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HomeMy WebLinkAbout2009/01/08 Agenda Packetdeclare under penalty of perjury that I am employed by the City of Chula Vista in the Office of the City Clerk and that I posted th document on the bulletin board accord rn Act requirements. ,,, - ,~, )ohn McCann, Councilmember Pamela Bensoussan, Councilmember Bart Miesfeld, City Attorney Donna Norris, City Clerk Notice is hereby given that the Mayor of the City of Chula Vista has called and will convene a Special Meeting of the City Council on Thursday, January 8, 2009 at 6:00 p.m. in the Council Chambers, located at 276 Fourth Avenue, Chula Vista, California, to consider the items on this agenda. /~ ~ n ~ U Cheryl Cox, Mayor SPECIAL MEETING January 8, 2009 6:00 P.M. Council Chambers City Hall 276 Fourth Avenue CALL TO ORDER ROLL CALL: Councilmembers Bensoussan, Castaneda, McCann, Ramirez, and Mayor Cox PLEDGE OF ALLEGIANCE TO THE FLAG AND MOMENT OF SILENCE ACTION ITEM The Item listed in this section of the agenda will be considered individually by the Council and is expected to elicit discussion and deliberation. If you wish to speak on this .item, please frll out a "Request to Speak" form (available in the lobby) and submit it to the City Clerk prior to meeting. 1. CONSIDERATION OF DECLARATION OF A FISCAL EMERGENCY Over the last few years the City of Chula Vista has experienced a precipitous decline in revenues due to the slumping economy, the housing crisis, and the slowdown in development activity. The City had made significant program and personnel reductions during this time in order to bring expenditures in line with a lower revenue base. However, the City's financial outlook has continued to deteriorate and is facing a $3.9 million deficit in fiscal year 2008-2009 and an estimated $20.0 million deficit in fiscal year 2009-2010 for the City's operating fund. (Finance Director) Page 1 -Council Agenda http://www.chulavistaca.gov January 8, 2009 Staff recommendation: Council adopt the following resolution: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DECLARING A FISCAL EMERGENCY CLOSED SESSION Announcements of actions taken in Closed Session shall be made available by noon on Wednesday following the Council Meeting at the City Attorney's office in accordance with the Ralph M. Brown Act (Government Code 549 7.7). 2. CONFERENCE WITH LABOR NEGOTIATORS PURSUANT TO GOVERNMENT CODE 54957.6 • Agency designated representatives: Jim Sandoval, Scott Tulloch, Marcia Raskin, Bart Miesfeld, Rod Betts, Maria Kachadoorian, Leah Browder • Employee organizations: CVEA, IAFF, POA, WCE, Mid-Management, Professional and Unrepresented Groups ADJOURNMENT to the next Regular Meeting of the City Council, January 13, 2009 at 6:00 p.m. in the Council Chambers. Materials provided to the City Council related to any open-session item on this agenda are available for public review at the City Clerk's Office, located in City Hall at 276 Fourth Avenue, Building 100, during normal business hours. In compliance with th e AMERICANS WITH DISABILITIES ACT The City of Chula Vista requests individuals who require special accommodations to access, attend, and/or participate in a City meeting, activity, or service, contact the City Clerk's Office at (619) 691-SO-~1 or Telecommunications Devices for the Deaf (TDD) at (619) 585-5655 at least forty-eight hours in advance for meetings and five days for scheduled services and activities. California Relay Service is also available for the hearing impaired. Page 2 -Council Agenda http:i/www.chulavi.sta.ca.;ov January 8, 2009 CITY COUNCIL AGENDA STATEMENT CITY OF tft CHULA VISTA JANUARY 8, 2009, Item ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA DECLARING A FISCAL EMERGENCY SUBMITTED BY: FINANCE DIRECTOR r 2jrz M, REVIEWED BY: DEPUTY CITY GER'' CITY MANAGER 4 /5THS VOTE: YES 1-1 NO ❑X SUMMARY Over the last few years the City of Chula Vista has experienced a precipitous decline in revenues due to the slumping economy, the housing crisis, and the slowdown in development activity. The City had made significant program and personnel reductions during this time in order to bring expenditures in line with a lower revenue base. However, the City's financial outlook has continued to deteriorate and is facing a $3.9 million deficit in fiscal year 2008 -2009 and an estimated $20.0 million deficit in fiscal year 2009 -2010 for the City's operating fund. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed action for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a "Project' as defined under Section 15378 of the State CEQA Guidelines because the action only involves fiscal issues which do not involve any commitment to any specific project which may result in a potentially significant physical impact on the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. RECOMMENDATION That City Council approve the resolution. BOARDS /COMMISSION RECOMMENDATION Not Applicable. 