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Home My WebLink About2010 06-08 CC CDC ADJ MINBook 92 / Page 155 06-08-2010 MINUTES OF THE ADJOURNED REGULAR MEETING OF THE CITY COUNCIL AND COMMUNITY DEVELOPMENT COMMISSION OF NATIONAL CITY, CALIFORNIA June 8,2010 The Adjourned Regular Meeting of the City Council and Community Development Commission of National City was called to order at 6:05 p.m. by Mayor Ron Morrison. ROLL CALL Council / Commission members present: Morrison, Sotelo-Solis, Van Deventer, Zarate. Administrative Staff present: Babaki, Dalla, Deese, Duong, Eiser, Gonzales, Hodges, Ladrido, Raulston, Smith, Stevenson, Zapata. NON CONSENT RESOLUTION PERSONNEL ADMIN (604-6-1) 1. Resolution No. 2010-121. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NATIONAL CITY AUTHORIZING THE CITY MANAGER TO IMPLEMENT A ONE-TIME INCENTIVE BASED VOLUNTARY SEPARATION PROGRAM FOR ELIGIBLE FULL-TIME, CAREER EMPLOYEES OF THE CITY OF NATIONAL CITY. (Human Resources) RECOMMENDATION: Adopt the Resolution with inclusion of omitted language in Sub -Section B. TESTIMONY: None. ACTION: Motion by Van Deventer, seconded by Zarate, to adopt the Resolution with the corrected Ianauaae. Carried by unanimous vote. BUDGET WORKSHOP 2. City Manager Chris Zapata, Assistant City Manager Leslie Deese, and Finance Director Jeanette Ladrido collaborated on presentations regarding the Incentive Based Voluntary Separation Program, the FY 10-11 Preliminary General Fund Budget, FY 10-11 CDC Budget and the Proposed Sewer Loan for Street Re -pavement Program. (See attached Exhibit 'A') Book 92 / Page 156 06-08-2010 BUDGET WORKSHOP (cont.) 2. City Manager Chris Zapata, Assistant City Manager Leslie Deese, and Finance Director Jeanette Ladrido collaborated on presentations (continued). ACTION: Motion by Van Deventer, seconded by Sotelo-Solis to authorize (1) a $1 million contingency reserve for Voluntary Separation Incentives, (2) $1.5 million Sewer Fund loan for Street Resurfacing Project, (3) approve $245,000 CIP transfers to the General Fund, (4) approve reduction in Library operating hours and Community Services with details and recommendations to be brought back and (5) reinstate Development Services Fees. Carried by unanimous vote with Member Van Deventer abstaining on Item #5. 3. PUBLIC COMMENT None. 4. Community Services Director Brenda Hodges requested an item be added to the Agenda. The item involves the upcoming Concert in the Park. RECOMMENDATION: Add the item to the agenda and approve a change in date to September 18th and a change in the music format to Oldies - Classic Rock. ACTION: Motion by Van Deventer, seconded by Zarate, to add the Item. Carried by unanimous vote. Motion by Sotelo-Solis, seconded by Van Deventer, to approve the date change and music format. Carried by unanimous vote. ADJOURNMENT Motion by Van Deventer, seconded by Sotelo-Solis, to dispense with the Regular City Council and Community Development Commission Meeting of June 15, 2010 and Adiourning to an Adiourned Regular City Council and Community Development Commission Meeting - Tuesday - June 22, 2010 - 6:00 p.m. - Council Chambers - National City, California. Carried by unanimous vote. Next Regular Adjourned City Council/Community Development Commission Meeting - Tuesday - June 22, 2010 - 6:00 p.m. - Council Chambers, Civic Center The meeting closed at 7:42 p.m. Book 92 / Page 157 06-08-2010 Ci Clerk The foregoing minutes were approved at the Regular Meeting of November 9, 2010. Mayor EXHIBIT 'A' CALIFORNIA.. N%TIONAL CI �' lICOAYORflW FY 2010-11 Budget Update June 8, 2010 Agenda Incentive Based Voluntary Separation Program FY 10-11 Preliminary General Fund Budget Sewer Loan for Street Re -pavement program FY 10-11 Preliminary CDC Budget