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HomeMy WebLinkAboutCC Minutes 2007-06-20SRCC Minutes (Special) 06/20/2007 Page 1 IN THE COUNCIL CHAMBER OF THE CITY OF SAN RAFAEL, WEDNESDAY, JUNE 20, 2007 AT 8:00 P.M. Special Meeting: San Rafael City Council Also Present: Ken Nordhoff, City Manager Gary T. Ragghianti, City Attorney Esther C. Beirne, Deputy City Clerk OPEN SESSION — COUNCIL CHAMBER None CLOSED SESSION — CONFERENCE ROOM 201 None ORAL COMMUNICATIONS OF AN URGENCY NATURE: None CONSENT CALENDAR: Present: Albert J. Boro, Mayor Paul M. Cohen, Vice -Mayor Barbara Heller, Councilmember Cyr N. Miller, Councilmember Gary O. Phillips, Councilmember Absent: None Councilmember Phillips moved and Councilmember Miller seconded, to approve the Consent Calendar, as follows: ITEM RECOMMENDED ACTION Approval of Minutes of Regular City Council Meetings Minutes approved as submitted. of Monday, May 21, 2007 and Monday, June 4, 2007 (CC) 2. Resolution Authorizing the City Manager to Execute an Agreement for Professional Services with RBF Consulting for Assistance Needed to Prepare an Environmental Impact Report for the San Rafael Target Store at Shoreline Center (Term of Agreement: from June 20, 2007 - June 20, 2008, for an Amount Not to Exceed $285,806.00) (CD) — File 4-3-471 3. Summary of Legislation Affecting San Rafael (CM) — File 116 x 9-1 4. Resolution Authorizing an Agreement for Professional Services with Beth Goldberg for Curator Services at Falkirk Cultural Center (CS) — File 4-3-334 x 9-3-84 5. Monthly Investment Report for Month Ending May, 2007 (FIN) — File 8-18 x 8-9 RESOLUTION NO. 12274 — RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT FOR PROFESSIONAL SERVICES WITH RBF CONSULTING FOR ASSISTANCE NEEDED TO PREPARE AN ENVIRONMENTAL IMPACT REPORT FOR THE SAN RAFAEL TARGET STORE AT PROJECT SHORELINE CENTER (Term of Agreement: from June 20, 2007 to June 20, 2008, for an amount not to exceed $285,806.00) Accepted report. RESOLUTION NO. 12275 — RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO AN AGREEMENT FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF SAN RAFAEL AND BETH GOLDBERG FOR CURATOR SERVICES AT FALKIRK CULTURAL CENTER (Grant Period: 12 months, July 1, 2007 to June 30, 2008) Accepted Monthly Investment Report for month ending May, 2007, as presented. SRCC Minutes (Special) 06/20/2007 Page 1 SRCC Minutes (Special) 06/20/2007 Page 2 6. Resolution Authorizing the Rental/Lease of a Mobile RESOLUTION NO. 12276 — RESOLUTION Trailer for Management Services and the Police AUTHORIZING THE RENTAL/LEASE OF A Department from Pacific Mobile in the Amount of $795 MOBILE TRAILER FOR MANAGEMENT a Month, $9,540 a Year, and a One Time Fee of SERVICES AND THE POLICE $8,137.15 (PD) — File 9-3-87 x 9-3-30 DEPARTMENT FROM PACIFIC MOBILE, IN THE AMOUNT OF $795 A MONTH, $9,540.00 A YEAR, AND A ONE TIME FEE OF $8,137.15 7. Resolution Authorizing an Agreement with Sally RESOLUTION NO. 12277 — RESOLUTION Swanson Architects, Inc., to Provide Consulting APPROVING AN AGREEMENT WITH Services for Issues Related to the Americans with SALLY SWANSON ARCHITECTS, INC. TO Disabilities Act (ADA) Compliance with the Department PROVIDE CONSULTING SERVICES FOR of Justice -City of San Rafael Project Civic Access ISSUES RELATED TO THE AMERICANS Settlement Agreement, Capital Project Accessibility WITH DISABILITIES ACT (ADA), Design Review Services and Related Matters (PW) — COMPLIANCE WITH THE DEPARTMENT File 4-3-431 x 13-1-1 OF JUSTICE -CITY OF SAN RAFAEL PROJECT CIVIC ACCESS SETTLEMENT AGREEMENT, CAPITAL PROJECT ACCESSIBILITY DESIGN REVIEW SERVICES AND RELATED MATTERS 8. Resolution Authorizing the City of San Rafael to Enter RESOLUTION NO. 12278 — RESOLUTION Into an Agreement with the County of Marin to Receive AUTHORIZING THE DIRECTOR OF PUBLIC Funds for the Non -Motorized Transportation Pilot WORKS TO ENTER INTO AN AGREEMENT Program (NTPP) and Authorizing the Director of Public WITH THE COUNTY OF MARIN TO Works to Execute the Agreement (PW) — IMPLEMENT THE NON -MOTORIZED File 4-13-120 TRANSPORTATION PILOT PROGRAM Housing Funds Outside the Central San Rafael (NTPP) 9. Resolution Authorizing the Mayor to Execute the RESOLUTION NO. 12279 — RESOLUTION Termination of Joint Exercise of Powers Agreement, AUTHORIZING THE MAYOR TO EXECUTE and to Execute the New Joint Exercise of Powers THE TERMINATION OF JOINT EXERCISE Agreement II Relating to the MarinMap Project (PW) — OF POWERS AGREEMENT, AND TO File 4-13-109 EXECUTE THE NEW JOINT EXERCISE OF Utilization of Agency Low and Moderate Income POWERS AGREEMENT II RELATING TO Housing Funds Outside the Central San Rafael THE MARINMAP PROJECT 10. Resolution Approving a Seventy Thousand Dollar RESOLUTION NO. 12280 — RESOLUTION Contract with Marin Housing to Administer the APPROVING A SEVENTY THOUSAND Ownership Below Market Rate Housing Program and DOLLAR CONTRACT WITH MARIN Making Findings and Approvals Pursuant to the HOUSING TO ADMINISTER THE California Redevelopment Law in Connection with the OWNERSHIP BELOW MARKET RATE Utilization of Agency Low and Moderate Income HOUSING PROGRAM AND MAKING Housing Funds Outside the Central San Rafael FINDINGS AND APPROVALS PURSUANT Redevelopment Project Area (RA) — File 229 TO THE CALIFORNIA REDEVELOPMENT LAW IN CONNECTION WITH THE UTILIZATION OF AGENCY LOW AND MODERATE INCOME HOUSING FUNDS OUTSIDE THE CENTRAL SAN RAFAEL REDEVELOPMENT PROJECT AREA 11. Resolution Appointing a Business Improvement RESOLUTION NO. 12281 — RESOLUTION District (BID) Board of Directors Through June 30, APPOINTING THE BUSINESS 2009 (RA) —File 224 IMPROVEMENT DISTRICT (BID) BOARD OF DIRECTORS 12. Resolution Authorizing the Economic Development RESOLUTION NO. 12282 — RESOLUTION Director to Execute a Professional Services AUTHORIZING THE ECONOMIC Agreement with Joanne Webster for Management DEVELOPMENT DIRECTOR TO EXECUTE Services for the Downtown Business Improvement A PROFESSIONAL SERVICES District, from July 1, 2007 - June 30, 2008 (RA) — AGREEMENT WITH JOANNE WEBSTER File 224 FOR MANAGEMENT SERVICES FOR THE DOWNTOWN BUSINESS IMPROVEMENT DISTRICT (FROM JULY 1, 2007 TO JUNE 30, 2008) SRCC Minutes (Special) 06/20/2007 Page 2 SRCC Minutes (Special) 06/20/2007 Page 3 AYES COUNCILMEMBERS: Cohen, Heller, Miller, Phillips and Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None ABSTAINING: COUNCILMEMBERS: Mayor Boro, (from minutes of 6/4/07 only, due to absence from meeting). PUBLIC HEARING: 13. Public Hearing — CONSIDERATION OF A RESOLUTION LEVYING AN ANNUAL ASSESSMENT FOR THE DOWNTOWN PARKING AND BUSINESS IMPROVEMENT DISTRICT FOR FISCAL YEAR 2007 - 2008 (RA) — FILE 183 x 224 Mayor Boro declared the public hearing opened. Economic Development Coordinator Katie Korzun explained that this was the Downtown Parking and Business Improvement District (BID) which exists on monies given to them by the Redevelopment Agency as well as fees levied on their members. Indicating that State law is followed on how to levy the fee, she explained that it is necessary to declare the intention to levy the fee, which was done in May, and tonight's hearing was to ascertain whether there were any protests. Ms. Korzun stated that if more than 50% of those in the district filed a protest, the assessment would have to be changed or not levied. Noting that to date, no written protests had been received, she stated that the BID was normally quite enthusiastic about having their fees levied for a further year because they spend them adequately downtown. Ms. Korzun stated staff recommended that the City Council adopt the Resolution levying the fee. There being no comment from the audience, Mayor Boro closed the public hearing. Councilmember Phillips moved and Councilmember Heller seconded, to adopt the Resolution. RESOLUTION NO. 12283— RESOLUTION LEVYING AN ANNUAL ASSESSMENT FOR THE DOWNTOWN PARKING AND BUSINESS IMPROVEMENT DISTRICT FOR FISCAL YEAR 2007-08 AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: COUNCIL CONSIDERATION: OLD BUSINESS: Cohen, Heller, Miller, Phillips