1 -1 JANUARY 8, 2009, Item Page 2 of 4 DISCUSSION As previously reported to Council, the City is projecting budget shortfalls of $3.9 million in the current fiscal year and $20.0 million annually beginning in fiscal year 2009 -2010. Over the last few years the City of Chula Vista has experienced a precipitous decline in revenues due to the slumping economy, the housing crisis, and the slowdown in development activity. The City had made significant program and personnel reductions during this time in order to bring expenditures in line with a lower revenue base. Despite these reductions the City's financial outlook has continued to deteriorate. General Fund revenues are currently projected to come in $5.5 million dollars below budget (3.9 %) in fiscal year 2008 -09 and are projected to drop another $3.1 million (2.2 %) in fiscal year 2009 -10. The anticipated shortfalls are primarily due to significant decreases in the City's top revenue sources — Property Taxes, Motor Vehicle License Fees, and Sales Taxes. • Property Taxes - In developing the budget for the current fiscal year, property tax revenues were projected to increase 3.9 %, however, due to declining assessed property values and the slow down in new home construction, the actual growth is only 2.2 %. Through January 2008 the City's aggregate property values have dropped $1.1 billion as a result of reassessments. In the current year the impact of the decline in assessed values was partially mitigated by the addition of the SR 125 with an assessed valuation of $600 million. However, based on the most current information provided by the County Assessor's Office, property tax revenue is projected to decrease by 3.9% in fiscal year 2009 -2010 as a result of the continued decline in housing values and additional requests for reassessments of residential properties. • Motor Vehicle License Fees - Motor Vehicle License Fees are based on the ownership of a registered vehicle and are administered through the State of California. In 1998, the State Legislature reduced the fee from 2% to 0.65 %, resulting in a negative impact to local governments. The State replaced those funds with offsetting property tax revenues, resulting in MVLF being susceptible to changes in assessed value. Combined with property taxes, 36% of the City's total revenues are now susceptible to fluctuations in property assessed values. • Sales Taxes - Decreases in sales tax revenue reflect historical lows being reported for consumer confidence. The ongoing housing and credit crisis combined with continued job loss do not point to a quick recovery in this revenue source. The fiscal year 2008 -2009 budget assumed a moderate 2% increase for sales tax revenue. However, due to the worsening economic condition coupled with poorer than expected sales tax numbers in the most recent quarter, sales tax revenue is now projected to decrease by 5% in the current fiscal year and an additional 2% decrease next fiscal year. 1 -2 JANUARY 8, 2009, Item Page 3 of 4 In fiscal year 2008 -2009, budget savings of $1.6 million have been identified to help mitigate the projected revenue shortfall of $5.5 million, which reduces the estimated budget deficit to $3.9 million. For fiscal year 2009 -2010, the base budget is projected at $154.2 million, an 8% increase over fiscal year 2008 -2009, and includes full funding for all Council approved positions, all scheduled step increases and cost of living adjustments, no budgeted salary savings, higher flex/insurance costs, increased equipment replacement costs, higher fleet maintenance and fuel costs, and higher public liability expenditures. The increase in expenditures coupled with a declining revenue base result in a projected budget gap of $20.0 million for fiscal year 2009 -2010. As reported in the first quarterly financial report, the General Fund reserves as of July 1, 2008 total $9.3 million. Should the City take no corrective action in the current fiscal year to address the projected budget gap, the reserves would drop to $5.4 million. The remaining reserve level would not be sufficient to offset the projected deficit of $20.0 million in fiscal year 2009 -2010. The five -year revenue and expenditure forecast indicates that the projected budget deficit is an ongoing structural issue that requires permanent solutions — one time revenues and short term expenditure reductions are not practical solutions to address this issue. The table below summarizes the five -year fiscal outlook (in millions) for the General Fund. 2008 -04- "2009 -10 2010 -11 2011 -12 2012 -13 2013 -14 I Revenues $ 137.30 $ 134.25 $ 135.04 $ 137.55 $ 140.21 $ 142.88 Expenditures $ 141.30 $ 154.22 $ 157.90 $ 161.31 $ 160.18 $ 163.63 Deficit $ (4.00) $ (19.97) $ (22.86) $ (23.76) $ (19.97) $ (20.76) The City Manager has prepared a budget reduction plan that addresses the projected deficit for fiscal year 2008 -2009 and fiscal year 2009 -2010. This plan includes the elimination of 166.5 positions and may result in as many as 129 layoffs. The recommended program and personnel reductions impact all departments and bargaining groups and will result in significantly lower levels of service being provided to the community. Due to the factors highlighted above, it is recommended that the Council move to declare a fiscal emergency and recognizes that the fiscal emergency is a structural imbalance that cannot be addressed through the use of reserve funds. DECISION MAKER CONFLICT Staff has reviewed the decision contemplated by this action and has determined that it is not site specific and consequently the 500 foot rule found in California Code of Regulations section 18704.2(a)(1) is not applicable to this decision. 