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HomeMy WebLinkAbout1951 04-13 CC ADJ MINNational City. California, April 13. 1951 614 Adjourned meeting of April 10, 1951 was called to order by Mayor Clinton D. Matthews at 7:30 P.M. o'clock. Councilmen present: Carrigan, Clarke. Curry. Hart. Matthews. Council- men absent: None. ADMINISTRATIVE OFFICIALS present: Alston. Sullivan, Campbell. Vansant. MAYOR TtAT^HETrS stated that this meeting was held over for the purpose of the acceptance of the final map of Beverly Glen. ATTORNEY CAEPBELT stated that he talked with Mr. ?cutter and the Attorney for the ''rater Connany and they are preparing an agreement for the contractor. or at least sufficient data so that they in turn can certify to the City that they will install the mains, They are sending it to Sag Francisco today and it should be back by Monday and then the certificate will be pre- pared. Mr. Campbell said he had prepared the contract -for Mr. Gordon and the City to sign and that will also be signed Monday.. Moved by Clarke, seconded by Hart, that it be laid over until the next meeting. Carried, all Councilmen present voting aye. COVCIL:iAN CLARKE stated he read in the paner an article con- cerning the Police Department in regard to the delinquent business licenses. Since March 9, 1951, when there was a total of 203 delinquent business licenses the police have cleared up the delinquencies 100 percent. Since the first of the year 1,067 licenses have been issued, Mr. Clarke said he thought this shows that we have a efficient Police Department, and that he thought the Police Department should be notified to that effect• MAYOR ilATTHz43 said he thought that the License Department and the Police Department should be commended for their work well done. COUNCILMAN CURRY said he noticed that there le no penalty on dog licenses and wondered why. MAYOR MATTHT'TWS suggested that the Attorney contact the Police 4/13 615 Department and the Poundmaster in this regard and make his recommendations to the Council. COUNCILMAN CA,RIGAN stated he thought this meeting had been called to discuss the budget situation, and that he had a report which he does not understand and thought that we might have an explanation of it. COURTCIL.AN CLARKE said he too thought we were to meet tonight in anticination of some report that would be compiled by the Auditor. He received a cony through the mail which answers the question that he believed primarily this meeting was called for. The report appears to be in ord°r, but he would appreciate hearing more about it. CITY IIANAGER SULIIVAN said she went over the report with Mr. Collura and went over it in preparation with the budget last year, and that she is familiar with another phase of it having gone over it twice with the State Allocation Board. Mrs. Sullivan said she would be glad to discuss it. COUNCILMAN CLARKE said he would like an explanation as to why certain items were bracketed, such as the transfer from 1946 sewer, which is No. 1; street equipment traded in for 31,000, No. 2. MAYOR HATTHEtTS asked if Councilman Carrigan had a specific question. COUNCILMAN CARRIGAN said the whole question was the transfer of funds, although the terms and comments are on the report, he still was not sure whether the transfer was proper or whether the transfer that is contemplated can be nndc. CITY MANAGER SULLIVAN said the first sheet of the retort shows the cash receipts from the bond issue. There was a 8365,000.00 bond issue voted but not all of the bonds were sold. The State had allocated to this community for reimbursement of construction projects with sewage as the priority in the amount of 891,876.00. That was done when the 390,000,000.00 was allocated to every political sub- division on the basis of population. The reimbursement to 4/13 616 the City had been completed excant for the lest amount in excess of 131,000.00 which you received this year, on nrior application. In addition to the 391,876.00 allocated to this City there was an amount allocated for sites•and plans under another chapter, a separate one from the ?91,000.00 and that is not included in the 191,876.00 and it is the same amount that we have discussed before in connection with reimbursements, so that the total cash receipts in relation to the particular project of sewers for which the bond issue was voted by the people was the amount of bonds sold, the remainingtum unsold and the total reimbursement for which the City was eligible under a quota system. Had the City chosen not to apply for this 191,000.00 under this category the City could have annlied for this amount under some other project. The $31,000.00 or ex- cess of '331,000.00 which we received this year as reimbursement need not have been applied to the sewer at all, could have been applied for under a different construction project. Mrs. Sullivan said it was her understanding, and that of the former Attorney that the moral commitment to the people the City administration had nreviously promised they would apply for the total amount for the trunk line sewer system, an extension of the sewer system, although it was not necessary to aptly, for all of it, it had been a promise, so that when application for reimbursement vas made it was made for this amount although it could have been transferred. Under the expenditures, the City has not had the practice of keening elaborate books but rather simple books of expenditures. It has not been the habit of the City in the east, either departments or the central office to keep any detailed breakdown accounts. It has been somewhat of a lump sum sytem. The expenditures shown on the report are all that Mr. Collura was able to find as identifiable to the expenditure of the sewer fund. It shows the total exnend- r 4/13 617 itures nade and identified under this sewer project. Prior