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Home My WebLink About2003 06-10 CC ADJ MINBook 85/Page 142A 6/10/03 MINUTES OF THE ADJOURNED REGULAR MEETING OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY, CALIFORNIA JUNE 10, 2003 The Adjourned Regular Meeting of the City Council of the City of National City was called to order at 9:45 a.m. by Vice Mayor Parra. ROLL CALL Councilmembers present: Morrison, Natividad, Parra, Ungab, Inzunza (9:55 a.m.). Administrative officials present: Campbell, Condon, Dalla, Desrochers, Diaz, Eiser, Hodges, Kirkpatrick, Kossyta, Matienzo, Morse, Myers, Post, Short, Trees, Yeo. 1. City Council Finance Committee - Review of 2003-2004 Preliminary Budget. Vice Mayor Parra introduced Finance Director Marylou Matienzo, who presented her annual budget summary with prepared slides and handouts (Exhibit A, attached), and answered questions from the City Council. Acting City Manager Park Morse then provided his synopsis of the proposed budget and the City's financial condition: • The budget presented to the Council for consideration: o is a $52,213,703 Resource Allocation Plan spread across 48 operating funds, and; o is balanced, with no layoffs, no new taxes and no service reductions; o notes that what began as a roughly $2.2M General Fund (GF) deficit when we began, now leaves us with a $545,000 projected ending fund balance in the General Fund on June 30, 2004. Book 85/Page 142B 6/10/03 • Of the $52M in total spending, most of the City's services come from the General Fund. • For FY 03-04 GF spending is recommended at $27,247,706. • On the revenue side, National City's tax base is not balanced. We live and die by sales tax. • Of the 55% of our GF revenue in sales tax, about 34% or about $4.5M comes from auto related uses. • Revenue in the GF is up 2.19% gross over last year. • This includes a 10.41 % gain in sales tax projections and we are being somewhat aggressive about the projection we are using. • The 2.19% increase also includes a 37.69% decline in investment earnings. • Our biggest worry right now is not the economy but the State and it's $38.2B budget deficit • National City already contributes about $2.1M of revenue that was once ours and has, over the years, been stolen by the State. Since 1981, we have lost about $31M that could have been used on National City needs. • For FY 03-04 we have not reacted to that which we can't know. We have not made provisions for possible State cuts. • Rather than going through the individual items, we believe something like $3.9M could be at risk by the State this next year and some of these cuts, the State has already implemented. This is not fear. This is reality. • We anticipate re -opening the City budget after the State adopts their budget. • Much is going on in Sacramento re: sales tax redistribution. There is a feeling in the legislature that cities don't know how to plan and make decisions on what their constituents need. • To address this "wrong" we saw AB 680 last Session which reallocated sales and property tax within the Sacramento Metro area. It failed. • This Session we have AB 1221 which is the "Son of AB 680," only now it's applicable statewide! AB 1221 would cost us $1.9M per year in its 5th year of operation. Hugely toxic legislation for our citizens. We understand it is now a 2-year bill but its still there. • On our expenditure side, one trend I don't like is that each year, revenue and expense move in lockstep with one another. Book 85/Page 142C 6/10/03 • What we need desperately is good solid revenue growth at a rate consistently surpassing the rate of growth on the expenditure side. • The proposed FY 03-04 budget does contain a number of features designed to give us budget flexibility in the future: o hiring freeze for non -safety; o submission of zero -growth budgets by departments; o what started as a reduction of about $642,000 was lessened to $404,924 or (1.49% of the GF) in reductions to operating spending. Had the reductions not been made, the GF ending balance on 6-30-04 would have been $140,6941 o ongoing, individual review of all purchases; o already -funded GF capital projects on hold; o proposed GF capital projects reduced. • In summary, the budget as presented has GF revenues up 5% net and expenditures up 4% over last year. • As a public agency, our mission is essentially service delivery. Our chief resource is our employees. • Employee compensation added $1,949,282 in new costs for FY 03-04. • The majority of our services are delivered in the public safety area. • The Sewer Enterprise Fund is in need of major work. Huge cost increases from Metro, the NPDES