and Mayor Boro None None 14. REVIEW AND UPDATES ON CITY BUDGET FOR FISCAL YEAR 2007-2008 (FIN) — FILE 8-5 Mayor Boro explained that this was a review and update on the City budget for Fiscal Year 2007- 2008. Two meetings had been held to date on this budget: May 21 and June 4, 2007, and the intent this evening was to have Finance Director Cindy Mosser discuss the highlights and answer questions. City Manager Ken Nordhoff, would address some recommendations and with consensus, the item would be returned to the City Council meeting of July 2, 2007, for action. Finance Director Cindy Mosser reported that this was an update and review of the City's budget for Fiscal Year 2007-2008. While not repeating items presented to Council in previous study sessions and budget meetings, she indicated she would point out a few notable items on which staff would like to obtain guidance prior to adopting the budget on July 2, 2007. Ms. Mosser explained that staff was presenting a balanced budget for Fiscal Year 2007-2008 and pages 2 through 4 of the staff report included details of major revenues and expenditure assumptions. Total appropriations were estimated at $86.65 million, which included the $4.5 million of Regional and Local Measure A funds for Fourth Street -West End Village, originally included in Redevelopment funds. With regard to the Paramedic Tax rate, Ms. Mosser reported that staff was currently presenting a $74 residential living unit rate and a 9.3 cent non-residential building square foot rate, which could change depending on Council's action this evening. She indicated that the Fire Department had presented a New Service Request, not included in the current projections. Ms. Mosser indicated she had calculated that each dollar increase in the residential rate, and a corresponding percentage increase for the non-residential rate, would provide approximately $43,000 in revenues. A separate SRCC Minutes (Special) 06/20/2007 Page 3 SRCC Minutes (Special) 06/20/2007 Page 4 action would be presented to Council for the tax rate approval on July 2, 2007. Ms. Mosser stated that the staff report also contained several spreadsheets, including a list for the proposed capital projects (Exhibit II), and staff would update that list with the $4.5 million Fourth Street project. Also included were personnel authorizations (Exhibit III), fleet replacement listings (Exhibit IV), and ongoing and one-time items (Exhibits V and VI), which were included in the budget. Funds were included for the General Fund reserve to maintain a 6.74% level, which was the same level as Fiscal Year 2005-2006. Ms. Mosser stated that City Manager Ken Nordhoff would discuss New Service Requests. Noting that in Fiscal Year 2006-2007, the General Fund subsidized the Paramedic fund to the tune of approximately $448,000, Mayor Boro inquired whether attempts would be made to recover that through the Paramedic fund. Ms. Mosser responded in the negative. Mr. Nordhoff explained that staff had not intended to recapture that. Because the cap was reached last season sooner than the four-year period the tax provided for, caution was being taken on doing this prior to years two or three. He noted the proposal was for $74 from $61, with an $85 cap, a lot of which was being recaptured going forward, but not going backwards. With reference to his memorandum attached to the staff report regarding New Service Requests, Mr. Nordhoff stated he wished to highlight some of the suggested issues for Council deliberation and direction. Noting discussions had taken place regarding the very limited amount of discretionary funds, Mr. Nordhoff stated that while staff was very grateful for what Measure 'S' had done in terms of replenishing the budget and keeping the City out of a deficit position (the Measure `S' Advisory Committee would furnish a report for the July 2, 2007 meeting showing that those monies were being used in a appropriate way, as approved by the voters), the long and short of it was approximately $500,000 of discretionary money available from the current fiscal year and the ability to maintain the budget in balance, particularly the General Fund, heading into 2007-2008. In his memorandum, Mr. Nordhoff stated he had suggested what he believed to be an appropriate way to utilize some of these funds: Indicating that he had been working for the City of San Rafael for approximately ten and a half years, Mr. Nordhoff stated for all but approximately two weeks of that time he had been talking to the City Council about deferred maintenance on public buildings. Therefore, although the needs were enormous, he was suggesting half the $500,000 be taken and directed to beginning to chip away at some of the deferred maintenance on all nineteen buildings. Although it would not go very far, it was a good start and would give the CIP (Capital Improvement Projects) committee a little breathing room as they attempt to figure out the highest and best use of those monies next year. Recalling that reserves had to be drawn down in recent difficult budget times, Mr. Nordhoff stated that it had not yet been possible to build these back to the 10% required level (roughly $5 million). In building the budget, Ms. Mosser had kept the level of reserves in place at approximately 6.7%, and he suggested beginning to move back towards the 10% level by adding $150,000 from the $500,000, for a 7% reserve level heading into next year. Lastly, Mr. Nordhoff reported that for several months, the Fire Department had been working on a Wildland-Urban Interface program that requires defensible space clearance on private property. Council had made it pretty clear this was a partnership program, with which staff concurred, and to that end, in order to clear some of the City owned open space, using similar standards, the Fire Chief had proposed a New Service Request (item K) for $267,000. While this was a significant amount of money, the intent was to try to start getting after years of not having funds available to do defensible space on City property. Mr. Nordhoff suggested that $100,000 be put towards that effort which would go some distance in helping to get started. He believed the Fire Chief and Fire Department staff were targeting working this new program in two, three or four neighborhoods immediately this year, which would afford a chance to see how it worked. It would demonstrate that the City was committed to partnering with the community; however, additional funding would have to be requested in the future to make that program fully successful. Other items highlighted included: Mr. Nordhoff stated that discussions took place with regard to the need to continue the School Resource Officer program, and thanks to Measure `S', it had been possible to replenish a police officer position in January, 2007. He did not believe funds were currently available to sustain adding another officer position, listed on the schedule as item F. However, confirmation of a grant for SRCC Minutes (Special) 06/20/2007 Page 4 SRCC Minutes (Special) 06/20/2007 Page 5 approximately $88,000 was received this week and with the restored position staff could continue to commit to having a second School Resource Officer on campuses for this coming school year. Mr. Nordhoff stated that he and the Fire Chief would be actively involving both districts and seeking ways in which they could help with some funding. He noted that some of the grant received would help with some of the weekend events, party types of things, etc., and there would be resources to assist with some of the overtime costs that were police related, not necessarily at the school site, but involving students. While not recommending the position, he indicated he was recommending the service be continued. With regard to additional rates in the Paramedic fund dealing with medical supplies, linens, etc., Mr. Nordhoff stated that typically, operating costs of the budget are adjusted around the CPI factor. However, because of the volume of