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HomeMy WebLinkAboutSPJT Minutes 2006-05-15(Spec.) SPJTCCRA 05/15/06 Page 1 IN THE COUNCIL CHAMBER OF THE CITY OF SAN RAFAEL, MONDAY, MAY 15, 2006 AT 6:00 PM Special Meeting Present: Albert J. Boro, Mayor/Chairman San Rafael City Council / Redevelopment Agency Gary O. Phillips, Vice-Mayor/Vice-Chair Paul M. Cohen, Councilmember/Member Barbara Heller, Councilmember/Member Cyr N. Miller, Councilmember/Member Absent: None Also Present: Ken Nordhoff, Interim City Manager/Interim Executive Director Gary T. Ragghianti, City Attorney/Agency Attorney Esther C. Beirne, Deputy City Clerk/Deputy Agency Secretary 6:00 PM BUDGET HEARING: - FILE 8-5 x R-103 Mayor/Chairman Boro explained that staff would review the proposed fiscal year 2006-2007 Redevelopment Agency budget, followed by a status report on the fiscal year 2005-2006 City budget and the proposed fiscal year 2006-2007 City Budget. Council would then hear from staff with respect to items recommended for the coming year. In two weeks, (June 5, 2006), staff would review comments received and make a recommendation for the budget for fiscal year 2006-2007. Interim City Manager/Interim Executive Director Ken Nordhoff stated that Finance Manager Cindy Mosser would make a presentation on the financial outlook, most of which would focus on the next fiscal year. However, most of the time would be dedicated to community involvement and ideas surrounding the budget, and as time permitted, he would suggest some ideas staff had been working on. Mr. Nordhoff noted that should there be specific service related questions, all the department heads, or representatives from each department, were present and could respond. PROPOSED FISCAL YEAR 2006-2007 REDEVELOPMENT AGENCY BUDGET: Ms. Mosser reported: Staff proposed an appropriation for fiscal year 2006-2007 for the Redevelopment Agency of $5.4 million, which was similar to this year. • No change in staffing levels — 4.75 FTE. (Full Time Equivalent) • Continued support of Code Enforcement, Public Works and the Administration. • No new projects were planned for Redevelopment and no new bond revenues expected • Staff proposed adopting the Redevelopment Agency budget on June 19, 2006. 2. STATUS OF FISCAL YEAR 2005-2006 CITY BUDGET: Reporting that the budget was originally adopted on June 20, 2005, Ms. Mosser noted that since that time there had been amendments on February 6 and May 1, 2006. Of the total appropriations of $73.2 million, $50.9 million related to the General Fund. She indicated the budget was balanced using reserves of $3.2 million. 3. PROPOSED FISCAL YEAR 2006-2007 CITY BUDGET: Ms. Mosser stated that projections for the Fiscal Year 2006-2007 Budget included: • No changes in level of service. • No changes in current staffing levels of 416.21 FTE. • Total revenue projection of $71.7 million. • Total appropriations of $72.9 million. Of this, $1.2 million was drawn from the Equipment Replacement Fund for fleet purchases. Indicating that the State Budget impacts the City Budget, Ms. Mosser explained: (Spec.) SPJTCCRA MINUTES 05/15/06 Page 1 (Spec.) SPJTCCRA 05/15/06 Page 2 May Revise: • COPS funding — up from $100 million to $121 million. • Public Library funds up from $14 million to $21 million. • Full funding of Proposition 42 for the current year. • Savings of $165,000 in booking fees to the County. November Initiatives: • Transportation Package of $1.8 million for roads to San Rafael. Total revenues by Source - $71.7 million — Ms. Mosser explained: Taxes, totaled $45,368,380, or 63.3% of the budget. • Sales Tax was the greatest revenue generator @ $18 million or 40.6%; • Property Tax @ $11.29 million or 25%; • Transactions and Use Tax @ $4.2 million or 9.3% of the budget. J Explaining that $4.2 million was projected for the Transactions and Use Tax, Ms. Mosser reported that this was passed by the voters with a 70% approval rate. While it took effect on April 1, 2006, the City would not receive any funds until September, 2006; therefore, actual results probably would not be known until the middle of the fiscal year 2006-2007. • Court fines revenue reduction of one-third - $240,000. There could be other residual reductions. • Tax adjustments for property and property transfer, business license and transient occupancy (hotel tax) — increased by $677,000. • Fee adjustments for full cost recovery — increased projections by $124,000. Total Appropriations - $72.9 million — Ms. Mosser explained: The two largest were Public Safety @ $32 million, or 44.4%, and Public Works @ $10 million, or 13.9%. Projections included: • Increase in supplies and services by 1.4% from the fiscal year 2005-2006 budget. • Anticipated personnel cost changes, subject to change because of contract negotiations. • Constant level of staffing — 416.21 FTE J Same level as FY 2005-2006 ,I_ Lower than FY 2002-2003 — 444.24 FTE Total General Fund Appropriations - $52.6 million — Ms. Mosser explained: Public Safety (Fire and Police) account for 57.8% or $30 million, with Public Works @ $9 million or 17.8%. This projection includes: • Marinwood CSD (Community Services District) Agreement. • Constant level of funding for capital projects. 