storm water permit program and bad debt have conspired to significantly increase costs. • The Sewer Fund is balanced assuming a rate increase. City Council questions and discussion followed. ACTION: Motion by Natividad, to do away with the Human Resources Director Position. Motion was withdrawn. ACTION: Motion by Inzunza, that every month there be a report by finance and that it be an all inclusive report that include all reimbursements and expenditures made for travel, supplies or anything else from our city accounts and all other agencies including Book 85/Page 142D 6/10/03 MTDB, Sweetwater Authority, SANDAG, Metro Wastewater and that those travel and expense accounts be made public every month on any expense paid for by taxpayers. There was no second. There appeared to be consensus that the Finance Department would provide a monthly digest of Council expenditures to the Councilmembers. There was clarification that in the City Council budget, account number 226-000 should be re -titled from `Training & Seminars' to `Language Training.' ACTION: Motion by Morrison, to not allocate $5,000 for the Filipino Independence Day parade. Motion amended by Natividad, seconded by Inzunza, to change the title of the account to `International Celebration Fund.' Carried by the following vote, to - wit: Ayes: Inzunza, Natividad, Parra, Ungab. Nays: Morrison. Absent: None. Abstain: None. PRELIMINARY BUDGET ACTION: Motion by Inzunza, seconded by Ungab, the Preliminary Budget for 2003-2004 be approved as amended. Carried by unanimous vote. A recess was called at 11:30 a.m. The meeting was recessed to 12 noon for Closed Sessions. CLOSED SESSIONS Public Employee Performance Evaluation -Government Code Section 54957 Title: Acting City Manager Public Employment -Government Code Section 54957 Title: City Manager Book 85/Page 142E 6/10/03 ADJOURNMENT The meeting was adjourned to the Adjourned Regular Meeting of the City Council to be held on Tuesday, June 17, 2003, at 9:30 a.m., in the Large Conference Room, Civic Center. CITY CLERK The foregoing minutes were approved at the Regular Meeting of July 15, 2003. CITY OF NATIONAL CITY ALL CITY COUNCIL MEETINGS ARE TAPE-RECORDED. YOU MAY LISTEN TO THE TAPES IN THE CITY CLERK'S OFFICE. COPIES OF THE TAPES MAY BE PURCHASED FROM THE CITY CLERK. EXHIBIT A PRELIMINARY BUDGET WORKSHOP City of Nailonal CRY Fiscal Year 2003-04 June 10,2003 Presented By: Marylou Matienzo General Assumptions $38.2 Billion State shortfall impact to local government subventions & grants National economy is unpredictable & difficult to assess California's economy is also unpredictable National City's high dependence on sales tax Maintenance of Contingency Reserves General Fund Revenue Assumptions 82 Property Taxes to decrease O.63% a� Sales taxes to increase 10.41% 82 Transient Occupancy Tax to decrease � Investment Earnings to decrease 31.69% a� Other Revenues to decrease 1.49% 8/ Overall Average Increase 2.19% General Fund Expenditure Assumptions a� Negotiated compensation adjustments are included in the budget a� Maintenance & Operation slightly reduced from FY2003 a� Capital Outlay same as FY2003 a� Changes bv City Manager are included cq Overall increase of 4% based on various budget adjustments/city manager changes FY 2003-04 GENERAL FUND REVENUES [Ranking by Dollar Amountl 6l (52 62 62 82 (Ten Largest Revenue Categories) Sales & Use Taxes Motor Vehicle in Lieu Property Taxes Franchise Fees-Gas,Cable,Refuse,Electric investment Earnings Transient Occupancy Tax Parking Citation Business License Tax CDC Contributions Other Revenues Total Revenues $ 14,912,500 $ 3,120,000 $ 2,280,451 $ 1,377,091 $ 1,000,000 $ 937,766 $ 643,000 $ 520,000 $ 320,000 $ 2,169,087 $ 27,279,895 FY 2003-04 GENERAL FUND REVENUES CDC Contributions Parking Citations Other Re'enues 1% 2% 9% Business License Tax 2% Transient Lodging Tax 3% Investment Earnings 4% Motor Vehide in Lieu 11% Sales & Use Taxes 55% o Sales & Use Taxes Motor Vehide in Lieu o Property Taxes o Inestment Earnings ® Franchise Fees o Transient Lodging Tax ® Business License Tax o Parking Citations • CDC Contributions ® Other Re'enues FY2003-04 ALLFUNDSREVENUES IRankiN' b Dollar Amounhl (Ten Largest Revenue Categories) Sales & Use Taxes Sewer Service Charges Motor Vehicle in Lieu TDA Grant Funds Property Taxes Gas Taxes Investment Earnings Transient Occupancy Tax Proposition A Other Revenues Total Revenues $ 14,912,500 $ 6,778,914 $ 3,120, 000 $ 2,880,467 $ 2,280,451 $ 1,200,000 $ 1,000,000 $ 937,766 $ 925,000 $ 9,505,372 $ 43,540,470 FY 2003-04 ALL FUNDS REVENUES Proposition A 2% Transient Occupa Tax 2% Investment Eamings 2% Gas Taxes 3% Property