activity in the last several years, together with the cost of medical supplies, and the need for linens, etc. in Paramedic services, item J proposed some additional funding for these types of costs. Mr. Nordhoff suggested adding $43,000 to the Paramedic budget, which would add a dollar to those rates, bringing them to $75, and start to move in a direction to recover those costs. Mr. Nordhoff noted that the Fire Department recently transferred third -party ambulance billing away from an outside provider and was now contracting with the Novato Fire District, and he believed opportunities for additional revenues existed, although they had not manifested themselves yet. Staff would like to see the results of this contract in the next six months to ascertain whether the issue might need to be further addressed; however, because tax rates needed to be adopted in order to get them on the tax bill, his suggestion was to fund this to the level of $43,000. Indicating there were a couple of requests related to the Community Services Department, which were self-funded, Mr. Nordhoff explained one dealt with a number of youth services based events, after-school programming for middle-schoolers, etc. Cost reductions of not using hourly help and potential fee increases would allow for that position - 0.80 of a full-time position. Secondarily, because of renovating and expanding Pickleweed Community Center, there was quite an inventory of facilities in Community Services requiring custodial support. Staff was suggesting that through a combination of fee increases and a reduction of hourly help and services, these costs should be recovered. Mr. Nordhoff stated that items M and N were self-funded and he recommended that the City Council include these as part of the budget actions. With regard to Library items, Mr. Nordhoff noted that item Q listed a % time Teen and Electronic Services Librarian that Library Director David Dodd had found ways to fund and which could be increased to full-time. Although not in his memorandum, Mr. Nordhoff invited the City Council to consider this as an additional action this evening. Mr. Nordhoff noted a number of items on the list dealing with the General Plan, some of which were fairly significant and there also was an addendum from the Federation of San Rafael Neighborhoods addressing some neighborhood issues of importance. While he did not have any specific recommendations on taking action on these, given the limited resources, Bob Brown, Community Development Director and he were committed to looking at some fee alternatives that perhaps could be put into place that would begin to allow monies to be collected in the future, based on development applications, and would start to create a sinking fund to help address some of these issues. Mr. Nordhoff noted that in the past, Mr. Brown had gone back to the General Plan Steering Committee and worked with them to try to prioritize a number of these implementing programs, and that list would be refreshed and made part of fee recommendations to the City Council in the next year. Mr. Nordhoff indicated that recently, Andy Preston, Public Works Director, had presented a half- dozen slides depicting a number of engineering related projects, many of which were the routine types that were done every year, i.e., street repaving, drainage, pump station improvements, etc. Quite a few new initiatives were also being taken on: active involvement (although not a City project) in working with both phases of the freeway widening, West End Village and several projects that had come to life due to the non -motorized pilot program that requires a number of new or expanded initiatives be done in the next couple of years. To that end, Mr. Nordhoff stated staff suggested that the City Council provide an additional position in the engineering division for a period of a couple of years to get through this blast of capital projects. Having worked with Mr. Preston since the last meeting, he indicated there were ways of allocating those costs across these various projects. Although numerous, staff had not delineated where the allocation would occur; however, they were confident that the various programs and fundings in place could absorb the cost of that position. With regard to Exhibits V and VI in the staff report, Mr. Nordhoff stated these were additional items resulting from his budget review process with the various departments at the end of May that he suggested be built into the budget. These were over and above the base budget in place in the current fiscal year. Most had dedicated funding sources and all of this was incorporated in the SRCC Minutes (Special) 06/20/2007 Page 5 SRCC Minutes (Special) 06/20/2007 Page 6 financial results provided by Ms. Mosser this evening. With regard to facilities upkeep, Councilmember Heller inquired whether the $100,000 included some fixes for the Fire Department buildings, or whether funds were allocated in another area for this. Referring to Exhibit VI, Mr. Nordhoff reported that in the Paramedic fund, and other fire functions, it had been possible to have a sinking fund over a period of time for some smaller building issues. Noting items Fire Chief Montenero had raised, Mr. Nordhoff explained that one dealt with obtaining an outside restroom facility to support the training room at Station #2 and the second related to painting, carpeting, etc. The $250,000 of the $500,000 he was suggesting be allocated would go through the CIP process; therefore, the CIP team would take the $250,000, add the $100,000 that had been in the base budget for several years and determine the best use of $350,000. Responding to Councilmember Heller's comment that the fire stations would be taken care of as much as possible in another fund, Mr. Nordhoff stated he would not like the City Council to be under the impression the fire stations were being taken care of. He explained that some required OSHA cleaning, together with interior painting and cabinet replacement would be carried out; however, in terms of roofs, electrical or major items, he could not guarantee that any or all of the fire stations' needs were being taken care of. Indicating he was pleased with staff's recommendations, with regard to streets, Councilmember Phillips stated that from his observations and comments received, perhaps they were worse than in the past, and he requested an update on the issue. Mr. Nordhoff explained that Public Works maintains a pavement management index and he noted that the cost of overlay materials had increased significantly, making dollars go less far. The City is under a Settlement Agreement with the Department of Justice; therefore, every time a street is overlaid, if curb ramps are not in place, a fair amount of money in that project budget is being directed to those requirements. Noting gas taxes were paid as a "cents per gallon" item, without a lot of increased consumption evident, Mr. Nordhoff stated that the amount of gas tax being received for the last several years was fairly stagnant. He indicated there were a number of competing events that were shrinking the number of streets that could be paved or slurry sealed, etc. Concurring, Mr. Preston, Public Works Director, stated that the pavement condition index over the past four years had decreased by approximately 3 — 4 points on a range of zero to 100, 100 being a perfect street with zero being dust. Noting City streets were in the 67 range, which was fairly good, he indicated the target range over the entire street system was 70. Mr. Preston stated that over the past four years they had decreased to 63 or 64 on the pavement condition index. Indicating that different strategies were now being used, Mr. Preston stated that in driving around the City, crack sealing and pavement patching could be observed. Although it made the streets look ugly; it did prevent the water from getting into the sub -base materials, which would preserve the street longer. He indicated that having