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HomeMy WebLinkAboutcc min 1978/04/01 MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA, CALIFORNIA Held Saturday - 7:40 a.m. April 1, 1978 An adjourned regular meeting of the City Council of the City of Chula Vista, California, was held on the above date beginning at 7:40 a.m. in the Conference Room C-i, Chula Vista Public Library, 365 "F" Street. ROLL CALL Councilmen present: Mayor Hyde, Councilmen Hobel, Cox, Scott, Egdahl Councilmen absent: None Staff present: City Manager Cele, Assistant City Manager Asmus, Director of Finance Grant, Department Heads, Deputy City Manager Wittenberg 1. CITY MANAGER - City Manager Cole submitted a package of materials to the OPENING REMARKS Council explaining that the meeting was called today so that certain budgetary matters could be discussed in a non-pressured time frame. Mr. Cole said he and his staff will be talking about trends in expenditures, revenues, increasing reliance on revenue sources over which the Council has little or no control, Block Grants, CETA funds, increased cost of operations, inflation, and insurance costs which have increased four times in five years - 284% increase. Mr. Cole stated that the City's traditional revenues are lagging behind the increasing costs. He asked that the Council, after reviewing all the material subm±tted,"react'' to it in terms of different emphasis on the City's services, look at the revenue sources and possible change in those sources, and re-evaluating the use of the revenues, such as Block Grants and Revenue Sharing. Mr. Cole added that since 1975, the traditional income was less than the expenditures; however, the City was able to meet its budgets by utilizing the reserves with help from the Anti-recession funds. He referred to Exhibit "A" which shows a deficit of $1,2 million, emphasizing that it is based on estimated revenues and represents the requested departmental budgets - no deletions have been made. The figure will be reduced following the City Manager's review. Mr. Cole added however, that the reductions will be offset by salary adjustments. 2. STAFF PRESENTATION - (Note: Detailed Summary Sheets Exhibits "A" through "G" FINANCE DIRECTOR are on file in the office of the City Clerk.)  "A" 6-year Income Director of Finance Grant discussed Exhibit "A" which he Expenditure Summary said was a combined income and expenditure summary of general funds, parks & recreation, library and planning. In 1976, the amendment to the Charter was approved combining all these tax levying funds into one operating fund. Mr. Grant detailed the incomes received, noting the percentages of increase during the years, and that of the expenditures. Sales and Use Taxes In answer to Councilman Hobel's query, Mr. Grant explained that the less than significant upward trend in the sales tax was due to the fact that Chula Vista, although the second largest city in the County, is fourth in sales and use tax. Other cities, such as Escondido and E1Cajon have had a substantial increase. Adjourned Regular Meeting -2- April 1, 1978 "B" Combined General Fund In this particular bar chart, Finance Director Grant Basic Budget Summary compared the estimated and actual ending balances for the years 1973/74 through 1977/78, as projected. "C" Capital Improvement Mr. Grant said that this chart shows the total source of Program funding. In 1973/74, the largest contributor was the gas tax fund ($626,297) - 78.8%. The next year, 1974/75, it was the revenue sharing fund - 75%; in 1975/76, it was the general fund contributing 32%; in 1976/77, Public Works Bill contributed 37.5% and in 1977/78, it was the Public Works Bill funds again with 22.5%. "D" Schedule of Estimated City Manager Cole noted the following estimated amounts Other Fund Balances/ which are restricted funds: Revenue - 1978/79 2. Community Development Block Grant Funds $965,000 5. Park Land Acquisition & In Lieu $600,000 9. Park & Recreation Block Grant $ 47,580 10. State Bond Act II Fund $308,150 Assistant City Manager Asmus referred to the charts marked "Exhibit D" explaining the various £un8 balances/revenues. He noted the sewer service revenue fun8 which has been restricted in terms of Council policy - all of these monies (with the exception of one year in the past four years) have been used to pay the Metropolitan charges. Mr. Asmus remarked that from the 10 funds l±sted, it is estimated that there will be a carry-ever of $1,392,672 and e×pected to accrue to those funds would be $3,992,230 getting the total estimated funds for appropriation oF $5,384,902. In the second Exhibit "D" - the preliminary 1978/79 Capital Improvement Program, Mr. Asmus stated that it shows a total of $4,392,000 which is a misleading figure. The staff has held back completing some of these projects because of difficulty in financing. Even though $8,384,902 is shown as estimated funds available, Mr. Asmus declared that the types of projects listed on the preliminary chart are not money in funds that can be used for financing. City Manager Cole commented that in the total budget, the Council may find itself using revenue sharing - traditionally used for capital improvement programs - for operating costs. This would reduce the amount of money available for these programs. "E" Federal Revenue Sharing Finance Director Grant discussed how the total of $3,690,866 Expenditures was disbursed: 72% or $2,671,975 going to the construction 1/1/72 - 12/31/76 of the new library; 20% or $731,879 for capital projects and capital outlay equipment; and 8% for all others. For the 1977/78 fiscal Year, the appropriations of $1,150,837 in Federal Revenue Sharing were allocated as follows: 81% or $936,437 for capital improvement program; 13% or $145,000 for capital outlay equipment; 5% for a hot paint stripe machine (public works) and 1% for community promotions. Adjourned Regular Meeting -3- April 1, 1978 "F" Schedule of Insurance Finance Director Grant pointed out that the City's insurance Requirements cost has escalated from $287,951 in 