4- Building maintenance - $100,000 J ADA (Americans with Disabilities Act) compliance - $350,000 4- Sidewalk replacement- $100,000 Projected Outlook — Undesignated General Fund balance - $925,000 — Ms. Mosser reported: Uncertainties include: • Final court revenue adjustments. A notice was just received that there probably would be $150,000 for this year, and 2004-2005 was still under consideration, with the possibility of proposed penalties. (Spec.) SPJTCCRA MINUTES 05/15/06 Page 2 (Spec.) SPJTCCRA 05/15/06 Page 3 • MTA (Marin Transportation Authority) Franchise Fee — COMCAST changes • Actual collections from Measure 'S'— Transactions and Use Tax. Councilmember Heller requested further explanation on court revenue and adjustment and inquired as to how the City could be penalized for something it was not responsible for. Responding, Mr. Nordhoff explained that the court system five-year audit that went through fiscal year 2003-2004 had an overpayment to the City of San Rafael and was consistent with overpayments to the remainder of cities and towns. San Rafael's portion of this was approximately $750,000 and the subsequent two years could also be at risk; therefore, together with penalties which could amount to approximately $200,000, potentially over a million dollars was at risk. He noted this was not really a County, rather a court system issue. Ways were being explored to negotiate this out; however, it was pretty clear that if the City had been overpaid for years, somehow it would have to be paid back, and the question was how. Mr. Nordhoff stated he would not stand for paying penalties for something the City did not cause to occur. Regarding the Marinwood agreement, Councilmember Cohen noted the cost of this agreement was included in the number for the General Fund appropriations, and he inquired whether this would be counted against what is currently the undesignated General Fund balance. Ms. Mosser stated it was already subtracted out. Mr. Nordhoff confirmed for Councilmember Cohen that the $925,000 was after the proposed Marinwood appropriation; therefore, it was net money available subsequent to appropriating the contract money for Marinwood next year. Councilmember Cohen clarified that this was based on the assumed Measure `S' revenue for the year, minus maintaining the service level and the Marinwood agreement. He further confirmed that if Measure `S' funds came in as projected, $1.2 million would actually be anticipated, taking Marinwood off the top. Mr. Nordhoff clarified that the figure would be $1.15 million backing out what staff believed would be the first year's obligation to Marinwood. In terms of sales taxes, Councilmember Miller inquired whether the City was in a growth or stagnant situation at the local level. Ms. Mosser reported that having met with HDL (Hinderliter de Llamas), no growth was identified. Some adjustments appeared as though there had been some growth; however, all in all, it was pretty flat. With Best Buy coming early next year, she anticipated seeing some growth. Mr. Nordhoff stated that working with the Economic Development Department, staff tries to look at any significant new retail opportunities, whether being built or reused, and this is built into all projections. He noted that for several years, no significant growth in sales tax had been observed beyond just the cost of goods rising. For the benefit of the audience, Mayor Boro invited Mr. Nordhoff to recap the amount of money anticipated from sales tax, the amount of deficit and how the figure of $925,000 was arrived at. Mr. Nordhoff explained that when the budget was put together last June for the two-year period, as Ms. Mosser mentioned, money was pulled from reserves to cover the deficit of $3.2 million this year. Approximately $3.5 million was projected for fiscal year 2006-2007 as a deficit, and having gone through many discussions, the City ultimately ended up with a very successful tax measure. The new $4.2 million coming into the General Fund, when added to all other revenue sources of the General Fund subsequent to projecting out costs and adding in Measure `S', resulted in the $925,000 figure. Mr. Nordhoff stated that Measure `S' was a general Transactions and Use Tax which was put into the General Fund along with everything else and measured against expected expenditures for next year. Sylvia Brady, Las Pavadas Avenue, stated she was a pharmacist with two children. She requested that the Public Works Department traffic calming program be reinstituted and staff at the Police Department, especially in the traffic section, be increased. She explained that vehicles travel at speeds of 40 miles per hour on this street and having written to Mayor Boro and Councilmember Cohen, she did not know what else to do. Ms. Brady stated that Traffic Engineer Nader Mansourian had been really helpful and had done his best, absent funds and traffic calming, and she thanked Officer Glen McElderry who always sent a Police Officer, if available. She requested that something be done before someone was badly hurt or died. Dil Kazzaz inquired whether there would be measures to monitor the effect of sales tax on commerce in the City and how this would affect appropriations. Mr. Nordhoff stated that when looking at sales tax, staff looks not just at retailers, rather the trends in