HomeMy WebLinkAbout2011-06-06_cityofsanrafael_007740849701a6c0ec79c53d67896099CITY OF
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Agenda Item No: 19
Meeting Date: June 6, 2011
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: CITY MANAGER
Prepared by: Nancy Mackie, City Manager City Manager Approval.
SUBJECT: UPDATE ON BALANCING THE FISCAL YEAR 20011-2012 BUDGET,
THE RECESSION ACTION PLAN AND THE ECONOMIC VITALITY WORKPLAN
RECOMMENDATION: Accept Report
BACKGROUND: Staff has presented several reports to City Council over the last few months
regarding the structural deficit in the General Fund for FY 2011/12. At the City Council
meeting on May 16th, the Council approved $2.2 million in primarily "one time" fixes to cut the
deficit in half, bringing the current deficit level to $2.2 million. Obviously more work must be
done to close this year's deficit, and actions that have multiple year impacts are needed to
minimize future fiscal year deficits. Labor negotiations are underway with all bargaining units
(except Childcare) and the discussions are revolving around solutions to the deficit. In addition,
we still await the final results of the State budget impacts on our budget. Today's report is a
chance to provide an update on the Recession Action Plan, Economic Vitality Workplan, and
recent actions taken on the budget since the May 16th Council meeting. Final budgetary
actions will be presented to the Council on June 20th to close the gap and balance the budget.
RECESSION ACTION PLAN. The Council approved a Recession Action Plan in 2009. The
plan listed a series of action strategies that have since been used to partially solve the budget
situation. Attachment A is an update on all of these strategies. I think it is important to review
this list, in its entirety, to see the multiple approaches San Rafael has taken to attempt to solve
this issue over the last two years. However, even with a proactive plan, and implementation
actions such as furloughs, layoffs, elimination of vacant positions, and reductions in overtime
and expenditures, the problem is not yet fully resolved. In short, as has been discussed in prior
staff reports, in this harsh economic climate General Fund revenues, having plunged during this
recession, are not rebounding to cover expenditures.
ECONOMIC VITALITY WORKPLAN. A complementary component to the Recession Action
Plan is the Economic Vitality Plan, also approved by the City Council in 2009. Staff has worked
to stimulate business growth and retention, expedite approvals, and overall improve our tax
base. Attachment B summarizes those activities, ranging from working with large and small
businesses, combining short term activities and long term planning for the economy, as well as
both seeking new development and re -use opportunities. Again this is an extensive list worth
reviewing carefully to see the full range of approaches taken to boost our local economy.
FOR CITY CLERK ONLY
File No.:
Council Meeting:
Disposition:
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Paue: 2
FY 2011/12 BUDGET UPDATE. Extensive hours have been spent by staff on a variety of
difficult budget choices to date, and we continue looking at future options for cuts. It is clear
that there are few actions that can be taken without service reductions. I have several
additional items to report that can help with this year's budget deficit. These will all be brought
back to the Council at the next meeting when more details are worked out, but I wanted to
report our progress:
We will allocate a portion of Community Development Block Grant (CDBG) funds to
engineering design costs. This will reduce funds available for ADA capital
improvements and create funds to cover staff time for engineering. These are
considered "one time" funds, as CDBG funds cannot be counted on in for future years.
2. We will reassign Fire Department administrative personnel (0.5 FTE) to provide
additional support staff for EMS billing services. We will allocate EMS funds to this staff
time, and this extra EMS work will also allow us to bring in additional revenues. It will,
however, reduce much—needed non -EMS support functions for the Fire Department.
3. Due to a retirement in Community Services, we will eliminate the Assistant Director
position and reorganize the department. Administrative work for both Childcare and
Recreation will be allocated among staff in a different way, reducing management staff
by 1 FTE, and reducing administrative hours available to the public.
The above items will save between $150,000- 200,000, so we still have need for significant
budget solutions to balance our budget.
The City's labor negotiating team is working diligently with all of the City's bargaining units
(except Childcare which has a MOU that expires in October) with an eye towards immediate
and long term costs savings. Conversations have taken place regarding one time and on going
cost reductions, and all involved are continuing to dedicate many hours to this effort.