located appropriate material, a very extensive slurry seal program was underway. Five miles of slurry sealing had been completed so far this year, at a cost of 10 cents on the dollar of the cost of paving the street. Curb ramps would commence next week followed by 5.5 miles of street resurfacing with a conventional overlay. Crack sealing and pavement patching would continue and staff proposed to do another five miles of slurry sealing in August, 2007. With increased funding from the garbage franchise fee and construction impact fees, Mr. Preston believed that hopefully over the next couple of years the previous range could be reached. Mr. Nordhoff stated he did not wish to lose sight of the fact that it would be a challenge to find sufficient money to keep up with street maintenance/overlay in the future, as it was a timely and costly process. With regard to the amount allocated for deferred maintenance, Councilmember Phillips inquired as to the type of improvements to be expected. Responding that this would be very minimal, Mr. Preston stated that of the $350,000, the first priority was the HVAC system in City Hall, which was forty years old. Noting this project could cost between $1 million and $2 million, he indicated that in the first instance it would be necessary to obtain scoping of its size and how to deal with it. In this respect, Group 4 Architects would be hired to carry out an initial scoping and analysis of the different alternatives on how to address the project. This would utilize the first $250,000, with any unused funds placed in a sinking fund. The remaining $100,000 would go towards trying to correct some of the leaking out from the external envelope of many of the City's buildings. Indicating that he really wanted to concentrate on Falkirk, Mr. Preston stated that foundations underneath the building were being washed away because of underground water, which if not corrected immediately, would result in serious damage. SRCC Minutes (Special) 06/20/2007 Page 6 SRCC Minutes (Special) 06/20/2007 Page 7 Mr. Preston stated that he would try to spread the $100,000 as thinly and usefully as possible; however, it would be on the external envelope of the buildings in painting, windows, roofs and foundations. Councilmember Phillips stated that during Fire Chief interviews yesterday an interesting idea came from the final candidate with regard to the possibility of additional funding sources, and he inquired whether Mr. Nordhoff had had a chance to consider that point. Indicating that it would not impact anything under discussion this evening, Mr. Nordhoff recalled the program concerned some low interest loan incentives created around greening various public buildings. He indicated that staff would ascertain more about that program and where it might work. Mr. Nordhoff stated that when the Group 4 studies were carried out about three years ago that were part of the Critical Facilities Committee work, at that time, the recommendation was that $2 million annually was needed just to keep up with the maintenance on the buildings in place. This, he indicated, further emphasized that $250,000 would not go very far, albeit a good step in the right direction. Arguably, a pretty good case could be made for allocating the entire $500,000 to this; however, he stated he tried to create something to balance the higher priority needs of the City Council. Concurring, Councilmember Phillips stated that at some point in time he would be interested in further information on this program. Noting the funding request for the Wildland-Urban Interface program was for $267,500, Councilmember Cohen inquired whether there was something specific that particular dollar amount was going to fund or why this particular amount was arrived at. Mr. Nordhoff explained that staff was looking at the cost of defensible space requirements as contained in the proposed ordinance over a three-year period. Some thought was given to what the ultimate cost of getting all the acreage into compliance might be, amortizing it out over some life cycle. Councilmember Cohen inquired whether this plus the $48,000 of existing funds equaled one-third of what was needed. Mr. Nordhoff stated that the $267,000 requested by Fire Chief Montenero was one-third of the full amount required, i.e., approximately $800,000 over a three-year term. Councilmember Cohen confirmed this was exclusive of the $48,000. Believing this item should be more aggressively funded, Councilmember Cohen stated that while he agreed on the importance of funding the reserves, it also was important to tackle this problem aggressively for the following reasons: 1) Inherently, no one would ever want to look back and state: "If only we had moved that up in the priority and done it last year, that fire would not have been as bad", and 2) As discussed, if the residents in some of these neighborhoods were informed that the City demanded they deal with this problem on their property, the City should lead by example; therefore, both of these led him to believe this should be done. Councilmember Cohen suggested this could be considered deferred maintenance - outdoors instead of indoors - or alternatively, defer putting funds into the reserves to more aggressively deal with this problem. He did not believe what was proposed was sufficient and would like to see it funded at least to the tune of $200,000. Suggesting that perhaps it could be done over four years, he believed at least a quarter of the need be funded. Regarding a New Service Request not proposed for any funding, Councilmember Cohen stated that considering the community survey and feedback received both at the City and anecdotally, the biggest problem people feel they face that the City is not dealing with satisfactorily, was traffic. Indicating he would like to see some money being put back into traffic calming efforts, Councilmember Cohen stated it was not a huge fix or a silver bullet; however, his impression was that it was an area where in the past when the City was able to respond to requests and work with neighborhoods, people felt the City was at least attempting to be responsive. Commenting that a lot of years of work went into being able to do something about Highways 101 and 580, and while there was not a lot of money for other major street improvements, (Montecito area project coming up), he believed people appeared to really recognize an impact when something was being done in their neighborhood, and traffic calming was one such way; therefore, he would like to see the City fund the traffic calming program. Councilmember Cohen suggested taking the $150,000 recommended to be put back into reserves and using it for a combination of funding traffic calming and putting more money into vegetation management. SRCC Minutes (Special) 06/20/2007 Page 7 SRCC Minutes (Special) 06/20/2007 Page 8 Councilmember Heller inquired whether Councilmember Cohen was suggesting going neighborhood by neighborhood, picking one to start with to see how it worked before proceeding to others. Noting the New Service Request was for $100,000 and assuming with such a small amount every request was not being funded, Councilmember Cohen stated it was necessary to choose amongst requests and do what was considered feasible. Mr. Nordhoff suggested that it could create in some cases some partnership opportunities, noting an earlier item on the list that addressed ways of creating neighborhood partnerships. He noted that at the last meeting there was a request from the community concerning ensuring the appropriate tools were available as part of traffic calming, and he conveyed to Nader Mansourian, City Traffic Engineer, today the importance of getting a good handle on what the menu of these tools looked like and the various costs, as some were fairly inexpensive and some, such as the speed sign in front of Vallecito school, were $40,000 installations. While not appearing significant, Mr. Nordhoff stated that should this be a preferred