the marketplace, volumes for certain businesses and trends in general merchandise consumption and (Spec.) SPJTCCRA MINUTES 05/15/06 Page 3 (Spec.) SPJTCCRA 05/15/06 Page 4 procurement that deal with internet sales and a number of other things. All of those elements are factored into how sales tax projections are arrived at. Mayor Boro stated that when the campaign was initiated for the Transactions and Use Tax, this was a concern of the Chamber of Commerce. The City consulted with someone who was familiar with and had studied this type of sales tax in approximately 18 other communities throughout the state, and as a result of those taxes being passed, no impact on future growth was detected. Mr. Nordhoff stated staff was not aware of any measurable impact on local sales transactions based upon imposing a local sales tax measure. Indicating this would continue to be monitored, Mayor Boro stated that as pointed out by staff, the anticipated funds would not be received until the fall; it would be tracked over the coming year and reported on. Mr. Kazzaz inquired whether there was a mechanism to monitor this tax. Responding affirmatively, Mr. Nordhoff reported that the City had a consulting firm that audits and reviews sales tax and they would be doing the same for the new Transactions and Use Tax. Therefore, should there be declines, both overall or within various retail sales tax industries, staff would be in a position to report this. George Mills, Sun Valley Neighborhood Association, spoke with regard to traffic safety in the Fifth Avenue area, and noted River Oaks Street needed striping for sidewalk safety for children going to Sun Valley School. Noting the anticipated improvement of the multi -use path from Sun Valley Market to Happy Lane, Mr. Mills hoped there would be funds to get the unpaved area paved. He also hoped funds would be available to review the neighborhood guidelines/standards. Dick Sadler, Dominican area, stated he wished to address an item not in the budget. He explained that each year on inquiring of Mr. Preston as to what was in his budget to maintain the 567 acres in the Black Canyon Area, Mr. Preston `s response is "nothing." With the rains of this past year, Mr. Sadler stated this would present tremendous fire fuel build-up representing a real challenge for the Fire Department; however, those rains also produced two slides on the fire roads, one of which was significant enough to require engineering to fix. Mr. Sadler stated he believed San Rafael would fix these slides; however, as this was a continuing issue with some maintenance always being required in the 567 acres, he suggested it be made a Public Works budget item. Gary Ford, Marin United Taxpayers Association, stated they noted with some dismay that the public is now finally receiving the June 30, 2005 audited financial statements for the City of San Rafael. This being May 15, 2006, Mr. Ford stated they had a very difficult time as they actually read the financial statements; therefore, he did not believe the public was served when sufficient time was not afforded to review these statements. Mr. Ford encouraged the City to obey state law and get the financial statements out in 120 days. With regard to the 2006-2007 budget, Mr. Ford stated there appeared to be a $1 million surplus and he inquired whether this included any type of housing allowance for the new Fire Chief. In addition, he inquired whether there would be a mortgage of $800,000 given to, for example, a City Manager, and questioned whether the $1 million surplus for 2006-2007 took these factors into account. Understanding the City was going through union negotiations, Mr. Ford inquired whether the spikes in workers' compensation, medical care and pensions were reflected in the $1 million figure. On the housing allowance, Interim City Manager Ken Nordhoff stated that a $400,000 reserve had been set aside, which was outside of the numbers presented this evening, for housing assistance. He was not aware whether this would be used for a new Chief of Police or potentially, another Department Director down the road. While there was some money available, the City had never loaned $800,000 to anyone. Loans on the order of $400,000 had been made in the past and currently, nothing was outstanding. With regard to negotiations, Mr. Nordhoff stated that at Council's direction staff was interested at the table in looking at ways of containing costs. As part of discussions from the City's side, staff was looking at the issues of healthcare, workers' compensation and other issues to ascertain whether ways could be found to contain costs, share costs, look at new programs, etc., and these were very much a part of discussions with the six groups currently in negotiations. Concerning the delay in the fiscal audit, Mr. Nordhoff explained that the audit was delayed this year due to his appointment and being more actively involved in finance and other issues that had arisen during the course of the past few months. He indicated that Mr. Ford was aware the City does make available in the City Clerk's office a set of financial results within the 120 -day limit mentioned. What he does not have ample opportunity to look at are the final footnotes that go into the audit, together