1973/74 to $1,105,754 1973/74 - 1978/79 in 1978/79. Mr. Grant detailed the costs of the fire and extended coverage; public liability;property damage; worker's compensation; group insurance; worker's compensation reserve; public liability reserve and unemployment reserve. Council discussion Discussion followed regarding the insurance coverage - the City is getting less coverage now for more money; claims paid in the past; self-insurance; coverage under the State Plan; reserve fund. In answer to the Council's query, Assistant City Manager Asmus stated that the City's insurance administrator, Kautz, recommended that the City not "go bare" on insurance. Mr. Asmus said that he has some reservation about this because the City is paying $23,000 and is still obligated for the first $200,000 of claims (even though there is the potential of a $2 million claim "out there"). He added that in a City of this size with the ability to tax, the remoteness of such a claim and the fact that the money would not be paid out in a lump sum anyway should be considered. "G" Summany of Funds Mr. Asmus listed the 13 funds in which the Council has little or no flexibility over expenditures. He then discussed each of the funds which are under the full control of the Council: (1) General Fund; (2) Sewer Service Fund; (3) Traffic Safety Fund; (4) Cash Basis Fund; (S) Special Gas Tax Fund; (6) Sewer Income Fund; (7) Federal Revenue Sharing Fund; (8) Capital Improvement Fund; (9) Residential Construction Tax Fund; (10) Special Capital Outlay Fund. Mr. Asmus noted that some of these funds are restricted by Council policy; however, this can be changed by the Council. Metropolitan Sewer Fees Discussion followed regarding the yearly cost to the City; the amount of reserve capacity; selling off some of the capacity; staff report on this matter. Report to Council Mayor Hyde asked that the staff make a report to the Council during budget considerations. City Manager Cole indicated that staff may not be ready at budget time to make a recom- mendation regarding the amount of capacity to keep and that to sell. After more discussion, Mayor Hyde, with the concurrence of Council, directed that the matter be again considered at budget time. Cash Basis Fund Mr. Asmus explained that a reserve of $240,000 has been built up in this fund which will meet less than one month of the City's bills. The intent of this fund is to put the City on a cash basis; however, the Council has the prerogative of determining the amount. Recess A recess was called at 9:10 a.m. and the meeting reconvened at 9:20 a.m. 3. COMMENTS BY CITY MANAGER City Manager Cole asked that the Council submit any general reactions they may have regarding the information presented this morning. Adjourned Regular Meeting -4- April 1, 1978 Budget Sessions Council discussion followed regarding the specific dates for budget deliberations. Councilman Egdahl stated he has a firm commitment to be away from the City from May 13, 1978 to June 3, 1978. Mayor Hyde indicated he would be gone the latter part of May and Councilman Hobel said he had tentative plans to vacation the first two weeks of May, 1978. Mayor Hyde asked that the City Manager schedule the sessions the first of May and use Saturday as a working session. Sessions scheduled City Manager Cole stated this could be done - he will submit the preliminary budget to the Council on April 28, and the sessions could start on May 1 continuing through May 6, 1978. Mayor Hyde asked the City Manager to submit the specific proposal to the Council at the April 4 meeting. 4. MAYOR'S REPORT Metro reserve sewer Mayor Hyde asked that the staff be prepared to make some recommendation during budget session regarding the question of whether the City should sell off some of the reserve sewer capacity. Revenue Sharing Mayor Hyde asked that the Council consider whether or not it wishes to revise the policy of limiting and restricting the general revenue sharing. City property Mayor Hyde asked that the staff report on any City property they are interested in selling. 5. COUNCIL COMMENTS Jarvis/Gann Initiative Councilman Cox noted that the presentation this morning did not include any figures if the JarVis/Gann Initiative passes. Director of Finance Grant stated the City would lose $2.3 million - a 60% drop. Requests by Councilman Hobel asked that the staff (1) provide the Councilman Hobel Council with a summary sheet on the accrued accounts - the carryovers, where they are, etc; (2) administrative staff should come to the Council with recommendations of goals and "turn-around" in the areas of sales tax - this is part of the Manager's charge. Economic Advisory Mayor Hyde remarked that one of the reasons he created the Committee Economic Advisory Committee was that it should examine the Council's actions - whether they have a negative effect on the community - what can be done to correct that - and determine what programs can be started to improve the economic status of the community. The Committee is addressing this charge. Assessed Valuation In answer to Councilman Hobel's query, Mr. Grant said he is using a 7-1/2% increase for Fiscal Year 1978/79. Metro Sewer Councilman Hobel said he fully agreed with the Mayor that they need a staff analysis on the sewer issue. Council appointees' Counciman Hobel indicated that the Council should review budgets both the City Clerk's and the City Attorney's budget as they are appointeesoftheCouncil. The Council may want to make certain recommendations to these two department heads before they submit their budget to the City Manager. Adjourned Regular Meeting -5- April 1, 1978 After discussion, it was concurred that Councilman Hobel and any other memb6r oflthe Council ~ho r~quests them will get ~ copy of both these budgets. Recess to Executive The Council recessed to Executive Session at 10:00 a.m. Session and reconvened at 11:20 a.m. ADJOURNMENT Mayor Hyde adjourned the meeting at 11:20 a.m. to the meeting scheduled for Tuesday, April 4, 1978 at 7: p.m. in the Council Chambers, City Hall.