option in one neighborhood, $50,000 could be expended quickly. With regard to slurry sealing, Councilmember Heller inquired whether this tripped ADA (Americans with Disabilities Act) or was that just when overlay was done. Mr. Preston stated that currently there were no ADA requirements when a street was slurry sealed; however, this could change in the future. Councilmember Miller believed additional money should go into safety, i.e., Wildland-Urban Interface. Traffic calming was not a huge safety issue compared to vegetation management and he would prefer to put the entire amount into Wildland-Urban Interface, subsequently figuring out what could be done in terms of traffic calming. He believed there were other areas and combinations that could be done towards traffic calming. Mayor Boro reported that a couple of weeks ago, City Manager Nordhoff, Chief of Police Odetto and he met with Marin County Sheriff Doyle concerning San Rafael rejoining the Major Crimes Task Force and informed him that the City did not have sufficient funds available for this, and the top priority in the Police Department with regard to enhancements was continuing with the School Resource Officer. There was agreement that Chief Odetto would work with Sheriff Doyle over the next year as there was a definitive benefit. Referring to Exhibit III — Personnel Authorization - Mayor Boro noted that Public Works Director Andy Preston had requested an additional engineer position, funded through other sources, which he agreed with. Aware of other such positions in Community Development, he suggested it would be worthwhile, over the next six months or so, if of the 435 positions in the City, staff could identify those positions funded through other sources on an ongoing basis. Referring to Exhibit II — Proposed Capital Projects - Mayor Boro noted approximately $5.1 million in projects, with funds coming from many sources. Mr. Nordhoff clarified that this was new money anticipated for either new projects or expansion of existing projects. Mayor Boro confirmed that this $5.1 million was capital work being done, not from City funds, rather other funds the City had access to. Mr. Nordhoff confirmed that the majority was from restricted funds, such as gas taxes, storm drain fees, grants, etc. Mayor Boro believed it important to acknowledge that some capital projects were being done regardless of the source of the funds. Mr. Nordhoff stated there was no question that the City was doing a significant amount of work in the capital area. Mr. Preston confirmed that not all of these projects would be completed, but they would be started. Mayor Boro noted that Measure `A' contained four components, one of which was for streets and roads, which was in two parts: one part was regional, like Fourth Street, and the other local, and he inquired whether money was being received each year for local streets. Responding affirmatively, Mr. Preston reported this was approximately $530,000 for the next fiscal year from the local Measure `A' funds. SRCC Minutes (Special) 06/20/2007 Page 8 SRCC Minutes (Special) 06/20/2007 Page 9 Mayor Boro stated that this could be added to gas tax money should the City choose to do more street repair work. Mr. Preston stated this money had already been allocated to the Medway/Canal project for next year; however, it could be used the year after for any project authorized by the City Council. On the Wildland-Urban Interface issue, Mayor Boro stated his assumption was that the critical neighborhoods had been identified, together with those critical neighborhoods willing to work with the City. He also assumed those were the neighborhoods money would be allocated to to deal with the public lands in their areas to maximize the effect of their work. Mr. Nordhoff believed very high fire severity zone areas had been identified and there were some neighborhoods ready to go. Some money had to be spent to try to get the program going everywhere; however, the main funds would be allocated to those priority neighborhoods. Although he favored reinstating the reserves, Mayor Boro agreed that now being truly aware of the magnitude of this issue, there was a responsibility to deal with it. He suggested putting the $100,000 in reserves with the understanding that if the Fire Department presents a plan that spends the first $100,000 and requires the second $100,000 this year, it would be released from reserves. It should not be put into the budget and forgotten about, rather have an understanding that it is earmarked for vegetation management should there be a plan to spend it this year. With regard to traffic calming, Mayor Boro stated this could perhaps be scoped out somewhat in conjunction with the Neighborhood Grant Program, and perhaps partner with neighborhoods. With regard to Safe Routes to Schools, Mayor Boro noted a substantial amount of money was being received, approximately $1.5 million in the past year. Mr. Nordhoff confirmed that $360,000 was received to carry out some work on Happy Lane in Sun Valley. Mayor Boro stated that although it was not a traffic calming device as such, it did control traffic in the neighborhoods and made them safer. He suggested that this could be evaluated as something to work with neighborhoods on with regard to grants and put the extra $100,000 into vegetation management. With regard to vegetation management, Councilmember Phillips stated he assumed that what could be efficiently done during this time period was taken into account, and utilizing the entire amount to have it done in one year might not be the most efficient or effective way; therefore, he had some concern about substantially increasing the funding. As the project progressed it could be discovered that for efficiency and community momentum reasons, and with some knowledge base, funding might need to be increased. With regard to reserves, Councilmember Phillips noted they had been used in the past and there could be a need for them in the future; therefore, lobbying for them had merit now that there was a little extra money. While he was not inferring it was not important, he questioned the timing with regard to the efficient and effective use of those funds over that period of time. Councilmember Cohen stated he was not proposing to allocate more money than was requested by the Fire Department to direct that the project be done faster than they were prepared to do. He indicated he was working off the assumption that the Fire Department's request for $267,000 on top of the $48,000 already in the budget, was a number they believed they could effectively and efficiently spend in this fiscal year. Concurring, Fire Chief Montenero stated that the program was split into pieces. He explained that approximately $200,000 was to clear City lands that interface with private lands, $30,000 to clear open space roads and take care of the ruts in them, $30,000 to keep pushing homeowners groups to work together as a team with the City to do their cutting at the same time to afford the economies of scale of chipping and hauling the waste away. Funds were also needed for literature and educational material. Chief Montenero stated that most of the $200,000 would be done by contract. Councilmember Cohen stated his recommendation was to not necessarily fund the entire request put forward by the Fire Department, but that it be spread over four years instead of three, i.e., approximately $250,000 to more aggressively fund the proposal but a little less than requested by the Fire Department in terms of the coming fiscal year. Councilmember Cohen stated he favored stating that this was what the City intended to do. Recognizing Councilmember Phillips' comment about the need to build reserves back up, and indicating he was an advocate for spending it when the rainy days hit, he believed the big daunting problem of vegetation management had to be tackled. He countered that instead of allocating $100,000, earmarking the remainder to the reserve and having