with other items. Mr. Nordhoff stated staff saw this as a one-time glitch and intended to be back on track having audits completed in the fall season. (Spec.) SPJTCCRA MINUTES 05/15/06 Page 4 (Spec.) SPJTCCRA 05/15/06 Page 5 If and when a loan was made to a key employee to consummate that employment, Councilmember Phillips inquired whether this impacted reserves. Mr. Nordhoff stated that these housing loans had been held outside of the 10% general reserve requirement, as that had been ebbing and flowing over the last few years. He indicated that the last one was in 1996. Councilmember Phillips confirmed that a loan was another form of an asset which would not be a charge against the reserve. Noting Mr. Ford had not used the word "loan", Councilmember Heller confirmed that the City loans the money rather than giving it. Mr. Nordhoff confirmed that a loan is intended to be repaid with interest. Kathleen Russell, homeowner in Sun Valley, business owner in Gerstle Park and a member of the San Rafael Chamber of Commerce stated she was present to speak on behalf of the Gerstle Park Neighborhood Association Flood Group, which she was aware had met with Councilmembers Cohen and Heller recently concerning the ongoing issue of flooding in Gerstle Park. She reminded the City Council that the Flood Group had been working very closely with Public Works Director Andy Preston for years on this issue. The engineering study carried out more than a decade ago stated that should the trestle be removed, the flooding would be seriously alleviated in the neighborhood. Given the influx of Measure `S' funds and the fact that Mr. Preston had assured the neighborhood this was part of existing funds, regardless of Measure `S", she wished to ensure that it was a priority in the coming year and that the neighborhood was not held hostage to what did or did not happen with the SMART (Sonoma/Marin Area Rail Transit) proposal. Ms. Russell indicated they were concerned about delays and the fact that there was not a lot of impetus to move forward until after that issue was decided; however, she believed this was a public safety issue and having sewage in yards after flooding was something the City needed to attend to. Regarding the sewage in yards, Mr. Preston reported that the Sanitation District had retained D & D Pipelines, Inc., who were carrying out two pipeline projects — one on B Street and the replacement of the sewer line in the lower regions of C Street. He indicated this would prohibit any rain water, intrusion or inflow into the sewer system, making it a completely sealed system and preventing sewage from getting into houses. Mr. Preston stated he was in constant contact with the engineers from SMART concerning the problems, issues and all other nuances with regard to removing the trestle, noting It was not as easy as it appeared on the surface. He indicated that SMART was very concerned about having a continuous track there at all times. If the track were removed it could be deemed abandoned which was the last thing SMART wished to happen at the moment. He reported being in extended discussions with them and keeping the Friends of Mahon Creek involved and updated at all times, meeting with them approximately four times per year. Mr. Preston stated he was developing a maintenance program to more proactively clean the section of Mahon Creek. From along Albert Park Lane from B Street, approximately 600 tons of debris and silt were removed just after this year's storms and thorough cleaning would continue during the year. Councilmember Cohen stated he had met with Mr. Preston and with representatives of the neighborhood with regard to this issue. He was very interested and believed the City needed to be proactive. He disagreed with the characterization of holding the issue hostage as far as waiting for the passage or failure of the SMART road issue. It simply was a fact that that agency did not know what it was dealing with in terms of whether or not it had resources to invest in the trestle until the measure either passed or not. As far as the City offering to partner and do the removal in anticipation of reconstruction, Councilmember Cohen stated that knowing whether or not SMART had funding was a huge issue. The City could indicate something different and pretend something was going to happen in advance of passage or failure of a measure anticipated to be on the November ballot; however, it would be foolish to believe there could be any serious negotiations about getting this done in advance of the ballot measure. While he wished something could be done sooner, as discussed with representatives of the neighborhood association, he did not see a realistic way of getting it done until it was known whether or not SMART had a funding stream. As soon as this was known, Councilmember Cohen stated the City should move aggressively to get them to deal responsibly with their part of the problem, and the City could deal with its part. 4. DISCUSSION OF BUDGETARY PRIORITIES: a) Services b) Infrastructure c) Emergency Reserves Mr. Nordhoff stated that in working this through at staff level, items were clustered into three levels: Restoring Services — Staff believed that over the budget process some of this would come from the community