to the end of the lest fiscal year, the resolution of transfer included the transfer of $30,000.00 to the Capital Reserve Fund which had been a loan not repaid by the 1946 sever fund. The remaining K21,885.03 then was left in June. Mrs. Sullivan said she raised the question whether it could be used for the extension of the sewer system, whether it could be used to apply on the repayment of the bonds, whether it could be used for sewer replacement. Mr. Collura and Mr. Trarner nade a seach and cane to the conclusion that the money could be used for sewers under the terms of the ordinance. Quite obviously more than this amount was actually expended on sewers, but because of the custom of the City of not keeping cost analysis of any kind it was not identifiable. That vms the problem we also had in the matter of -making application to the State Allocation Board for plans and specifications. sre were able at a previous time to make application for site reimbursement because that was identifiable by property. Mr. Ireland, who was then City Engineer had not had a practice of keeping any documentary evidence of his tine, so that there is no evidence to establish what the cost was. The total cash that is identifiable has been compiled by Mr. Collura as $355,784.25 prior to June. The question was raised as to whether any money could be spent for equipment, and the ordinance reads that it could. By investigation of the past practices it was found that no charge was made by the Street Department to the Sewer Fund for any use of equipment. There was an arbitrary division of the payroll and no supporting documents. Mrs. Sullivan stated she felt that the gas tax fund had been imposed upon by paying for all the cost of the equipment used by sewers and that some equipment should be purchased for specific use on sewers. The Street Department had a pieoe-of equipment that 4/13 618 WAS very old and not useful and was traded in to defray part of the cost, and that accounts for ",12,835.49 anent in the latter tart of the last fiscal year, leaving a balance in the fund of 19,C49.54 at the beginning of July. Subsequent to that time we made an application and received the rest of the money for which the City was eligible for construction projects and made theapplication on this project. IThe cost of the sewer systen to the City was without doubt in excess of the amount that the books show but there is no :ray to determine how much more they cost, so that you have a balance which at the beginning of the fiscal year last year, trhen she made the inquiry as to how it was to be used, her reply was for sewers, therefore it was her recommendation that it be included in the sewer budget for the replacement of sewers in the old district and that is where it is budgeted. for the Sewer Department to spend for replacement of trunk lines. There are several tha4 need to be replaced. We have meanwhile added trunk lines to the sewer system, but in each case you advertised contracts for bid, these were not laterals, they were trunks and paid out of tho Capital Reserve Fund, and in turn, according to the Sewer Ordinance which wrs adopted you put the money received of the sewer systen costs of 1170.00 per unit into this Capital Reserve Fund. The matter of expenditures on sewers hes been a serious problem because it was necessary for the City to have sewers and money was available, but unfortunately the detailed breakdown in coats was not kept so we are frtoed with the problem again, and the City Clerk has asked the Attorney the question as to how can the -money be spent. No matter how the Attorney decides, Mrs. Sullivan said she is convinced that the sewer fund has been properly spent as far as the money received and expended, but we sin'1y do not know just how much the total would have been had records been kept. 4./13 • `-. 619 COUNCILMAN CAFRIGAN said that he did not understand that the interfund charges of $8,000.00 shptm on the second page, and the same charge shows on the first page and it states that the wages were paid the street department employees, however there is no supporting evidence for labor allocation, no charge for compensation insurance, sick leave, vacation and retirement. The question that arose in his mind, Mr. Carrigan said, is just how the 18,000.00 enteres into it twice, or is it supposed to be a substantiating charge for leaving out the compensation insurance, etc. CITY IANAGER SULLIVAN stated what happened before was that the Street Department and the Seuer Department was run as a unit without any clear definition of cost, and the salary was arbitrarily divided in half. There is no tray of knowing whether actually exactly 50 percent of the time of the people when the payroll is divided in half was charge- able to sewers, there are no supporting time sheets, no work sheets, there just isn't anything, it was just an arbitrary assignment. The only thing you can depend upon is the possible memory of somebody who knows how they spent their time that long ago. COUNCILMAN CARRIGAN said the point he wished clear is, in that particular instance, and then for preliminary investigations and surveys it is an estimated cost of 127,960.00, has that been charged to the Sewer Fund, or is that the sum • that should have been charged andCITY nota,Gn� SULLIVAN stated that /no charge was made for the 127,960.00. No charge was made for any compensation insurance, sick leave, vacation or retirement, collection of wages, it was an arbitrary amount set. COUNCILMAN CARRIGAN stated that there are no dates on the report. CITY TANAGER SULLIVAN said these are back in 1946 all the tray through the project. The wages were cut in half. COUNCILMAN CARRIGAN asked if the 127,960.00 is an estimate. CITY MANAGER SULLIVAN said it is an estimate that was filed with the budget and 4/13 62o should have come out of funds, and it is the 115,140 that would have been available from the State and it is not because no records were kept, and at the time the project started this vras an estimate of the amount and it is about what the cost of plans and specifications would have been. There is no charge - anywhere for engineering costa in the whole project. COUNCIL- MAN CLARKE said it was quite obvious to him that this is some more of those things that we have inherited, and asked Mr. Collura if the figures on the report primarily refer to every- thing that hannened prior to June 1950. '_ER. COLLURA stated that the statement ends with the unexpended balance which would have been June 30, 1950, or $53,843.65. 