Loading...
HomeMy WebLinkAboutCC Minutes 1991-12-18SRCC MINUTES (Spe` . Budget) 12/18/91 Page 1 IN THE COUNCIL CHAMBERS OF THE CITY OF SAN RAFAEL, WEDNESDAY, DECEMBER 18, 1991, AT 5:30 PM Special Meeting: San Rafael City Council Present: Albert J. Boro, Mayor Dorothy L. Breiner, Councilmember Paul M. Cohen, Councilmember Michael A. Shippey, Councilmember Joan Thayer, Councilmember Absent: None Also Present: Pamela J. Nicolai, City Manager Tessie Belue, Assistant City Attorney Jeanne M. Leoncini, City Clerk RE: CONSIDERATION OF REVISIONS TO THE 1991/92 BUDGET (CM) - File 8-5 x 7-8-1 x 7-8-2 x 7-8-3 x (SRRA) R-103 City Manager Nicola! gave an overview and background regarding the budget issue. She stated that the staff has been carefully monitoring the revenue and, since June of 1991 when the Council approved the 1991/92 budget, staff already knew that their revenue projections were possibly over -optimistic. For that reason they committed to monitoring the situation very closely and reporting back to the Council mid -year. Ms. Nicolai stated that the recession and the pervasive impacts on all of the City's revenue sources have been greater and longer -lasting than anyone expected or predicted. She pointed out that the packets contain a detailed review of the City's revenues, prepared by Finance Director Coleman. She stated that staff waited until the second quarter before suggesting modifications to the budget, and Mr. Coleman will give an overview and alternatives on what is projected to be a shortfall. Ms. Nicolai stated that before taking action on any alternatives she wanted to get clear direction from the Council on which she could act. Finance Director Coleman referred to his memo in the packets, and addressed the shortfall of $970,000, with a total shortfall in sales tax revenues of $1,055,000. He explained that the problem started in the third quarter of 1990, when the recession started, and staff expected a mild recession which would turn around in the Summer of 1991, and instead it was worse by that time. Mayor Boro stated the Council is familiar with the County's situation, but would like to know about Mr. Coleman's talk with the cities. Mr. Coleman stated that when we were down 13% the average State-wide was 8%. Some cities were 22% and 23% negative. He noted that one other Marin city was down 13%, and the majority of cities are experiencing a decline. Automobile sales and building materials particularly are being hurt. He stated that if a city's budget is dependent, as ours is, on sales tax the impact is significant. Councilmember Breiner inquired about forecasting for next year, as to how there could be an 8% increase next year with all of the present negative projections. Mr. Coleman responded that the theory in the cities is that we would be close to where we were two years ago. He pointed out that the second quarter this year compared to the second quarter last year, and it seems we are close to where we were two years ago. Ms. Nicola! stated that obviously the challenge has been to try to budget in an uncertain environment without being unduly pessimistic. She stated that is the reason she recommended a hiring freeze for non -safety personnel. She said she has been working on alternatives of adjusting the budget, and addressing it in a six-month time frame, trying to reduce expenditures as outlined in the staff report. She noted that funds for capital improvement projects in the budget could be used and thereby diminish the shortfall in the operating budget. She pointed out that there is $470,000 budgeted for rebuilding Fire Station #6, and $20,000 for partial repainting of Pickleweed Community Center. She noted that if those projects are not deferred it will mean an even deeper cut. She stated her recom- mendation is that those two projects not be done at this time, but become part of next year's budget. Ms. Nicolai stated that the next issue is implementing hiring freezes, and in this regard an option should be considered. In the case of safety personnel, because of the manning of fire stations and the pressure that the Police Department has been under with the drug crackdown, she does not recommend freezing positions in the safety services. She added that would mean that cuts would have to be in the non -safety departments, and noted that Police and Fire account for 50% of expenditures in the budget, so the impact goes to half the budget in the six-month period. Ms. Nicolai noted that the Police Department has reallocated their non -safety functions to cover the officers addressing the crack cocaine problems, and others on the street. Ms. Nicolai stated the next issue is furloughs and lay-offs. She suggested short-term lay-offs for all non -safety employees across the board, as opposed to laying off individual bodies. She said she does not see this as a short-term problem, because of the unpredict- SRCC MINUTES (Special Budget) 12/18/91 Page 1 SRCC MINUTES (Specia, Budget) 12/18/91 Page 2 able economic situation which she does not feel will turn around in the next six months. Ms. Nicolai stated we will have to realize a service level reduction, and will have to eliminate programs. By recommending that we furlough employees for six months we do not impact any one area. She noted the City has been able to keep the Library open, but lay-offs or across-the-board furloughs will affect person hours. She stated that neither option is something she is happy about suggesting, but