and staff had similar ideas. Unmet Infrastructure Needs — Mr. Nordhoff stated that in his former position he went to Council regularly to inform them of how inadequately the City's infrastructure was funded and noted today's story was no different from the last nine years. (Spec.) SPJTCCRA MINUTES 05/15/06 Page 5 (Spec.) SPJTCCRA 05/15/06 Page 6 Rebuilding Emergency Reserves a) Services: Mr. Nordhoff referred Council to the last page of this evening's handout — Service Options for Consideration — Staff Requests — Budget Year 2006-2007 — and explained that he and the department directors had been working on this for a couple of months. He had clustered some ideas for consideration as part of services, together with items to consider in looking at what Council would propose to amend should the $925,000 be available. Mr. Nordhoff indicated staff had gone through an exercise to generate approximately $500,000 worth of items just as a placeholder. Mr. Nordhoff stated that the list was broken into two groups and explained: The first clustering concerned some baseline organizational needs identified in the City and dealt with having the appropriate level of staffing in place. In the Community Development Building Division, this related to over-the-counter help, together with a vacant Building Inspector position — the money dedicated to this was being used towards paying for plan checking services which now needed to be put back into alignment. Mr. Nordhoff stated this had been contracted out because locating someone to work in-house had been unsuccessful. These two self-funded adjustments would improve the level of service which had already seen a fair amount of progress under the direction of Thomas Ahrens, Chief Building Official, which he believed would continue when funded. Noting many items that cross the Community Development counter ended up in Public Works in the Traffic Division, Mr. Nordhoff explained this was a group of four people with responsibilities for everything from signal maintenance to new project installation, and who needed to be involved where appropriate in development review processes. Staff suggested that an additional Transportation Engineer, 80% of which would be funded through fees, would be appropriate and assist in furthering the turnaround time on some development applications. Mr. Nordhoff noted that these were not always the big projects, rather some of the items that tended to fall in the more medium size range. Mr. Nordhoff indicated there had been some ongoing conversations concerning some restructuring and reorganizing in the Fire Department and as staff looked at realigning some management responsibilities, as well as administrative functions, there was a net cost to do that. The cost of the four items proposed when netted out against revenue, was an approximate $71,000 charge to the General Fund. Regarding Service Restorations, Mr. Nordhoff stated this was more focused on looking back for the past three or four years at many of the items the City Council unfortunately had to make difficult choices about in terms of restoring services. The list had been paired down to restoring one position in the Parks Division and one in Streets, where three positions in each Division had been cut over the past three years. He indicated that this cost would be partially offset by Mr. Preston not filling a vacant Administrative Assistant position in Public Works. Mr. Nordhoff reported that David Dodd, Library Director, and his staff had anxiously been awaiting this discussion around rebuilding the library materials budget. He explained this was slashed fairly significantly and had been backfilled through fundraising, donations and such for the past couple of years. Some of this money would be directed towards the main library; however, some would also be directed to Pickleweed as that facility opens. Noting six Police Officer positions were cut over the last several years, Mr. Nordhoff stated staff suggested adding back one position. Mr. Nordhoff stated that the total of these items amounted to approximately $454,000 and when added to the first grouping, resulted in a net cost of approximately $525,000. He indicated this was something for Council to consider going through the process. b) Infrastructure: Noting there were over 200,000 square -feet of facilities to manage, Mr. Nordhoff stated that currently the General Fund puts in 50 -cents per square foot per year, which was not really adequate, and the City needed to do a better job of funding infrastructure, particularly buildings. He indicated that currently funds are put into sidewalks and ADA (Americans with Disabilities Act) requirements, which are part of the Settlement Agreement with the Department of Justice. Mr. Nordhoff stated that most parks work had either been done through partnerships, bonds or grants; however, clearly, there was insufficient money going into keeping buildings in place. Mr. Nordhoff recalled that a couple of weeks ago, staff requested formal approval from Council in the budget amendment process for the current year to put a new roof on City Hall and remove and (Spec.) SPJTCCRA MINUTES 05/15/06 Page 6 (Spec.) SPJTCCRA 05/15/06 Page 7 relocate a Heating and Air Conditioning system, and in the library, remove