NEXT STEPS. At the June 20th Council meeting, staff will present the budgetary action items
listed above and any additional savings identified before that meeting. Our goal is to complete
labor negotiations by then and bring you structural budgetary solutions to our ongoing deficit.
FISCAL IMPACT: None. This is an informational report.
ACTION REQUIRED: Accept Report.
ATTACHMENTS:
A: Recession Action Plan Update
B: Economic Vitality Plan Update
W:\City Managers- WorkFile\Council Material\Staff Reports\1 1 \Budget RAP & EVP.doc
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SAN RAFAEL
RECESSION ACTION PLAN
STATUS REPORT UPDATE - JUNE 2011
Below is the sixth in a series of reports, defining progress on our Recesssion Action
Plan since its adoption in May 2009. This updates our December 2010 information. As
a reminder, the Principles for Budget Recovery are included, along with a short
summary of actions to date.
Principles for Budget Recovery
To meet our financial challenges, the City is taking steps that will keep our budget
balanced and in line with the City Council's goals and priorities. Budget actions will
also be guided by a series of long-standing financial management policies. The Council
has identified the following guidelines as we respond to the recession:
• Collaborate with neighboring governmental agencies to consolidate or regionalize
services to leverage resources and improve efficiency
• Reduce services, where necessary, after identifying the impacts and weighing the
reduction against other options
• Reject new services or projects if reduced staffing cannot manage the workload
• Continually assess and improve efficiency in the delivery of services
•Manage the size and compensation of the workforce to best deliver services given
our current and anticipated financial realities
• Provide a responsible level of transition assistance to city employees who have
lost their jobs
. Seek additional revenues from all sources to meet the community's expectations
of a high level of service
• Implementing an Economic Vitality Plan Commenced implementation of, Economic Vitality
focusing on local business retention, Plan (see separate report)
expansion and attraction as well as job
development
• Pursuing Federal Stimulus actions and Secured over $2 million in Federal Stimulus
other grants that can provide one time grants for one time resources for street
resources for projects and service needs resurfacing, energy efficiency improvements at
City Hall, and Police Citizens Academy and other
Police activities.
Pursuing additional grants where available and
stimulus funds if the amounts are large enough to
justify the significant staff time involved. For
example, State grant funds were received for the
Freitas Park playground installation.
Recession Action Plan — June 2011 Update Page 2
• Continuing to suspend hiring of
positions whenever possible
• Offering early retirement packages
through incentives
Staff continues to suspend hiring whenever
possible. Each new vacancy undergoes a process
that ultimately requires City Manager approval to
fill the position. Staff first looks at other options
such as eliminating the position, reducing the
hours, reorganizing the division or work group,
etc.
Program completed. Created "Voluntary
Retirement Separation Program" resulting in
savings of approximately $900,000 annually
through permanent elimination of these
positions.
• Offering employees the opportunity to This opportunity continues for employees.
voluntarily reduce their work hours However, given the on-going furloughs, there is
limited interest at this time in additional time
off without pay.
Reducing the workforce by laying off
employees through strategic planning
• Working with employees to develop a
furlough plan that includes a pay
reduction and time off by closing City
Hall and other non-public safety facilities
on certain days
Implemented layoffs in July 2009 and January
2010; provided transition assistance to those who
lost their jobs. Layoffs remain an option to
reduce the workforce to control costs.
Furlough implemented for Fiscal Year 2009-10
and continued in Fiscal Year 2010-11. Furloughs
remain under consideration for Fiscal Year 2011-
12. Furloughs equate to a 5% salary reduction for
non -safety employees, saving approximately
$450,000 per fiscal year. .
• Meeting with employee unions to Contract negotiations are currently in -progress
control costs by analyzing compensation for all bargaining units, except Childcare as their
levels, including possible reductions in MOU expires in October. The goal is to reduce
salaries or benefits costs through compensation and other means.