we can not make up the shortfall without addressing one of them. Ms. Nicolai pointed out that staff will be looking at other options, including revenue options, and referred to a memorandum with the staff report prepared by Public Works Director Bernardi and Planning Director Pendoley suggesting certain fee increases which, if generated quickly, could make a difference. She noted this is not a new major revenue source, but is an adjustment to certain existing types of fees to bring in more revenue. Ms. Nicolai explained that staff could not start addressing specifics until the Council indicated which way it wanted to go, and that between now and the Council meeting on January 6, 1992, the employees' groups will be involved in discussions. Councilmember Thayer inquired when the Hughes-Heiss survey on efficiency and manpower will be available to the Council. Ms. Nicolai responded it should be in final form the first or second week in January. She stated there is an Executive Summary the Oversight Committee is going over the first week in January. She noted there are some suggestions about fees and about reorganization, and in looking over the Executive Summary the overall conclusion is that the organization is very lean and they have some suggestions on reducing, but most of the suggestions are about adding. There are not a lot of savings being recom- mended. Councilmember Thayer inquired if there are currently any vacancies in the safety personnel. Ms. Nicolai stated she is not aware of any firefighter vacancies, but there might be a retirement coming up soon. She stated the Police Department is in the process of attempt- ing to fill vacancies which they have been working on since May. There is one clerical vacancy in the Police Department. Councilmember Thayer noted that Redevelopment Agency funds have not been used for the operating budget, and that the City has been stringent; however, some cities have used Redevelopment funds. She stated that Fullerton used Redevelopment funds for overtime for the Police Department. Ms. Nicolai pointed out that we have used drug seizure monies; about $89,000 in Police Department overtime has come from drug seizure monies, but that could be depleted at any time. She stated that San Rafael has been doing that, and also using drug seizure monies for some computer equipment and radios, but San Rafael does not use Redevelopment funds for those purposes. Councilmember Thayer inquired about Redevelopment funds used in the parking structures building and maintenance. Ms. Nicolai responded that Redevelopment funds were used for the buildings, and Mr. Coleman added that maintenance and operation come from the Parking District, from meter revenues. Ms. Thayer asked if there is anything we could get into our budget from Redevelopment, and Ms. Nicolai responded the staff is very careful about how they use Redevelopment monies. Councilmember Shippey noted that the Child Care Program at the Recreation Department was not mentioned in the furlough issue, and Ms. Nicolai responded they would not be impacted, and she is not recommending them. Mr. Shippey asked, if City Hall were closed for a day would that affect Child Care, and Ms. Nicolai stated it would not. Mr. Shippey then inquired about Recreation programs and Ms. Nicolai stated that if the registrants had paid the class fees they might be kept open, and that issue will have to be addressed. Councilmember Cohen stated it would be helpful at some point to know exactly how much potential savings can be realized from the various cutbacks, and a graph with a scale of that would be helpful in making policy decisions. Mayor Boro noted that $150,000 is the freezing of non -safety positions already in effect, and the question is should we continue with the same level of the freeze. Councilmember Cohen inquired if all of the Fire Department engine companies are three-man, and Ms. Nicolai stated they are. He then inquired if the furloughs have been discussed with the employee groups, and Ms. Nicolai responded there has been discussion, but not specifically on the furloughs. Councilmember Breiner noted that the reserve is down, and asked what percent. Ms. Nicolai stated it should be 10%, and should be $3,200,000 instead of the present $2,200,000. SRCC MINUTES (Special Budget) 12/18/91 Page 2 SRCC MINUTES (Special Budget) 12/18/91 Page 3 Mayor Boro referred to the Summary on Page 4 of the staff report, noting the elimination of Fire Station #6 and the painting of Pickleweed Community Center, and noting they are not eliminated, but postponed to the next budget. Ms. Nicolai stated that if we do not do those projects, and use them to solve our problem that money would be gone. Mayor Boro responded that in this current level of funding we should not build the Fire Station. Councilmember Breiner stated it is critical that we postpone both the Fire Station and Pickleweed Community Center. Councilmember Thayer stated she does not think the Council has a choice, but noted that Fire Station #6 is in very poor condition. Councilmember Cohen agreed to the postponement, but not necessarily to the next Fiscal Year, due to the economy in the State. He inquired would the operating costs increase because the new station is not being built. Ms. Nicola! responded that some things will have to be done at that station by the next budget, because they have been deferred in the anticipation of the new station being built, and the station