Public Comment City Council Comments and Direction Assistant City Manager Finance Director City Manager Finance Director Community City Council 1 Background • In response to City's projected structural deficit, cost saving suggestions to reduce expenditures and generate revenue & expenses have been presented — 226 suggestions from CARE Committee — 81 suggestions from labor & management — May 25, 2010 City Manager presentation to City Council — Three Tier approach — City Manager's Comments Background • To create ongoing personnel related savings, on May 25, 2010 City Council authorized an expenditure of up to $1M to incentivize eligible full-time, career employees to voluntarily separate from City employment 2 Managed Attrition • Incentive Based Voluntary Separation Program - Component of Managed Attrition • Model Program designed to create savings and eligibility will consider extent of cost savings achieved through retirement or resignation — Limited to employees in positions where retirement or separation results in reduction of a position or ancillary position One-time expenditure of up to $1M — Eligible full-time, career employees — First come, first served basis The Program • Voluntary Retirement Incentive Program CalPers retirement with 2 years service credit purchased by City — Completed at least 5 years of service with City — At least 50 years of age Subject to approval by City Manager based on achieving cost savings Must voluntarily retire between June 24, 2010 and September 20, 2010 — CalPers 90 Day Enrollment Window • Voluntary Separation Program One rime cash payment & one year medical benefits (employee only) purchased by City • lyuals S3,000 plus S1,000 for each year of service Completed at least 5 years of service with City Subject to approval by City Manager based on achieving cost savings Must voluntarily retire between June 24, 2010 and September 20, 2010 3 Hconomic Impact — Cost Savings Limited to employees in positions where retirement or separation can result in reduction of position or ancillary position • City Manager determination Creates on -going personnel related savings • Savings in base salary & benefits • Escalating health care & retirement costs Assumptions: 10 employees (6 mist; 4 safety Assumption Scenarios - Costs Purchase of Service Credit Voluntary Separation Program Annual increased cost Buy Out $328,000 of plan (20 years)....$47,061 One Year Medical Retiree Medical $18,360 (Employee Only) $ 47,674 (annual ongoing) Ongoing Subtotal $65,421 Total x 20 years $941,220 Both Scenarios Leave Cash Out One time Cost $152,383 4 Economic Impacts — Purchase of Service Credits Ongoing Annual Costs (Plan Cost & Retiree Medical) = $65,421 Salary & Benefits Savings = $1,036,359 Current year savings $970,938 minus $152,383 (leave cash out one time cost) Equals total current year savings = $818,555 Future Ongoing savings = $970,938 Will spend up to $1M to save $818,555 this year and future ongoing savings would be $970,938* annually * Ongoing savings realized only if the positions are not filled Economic Impacts - Voluntary Separation Program Employee Buy Out = $328,000 Plus One Year Medical (Employee Only) = $ 47,674 Plus Leave Cash Out = $152,383 Equals Total One Time Cost of $528,057 Salary & Benefits Savings = $1,036,359 Minus leave cash out, medical & employee buy out (one time costs) Equals Current Year Savings of $508,302 Will spend up to $1 M to save $508,302 this year and future ongoing savings would be $1,036,359* *Ongoing savings realized only if the positions are not filled 5 Next Steps • Adopt Resolution authorizing the City Manager to implement a one time incentive based voluntary separation program for eligible full-time, career employees of the City of National