• Considering alternative work schedules Staff has investigated alternative work schedules
in order to save costs in place in other agencies and the topic is
currently under discussion. Will continue to
consider.
• Maximizing opportunities to recover
costs, such as changes in our paramedic
transport service
City is in the process of updating the master fee
schedule which will considerably improve our
ability to recover costs. For example, the State
has taken an increasingly bigger portion of
parking citations making it important to review
citation levels so the program does not impact
the General Fund.
Recession Action Plan -June 2011 Update Page 3
• Continuing to explore collaboration
opportunities with other public agencies
to maximize efficiency
Other Actions to Reduce Expenditures or
increase revenues
Also, paramedic transports completed by City
staff have significantly increased due to program
changes, which enhance City revenues.
In process of finalizing the agreement with
Marinwood CSD to control City costs and provide
superior levels of service to both Marinwood and
San Rafael. Fire Battalion Chief services
agreement with the City of Larkspur (cost
sharing) continued as did the contracting out of
Fire Dispatching with the County Communications
Center. OES services to the City of Larkspur took
place throughout the year, bringing in revenue to
the City, but will not be continued next year due
to Larkspur's budget challenges.
City successfully provided Hamilton Pool
operations for the City of Novato this past season
and will do so again for the 2011 season -
providing high quality services and bringing in
revenue to the City of San Rafael.
Measure C was passed and will increase library
service revenues by approximately $875,000 for
the next seven years.
The City issued bonds to create a "retirement
system fund" to go towards retirement cost
increases.
The City issued "tax revenue anticipation notes"
which will steady our cash flow as revenues are
received by the City at various points throughout
the year while expenditures are weekly.
The City continued to make use of special funds
(such as Measure A) to meet General Fund
obligations where appropriate. The City also
continued to defer expenditures where possible
(such as to vehicle fleet replacement), reduce
contract services, reduce supplies, etc.
The City took action on a development proposal
(Target) which would significantly increase sales
tax revenues and will see other openings (e.g.
Honda) that will also enhance revenue (see
Economic Vitality Strategy).
Attachment B
City of San Rafael
Economic Vitality Workplan
Progress Report March 2009 - June 2011
I. NEW DEVELOPMENT
a) West Francisco Boulevard (WFB).
. New VW Et Audi facility facade change approved. Anticipate
filing for foundation permit this spring with the rest of the
building permit requests to follow.
• Construction completed on RAB pre -owned vehicle lot.
Construction almost complete on main dealership remodel.
Final phase of the project will be the facade improvement
anticipated in June 2011.
b) East Francisco Boulevard (EFB).
. GM site at Shoreline Center leased to Honda. Honda remodel
approved, construction almost completed with dealership
opening in June 2011.
• Pre -owned Luxury Car facility opened in former Ford facility,
initial sales tax revenue in 4th quarter 2010.
• Infiniti dealership facility remodeled and opened.
c) Shoreline Center Completion.
137,000 sq. ft. Target approved by City Council on May 16, 2011.
First LEED Gold big box building in CA Ft first to commit to
meeting CA renewable portfolio standards for power for store
operations.
d) Marin Square Area Redevelopment.
No application received yet from property owner, Sutter Health.
Existing businesses continue to operate in the Center.
e) Completion of the San Rafael
Two new buildings and a parking structure have been
Corporate Center.
constructed. Leasing activity is underway. Original two office
buildings are 80% leased. City Council approved extension of time
to build out remaining office building and parking structure;
construction of these last structures is not expected to proceed
quickly given market conditions.
f) Reuse of PG£tE's 999 Third Street
PGFtE completed soil and groundwater testing and are developing
Site.
the property's Remediation Action Plan. It is anticipated this
phase will take close to a year to complete. PGEtE provided an
update to City staff in May 2011.
g) Caltrans Remnant Properties.
TAM to coordinate with CalTrans and provide remnant parcels
now that 101 Freeway project and 580/101 flyover are
completed. CalTrans staff evaluating a sale process for CalTrans
Rice Drive parcel. City staff exploring joint marketing Et sale of
RDA Et CalTrans Rice Drive parcels.
