to put its best foot forward because of the heavy competition for the Lawrence Berkeley National Laboratory project. The City Manager/Executive Director stated the economy is down and difficult right now; prices are lower; there are more than adequate reasons to accelerate funding. The Deputy City Manager stated the issue could be revisited next year. Mayor/Chair Gilmore stated that she is in favor of moving forward and getting through the projects in the cue. Councilmember/Board Member/Commissioner deHaan inquired whether the $250,000 is available now, to which the Deputy City Manager responded in the affirmative. Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 7 June 28, 2011 Councilmember/Board Member/Commissioner deHaan inquired whether projects in the cue would use most of the $250,000. The Deputy City Manager responded the money would cover fifteen to twenty projects; stated staff would pursue grants. Vice Mayor/Board Member/Commissioner Bonta stated that he is supportive of taking advantage of lower costs; he is worried about the lack of on-going funding for the program; inquired how the program would continue. The Deputy City Manager responded staff does not have a detailed plan; stated Fleet Industrial Supply Center (FISC) lease revenue funds that have been kept available in case something happens to the warehouses could be used. Vice Mayor/Board Member/Commissioner Bonta inquired whether a finite time limit has always been assumed for the program. The Deputy City Manager responded staff has always assumed that another funding solution would be needed. The Assistant City Manager stated the program has always been successful and money has been well spent; staff is working on an alternative but cannot promise that a solution will be found down the road; the City does not have a lot of unrestricted funds. Councilmember/Board Member/Commissioner Johnson stated the $250,000 leverages a lot of money from the private sector; inquired how much money [for projects] comes from businesses and building owners. The Deputy City Manager responded that she does have said information at this time but it would be provided. Mayor/Chair Gilmore stated the she is hearing a consensus to go ahead and spend the money aggressively and try and take care of as many of projects in the cue as possible; provided direction to increase the façade grant program to $250,000. * * * Councilmember/Board Member/Commissioner Tam left the dais at 9:00 p.m. and returned at 9:02 * * * Councilmember/Board Member/Commissioner deHaan stated Alameda’s reserves are at the lower end compared to other cities. The Controller stated Alameda has a fair amount of reserves; however, the chart Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 8 June 28, 2011 indicates that the City has a long way to go. Councilmember/Board Member/Commissioner deHaan stated Other Post Employment Benefits (OPEB) have increased ten percent over the last year; inquired whether said increase is noted in the budget. The Controller responded page A-1 notes contributions; stated contributions jump from $2.3 million in Fiscal Year 2010-2011 to $2.7 million in Fiscal Year 2011-2012 and to $3 million in Fiscal Year 2012-2013. Councilmember/Board Member/Commissioner deHaan stated that he has yet to see one-time dollars being used at such a high rate. The Controller stated the City has a significant deficit issue; trying to do all the cuts in one year would be dramatic; one time revenues and a small portion of reserves would be used. The Assistant City Manager stated that she requested five and ten percent cuts Citywide; the community has not had an opportunity to provide input regarding cuts; using one time sources would provide a method of transitioning to a lower level of service while planning more appropriately for the future. The Controller stated staff has been upfront regarding using one time funds; a five-year forecast has been provided; the deficit jumps so much in Fiscal Year 2013 because one time funds would not be available in 2013. Councilmember/Board Member/Commissioner deHaan stated the City threshold of having 20% in reserves would erode by next year; that he does not see the economy changing quickly; opening up the next budget dialogue needs to be done soon; the estimated increase in revenue for Fiscal Year 2012-2013 is 1% and expenses are 1.3%, which is not in character with past budgets. The Controller stated the reason for the small revenue increase is primarily due to property taxes; foreclosures are still happening; the property tax increase would be minimal. Councilmember/Board Member/Commissioner Tam stated that she disagrees with Councilmember/Board Member/Commissioner deHaan; commended staff for fixing some prior budget problems; stated the former City Manager forgot to pay $1.3 million in debt and also forgot to pay the County for the administration of collecting property taxes; stated using one-time fees for a one time event is appropriate; a 21% reserve is commendable given the changes the City is going through; service cuts are going to be real and hard for the community; concessions need to be appreciated; the City is very reliant on property taxes as a revenue source; the City will be stuck without diversifying Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 9 June 28, 2011 its revenue portfolio; Pleasanton relies less on property taxes. The City Manager/Executive Director stated the City is over reliant on property taxes; the City has never recovered from the loss of business at the former Naval Air Station; the City can grow at the former Naval Air Station and other commercial, industrial, and