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2015-06-02 Joint CC SACIC MinutesMINUTES OF THE SPECIAL JOINT CITY COUNCIL AND THE SUCCESSOR AGENCY TO THE COMMUNITY IMPROVEMENT COMMISSION (SACIC) MEETING TUESDAY- -JUNE 2, 2015- -7:01 P.M. Mayor/Chair Spencer convened the meeting at 9:07 p.m. Roll Call - Present: Councilmembers/Agency Members Daysog, Ezzy Ashcraft, Matarrese, Oddie and Mayor/Chair Spencer – 5. Absent: None. Oral Communications None. Consent Calendar Agency Member Oddie moved approval of the Consent Calendar. Agency Member Ezzy Ashcraft seconded the motion, which carried by unanimous voice vote – 5. [Items so enacted or adopted are indicated by an asterisk preceding the paragraph number.] (*15-009) Minutes of the Successor Agency to the Community Improvement Commission (SACIC) Meeting Held on March 17, 2015; and the Special Joint City Council and SACIC Meeting Held on April 7, 2015. Approved. Agenda Items (15-377) Resolution No. 15048, “Approving and Adopting the City of Alameda Operating and Capital Budget for Fiscal Years (FY) 2015-16 and 2016-17.” Adopted; and (15-010) Resolution No. 15-03, “Approving and Adopting the Successor Agency to the Community Improvement Commission Budget for FY 2015-16 and 2016-17.” Adopted. The Interim City Manager stated revised pages were provide on Other Post- Employment Benefits (OPEB) and made brief comments. The Finance Director gave a Power Point presentation and responded to questions. Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 2, 2015 Mayor Spencer inquired whether the annual operating results for the coming year is $1.2 million positive, but $5.2 million deficit after five years. The Finance Director responded the City has been prudent in forecasting moving forward; stated; deficits are attributed to increases in retirement contributions that cannot be easily changed; the City is working with bargaining groups on long term solutions for Other Post Employment Benefits (OPEB); structural deficit issues have to be reviewed and corrected; anytime budget forecasts go further out in years, it is best to assume where the economy will go based on what is known now; staff is doing its best to estimate; the budget is conservative and there are a multitude of items that need to be addressed. Councilmember Ezzy Ashcraft stated one-time large transfer funds are referenced; inquired what the plan is moving forward. The Interim City Manager responded a portion of the transfer tax is one-time; eliminating the transfer tax from the Balance Revenue Index (BRI) was discussed and needs to be negotiated with bargaining units. Vice Mayor Matarrese inquired whether one-time fund transfers have been used to balance revenue in budget, to which the Interim City Manager responded in the affirmative. Vice Mayor Matarrese stated there are no other outstanding loans; solutions for fixing structural problems needs discussion; budgeting is not exact and projections are variable; the City has the benefit of history to make projections tighter; that he would like checkpoints after the first year to address the gap. The Finance Director stated the loan repayment from Alameda Municipal Power (AMP) is $2.2 million; there was a swap of revenue: AMP prepaid a portion of its franchise with an advance, which is already in the General Fund; AMP will repay the $2.2 million in full in FY15-16 instead of trying to eliminate it; the net increase one-time money is $1.2 million added to the fund balance in FY15-16; Council agreed to use the fund balance toward FY16-17. The Interim City Manager stated staff met with an attorney who specializes in utility users tax to determine an estimate of what is being left on the table; the five year projections show the need to continue belt tightening; continuing to be frugal and making adjustments would help fiscal sustainability. Councilmember Daysog stated the chart is helpful; when comparing annual expenditure increases to conservative revenue estimates, the annual rate of change almost doubles; staff is being conservative; the chart shows the structural deficit in summary form; he questioned what happened to the programs being considered to decrease fund balance from 30% to 20%. Special Joint Meeting Alameda City Council and the Successor Agency to the Community Improvement Commission June 2, 2015 In response to Councilmember Oddie’s inquiry regarding PERS smoothing, the Finance Director stated the PERS Chief Actuary does not expect rates to go down. Councilmember Oddie stated increases in expenses are expected to level off in five years. The Finance Director stated PERS is trying to address liabilities; the City cannot control whether PERS will revise assumptions; the City will have to contribute what PERS requires; PERS is just one component; there is a combination of factors to review, focusing on one is not prudent. Councilmember Oddie stated PERS is the main root of the annual operating result deficit; the City should focus on ways to be more efficient in controlling costs moving forward. In response to Mayor Spencer’s inquiry, the Finance Director stated a deficit reduction is not anticipated because operating expenses are locked in; some components of salaries and benefits could be controlled; other ideas regarding contracts may come up in five years. The Finance Director continued the presentation. In response to Mayor Spencer inquiry, the Library Director stated $100,000 represents adding hours on Wednesdays to offer more programming and class visits; $40,000 is to extend hours, and $60,000 goes toward the materials budget. In response to Councilmember Daysog’s inquiry, the Finance Director stated the County grant is for additional limited term Fire Department positions; elimination of the ambulance is not on the list for FY16-17. Councilmember Daysog inquired whether costs are rolled into the five year projections, to which the Finance Director responded in the affirmative. In response to Councilmember Ezzy Ashcraft’s inquiry, the Fire Chief stated the Community Paramedicine Pilot Program grant funds are for two years; once funds run out, the program will be dissolved if no other funding is found; lots of people could benefit from the program, including Alameda Hospital. Councilmember Oddie stated pilot programs are not continued if they do not work. In response to Mayor Spencer’s inquiry, the Interim City Manager stated filling positions saves overtime costs. Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 2, 2015 The Finance Director concurred with the Interim City Manager; stated Fire Department vacancies are reviewed to determine realistic timeframes to fill the positions; estimated vacancy savings would be based on hire dates; estimates are based on known vacancies. Mayor Spencer inquired whether the budget addresses overtime of public safety. The Interim City Manager responded the Fire Department’s SAFER Grant expired; positions were no longer funded and were filled with overtime; the Fire Department submitted a grant application for a $500,000 SAFER Grant which will reduce overtime. Mayor Spencer inquired whether staffing levels will be reviewed as part of the budget, to which the Interim City Manager responded it would be the Council’s decision to review staffing levels. Mayor Spencer inquired whether the staffing level issue is in the parking lot of items, to which the Interim City Manager responded in the negative; stated the issue could be added to the parking lot. Councilmember Ezzy Ashcraft stated the problem for the budget and for personnel is that overtime increased; there needs to be a balance so personnel is not stretched; new members could be added, but there is a lot to be considered in addition to salary and new employment benefits. In response to Councilmember Oddie’s inquiry, the Interim City Manager stated the SAFER Grant funds two years. The Interim City Manager noted overtime will never be eliminated 100%. Mayor Spencer stated Council and staff should be looking at everything. Vice Mayor Matarrese inquired what would happen if the City does not get the SAFER Grant; stated a plan is needed for when the grant expires; suggested reviewing other cities’ models like Sunnyvale and Rohnert Park. The Finance Director responded the current budget does not assume the City will get the SAFER Grant which is $2.2 million over two years. The Finance Director continued the presentation. Mayor Spencer inquired whether the Emergency Water Supply (EWS) could fall under Community Improvement Projects (CIP), to which the Public Works Director responded in the negative; stated EWS falls under the Fire Department budget and is a parking lot issue. Special Joint Meeting Alameda City Council and the Successor Agency to the Community Improvement Commission June 2, 2015 Councilmember Ezzy Ashcraft noted the Fire Department has a fire boat which is capable of pumping water from bay. The Interim City Manager stated the Fire Department does not have water tanks; training for use of the fire boat is being done; water from the fire boat cannot reach the entire town; an alternate system needs to be researched and brought back. In response to Councilmember Ezzy Ashcraft’s inquiry, the Fire Chief stated alternate systems could be researched and a report would be brought back in four months. The Interim City Manager stated parking lot issues could be discussed after the budget. *** (15-378) Mayor Spencer stated a motion is needed to consider the remaining agenda item adoption of the appropriations limit [paragraph no. 15-380]. Vice Mayor Matarrese moved approval [of considering the remaining item]. Councilmember Oddie seconded the motion, which carried by unanimous voice vote – 5. *** Councilmember Daysog stated West Enders feel shortchanged in CIP items; pavement and new streets being well distributed across town should be made part of the discussion. Councilmember Oddie noted Bay Farm Island is not on the budget map. The Finance Director continued the presentation. In response to Councilmember Ezzy Ashcraft’s inquiry regarding State legislation, the Chief Operating Officer – Alameda Point stated the City has a State lobbyist identifying ways to improve bills and find financing tools for Alameda Point’s $600 million infrastructure. Vice Mayor Matarrese stated the State infrastructure bills are impractical for Alameda. The Chief Operating Officer - Alameda Point stated mitigating the impacts to the General Fund reduces ability to fund infrastructure through a special tax. Mayor Spencer inquired whether Council is being asked to approve the budget without addressing the parking lot issues, to which the Interim City Manager responded in the affirmative; stated parking lot issues are reserves that do not affect the budget and can be addressed any time. Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 2, 2015 Mayor Spencer stated the budget could be affected if additional cuts are made to fund parking lot items. The Interim City Manager stated cuts was were already discussed; there will be no additional cuts; the parking lot is a laundry list. Mayor Spencer stated the part time employee issue has not been discussed and cannot be funded with reserves. The Interim City Manager stated staff is not prepared to discuss the part time employee issue at this time. Mayor Spencer stated that she has been waiting to have the conversation on part time employees for a long time; there may be other items in the parking lot that would be considered ongoing. Councilmember Ezzy Ashcraft stated staff needs time to address the part time employee issue; the parking lot issues are not part of the two-year budget; that she would like to have a priority setting workshop to address parking lot issues after the budget and the August recess; she is content to know the items are still on the parking lot. In response to Mayor Spencer’s inquiry, the Interim City Manager stated parking lot items include: Alameda Point buildings, PERS smoothing, OPEB trust for current employees, part time employees, abandoned estuary vessels, and public safety issues; the items are not listed with any priority. Vice Mayor Matarrese stated the parking lot items were not voted on. The Interim City Manager stated Councilmembers raised parking lot items and she made note of them. Vice Mayor Matarrese stated the list could be agendized for public discussion; acting on items tonight would be inappropriate; that he would advocate restricting the General Fund balance on some of the items; there is no inordinate risk of failing to operate the City. Councilmember Ezzy Ashcraft inquired whether the participatory process would continue to be done in the future, to which the Interim City Manager responded in the affirmative; stated there is better participation when the show is taken on the road. Expressed support for the proposed budget: Robb Ratto, Park Street Business Association. Special Joint Meeting Alameda City Council and the Successor Agency to the Community Improvement Commission June 2, 2015 Councilmember Daysog stated that he is happy with the budget process and the assumptions are reasonable. In response to Councilmember Oddie’s inquiry, Vice Mayor Matarrese stated he is proposing a 20% restriction on the fund balance. Mayor Spencer inquired whether the money could be set aside in another fund, to which the Interim City Manager responded in the negative; stated any amount above the 20% reserve would become restricted, which means staff would have to come back to Council for approval to spend it. The Finance Director stated $3 million was restricted for a specific purpose; any amount above 20% has to be specifically restricted; staff is not ready to say where funds would be applied. *** (15-379) Mayor Spencer stated a motion is needed to continue the meeting past 11:00 p.m. Vice Mayor Matarrese moved approval [of continuing the meeting]. Councilmember Oddie seconded the motion, which carried by unanimous voice vote – 5. *** Councilmember Oddie stated that he wants to be clear on what can be done today, including the mechanics. Vice Mayor Matarrese stated that he would like to have Council consider restricting anything above 20% to be used for capital needs which have been deferred, or to fund other capital assets, such as salt water pumps and non-operational expenditures. Councilmember Ezzy Ashcraft stated the issues are all worthy to consider, but not tonight; that she would like input from staff; she cannot vote on something so specific without information. Councilmember Daysog stated the whole point of the budget process is to identify and budget CIP needs; questioned why an account would be created that specifies where to park or spend money; the budget process already in place deals with current needs and long term unfunded needs. Mayor Spencer stated that she cannot support a budget where parking lot items would be neglected unless it is a CIP item. Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 2, 2015 The Interim City Manager stated spending reserve money on one-time issues is just best practice. Councilmember Ezzy Ashcraft stated tonight is not the time to decide the parking lot issue; suggested bringing the items back since they have not come before the Council or the public. The Interim City Manager concurred with Councilmember Ezzy Ashcraft; stated there are other ways to fund the parking lot issues; using the General Funds is not recommended; finding the best use of funds would be evaluated and brought back to Council. Vice Mayor Matarrese stated not using reserves for operations over and above 20% is the point; he would like to cut revenues gathered from one-time events, and apply funds on a priority basis; specifics could be discussed once items are separated. Councilmember Oddie concurred with Vice Mayor Matarrese; stated anything over 20% or 25% should be set aside for discussion at a later meeting. Councilmember Daysog stated the straightest line approach is to develop a strategy on how to treat unfunded capital; once the strategy is known, details can be discussed; the process is backwards now. Mayor Spencer stated that she cannot support the process if items on the parking lot could not be discussed. Councilmember Ezzy Ashcraft stated Council is not making any decision one way or the other; discussions will take place at later date with agendized items; staff needs breathing room; she does not expect the item to come back before August; inquired what would be a realistic time frame and format. The Interim City Manager responded staff could do a more thorough job if a report could be brought back in September. Mayor Spencer stated it sounds like Council is being asked to set aside a certain amount for certain things like one-time expenses. Councilmember Oddie stated that he is open to developing a strategy as suggested by Councilmember Daysog; staff should have until September; Council could come up with a number tonight, then give staff direction. In response to Mayor Spencer’s inquiry, the Interim City Manager stated the current Council policy is 25%; all Council is doing tonight is giving direction. Special Joint Meeting Alameda