0f that amount 121,885.03 was transferred to the Sewer Fund of which 14,300.00 was spent after June 30, 1950, $8,482.97 and 152.50 making a total of 112,835.49 was spent after June 30, 1950. COUNCILMAN CLARKE asked Mir. Collura if he felt that we are now in a posi- tion to overcome any such thing as this happening in the future. MR. COLLURA said not altogether. We still have the same problem in the Street Department for the gas tax, we do not have the proper cost system set up there and we still do not have a very good system for inter -department charges. We expect to do something about it this year. COUNCILiAN CLARKE asked Mayor Matthews if he did not thing the Council should decide on some kind of a policy to try and have something done to overcome this condition so that it will not hannen in the future. MAYOR MATTHEWS said he believed that the books will be set up to take care of the inter -department charges, and he is in favor of keeping adequate records even if it does take more time. .CITY MANAGER SULLIVAN said this has been dis- cussed by Hr. Collura and herself, and it is almost impossible to change over a lump sum system to a cost accounting unit cost system in one jump and Mr. Collura has given us a basis b./ 13 621 from which we can now go. We are now giving jobs numbers for identification, and the bookkeeping system will be able to nick up the numbers. COUNCILMAN CA.RRIGAN said that when the books were setup at that time it was his understanding that Mr. Collura was going to keep in close contact with them and make the necessary changes as they came up. Mr. Carrigan asked Hr. Collura how much tine he has spent on the system and how many changes hod he nade since the original installation. MR. COLLURA said we have made no changes since the original installation. We know there are changes that have to be made. I4r. Vansant has some changes that he wants carried out at the beginning of the fiscal year. The accounts as they are setup on the machine will probably have to rearranged. COUNCILMAN CARRIGAN said it appears that the question then is whether the transfer as contemplated can be made. ATTORNEY CAMPBELL said he had an opinion, and that it would have to be based upon the '53,000.00; that he is not concerned with the amount of money it is just the cash receipts and expenditures which can be properly accounted for and then the balance is what he he.s reported on, whether it is e dol)ar of 053,000.00. It is his contention that the money must remain in the sever trust fund and unfortunately it cannot be usef for maintenance or repairs. Mr. Campbell said at the present moment he believes that it cannot be used for anything. MAYOR 1IATTBEWS asked that even though the charges have not been nade on that fund that should have been made, did Attorney Campbell still think that we cannot go back nor readjust those charges. ATTORNEY CAI•PBELL said he•is not trying to say that there cannot be additional charges, it is only on unsupported charges that would be any money that would be left, whether it is left through unsupported charges or left because you could sunport all charges and still had money left in the fund. MAYOR IATT}EWS asked Mr. 4/13 622 f Collura if the filly some thousand is unsupported. MR. COLLURA said the 53,000.00 is the balance in the fund after the sunnorted extenses have been met. MAYOR 1iATT}En1S asked if there was any chance of getting supporting charges by contacting old city employees who might have been on the job at that time. ATTORNEY CAMPBELL said that is more of an accounting problem. He would not go back and attenrt to question the G355,784.00 that has been,exnended and we assume that those are properly accounted for, and Mr. Collura'has so certified. His report is only on one thing, whether there was any money received from the bond issue and from the State of California under the allocation program, and if there is none you don't have that Problem. COUNCILMAN CARRIGAN asked if there was not some legal way to get that Honey back into n fund where it can be used. ATTORNEY CAMDBELL said there are probably two ways, they will both take about the same amount of time. There should be legislation to change what is happening to this unexpended fund. There are two bond acts, one the 1901 bond and one an 1889 bond act•. The bonds were issued under the 1901 bond act, it is so stated in both the ordinance of issuance, Ordinance NO. 716 and the amending Ordinance No. 748, The procedure followed tras also that of 1901 bond act, a resolution of in- tention was Passed by the Council when they first started the machinery; The 1889 bond act requires an ordinance to be publish on the notice of intention, and in all cases there is no dif- ficulty in establishing the fact that it was under the 1901 bond act which provides only this - that the money must be applied exclusively to the Purposes and objects mentioned in the ordinance. The 1901 bond act further provides that the bonds may be used for the acquisition and construction, there is nothing about maintenance and repairs except the actual construction of particular items es set forth in the ordinance. 