office park areas; the Assistant City Manager and Controller worked hard to avoid dipping into the reserves; reserves are a rainy day fund; the economy is the worst since the 1930’s; some cities have used reserves during spiking revenue periods; the City needs economic growth. Vice Mayor/Board Member/Commissioner Bonta thanked staff for all the hard work; stated that he is proud to have a balanced budget and healthy reserve; many past, unhealthy practices are being discontinued; moved adoption of the budget resolutions. Councilmember/Board Member Johnson stated that she has been reluctant to use one time funds; the City has faced a number of years of bad economy; public services have been severely cut; the use of one time funds is reasonable for now in order to avoid even more cuts; seconded the motion. Under discussion, Mayor/Chair Gilmore thanked staff for the hard work and willingness to work in a cooperative manner and continuing to enhance the budget format; stated the document is more readable; that she supports using one time funds now but would not support using a significant amount of fund balance to balance next year’s budget. Councilmember/Board Member/Commissioner Johnson stated staff would start working on next year’s budget in a few weeks; everyone understands that the process does not end tonight. The Controller inquired whether direction to raise the Façade Program to $250,000 is part of the motion or would be done administratively, to which Mayor/Chair Gilmore responded direction has been given to raise the amount. On the call for the question, the motion on the Proposition 4 Resolution carried by unanimous voice vote – 5. On the call for the question, the motion on the budget resolutions carried by the following voice vote: Ayes: Councilmembers/Board Members/Commissioners Bonta, Johnson, Tam and Mayor/Chair Gilmore – 4. Abstention: Councilmember/Board Member/Commissioner deHaan – 1. Councilmember/Board Member/Commissioner deHaan stated next year’s budget process needs to start now; the nation is struggling; the City will be feeling the heavy handed cuts made by the State. Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 10 June 28, 2011 The Assistant City Manager thanked staff for all of the hard work in preparing the budget. The Controller gave a brief presentation on the Master Fee Resolution. Speaker: Carol Gottstein, Alameda. In response to Ms. Gottstein’s inquiry, the Police Chief stated the scofflaw fee involves fees issued when a parking ticket is not paid. Councilmember deHaan moved adoption of the master fee resolution. Councilmember Tam seconded the motion, which carried by unanimous voice vote – 5. COUNCIL REFERRALS (11-344 CC) Discuss and Consider Taking a Position on the Audit Legislation (SB 186, 449; AB 187, 229, 253). Mayor Gilmore gave a brief presentation. Councilmember deHaan inquired whether the City Auditor has reviewed the issue, to which Mayor Gilmore stated that she has no idea. Councilmember deHaan stated the City Auditor should be in the loop. Councilmember Tam inquired whether the City Auditor is participating through an auditor association group. The Assistant City Manager responded that she does not know; stated Council adopted a Legislative policy that allows Council to oppose unfunded mandates on the City; Council can comment on the bills if so inclined. Councilmember Johnson inquired whether the League of California Cities has taken a position on the matter. The Assistant City Manager responded the League wants the bills to match up with the League’s principles. Councilmember Johnson inquired whether the legislation would apply to Charter cities, to which Councilmember Tam responded two of the auditors are from Charter cities. Councilmember Johnson stated Charter cities need to be more vigilant about pushing back on Charter authority violations; following up and commenting on the matter would Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 11 June 28, 2011 be good and should be brought back to Council. Councilmember Tam stated that she would like the City Auditor to join with other city auditors to comment on the matter. The Assistant City Manager stated staff could refer the matter to the City Auditor and send a letter from the Mayor on behalf of the Council with suggestions made by the Berkeley and Oakland City Auditors. Mayor Gilmore inquired whether the City Auditor could provide an Off Agenda Report, to which the Assistant City Manager responded that she would ask. The City Manager stated that he would be meeting with the City Treasurer and City Auditor on Friday and would discuss the matter with them. Vice Mayor Bonta stated having the City Auditor join with other city auditors in creating a course of voices saying the same thing would be powerful; that he would like the City Auditor to sign a letter, if he so agrees. The Assistant City Manager stated that the City Auditor could be requested to weigh in on the matter. The Acting City Attorney stated feedback can include language about not applying to Charter cities under the Constitution. Councilmember Johnson stated other Charter cities should be encouraged to put similar language in their communications; inquired why the State thinks it knows more about budgeting than local governments. ADJOURNMENT There being no further business, Mayor/Chair Gilmore adjourned the meeting at 9:38 p.m. Respectfully submitted, Lara Weisiger City Clerk Secretary, CIC The agenda for this meeting was posted in accordance with the Brown Act. Special Joint Meeting Alameda City Council, Community Improvement Commission and Alameda Reuse and Redevelopment Authority 12 June 28, 2011