1 -3 JANUARY 8, 2009, Item I Page 4 of 4 FISCAL IMPACT The City is currently facing a projected budget deficit of $3.9 million in fiscal year 2008- 2009 and $20.0 million in fiscal year 2009 -2010. The City Manager has prepared a budget reduction plan that corrects the annual ongoing structural budget deficit of $20.0 million. The budget reduction plan includes the elimination of 166.5 positions and may result in as many as 129 layoffs. The recommended program and personnel reductions impact all departments and bargaining groups and will result in significantly lower levels of service being provided to the community. In order to give the City Council greater flexibility in establishing remedial measures to resolve the City's budget deficit, it is recommended that the Council declare a fiscal emergency. 1 -4 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL FOR THE CITY OF CHULA VISTA DECLARING A FISCAL EMERGENCY WHEREAS, at the time the 2008 -2009 Budget was enacted it reflected budget reserves for Fiscal Year 2008 -2009 totaling $9.3 million; and WHEREAS, at that same time, as a result of spending requirements embedded in law and increased program costs as a result of inflation, workload and population - driven program growth, the Finance Department projected shortfall between revenues and expenditures in Fiscal Year 2008 -2009 would be $3.9 million and for Fiscal Year 2009 -2010 would be approximately $20.0 million; and WHEREAS, since the enactment of the 2008 -2009 Budget, the City has faced the same economic challenges that are affecting the rest of the state and nation, in large part as a result of a slowing housing market, down -turn in the economy and financial instability; and WHEREAS, these economic challenges have resulted in a $5.5 million reduction in the General Fund revenue forecast for Fiscal Year 2008 -2009 below the revenue forecast used when the 2009 Budget was enacted, and WHEREAS, expenditures from the General Fund during Fiscal Year 2008 -2009 are projected to be lower than the original adopted budget by approximately $1.6 million resulting in a projected budget deficit of $3.9 million; and WHEREAS, the Finance Director now reports that this combination of lowered revenue receipts and projections and anticipated expenditure savings has resulted in a projected budget shortfall for Fiscal Year 2008 -2009 of $3.9 million, as well as a cumulative budget shortfall in Fiscal Year 2009 -2010 of $20.0 million; and WHEREAS, due to the significant projected budget shortfall, City Council has reviewed and discussed this matter, and has taken public input, at noticed public meetings on November 17, 2008 (Council Budget Workshop), December 4, 2008 (Council Budget Workshop), December 9, 2008 (Council Meeting), December 16, 2008 (Council Meeting) and January 6, 2009 (Council Meeting); and WHEREAS, the City is negotiating with all of the City's bargaining groups in an effort to reduce expenditures and declaring a fiscal emergency will assist in said negotiations; and WHEREAS, this declaration of a fiscal emergency is being made to give the City Council greater flexibility in establishing remedial measures including identifying potential state and federal grants or other funding sources; and 1 -5 ,vrrs FOR I EVERYBODY SOUTH BAY FAMILY YMCA January 6, 2009 120] l'a~e\)Magda Chula Vista. California YISlJO Tekphune (hllJ) 421-8S0.'i FAX (619;42]-3012 Ms. Lena Malilas Parent of3'd grade DASH participant Olympic View Elementary School 1220 S Greensview Drive Chula Vista, CA 91915 Dear Ms. Mafnas, 1 am writing to you in response to your letter and drawings submitted to the Mayor and City Council on December 9,2008, through the City Clerk's office. Your passion and energy is commendable, and in my opinion, we nccd more passionate, involved parcnts, like you. 1 did want to clarify a few statements that were given in your letter. The title of your letter statcd "costly YMCA programs.'.' Drawings in the submitted packet also included dollars amounts of"$200" as the fce which the YMCA charges. Thc South Bay Family YMCA charges a maximum of $105 a week for a child to be enrolled in our after- school program, with financial assistance available for all childrcn. All of our YMCA child care providcrs are licensed. As an Executive DireetorNice President for the largest child care providcr in thc county of San Diego, I have spoken to thousands of parents about how important it is to them to have a licensed individual look after their child. The South Bay Family YMCA child care program has a 14 child to 1 providcr ratio. For a child that is enrolled in our childcare program, it is a policy that we offer academic enrichment time, a fitness component, nutrition standards, health and safety and education requirements for our staff, as well as always instilling the four character development values for our organization which are caring, honesty, respect and responsibility. I also personally know how hard it is for parents to make ends meet, and that is why the South Bay Family YMCA offers financial assistance to all parents, with the opportunity to be enrolled in our after-school program for little, or nothing. We also receive State funding, where parents can apply for Stale assistance. J have taken the liberty of enclosing our program booklet, which states our pricing and fees. Thank you again for being an active parent in bettering the life of your child. If you have any questious, please do not hesitate to contact me directly at (619) 421-8805. Sincerely, ~~ TINA WILLIAMS Executive Director/Vice President South Bay Family YMCA w~4~A~~ Cc: Mayor Cheryl Cox and City Council ~ ~J ^ re<')'cI~d f'.1per. MISSIOl'< STt\'J'E\lENT: "The South Bay Family )',\lCA j, dedi[;Jt~d 10 impro\!in~ lhe quality of human life ;Jlld 10 l1cJping all people rcidize their flllk,! pmelllinl a, children of God through del'elopment of tIle spirit. mind ,Ind hody,"