must be brought up to a tolerable level. The necessary repairs will be looked at in the next few months, if it becomes clear that the building can not be rebuilt. Councilmember Thayer stated that over the last few years we have thought of closing a fire station, and inquired if Station #6 is one they had thought of closing. Ms. Nicolai replied that it was not. She explained that if you close one station you end up relocating another, and by the time you get the land and the new station it takes about 20 years to amortize. She added that the Civic Center Station is funded and paid for by the CSA. Mayor Boro addressed the revenue options proposed by Planning and Public Works, and noted they would be the subject of a hearing if the Council approves them. Councilmember Breiner inquired about the inspection of apartments in the report. She asked that staff compare with other jurisdictions and see what other communities do. Ms. Nicolai stated she will give full comparisons with other jurisdictions at the next meeting. She noted that the higher fee is not out of line with what other jurisdictions are doing, and she stated she will set this issue for hearing on January 6, 1992. Mayor Boro stated he would like to see the comparisons with other cities. Councilmember Breiner noted that when Proposition 13 was voted in San Rafael was the lowest city in the County on property taxes, and we have been hurting as a result of that. She stated she supports staff's approach to raising the fees. Councilmember Shippey stated he supports it also, but asked why only certain fees were selected. Ms. Nicolai responded that there have already been some across-the-board fee increases, based on pro -rated fees. She stated that Hughes-Heiss stated a 10% increase would be valid, and noted that some of the staff's suggestions came out of the Hughes- Heiss report. Councilmember Thayer stated these fee increases seem to be structured toward building permits and permit fees in Public Works and Planning, and asked about some of the fines in the Fire Department for Hazardous Waste violations. Ms. Nicolai stated that when staff did a major revision of the Master Fee Schedule they changed the bulk of fees to formula -based. She noted that the Hazardous Waste fees are somewhat new in concept. Councilmember Thayer inquired if that component and the personnel pay for themselves, and was that not a County function which we took over. Ms. Nicolai responded that we only took over one small function, the underground tanks. She stated we are generating a significant amount of revenue and covering most of the cost. In the case of a spill, it depends on whether they catch the person, and they are working on toughening the penalties. Councilmember Cohen stated he does not see anything to object to in the revenue options, but agreed that a public hearing should be held. He asked if the projected revenue from the increased fees is based on current levels of activity, and Ms. Nicolai responded that it is. Councilmember Breiner stated that it would be helpful when the issue comes up at the meeting to have illustrations of a couple of different kinds, to see what the effect of the new fee schedules would be. Mr. Cohen recommended it might be a sliding scale of inspection fees for apartment buildings, based on the number of apartments in a building. He stated that kind of information would be helpful. Ms. Breiner added we might want a category for separate fees for affordable housing. Mayor Boro then addressed the hiring, and the concept that safety personnel would continue to be hired for the next six months and that a freeze would continue for the non -safety departments. SRCC MINUTES (Special Budget) 12/18/91 Page 3 SRCC MINUTES (Speciur Budget) 12/18/91 Page 4 Ms. Nicolai stated she would like some flexibility in the non -safety positions, and asked if the Council wanted to impact Police and Fire safety level personnel. Councilmember Breiner stated the message we have been sending out is that basic services are very high on our list of priorities. We have a hard-working staff in every department, but where we do not want to see any cut is in the safety services, since they are something we have to sustain. She stated the Council would be remiss if they tried to cut safety services. Councilmember Thayer stated she shares the same opinion as Ms. Breiner, and the survey indicated the City needed additional safety personnel. She noted we would only be hiring for already approved positions. Councilmember Cohen agreed that we need to protect the public health and safety, and the primary duty of City management is to not reduce the level. With regard to any cuts in safety personnel, he stated it is his understanding that one of the Fire Stations has four men, and there is one retirement coming up. Fire Chief Marcucci stated that all stations are staffed with three people, but perhaps Station #1 would have more because of the Paramedics being there. He stated he does not suggest they go to two men, because that would jeopardize the personnel. Councilmember Cohen stated he is generally in support of this recommendation, and inquired if there will be input from interested parties tonight. Mayor Boro stated there will be input, but there first must be consensus from the Council on the policy issues. He noted that Fire and Police are the cornerstone of the City's protection, and we have learned the lesson that we must sustain the Police activities. He