City Council and the Successor Agency to the Community Improvement Commission June 2, 2015 Mayor Spencer stated Council is being asked to approve a budget; deciding the percentage does not need to be done at this point. The Interim City Manager stated setting reserves at a certain level is good practice; tonight Council is being asked to do two things: 1) approve the budget as proposed, and 2) give staff direction to come back with a plan on spending the amount above the 25% reserves. Mayor Spencer stated she thought all the parking lot items would be addressed then Council would decide how to proceed. Councilmember Ezzy Ashcraft stated the parking lot items will be addressed, just not tonight; suggested sticking with the 25% reserve policy; stated Council will address all items of concern; having full discussion is prudent and responsible. The Interim City Manager stated the same budget exercise was done in November with the prior Council; the process is a proven method separate and aside from the budget. Councilmember Daysog moved approval of the staff recommendation [adoption of the City Council resolution]. Councilmember Member Oddie seconded the motion. Under discussion, Councilmember Oddie stated issues discussed were important, including deferred maintenance and restoring some of the cuts made during the recession; the budget reflects his values and those of the City; growth in public safety was due to PERS smoothing and needs to be addressed long-term; the budget overall has strong values including no cuts to public safety; he is honored to cast a vote in his first budget approval. Mayor Spencer stated approval of the budget is a step in the right direction for serving the City at large and corrects departments that have been left behind. Vice Mayor Matarrese stated he intends to support the budget but would like to address an inflated General Fund reserve; there have been years of deferred maintenance and he would like to evaluate allocating one-time funds to that purpose; that he is looking forward to more discussion. On the call for the question, the motion carried by unanimous voice vote – 5. Vice Mayor Matarrese moved approval of directing the Interim City Manager to provide a strategy that involves allocating the excess of 25% of the current General Fund balance to items that fall under non-operations activities. Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 2, 2015 Councilmember Daysog stated the mechanics will be ironed out by City staff, but are still unknown; rather than chasing money and figuring out how to spend it, a strategy to address needs and wants is more appropriate; the issue is too substantive to not have a detailed discussion. Councilmember Oddie stated allowing the surplus to absorb operating deficits is not an appropriate use; Council should set a policy at 25% and use the excess to address important issues; Council and staff should develop a strategy to identify options; the 25% should be the amount at the end of FY16-17. Vice Mayor Matarrese stated the fund balance is already being chipped away; he is prepared to support the budget because the delta is so small and projections are so conservative; at the end of the year, the City will be in better shape than the projections; new development will add to the property tax roll and transfer tax; the margin of error could be worked with. Councilmember Ezzy Ashcraft seconded the motion. Under discussion, Mayor Spencer requested clarification on Vice Mayor Matarrese’s motion; stated she would not be able to support a restriction. Councilmember Daysog stated that he would vote no because the whole point of the month-long budgeting process was to identify the long-term unfunded capital needs, which are already known; to suddenly say a policy needs to be created to begin to address projects does not make sense; understanding the needs and bending accordingly is the straightforward approach. Vice Mayor Matarrese modified the motion to approve directing the Interim City Manager to provide a strategy that involves allocating the excess of 25% of the current General Fund balance at the end of FY 15-16. Councilmember Ezzy Ashcraft seconded the motion. On the call for the question, the motion carried by the following voice vote: Ayes: Councilmembers Ezzy Ashcraft, Matarrese and Oddie – 3. Noes: Councilmember Daysog and Mayor Spencer – 2. Agency Member Matarrese moved adoption of the SACIC resolution. Agency Member Ezzy Ashcraft seconded the motion. Under discussion, Chair Spencer requested clarification on approving the SACIC resolution. The Finance Director stated the Council is acting as the governing body of the SACIC Special Joint Meeting Alameda City Council and the Successor Agency to the Community Improvement Commission June 2, 2015 approving the SACIC budget. On the call for the question, the motion carried by unanimous voice vote – 5. (15-380CC) Public Hearing to Establish the Proposition 4 (Appropriations) Limit for Fiscal Year (FY) 2015-16; and (15-380A CC) Resolution No. 15049, “Establishing the Appropriations Limit for FY 2015- 16.” Adopted. Councilmember Ezzy Ashcraft moved adoption of the resolution. Councilmember Oddie seconded the motion. Under discussion, the Finance Director gave a brief presentation. On the call for the question, the motion carried by unanimous voice vote – 5. Adjournment There being no further business, Mayor/Chair Spencer adjourned the meeting at 11:58 p.m. Respectfully submitted, Lara Weisiger, City Clerk Secretary, SACIC The agenda for this meeting was posted in accordance with the Sunshine Ordinance. Special Joint Meeting Alameda City Council and Successor Agency to the Community Improvement Commission June 2, 2015