4/13 623 There is a possibility that the money could h ve been used for improvements had it been so noted in the notice of intention and ordinance and all the original proceedings. Th9t was not done and it was just for the acquisition and construction of a trunk and sewer system in said City including the acquisition of all equipment, easements and other nronerty necessary or convenient therefore. You re'ch the point of having a parti- cular purpose in mind when the bonds were issued under the 1901 bond act. There is no provision for the expenditure of the remaining money. In the 1889 act there is. The 1901 bond act needs the provision that you could put the unexpended funds into the General Fund, using the unexpended portion for main- tenance or repair or for the payment of the principal and inter- est. COUNCILMAN CARRIGAN asked that if the previous council drew up that ordinance, is it not possible for this council to draw another ordinance nullifying that one or adding an amendment to it. ATTORNEY CAMPBELL said it was not, what you would be doing is extending the purposes not only of the ordinance but the ordinance es annroved by two-thirds of the electors at the election. That was the ordinance calling for the elction and the electors voted on that particular thing, "Shall the bonds be issued for that particular nuroose° and the bonds were approved for that particular purpose. The 1901 act has this provision -that in the even the bonds had been approved by the elotors and the money t,res not expended for the purposes set forth in the act, then the electors would have the right, they must vote by two-thirds majority to show for what purpose that money could be used, that is, of course, if you issue the bonds, get the money and not spend it on anything. It would have to go back to the people to vote for what purpose the money could be used. CITY :TANAGER SULLIVAN asked Attorney Campbell, if in his opinion the remaining money could be 4/13 624 anent for a trunk line sewer. ATTORNEY CAiTPBELL stated no, that it would be stretching the purpose of the act and the intent to say that a bond issue for the purpose of acquistion, construction of a trunk and sewer system in said City including the acquisition of all equipment, easements and other property necessary or convenient therefore, to state that would allow trunk lines, stretching the interpretation of the act, it is possible but that he did not think that he would approve the expenditure of the money on it without court annroval. MAYOR MATTHETrS asked if it is possible to transfer this 53,000.00 back to the Sewer Fund and is there time now to attach an amendment to the San Ysidro bill and get it through. ATTORNEY CAMPBELL said he thought there would be, and there should be no objection from Assemblemen or Senators. CITY FANAGER SULLIVAN asked if the money from this fund could be used to complete the pumping stations that were never completed. ATTORNEY CAMPBELL said he believed it could, but the only "ray he could answer it would be whether or not the original project was completed. If the project had not been completed it could be used. CITY MANAGER SULLIVAN asked that in the event that supporting affidavits were obtained for money expended for services but not charged to this project, would that be an adequate legal document for allocation of the money? ATTORNEY CAMPBELL said the way to answer that would be take the exaenditirues set forth for wages, S8,536.00,which he assumes that is supported by adequate data. As far as any affidavit as of this time, if the amount of salary or wages expended for.that particular project could be set forth by an employee, yes, but if it is upon information and belief, he would ques- tion that. It is a matter of proof. CITY :TANAGER SULLIVAN said it would hove to be a series of affidavits of different people in order to support anything about the charges that were 4/13 625 not made.. CITY CI; RK ALSTON asked if Mr. Collura would furnish her with a certified copy of the report for her files. COUNCILMAN CARRIGAN said he would like to make a motion that in the future on reports of this type, inasmuch as the Coun- cil and the City Manager are very much interested, and the City Clerk is the custodian of the books and the City Treasurer is the Treasurer of the City money, that they all be made acquainted with the various facts. IR. COLLURk said their policy has always been to submit reports to the Council, if the Council wants additional reports we would be very glad to furnish them. COUNCILMAN CARRIGAN said that when the Council gets something like this, that apparently the custodian of the books does not know about, that surely there is conflect set up that should be avoided. IR. COLLURA said he would be glad to submit reports to anyone that the Council wished him to. CITY CLERK ALSTON stated that whenever an audit is made of the books that an official copy should be placed on file in the office of the City Clerk, and that is all that she is requesting. MB. COLLURA said they would be glad to furnish her with one. COUNCILIAN CLARIEE said that in all fairness to Mr. Collura, the Council are the ones who hired him to do this job, he has fulfilled their request, and as far as the City Clerk and City Treasurer are concerned he was not requested to furnish them with copies. Mr. Clarke said he agreed that the City Clerk and the City Treasurer should have a -copy ae well as the Councilmen, but since Mr. Collura has not been requested to do that, that he did not think any criticism is in order. MAYOR MATTHEVS requested that Attorney Campbell present the answers to the questions at the next meeting. Moved by Hart, seconded by Clarke, that the meeting be closed. Carried, all Councilmen present voting aye. e AT'�EST) MAYOR, CITY OF NATIONAL CITY, CALIFORNIA >i �iLG'dGoY� 3 CITY CLERIC 4/ 16