stated it is critical that those levels be maintained, and he is looking to those departments to make any contributions they can make, to assist the non -safety personnel. Mayor Boro stated he would like discussion on furloughs versus layoffs at this point, since Councilmember Cohen had to leave at 7:15 PM. Jim Burneo, Executive Secretary of MAPE, Local 949, representative for the Supervisory and Miscellaneous Employees' Union, stated there has been no real consultation regarding furloughs, nor anything specific about the deficit. He stated he did not even get a copy of the staff report in advance of the meeting. He said any concept of furloughs requires a "meet and confer" process, and any change in hours will require negotiation. A layoff involves "impact bargaining". He stated they are not saying the City does not have a problem, and they are prepared to try to help, but they will not be dictated to. He stated they are willing to be part- ners, but partnership requires information which is discussed in open discussion. He stated they agree that the capital projects need to be delayed, and the fees should be raised. He stated one of the areas in which they disagree is that there should be a hiring freeze on all positions for three months. He stated the City is trying to buy some time while they are trying to find a solution, and the safety agencies should be asked to delay for three months. He stated the City can postpone the vehicle acquisitions for the rest of the Fiscal Year. Mr. Burneo stated that the City has in excess of $20 million which they have no obligation to spend this Fiscal Year, and while it is prudent to have reserve funds, the City should spend 1.5% of those reserves before asking the employees to give up 10% of their salaries. He stated the County Administrator is funding whatever shortfall he has, and his deficit is much worse. He stated there is no reason to harm anyone at this point, and this could be addressed in June. He also noted that the Christmas season is poor timing for this issue. He stated again that they want a partnership, but whether the City wants a partner- ship or confrontation is up to them to decide; whether they work together or draw battle lines and have a war. He stated the ultimate weapons belong to them. Mayor Boro asked Mr. Coleman to comment on the $20 million referred to by Mr. Burneo. Mr. Coleman explained stating that some of the funds are traffic mitigation fees, paid by developers to fund traffic projects, and the monies can not be used for any other purposes. Of the $20 million, there is approximately $2 million for Workers' Compensation and Liability claims. Another part is debt service funds for future bond payments. He stated there are no unencumbered monies in the $20 million, except for the $2.2 million which is theoretically reserve money. The other funds are earmarked for specific uses. Mayor Boro asked that Mr. Coleman furnish a report on the actual funds in the $20 million. Bob Parr, President of the San Rafael Firefighters Association, handed out copies of a letter to the Council, and read from it to the Council. The letter gave a comprehensive report on monthly salaries, monthly overtime costs, and cost comparison of sick leave used. He noted that there are two retirements coming up, and they will be off the personnel role by the end of the year; Captain Hamilton has already retired. He said they do not SRCC MINUTES (Special Budget) 12/18/91 Page 4 SRCC MINUTES (Special Budget) 12/18/91 Page 5 feel it is wise to hire until you have made some long term decisions. He stated the major problem is making short-term decisions which will be a problem in the long run. Linda Jackson, Associate Planner, informed the Council that before coming to San Rafael she had worked in a Planning Department in Austin, Texas, and this situation seems very similar, with the revenue decreasing and solutions being sought. Ms. Jackson stated that long-term solutions are critical if you want to avoid the ritual of revisiting the budget crisis on a regular basis, and furloughs are not a solution. They are an emergency stop gap measure. She stated that what San Rafael needs is a sound financial plan for the management of our municipal services. She stated that capital improvements should be a priority, and the Terra Linda fire station is an excellent example of what should be funded by bonds approved by the voters for CIP (Capital Improvement Projects). She feels it should not be funded out of the General Fund. Ms. Jackson added that the CIP was a wish list, of the various City departments and of the citizens. It identified the land, facility and equipment needs of the City, and with regular, well-publicized bond elections every two years which were promoted strongly by the City Council, bonds were passed. Ms. Jackson recommended diversifying the revenue basis for financing municipal services, and she supports the City's effort to find new funding sources. She noted that Berkeley has a parcel tax which funds library services. She concluded by saying she supports the Council's commitment to improving the funding and operations of the City. Mayor Boro stated that when the Hughes -Reiss study has been concluded, we can show the public that we are operating efficiently. He stated they will reconvene the Committee and will be having public hearings on revenue options, and will offer the public choices and options. Mayor Boro reviewed the evening's