the Fire Department request it if needed, he would favor showing the City's commitment to the issue by more aggressively funding SRCC Minutes (Special) 06/20/2007 Page 9 SRCC Minutes (Special) 06/20/2007 Page 10 the program, particularly in the year of its inception, and trusting the Fire Department to allocate the funds wisely. Should an emergency situation arise where the funds were required, if the money had not been used by the Fire Department, it could be applied to that emergency. Mr. Nordhoff stated it would be helpful to allocate the project a defined amount of money so that those implementing the program with the neighborhood groups would know what they had to work with. If not all used up immediately, the funds would sit in that project until drawn down and he issued an assurance that there were far more demands for that money than whatever Council chose to allocate for Wildland-Urban Interface compliance. Noting the recommendation was for $100,000, Councilmember Cohen suggested making it $200,000 for a total of $250,000, which although less than the approximate $300,000 plus Chief Montenero requested, it still was a pretty significant commitment. Fire Chief Montenero assured the City Council that the Fire Department would not use those funds for any other purpose than vegetation management and they fully understood that if they were incapable of achieving all of their goals, the remainder would be returned to the General Fund. Councilmember Cohen confirmed the $250,000 figure included the extra $100,000, plus the $48,000, rounded to total $250,000. Noting this was a new program with a $1 million commitment, Mayor Boro stated he was a little concerned about allocating money and if not used, what carrying it over might motivate. He was willing to spend $200,000 on this project this year; however, he did not favor allocating the entire $200,000 in the budget until he saw a plan and how the program was working. Fire Chief Montenero could assume he had $200,000 to spend; however, Mayor Boro indicated he would like the second half brought before the City Council for authorization. It could be planned for, the neighborhoods informed, and as the need arose, the money would be made available; he believed everyone was committed to the $200,000. Mr. Nordhoff stated he would be fine, if Council agreed, with flip-flopping his two recommendations by putting $150,000 into the Wildland-Urban Interface and $100,000 into reserves. Staff could commit to returning to Council in three or four months to report the status and should there be a desire to increase the allocation to $200,000, the extra $50,000 could be withdrawn from reserves. Indicating that this was a long-term plan, Mayor Boro stated the other issue was beating up on the County and State where they had lands in these neighborhoods having similar problems, because he did not believe they were planning to do much. Noting this would be a challenge, Fire Chief Montenero stated they would be working with Fire Safe Marin and there also were issues with CSA 19 that interfaced with the City. He stated the Fire Department would work really hard to provide the City Council with a good plan. They intended being really aggressive with the program and would work through any process directed by the Council with the dollars available. Councilmember Cohen stated that in every one of those areas the City would be better off being as aggressive as possible with funding and he was comfortable with the current discussion. Concurring, Councilmember Phillips stated he was comfortable with the current figure because as pointed out by Mayor Boro, it was a new program. As to the duration of the funding amount, Fire Chief Montenero stated it was a twelve-month program. Staff would be working throughout the year based on plant seedings, tree trimming, removal of Junipers, etc.; therefore, it was a long-term, full year, each year project. Councilmember Phillips stated there was no debate as to the necessity of the program. Mayor Boro stated he would like more aggressive enforcement, especially in neighborhoods with absentee landlords or property owners refusing to adhere to the program. Indicating this was a serious concern with homeowners groups, Fire Chief Montenero stated staff would be working with them to Notice and Order under the system. Staff was also working with the City Attorney's office to ensure a solid process. Mr. Nordhoff stated there were tools in the ordinance to assist with the enforcement arm of the program. Councilmember Phillips inquired as to when the program plan would be available. Mr. Nordhoff stated the ordinance would be introduced on July 2, 2007, with second reading on July 16, 2007, and would become effective on August 15, 2007. He stated Fire Chief Montenero and his staff were SRCC Minutes (Special) 06/20/2007 Page 10 SRCC Minutes (Special) 06/20/2007 Page 11 compiling a lot of publication and literature materials and an implementation program. Councilmember Phillips stated it appeared a little backwards in that normally the costed -out program would be available, whereas in this case it was in the abstract, making it a little more difficult to relate to. Fire Chief Montenero stated this was not a new invention. Councilmember Phillips clarified that as to the City Council and the application of this new program, he had a little difficulty relating to the funding amount not knowing the program in detail. Fire Chief Montenero stated that in watching other agencies work, he could assure the City Council that they all run out of money trying to do this program. The hauling and chipping alone was immense; however, the biggest challenge was Notice and Ordering and gaining compliance with those who chose not to. Councilmember Phillips also noted the whole educational process of the community and their involvement. Fire Chief Montenero stated he would compile something demonstrating how the clearance of City properties would work. Noting funds for chipping and hauling always ran out in approximately three quarters of a year, he indicated this was how staff determined the amount recommended in the budget. Mayor Boro inquired whether it was necessary to wait for the effective date of the ordinance to clear up City open space. Believing it was not legally necessary to wait, Mr. Nordhoff suggested it was more of a practical issue to meet with the neighborhoods to indicate the City was ready to go, outline how the program would work and begin with three or four neighborhoods simultaneously. Mayor Boro confirmed with Fire Chief Montenero that the Marin Conservation Corps would be involved, in addition to private contractors. Fire Chief Montenero stated staff would also confer with Marin Sanitary Service concerning their interest in gaining a few chippers and putting dumpsters in place, so that a better job could be done of taking the cuttings and putting them in dumpsters more quickly, as opposed to stacking them all over the streets for two, three or four days. Fire Chief Montenero stated that whatever Council's decision, the Fire Department would work with the City Manager and staff to make the process work. Mayor Boro confirmed that $200,000 plus $48,000 was available, and while $50,000 was in question, City Manager Nordhoff would make it available when needed. Councilmember Heller inquired whether three or four neighborhoods had been selected in which to commence the program and whether programs such as goats to clean the hillside were being evaluated. Noting the City's experience in the past with goats had not been so good, Fire Chief Montenero stated he had a concern that goats pulling up grass from the roots was an erosion issue; however, staff would evaluate the situation. Yvonne Martinez, local 1021 SEIU labor representative for all Marin cities, stated it was interesting to witness the discussion on what to do with the surplus, as generally, when she addresses City Councils it is usually not in that light. As a labor representative