Taxes 5% IDA Gant Funds 7% Other Re\.enues 22% Motor Vehide in Lieu 7% Sales & Use Taxes 34% Sewer Senice Charges 16% Sales &Use Taxes ■ Sewer Service Charges o Motor Vehide in Lieu o TDA Grant Funds ■ Property Taxes El Gas Taxes In'.estment Eamings o Transient Occupancy Tax • Proposition A • Other Re enues FY 2003-04 GENERAL FUND EXPENDITURES (Ten Largest Expenditures Categories) Police $ 13,599,233 Fire Operations $ 5,065,936 Streets $ 1,670,648 PW-Engineering $ 1,325,597 Recreation $ 1,176,989 Non Departmental $ 1,007,671 Planning $ 758,361 City Manager $ 558,279 Building & Safety $ 475,276 Other $ 1,609,716 Total Expenditures $ 27,247,706 0 Police ® Fire Operations ❑ Streets O PW-Engineering ® Recreation Non Departmental ® Planning O City Manager ■ Building & Safety ® Other FY 2003-04 GENERAL FUND EXPENDITUHES City Manager 2% Non Departmental 4% Recreation 4% PW-Engineering 5% Building & Safety Fire Operations 19% FY 2003-04 All FUNDS EXPENDITURES IRanking by Dollar Amountl (Ten Largest Expenditures Categories) Police Sewer Service Fire Operations Local Transit Risk Management Facilities Maintenance Streets Vehicle Services Proposition A Other Expenditures Total Expenditures $ 13,599,233 $ 6,819,365 $ 5,065,936 $ 2,489,886 $ 2,281,435 $ 1,786,936 $ 1,670,648 $ 1,186,583 $ 1,144,330 $ 16,169,351 $ 52,213,703 FY 2003-04 All FUNDS EXPENDITURES Other Expenditures 31% Proposition A 2% Vehicle Services 2% Streets 3% Facilities Maintenance 3% Fisk Management 5% Police 26% Sewer Service 13% Fire Operations 10% Local Transit 5% o Police ® Sewer Service o Fire Operations o Local Transit ®i Risk Management o Facilities Maintenance ® Streets o Vehide Seruces e Proposition A ® Other Expencitures BUDGET ANALYSIS, BY FUNDS, PRELIMINARY BUDGET FISCAL YEAR 2003-04 Fund Fund Title 001 General Fund 103 General Capital Outlay Fund 104 Library Fund 105 Parks Maintenance Fund 108 Library Capital Outlay 109 Gas Taxes Fund 110 Emergency Preparedness Fund 111 POST Fund 113 Cultural Arts Fund 115 Park & Rec Capital Outlay 125 Sewer Service Fund 131 Asset Forfeiture Fund 157 SLESF Grant 169 Local Law Enf. Grant 172 Refuse Fund 175 Petroleum Violators Fund 176 Police Reimbursed Overtime 185 COPS More Grant 189 Civic Center Refurbishing 195 Landscape Reserve Fund 196 Capital Project Reserve Fund 197 Productivity Improvement 212 Personnel Compensation Fund 243 Per Capita Grant Fund 244 Roberti Z'Berg/Harris Block Grant 0 Fund Balances 06/30/03 1,054,033 0 0 0 255,261 266,595 15,000 0 95,000 73,834 40,451 475,629 0 100,000 540,921 5,510 55,000 0 235,025 208,318 102,906 75,000 836,921 0 Fund Estimated Budgeted Inter -Fund Balances Revenues Expenditure Transfers 06/30/04 27,279,895 240,000 407,800 458,000 79,000 1,200,000 0 0 0 52,000 6,778,914 100,500 0 175,000 100,000 0 85,000 51,000 0 0 0 0 0 502,000 161,305 27,247,706 240,000 1,327,498 858,466 45,000 470,000 15,000 0 0 1.279 6,819,365 0 0 0 154,798 0 0 0 0 0 .50,000 35,003 436,927 502,000 161,305 (540,604) 545,618 0 0 919,698 0 400,466 0 0 289,261 (700,000) 296,595 0 0 0 0 0 95,000 0 124,555 0 0 0 576,129 0 0 0 275,000 0 486,123 0 5,510 0 140,000 0 51,000 0 35,025 0 208,318 0 52,906 0 39,997 0 399,994 0 0 0 0 BUDGET ANALYSIS, BY FUNDS, PRELIMINARY BUDGET FISCAL YEAR 2002-03 Fund Fund Title 302 Street Tree Maintenance Fund 303 Capital Facilities Fund 304 Park Development Fund 307 Proposition "A" Fund 308 Highway Bridge Rehab Fund 312 STP Local/TransNet Highway 313 CMAQ Grant 316 CEC Grant 348 State Conservancy Grant 349 State Local Assistance 343 State Local Partnership 345 Traffic Congestion Relief Fund 552 Local Transit 626 Facilities Maint Fund 627 Liability Ins. Fund 628 General Services Fund Balances 06/30/03 0 208,097 211,119 219,330 484,393 277,056 271,446 5,000 0 0 61,468 483,008 219,840 0 1,170,548 0 629 Information Systems Maint. Fund 452,579 630 Office Equipment Depreciation 1,957,192 631 Telecommunications Revolving 295,705 632 General Accounting Services 0 633 Unemployment Insurance Reserve 0 643 Motor Vehicle Svc Fund 479,560 Total All Funds 11,312,959 Fund Estimated Budgeted Inter -Fund Balances Revenues Expenditure Transfers 06/30/04 109,061 0 0 925,000 0 922,944 400,000 0 35,000 147,250 0 0 2,226,650 1,786,936 1,266,364 304,084 297,051 478,678 372,026 625,267 38,318 786,593 49,178,021 109,061 50,000 0 1,144,330 150,000 1,200,000 0 0 0 147,250 0 0 2,439,944 1,786,936 2,281,435 304,084 644,083 710,700 347,791 625,267 38,318 1,186,593 52,213,703 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (79,560) 0 0 158,097 211,119 0 334,393 0 671,446 5,000 35,000 0 61,468 483,008 6,546 0 155,477 0 105,547 1,725,170 319,940 0 0 0 8,277,277