discussions, stating he feels the Council has a consensus on the Capital Improvement dollars, and on the Revenue Options. There is also a consensus on the $150,000 at this point, based on whether or not it is decided that the $150,000 is the projection for current savings. Mayor Boro stated he would not suggest that the Council try to resolve the public safety issues tonight, but they should consider Mr. Parr's proposal that rather than hire new personnel in the Fire Department they use overtime to cover, and he would be interested to know what Ms. Nicolai's position is on that issue, and also Chief Marcucci's. Mayor Boro then inquired of Ms. Nicolai about her plans for meeting with the Unions. She stated she will have informational meetings with employees, but not negotiating meetings, and will have discussions with the Unions. Ms. Nicolai then addressed the issue of Police Department vacancies, stating they have had 5 or 6 vacancies and have struggled for 9 months and are now ready to fill those vacancies and do not feel comfortable that they should not be filled. Ms. Nicolai stated that on the two upcoming retirements in the Fire Department, they will be left open for six months. She stated she is not saying the public safety is untouchable, but she needs more time over the next few weeks to deal with furloughs versus layoffs, the capital improvement issues, revenue options and the overall concept of not freezing all of the vacancies in the other departments. Mayor Boro inquired specifically, are there vacancies which are planned to be filled in the next two weeks, before the next Council meeting? He stated he is thinking of foot patrols, and things the Council is committed to. Ms. Nicolai responded that should not be in the next two weeks, but she wants permission to continue to work on it. Ms. Nicolai stated that on the issue of meeting with the employee groups, one question which comes up is about the magnitude of what is being considered, and before this meeting she did not have the overall direction and specifics on the dollars. Councilmember Shippey stated the breakdown of the $20 million should be on graphics. Also, he would like to see the Firefighters' proposal dissected, and would like to know about the issue of bonds for capital improvements. Mayor Boro said he did not feel the Council could expect all of that information in two weeks. Mr. Shippey stated it is difficult to act on these issues without having the Hughes-Heiss survey. Ms. Nicolai promised to send it out as soon as it is available. Councilmember Breiner stated she would like to encourage any employees who have any positive suggestions to see that the Council gets them, since she is curious to see if there is anything missing on these issues. Councilmember Thayer stated that on the subject of new sources of revenue, all of the Councilmembers are willing to ask the public for recommendations. She stated that some of the Public Works people are wondering why the Council is stressing safety, and noted that this year we had a real crisis in the Canal area, and there are areas of the City SRCC MINUTES (Special Budget) 12/18/91 Page 5 SRCC MINUTES (Special Budget) 12/18/91 Page 6 which are not covered because of the crisis in the Canal, and many officers are working overtime and are burning out; they need relief. She said she has heard rumors that the Hughes-Heiss report says that we need 13 additional officers. She stated the Council is trying to prioritize in an area which has to do with life and limb, and will look at this issue closely. Councilmember Cohen agreed with Mr. Shippey on his request, saying he understands the Hughes-Heiss survey is not going to give the City all of the answers, but it will set the priorities, and requested to see an Executive Summary, even if it is in a Closed Session. He stated he would also like information about the Police Department positions which are to be filled, and also comment from the Police Officers Association, as well, to see if they are willing to provide input. He said he would like a response to the Firefighters' proposal, that overtime might be the way to avoid committing ourselves to more hiring. He stated he is disappointed that what the Council has been presented with tonight are two harsh choices which will affect our employees' lives, and disappointed that it was not discussed with the employees' associations. He stated we should talk with organized groups, as well as having individual presentations with employees. He added he appreciates Mr. Burneo's comment that individual vehicle replacement will affect next year's budget. He recommended that the Council look at these issues and see if there is a way to deal with the crisis without taking such a harsh approach to our employees' pocket. Mayor Boro stated that before the City Manager could "meet and confer" with the employees' groups she had to discuss the situation with the Council. He stated he is willing to participate in any meeting with the employees, stating the employees know better than the Council and some of the managers as to where savings can be made. He stated he does not think there is any right or wrong, but this is an open forum and hopefully we can solve it in a way that is acceptable to all. There being no further discussion, the meeting adjourned at 7:30 PM. JEANNE LEONCINI, pity Clerk APPROVED THIS DAY OF 1, 1992 MAYOR OF THE CITY OF SAN RAFAEL SRCC MINUTES (Special Budget) 12/18/91 Page 6