and writer, Ms. Martinez stated she developed her love for books at a local library where she was helped by a library worker similar to those she represents at the San Rafael library. She noted that library employee Carolyn John, who had worked at the library for over 30 years, took two days of her time to go to Sacramento on two important issues: healthcare and the use of temporary workers. Recognizing the work of David Dodd, Library Director, Ms. Martinez stated that she, together with Leslie Loomis, Human Resources Director, and David Dodd, found a way to turn some temporary positions at the library into full-time benefited positions and she applauded and publicly commended the work they did. Ms. Martinez indicated she was present to address the issue of the City's portion of a New Service Request for $10,000 to fund benefits for two literacy workers at the library. Noting Literacy was an important issue in many communities, she stated that libraries for youth and young people, SRCC Minutes (Special) 06/20/2007 Page 11 SRCC Minutes (Special) 06/20/2007 Page 12 particularly young people new to the City, were a haven and a place to learn and grow. Ms. Martinez encouraged the City Council to add funding for shared costs of the literacy position benefits for two individuals. Noting that one of the workers at the library who now had a benefited part-time position, testified about San Rafael and this position at the Legislature on behalf of a Senate bill which would be the subject of hearings on Monday, Ms. Martinez applauded the City of San Rafael for doing the right thing and she encouraged the City Council to take one more step. Indicating this was Item S on the New Service Requests list, Mr. Nordhoff explained that when the Literacy program was initiated many years ago it was funded through a combination of County funding and grants the City seeks each year. Initially, the program was carried out with contracted positions and last year, the director position was made a permanent budgeted position of the City; therefore, funding for the two positions in question, approximately $140,000, would be obtained through grants and/or increased funding from the County, with the General Fund or net cost to the City approximately $10,000. Councilmember Cohen stated the language indicated a cost of $140,000, $130,000 of which could be recovered for a $10,000 investment, with which Mr. Nordhoff and Mr. Dodd concurred, and he requested written clarification on this. He commented that if for an investment of $10,000 the City could obtain two full-time literacy workers, with someone else picking up $130,000, given the need in the community, he believed this deserved a further look. Should those positions become permanent, he inquired whether the funding would go away. Mr. Dodd stated that this funding had been fairly stable for approximately 20 years. It appeared like a solid program, funded by the State Library on an ongoing basis, with the addition of local funding from the Marin Community Foundation and other groups. This has been ongoing for a number of years and was one reason the money could be counted on in the future. He explained that the additional cost covered benefits which those positions currently do not receive, and which would not be covered by the existing funding. Responding to Mayor Boro's question on whether the City was already receiving the $130,000, Mr. Dodd explained that with $40,000 worth of benefits, the County was paying half, the program itself would absorb the cost of an additional quarter and the City would be liable for the remaining quarter or $10,000. Should the City not fund the $10,000, Councilmember Cohen inquired whether the two positions would be covered. Mr. Dodd stated that these people would be in place no matter what. They were contract employees who administered the office, accounting, some of the database maintenance for the program and matching up of tutors and students. Believing the response to be "maybe not", Councilmember Cohen requested clarification on whether the request was for the City to pay $10,000 to cover benefits for these positions that otherwise would not receive benefits, or whether the request was to pay $10,000 in order for the City to receive $130,000 to fund these two positions. Indicating that it was the former, Mr. Dodd explained that looking at the positions in the Library, the intention was to try to move as many as possible into being regular City benefited positions. Councilmember Cohen confirmed that it was not a question of leveraging $10,000 to obtain $130,000 that otherwise would not be received, rather an additional $10,000 to improve benefits. Mr. Dodd confirmed for Councilmember Miller that the total amount required was $40,000, with the County paying $30,000, since they were the larger organization. Councilmember Cohen stated he was pleased progress had been made and believing it was an issue the City needed to pay attention to on an ongoing basis, attempts should be made in as much as possible to provide benefits to employees in this position. He understood that even though a little money was available to move around this year, the City was still in a pretty tough position as there were a lot of items being rejected. Appreciating the support on the Wildland-Urban Interface issue, Councilmember Cohen stated he would like to make one more pitch for traffic calming. Noting comments that it should be evaluated as part of the neighborhood grant program, he stated his understanding was that currently, requests for any type of traffic calming were rejected as this program was not funded at all. The proposal for neighborhood grants was for funding of $5,000 and even rolling the two together and working on SRCC Minutes (Special) 06/20/2007 Page 12 SRCC Minutes (Special) 06/20/2007 Page 13 these issues as part of the neighborhood partnership would require more robust funding Noting Councilmember Heller addressed which issues to fund, Councilmember Cohen assumed tests would be carried out. It had been done in some neighborhoods and Mr. Mansourian had identified tools that worked; however, currently, not even one could be funded. Commenting that this was why she suggested picking one neighborhood rather than tackling the entire City, Councilmember Heller believed there would have to be neighborhood assistance in a speed hump program as these were expensive. Mr. Nordhoff stated that if the installation was speed humps, aside from the dollars, a lot of neighborhood process and support were required, which would quickly consume money. Beyond where it would go, staff would have to work with a neighborhood association and a particular street location. Should there be funds to do this a way would be figured out to make the highest and best use of those funds; however, like everything on the list, it was not nearly sufficient money to see any significant impact across the community. Agreeing with Councilmember Heller that bulb outs were expensive, Mr. Nordhoff noted that applications tended to compete well, particularly when near schools or other commercial types of locations; however, $50,000 would not install a bulb out anywhere in San Rafael. He believed Mr. Mansourian put in a request for $100,000 thinking he could get two or three things done somewhere around the community in the next year. Councilmember Cohen suggested that rather than funding it now, if Mr. Mansourian identified a traffic calming project that he believed would have a significant impact, even if only on one problem in one neighborhood, the door be left open to his returning and making a supplemental request to fund this one; thereby, doing at least something towards traffic calming in the coming fiscal year. Mayor Boro agreed it would be a lot easier to deal with this issue if there was something specific; therefore, he suggested Mr. Mansourian identify his highest need. Councilmember Heller suggested it might be the Gerstle Park neighborhood. Councilmember Cohen