Economic Vitality Workplan Page 2
II. REUSE, RE -TENANTING AND REHABILITATION
a) Economic Study.
Report presented to City Council: (Completed items italicized.)
• Prioritize attracting tenants to large retail sites. (Honda
leased former GM site.)
• Developed Shop San Rafael Campaign.
• Improved Economic Development website.
• Consider re -use opportunities of office sites. See Incubator
discussion below.
• Assist with training businesses on websites.
• Surveyed (interviewed) business community on constraints.
• Improve perceptions of permit process. (Coordinated with
Marin Economic Forum to explain the process to businesses,
continued improvement of business section of City website.)
• Coordinated with workforce development efforts.
• Increase office occupancy, especially with green office users.
(CD instituted over the counter approvals of tenant
improvements and zoning ordinance changes which will assist
applicants.)
• Coordinated with Countywide energy efficiency/retrofit
efforts.
• Consider incentives for green businesses. This item is on hold
due to City's financial situation.
b) Re -tenanting Vacancies. • Mi Pueblo opened at the former Circuit site.
• Working with property owner to re -tenant Border's Books
space in the Toys R Us center.
• Arizmendi Bakery opened at Rafael Town Center.
• Marin Arts Council opened on Fourth Street.
• Room Art Gallery opened at former Papyrus.
• George's opened in what was referred to as the Kimball's
site.
• Pizza Orgasmica opened in former Rafters.
• Sol Food expanded Lincoln Avenue location into adjacent
space Et filled 811 Fourth (former Golden Orb/Pie Shop).
• Lotus Chaat Et Spices opened in former Pier 6 space in West
End.
• 1340 Et 1344 Fourth at D filled with clothing store Et artists'
gallery.
• Working with West End businesses and WENA on campaign to
encourage Home Depot to fill old Yardbirds site.
Prepared information handouts for key sites to assist potential
tenants. Two of the sites, GM and Ford, have been leased.
Continued meetings with Marin Economic Forum, to explore
"business incubators" that would create jobs and fill vacant
space in the long term as businesses grow. Initial research
indicates no City funds will be required and instead City
2
Economic Vitality Workplan Page 3
Re -tenanting Vacancies (Continued).
facilitation and collaboration with local partners could result in a
b) Climate Change Action Plan
San Rafael incubator of some type.
Implementation.
Participate with Council Member Connolly on Steering Committee
of Dominican University's "Venture Greenhouse", a business
accelerator effort physically located in East San Rafael.
c) Rehabilitation of Northgate Mall.
53 stores opened out of a potential 65.
New Rite Aid completed. Promenade completed.
Music and entertainment taking place in Oak Plaza.
d) "Marin Rocks" Exhibition.
Marin History Museum experiencing financial issues including loss
of Executive Director. Project appears to be on hold.
e) General Plan Update.
In process of updating Housing Element.
III. SUSTAINABILITY MEASURES
a) Green Businesses.
Improved Economic Development webpage to include promotion
of green business certification and resources.
City received $100,000 grant from Marin Community Foundation
for collaboration with SR Chamber Et Dominican University for
pilot program on small business sustainability circles.
b) Climate Change Action Plan
Assisted with business outreach on potential requirement for
Implementation.
"green" food containers at food outlets. CD convened committee,
including business representatives, to prepare recommendations
for banning single use carryout bags Et reducing takeout food
containers.
Received grant from Co. Hazardous Et Solid Waste JPA to fund City
staff for activities related to single use plastics, construction Et
demolition ordinance Et commercial recycling.
Created webpage for businesses which includes links for the
following
• What Green Means to San Rafael
• Marin County Green Business Program
• San Rafael Climate Change Action Plan
• Green Resources
c) SMART.
Continued participation in Station Area Planning efforts for
Downtown and Civic Center stations. Redevelopment CAC is
providing oversight to Downtown Station Area Plan. Held a
community workshop for Civic Center Station Area Plan with 64
members of the public in attendance. Planning for a second
community workshop for the Downtown Station Area Plan to be
held in June has commenced.