a one hundred year old boiler, install a new system, replace windows and reseal the building. He noted that these two projects alone were in excess of $1 million. He indicated the committee's thinking was that it would be nice to move towards a 1 % funding level in the General Fund; currently at $100,000, getting it up to approximately $450,000 would go a long way to making better strides. Mr. Nordhoff stated that the CIP (Capital Improvement Projects) committee regularly reminds him that a couple of million dollars annually is probably required to really keep up with needs. He indicated that this should be considered in looking at the available monies. c) Emergency Reserves: Noting the City had an Emergency Reserve policy of 10% for a number of years, Mr. Nordhoff stated that in this current year it had dropped down to approximately half, or a little over $2 million, and in order to rebuild those reserves, each 1 % was approximately $440,000 annually. His recommendation was to consider how this should be done, probably on a multi-year strategy. Mr. Nordhoff pointed out that with regard to the slides of December 31, 2005, staff estimated in the recent budget spending approximately $880,000, with not that much significant damage; therefore, having an adequate reserve of 10% would be important in the event of something more significant. Mr. Nordhoff stated Council could provide direction to staff on any or all of these options, which could then be included in the updated budget proposal for June 51" , or the process could be continued. Staff hoped to have the budget adopted on June 19, 2006. He indicated that at the budget hearing of June 51" , there would be a mid -point review from the various departments on progress on goals, etc. Councilmember Phillips noted Measure 'S' created an Oversight Committee to ensure that the additional sales tax revenues were spent in part to maintain services, which implied there was a baseline established from which to measure "Yes" or "No" on the maintenance of services. He indicated his general but continual question in reviewing options would be: Has the committee yet identified any shortfalls that should be taken into consideration? Responding, Mr. Nordhoff stated the Committee was not that far along in the process. Three meetings were held and they were in the process of trying to define that baseline, and he believed the Committee then wanted to evaluate where those shortfalls might exist. He believed they clearly understood they wanted to ensure the City was maintaining what was in place in the current year, figuring out a quantitative way of measuring this and report that essentially, Measure `S' was being used in a proper manner on a go forward basis. He confirmed that to his knowledge at this point in time the Committee had not identified anything they would consider a shortfall. Realizing it was early in the process, Councilmember Phillips stated he would request that if at any point in time it became apparent to Mr. Nordhoff, through input from the Committee, that there was a shortfall, those points should be considered with regard to the budget. He commented that at the end of the year he would not like to hear from the Committee that such and such had not been adequately funded. Mr. Nordhoff stated he believed the intention of the Committee was that, hopefully on June 5, 2006, having looked at the budget at some level they felt satisfied the City had not stepped back in any area, they would be able to report that to the City Council as they formalized their process. At the staff level, and the Committee agreed, it was felt important that the Committee make a presentation to the City Council at the front end of a year in the budget process so that they would have something from which to gauge when reporting out at year end. Councilmember Phillips requested that Mr. Nordhoff monitor this to ensure the City Council did not receive information after the fact. With regard to the Police Officer position, Councilmember Cohen, quoting from the staff report: "Restoring one officer will allow PD to reduce overtime...." inquired whether there would be any savings from the reduction of overtime. Mr. Nordhoff stated that at this time savings would be fairly de minimis and he explained that when the point of critical mass was reached and sufficient positions were being added back, staff would be in a better position to gauge this. Even though overtime would be reduced, Councilmember Cohen inquired whether Mr. Nordhoff foresaw anything to offset filling this position. Mr. Nordhoff stated staff had not studied it at that level and while he believed it negligible, staff would evaluate the situation prior to the June 51" meeting. Councilmember Cohen stated that if staff believed it negligible, it should not be used as an argument for restoring the position. While an argument could be presented for restoring the position, if a reduction in overtime costs was not being achieved, he did not believe it should be part of the case. Indicating he was very supportive of putting some funds into the library's materials budget, Councilmember Cohen stated he would like to have a chance to discuss the issue of how that would be put to use, particularly what exactly was meant by "all types of materials free to the public." (Spec.) SPJTCCRA MINUTES 05/15/06 Page 7 (Spec.) SPJTCCRA 05/15/06 Page 8 Library Director David Dodd stated that when he made this request it was a much higher number — to fully fund the library materials budget would cost in the neighborhood of $200,000 solely for that line item in the budget. This $100,000 encompasses what is needed to run the Pickleweed branch and probably some would also need to go into some extra hire to cover both the downtown and Pickleweed libraries. He indicated his total requests for budget restoration were in the neighborhood of $289,000. Mr. Dodd apologized for not removing the line, "With this requested funding, the Library could make all types of materials free to the public" as this would not be accomplished. Rental fees would be retained for the time being at least for DVDs and books on tape. He noted Council had approved his taking away the charges for music CDs and videotapes last year and he believed that experiment was going relatively well, with some money being lost and some recovered; however, as discussed last week, the library was not currently in a place to further experiment. Councilmember Cohen stated one of his concerns was that the City needed to start by being very cautious about the extent to which this was built into the budget. Commenting that Councilmember Phillips' point about maintaining a baseline of service was key, he believed the City needed to try at the front end not to build this in as an assumption going forward beyond the ten years. To start by spending every penny of the Measure `S' funds on ongoing operational expenses would make it very difficult for a future Council to get towards the end of the ten years to sunset the Transactions and Use Tax, and he believed this should be held onto as a goal. Not knowing what was going to happen in terms of personnel costs and the fiscal relationship between state and local government, he believed it would be difficult to know whether it would be possible to do this; however, the City should start out by trying to be careful about preserving this as an opportunity. Indicating he wanted to be cautious about rushing into ongoing expenses, Councilmember Cohen stated his concern was that with the Marinwood contract added into the Service Restoration requests for personnel, over half of the $1.1 million that is beyond baseline service restorations was going to what would be ongoing obligations. He was particularly concerned about this in light of the fact that it was not yet certain what the Measure `S' revenue would be. While he believed all the personnel restorations were important, Councilmember Cohen suggested at the very least, looking at timing this during the year so as not to commit to those positions only to realize projections were behind and having spent most of the money on an ongoing obligation. He suggested Council might look at authorizing these positions but delay filling them until half- way through the fiscal year when the City could begin to have a read on whether or not revenue from Measure `S' was matching expectations, and projections of that revenue had some chance of being correct. He suggested proceeding very cautiously on new ongoing obligations. Concurring, Mayor Boro stated that restoration of reserves was one way to ensure the City held onto that money. Should Council support the positions, the key would be when they might go forward. Mayor Boro believed Police Captain Jeff Franzini had come up with an idea of how to restore the function of community policing with existing personnel, and he looked forward to hearing about this at the next meeting. Regarding Slide #6 — May Revise — Mayor Boro inquired as to what impact potentially those gross figures from the state might have on the City budget. Mr. Nordhoff explained that the COPS funding was probably on the order of approximately $120,000 annually — a 20% increase. Public Library funds had been pared back from previous levels; therefore, a $7 million across the state increase would be a light number to the City - $15,000 - $20,000 of additional funds that traditionally had been used to supplement the materials and operating costs in the library. Mr. Nordhoff stated he would elaborate on these for the next budget meeting. Explaining the reasoning behind the $500,000 on the last sheet, Mr. Nordhoff stated staff anticipated Council would want to move slowly. These were suggestions and part of the reason for not requesting the entire $1 million was recognizing that Council would probably want to retain at least half that money aside as things were slowly built back. Therefore, there was an expectation that some of this would go into reserves right out of the box. Mayor Boro expressed thanks to Mr. Nordhoff and Ms. Mosser for their presentations and to all of those in attendance. He indicated that a follow-up budget session would take place on June 5, 2006. There being no further business, the Special Meeting of the San Rafael City Council and Redevelopment Agency was adjourned at 7:00 p.m. ESTHER C. BEIRNE, DEPUTY CITY CLERK /DEPUTY AGENCY SECRETARY APPROVED THIS DAY OF , 2006 MAYOR OF THE CITY OF SAN RAFAEL / CHAIRMAN, REDEVELOPMENT AGENCY (Spec.) SPJTCCRA MINUTES 05/15/06 Page 8