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2014-06-03 Joint CC SACIC MinutesJoint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 3, 2014 1 MINUTES OF THE SPECIAL JOINT CITY COUNCIL AND SUCCESSOR AGENCY TO THE COMMUNITY IMPROVEMENT COMMISSION (SACIC) MEETING TUESDAY- -JUNE 3, 2014- -7:01 P.M. Mayor/Chair Gilmore convened the meeting at 8:53 p.m. Roll Call - Present: Councilmembers/Agency Members Chen, Daysog, Ezzy Ashcraft, Tam and Mayor/Chair Gilmore – 5. Absent: None. Oral Communications None. Consent Calendar Councilmember/Agency Member Tam moved approval of the Consent Calendar. Councilmember/Agency Member Chen seconded the motion, which carried by unanimous voice vote – 5. [Items so enacted or adopted are indicated by an asterisk preceding the paragraph number.] (*14-245 CC/14-007 SACIC) Recommendation to Accept the Third Quarter Financial Report for the Period Ending March 31, 2014 and Approve Third-Quarter Budget Adjustments to the Fiscal Year 2013-14 Budget. Accepted. Agenda Item (14-246 CC) Public Hearing to Establish the Proposition 4 (Appropriations) Limit for Fiscal year *FY) 2014-15; and (14-246 A CC) Resolution No. 14930, “Establishing the Appropriations Limit for FY14- 15.” Adopted. The Finance Director gave a brief presentation. *** Councilmember Chen left the dais at 8:54 p.m. and returned at 8:56 p.m. *** Councilmember Tam moved adoption of the resolution. Vice Mayor Ezzy Ashcraft seconded the motion which carried by unanimous voice vote – 4. [Absent: Councilmember Chen – 1.] Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 3, 2014 2 (14-247 CC/14-008 SACIC) Resolution No. 14931, “Approving and Adopting the Mid- Cycle Update to the Operating and Capital Budget for Fiscal Years 2013-2014 and 2014-2015.” Adopted. The Assistant City Manager and Finance Director gave a brief presentation. In response to Mayor Gilmore’s inquiry, the Finance Director stated Memorandums of Understanding (MOUs) have two parts addressing vacation payouts: 1) employees’ balances paid upon leaving the City, and 2) employees can cash out a certain number of hours as long as two weeks of vacation is used. The Assistant City Manager added the vacation cash out is so that employees will not continue to hit accrual caps; vacation extensions are no longer granted. The Finance Director continued the presentation. Vice Mayor Ezzy Ashcraft inquired whether the recently hired lobbyist is included in the budget for staff advocacy in Washington D.C., to which the Assistant City Manager responded in the negative; stated the staff advocacy budget is in addition to the lobbyist and will be used for staff trips to Washington, D.C. Vice Mayor Ezzy Ashcraft inquired if the $50,000 staff advocacy budget is for a year’s worth of staff travel, to which the Assistant City Manager responded in the affirmative. Councilmember Chen inquired whether the staff advocacy budget is for future trips, to which the Assistant City Manager responded in the affirmative; stated more trips are expected this year. In response to Councilmember Chen’s inquiry, the Assistant City Manager stated all trips will require City Manager approval. The City Manager stated Alameda’s representatives in Washington, D.C. will direct staff; there are changes in the activity level; Alameda’s representatives are more aggressive in chasing federal funding. The Assistant City Manager continued the presentation. *** Councilmember Tam left the dais at 9:14 p.m. and returned at 9:16 p.m. *** Vice Mayor Ezzy Ashcraft inquired what type of water savings measures the Recreation and Parks Department is taking. Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 3, 2014 3 The Recreation and Parks Director responded staff is reaching the goal of a 20% reduction in water use; stated the budget is still being exceeded because there have been no adjustment in water expenses for six to seven years while water rates have continued to increase. The Assistant City Manager continued the presentation. Vice Mayor Ezzy Ashcraft inquired whether the $100,000 for a new Recreation Specialist includes salary and benefits, to which the Recreation and Parks Director responded in the affirmative; stated the position is needed to handle the increasing volume of programs and activities. The Assistant City Manager continued the presentation. Councilmember Chen inquired whether a program for tobacco license retail tax that would recover cost could be included in the Police budget. The Assistant City Manager responded staff is researching the issue; stated the issue would need to be brought back as a Council referral and cannot be done in time for the current budget process. In response to Councilmember Chen’s inquiry, the City Manager stated the tobacco license is a fee, and not a tax, which needs to be justified through expenses; fees should not have a net impact on budget either way. The Assistant City Manager stated there is a wide spectrum of tobacco license fees in neighboring cities, ranging from $200 to $1,500. In response to Councilmember Chen’s inquiry, the Assistant City Manager stated legislation takes time and cannot happen in a short window. Councilmember Tam stated she concurred with the City Manager; staff should move forward with research for basis to put forth a retail tobacco license fee; stated the fee would not cover the cost of enforcement; inquired whether Council can give direction to staff tonight to continue research and bring the item back. The Assistant City Manager responded in the affirmative. Councilmember Chen stated that he would like an e-cigarette and tobacco license retail tax; inquired what would be a sufficient timeframe. The City Manager responded staff would have to do outreach. The Assistant City Manager concurred with the City Manager; stated a sufficient timeframe to do research and outreach would be early fall. Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 3, 2014 4 Mayor Gilmore stated that the Youth Commission presentation given was impressive; she is in favor of studying and drafting a plan for Alameda. Vice Mayor Ezzy Ashcraft stated proper outreach should be done; there are already enforcement issues with the A-Frame signs; placing the issue in the budget prematurely assumes foregone conclusions. Councilmember Tam stated there seems to be a consensus to continue with research; the Alameda Police Department (APD) has $12,000 grant funds for enforcement, but there is a concern that the funding source will disappear. The Police Captain stated funding from Alameda County Department of Public Health does not cover all costs; APD has received grants from the California Department of Alcohol Beverage Control (ABC) which have depleted; depletion of funds would also occur with tobacco grants. Councilmember Chen inquired where funding would come from if it is depleted. Mayor Gilmore responded staff would appropriate funds when necessary and the Council would vote to find funding. Vice Mayor Ezzy Ashcraft stated the City has lower sales tax revenue than forecasted; that she does not want Alameda to lose out on potential sales tax; suggested looking at new models of retail shopping. The Finance Director stated the trend is internet sales; companies are devoting less space to retail and the City receives less direct sales; more sales tax goes into the County pool; VF Outdoors is redirecting catalog sales to City, which will be beneficial. Vice Mayor Ezzy Ashcraft inquired whether online purchases are still subject to sales tax if the company has a brick and mortar retail in California. The Finance Director responded in the affirmative; stated most retailers spread the sales tax by County; if the company is located in the City, sales tax must be reported based on the specific location. In response to Vice Mayor Ezzy Ashcraft’s inquiry, the Finance Director stated a lot of the County pool sales tax revenues comes from internet sales, and from items delivered to the City; for instance, if cash is paid for a car, the City gets direct sales tax, if the car is leased, the transaction is done through a leasing company and therefore sales tax goes to the County pool; Business to Business sales also flow through the County pool. The Finance Director continued the presentation. Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 3, 2014 5 The Assistant City Manager concluded the presentation. Mayor Gilmore stated that she appreciates the presentation including historical perspective and useful facts, and making the budget easy to understand. Councilmember Chen concurred with Mayor Gilmore, stated the budget’s structure is easy to follow; inquired how the culture of online purchases affects the City’s goal of achieving balance with sales tax. The City Manager responded that staff would come back to the Council with a sales tax revenue strategy; stated Alameda may favor a scenario of centralized collection and distribution of sales tax, and not accept variety retail; Oakland chased a downtown enclosed mall with four department stores that are no longer in business; Alameda has to be smarter and open to what comes. Councilmember Daysog inquired why Alameda does not continue to hold down position vacancies in the five-year projections chart. The City Manager responded vacancies happen naturally due to understaffing in Human Resources; refilling of positions will continue to be slow; staff is requesting an additional $40,000 to help with recruitments; at the next two-year budget, Council can determine whether or not they are satisfied with the level of service given the level of vacancies; the budget cannot be achieved only through cuts, revenue needs to be raised. Councilmember Daysog stated Alameda already has the skill set and experience to retain vacancies if necessary, or remove vacancies from the books altogether. Councilmember Tam suggested looking at juxtaposing the performance measures against the vacancies and level of service. The City Manager concurred with Councilmember Tam; stated the performance measures will do exactly that. Mayor Gilmore stated past Councils had the same opinions about keeping the budget balanced with very little impact on the public: grow revenue or cut expenses; that she is not suggesting reducing the workforce, but there will be a time when Council will have to make a decision that would impact service to residents. The Finance Director stated the five-year forecast is done so there are no surprises. Mayor Gilmore thanked the Finance Director and staff; stated Alameda was supposed to be broke by 2011 but currently has a healthy fund balance. Councilmember Tam moved adoption of the resolution. Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 3, 2014 6 Vice Mayor Ezzy Ashcraft seconded the motion which carried by unanimous voice vote – 5. Adjournment There being no further business, Mayor/Chair Gilmore adjourned the meeting at 10:19 p.m. Respectfully submitted, Lara Weisiger, City Clerk Secretary, SACIC The agenda for this meeting was posted in accordance with the Sunshine Ordinance.