Economic Vitality Workplan Page 4
d) Energy Efficient Decorative Lights.
Completed. Installed LED twinkle lights in Downtown street trees
to save energy.
e) Pedestrian and Bicycle
Completed business outreach for Non -motorized pilot programs
Improvements and Linkages.
(NTPP). City completed $15 Million in NTTP improvements Et grant
funding for design of Grand Avenue pedestrian bridge.
f) "Greening" of Community Events.
Participated in discussions regarding "green" food containers at
c) Public Arts Installation Program.
events. Making City event recycling containers available to non-
profits hosting events in San Rafael.
c) Financial Resource Development.
Participated in planning and implementation of County's "Way to
Go" program to promote non -motorized access to Downtown
events.
IV. Promotions and Events
a) 10 Anniversary of the re -opening
of the Smith Rafael Film Center.
Completed. Assisted Film Center with a June outdoor movie as
well as "A" Street movie in September, 2009.
b) West End Village Event.
Dropped. July 2009 street festival was successful, held two
(BID) Strategy.
Farmers' Market fall festivals in October 2009 Et 2010. Extending
the Farmers' Market event into October at the West End will not
be repeated due to lack of promotional/ advertising funds.
c) Public Arts Installation Program.
Temporary art exhibits installed in Rafael Town Center vacant
retail window space. Notified building owners of Marin Arts
c) Financial Resource Development.
Council temporary art program for vacant storefronts.
Collaboration with Artworks Downtown and Ritter Center provides
ongoing temporary public art program in the City Plaza and other
civic locations. Added two additional locations in 2011.
V. FISCAL STRATEGIES
a) Redevelopment Bonds.
Interim Bond refunding completed.
b) Business Improvement District
BID Subcommittee recommended a plan to their Board. Agency/
(BID) Strategy.
BID retained consultant Et conducted survey to change from
business based to property based BID. Not enough interest from
property owners to proceed. BID is proceeding with incorporation
effort and with 501(c)6 tax-exempt status. Increased membership
from WEV E: two WEV merchants currently serving on BID Board.
c) Financial Resource Development.
ARRA funds have been secured for street repaving, Police Citizens
Academy, and energy efficiency improvements for City Hall.
Economic Vitalitv Workplan Pa
d) Emergency Preparedness/Business
"Get Ready" for Business was held in April 2009.
Recovery Plan.
with San Rafael Chamber, BID, and Hispanic Chamber of
Business Strategy drafted for how to better prepare and recover
in the business sector. Task Force with Chamber and BID has been
created; working on an implementation plan. Disaster
Preparedness Worksheet prepared with phone numbers and
websites for businesses £t tips for protecting business from a
disaster. Post -Disaster Business Resilience Kit published in English
Et Spanish. Both documents posted on City website.
e) Real Property Management.
Environmental testing of 519 Fourth Street is complete and a
final site closure letter for the underground tanks has been
received from the Water Quality Control Board.
A. COMMUNICATION, EDUCATION Ft OUTREACH
a) Communication to the Community
Participated in 25 Business Retention and Expansion interviews
with San Rafael Chamber, BID, and Hispanic Chamber of
Commerce of Marin. On an ongoing basis, attempting to meet
with one business per month.
Participating in San Rafael Connects.
Improved Economic Development website. Includes Business
Assistance and links to available properties. Several larger sites
in San Rafael are highlighted to assist in business attraction to
key retail locations. Participated in Bilingual Entrepreneurs' Fair.
b) Managers of Vacant Property.
In communication with owners/managers of former Yardbirds £t
Dodge sites. Facilitated temporary use by non-profit >:t
community groups with Marin Square Manager.
c) Re -Leasing Assistance.
City "Coffee and Codes" meetings were conducted to assist with
information helpful for releasing.
Coordinating with Planning staff, held several meetings with
commercial brokers to explain land use application processes,
City zoning and regulations, etc. Building Department instituted
over the counter approvals for tenant improvements, facilitating
quicker re-leasing.