indicated that serious dollars could be spent in that neighborhood and it might be necessary to consider some other neighborhood. Noting Gerstle Park was already in the queue, Mr. Nordhoff stated that some of the alternatives being studied were bigger fixes that would go beyond $50,000; however, should something in that financial order of magnitude arise, staff would request supplemental funding. With regard to the series of issues in the Library, Mr. Nordhoff clarified for Mayor Boro that the suggestion was for the City Council to provide direction on Item Q — Teen and Electronic Services Librarian, and based upon Ms. Martinez's request, the same with Item S — Two full-time positions in the Literacy Program, and the remaining Library items would be returned for future consideration. Recapping — Mr. Nordhoff itemized: Item B (CM) — Increase Facility Improvements Funding - Commitment for $250,000 of the $500,000 for facilities. Item D (CM) — Rebuild Reserves - $100,000. Item J (FD) — Additional EMS Funding - $43,000, equating to a $1.00 additional charge in Paramedic rates. Item K (FD) — Wildland-Urban Interface Program - $150,000. Support for Item M (CS) — Program Coordinator, Youth Services. Support for Item N (CS) — Custodian — SRCC. Support for Item Q (LI) — F/T Teen and Electronic Services Librarian. Support for Item S (LI) — Two FT Positions in Literacy Program. Support for Item AC (PW) — New Civil Engineer Position. Mr. Nordhoff reported that supplemental items would be returned to Council concerning the status of the Vegetation Management program, as well as a potential traffic calming project. SRCC Minutes (Special) 06/20/2007 Page 13 SRCC Minutes (Special) 06/20/2007 Page 14 Mr. Nordhoff expressed thanks to all the department heads present who had worked extensively on putting the budget together, particularly Cindy Mosser, Finance Director, who had spent countless hours working on the budget preparation, and who would be the first to thank her staff. The changes would be implemented and a budget presented to the City Council for adoption on July 2, 2007. Mayor Boro expressed thanks to City Manager Ken Nordhoff and Finance Director Cindy Mosser and all department heads, present and absent. NEW BUSINESS: 15. CONSIDERATION OF RESOLUTION APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE THE CITY OF SAN RAFAEL'S RESPONSE TO MARIN COUNTY GRAND JURY REPORT ENTITLED "RETIREE HEALTH CARE COSTS: I THINK I'M GOING TO BE SICK" (CM) — FILE 269 Assistant City Manager Jim Schutz stated this was a key issue currently, due in part to GASB 45 (Governmental Accounting Standards Board statement # 45). He indicated that accounting and reporting standards had been in place for many years on pension obligations; however, outside of pensions, jurisdictions often offered Other Post -Employment Benefits (OPEBs) and GASB 45 establishes standards for accounting and financial reporting for those OPEBs. Noting GASB 45 goes into effect in three phases, Mr. Schutz stated San Rafael fell into the middle phase, which requires reporting in Fiscal Year 2008-2009. Though many of the questions of the Grand Jury were somewhat broad and asked the City to give opinions on what jurisdictions overall were doing or how they were addressing this, Mr. Schutz indicated staff tended to try not to respond for other jurisdictions, rather to discuss what was going on in San Rafael. For example, staff noted that the City had been accounting for retiree health benefits for many years, using a pay as you go approach, and also accumulated approximately $12 million in the Marin County Employee Retirement Association which could be used to fund retiree health obligations. As one of the findings concerned jurisdictions not being aggressive enough or taking the situation seriously enough at this point, Mr. Schutz stated it was pointed out that the City had taken many steps in this effort and staff from Human Resources, Finance and the City Manager's office had attended seminars and workshops. Actuary, Bartell Associates, had been engaged and their full report was expected by August, 2007. Compliance with GASB 45 had also been included in the two- year budget objectives. It was being taken very seriously and the City was ahead of schedule by being in the second group that requires reporting in 2008-2009. Mr. Schutz stated that with Council approval, these reports would be submitted to the Grand Jury. Councilmember Heller inquired whether this reporting would be under the budget process or separately. Mr. Schutz confirmed it would be a notation in the financial statements. Mr. Nordhoff added that once the problem had been identified and decisions had to be made, much like pension obligations, those costs were built into the budget annually. While it would be noted in the financial statements, it would also have to be addressed in future budget processes. Mayor Boro suggested an option would be to build a sinking fund. Mr. Nordhoff stated it was very similar to the pension systems, funding obligations over a defined period of time. Mayor Boro stated he was somewhat concerned about the performance of the County Pension Fund and some of the decisions they had made, in particular, the fact that they assumed a decrease in earnings this year from 8% to 6%, and he referred to a CalPers letter indicating a return of approximately 15%. Mr. Nordhoff stated the data, because of the cycle, in this CalPers letter was probably a year old and the return was approximately 17% on that pool of funds in their last reporting period. Mayor Boro stated that the assumption made continued the "smoothing" of four years that raised the City's contribution by $700,000. Mr. Nordhoff stated this was a change in investment strategy where they reduced the expected rate of return, the inflation component, from 8.25% to 8.00%, and funding only comes from three places: investment returns, employee contributions and the remainder is the City's contribution. Therefore, SRCC Minutes (Special) 06/20/2007 Page 14 SRCC Minutes (Special) 06/20/2007 Page 15 dropping that rate of return created an immediate responsibility for both the employees and employers to pick up the difference. He indicated that this cost alone was approximately $750,000 which was built into the budget. Stating that this was not the type of hit the City could keep taking each year, Mayor Boro suggested in the fall or winter having a representative from the County Retirement Office attend a workshop at City Hall to discuss this issue and what it looked like for the future because money could not be raised fast enough to cover the continuous increases. It was not consistent with CalPers or any other pension fund he was familiar with, all of which were doing well; therefore, it would be worthwhile understanding where the money was going, how it was invested and controlled and what they anticipated for the future. Councilmember Heller commented that in the past there had been a San Rafael employee on the Marin County Retirement Board and she suggested working diligently to have someone elected. Mayor Boro noted nomination papers were currently in the mail. Mr. Nordhoff noted that Fire Captain Jim Huffard had been on the Board for three or four years. Should someone be interested in being elected to this Board, Mayor Boro suggested that interest be promoted. Councilmember Cohen moved and Councilmember Phillips seconded, to adopt the Resolution. RESOLUTION NO. 12284 — RESOLUTION APPROVING AND AUTHORIZING THE MAYOR TO EXECUTE THE CITY OF SAN RAFAEL RESPONSE TO THE 2006-2007 MARIN COUNTY GRAND JURY REPORT ENTITLED "RETIREE HEALTH CARE COSTS: I THINK I'M GONNA BE SICK" AYES: COUNCILMEMBERS: Cohen, Heller, Miller, Phillips and Mayor Boro NOES: COUNCILMEMBERS: None ABSENT: COUNCILMEMBERS: None There being no further business, Mayor Boro adjourned the City Council meeting at 9:35 p.m. JEANNE M. LEONCINI, City Clerk APPROVED THIS DAY OF 2007 MAYOR OF THE CITY OF SAN RAFAEL SRCC Minutes (Special) 06/20/2007 Page 15