City • Employees will be able to apply for program effective June 14, 2010 • Employee Informational Meetings have tentatively been scheduled for June 15 & 16, 2010 • Resolution to commence CalPers enrollment to City Council on June 22, 2010 Questions/Comments 6 -- CALIFORNIA NAT EDNALI CITY 1331 `- NVCOAPOAdIA ' General Fund Preliminary Budget FY 2010-11 Council Directed Actions • January 30 • February 16 • Feb -Mar • April6 Midyear budget review Adopted midyear changes Presentations to Neighborhood Councils FY 2010-11 Budget Update • May 11 • May 18 • May 25 • June 5 • June 8 • June 22 • July 1 Key Dates Community Budget Workshop Budget update Budget Workshop Neighborhood Council Breakfast Budget update Budgct Adoption FY 10-11 Budget available on the City's websitc FY 10-11 Preliminary General Fund Subtotal Total Estimated Revenues & Transfers in 37.0 M Contingency Reserve Contribution 1.0 M TOTAL REVENUE & TRANSFERS 38.0 M Estimated Expenditures & Transfers Out $ (37.0 NI) Amount needed for Voluntary Separation (1.0 M) TOTAL EXPENDITURES & TRANSFERS (38.0 M) Estimated Surplus/Deficit BALANCED 8 $10 $5 $0 Sales Tax and District Tax Combined Revenue 2003 2004 2005 2006 2007 2008 2009 2010 2011 Sales Tax ■ District Tax General Fund Contingency Reserve General Fund Policy: ... range between 25% and 50% of a single year's General Fund operating expenditures • FY 10-11 Estimated General Fund expenditures = $38 tnillion • Reserve will be at 20%, which is $1.9 million below target level of $9.5 million ($38 million x 25°/o) 9 12 — 10 — 8 - 6- 4- 2- 0 History of Contingency Reserve 88.6 8.2 .7 6.6 6.8 9.4 9.7 9.4 9.5 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 kW Reserve —25%Goal One Time Funding Transfers to the General Fund Telecommunications Revolving Fund 900,000 Parks & Recreation Capital Outlay Fund 575,000 Liability Insurance Fund 400,000 General Services 200,000 General Accounting Services 200,000 Unemployment Insurance Reserve 200,000 Total transfers = $2,475,000 10 Adjustments to Internal Charges No funding for the following: — Office Equipment Depreciation — Telecommunications Revolving — Unemployment Reserve Modified funding for the following: — Facilities Maintenance — Liability Insurance — General Accounting — General Services — Motor Vehicle Services Savings to the General Fund over $800,000 Vacant Positions Not Funded * Department Position Full -Time Savings Equivalence City Manager Management analyst III 1.00 $94,076 Puhlic information Officer 1.00 $94,219 Executive Assistant IV 1.00 $84,411 -Management Intern 1.00 $36,494 Community Recreation Superintendent 1.00 $97,557 Services Administrative Secretary 1.00 $61,220 Food Service Worker 1.00 $29,828 Building Building Inspect/Plan Exam 1.00 $87,813 Senior Building Inspector 1.00 $81,037 Fire Battalion Chief (Admin) 1.00 $139,800 Reserve Coordinator 0.25 $13,485 * General Fund, Library Fund, Parks Fund & Nutrition Center 11 Vacant Positions Not Funded * Department Position Full -Time Savings Equivalence. Engineering Management Analyst II 1.00 $87,903 Associate Engineer — Civil 1.00 $85,032 Management Intern 0.50 $17,237 Civil Engineering Tech 1.00 $79,796 Library Principal Librarian 1.00 $107,170 Senior Library Technician 1.00 $64,628 Human FIR Analyst 0.88 $77,355 Resources Management Intern 0.44 515,169 Public Works Tree Trimmer 1.00 $60,110 Senior Park Caretaker 1.00 $68,374 Seasonal Park .aide 0.50 $13,365 * General Fund, Library Fund, Parks Fund & Nutrition Center Vacant Positions -Not Funded * Department Position Full -Time Savings Equivalence Planning Associate Planner 1.00 $85,032 Senior Office Assistant 0.50 $17,586 Police Animal Control Officer 1.00 $74,901 Community Services Officer 1.00 $62,466 Crime Scene Specialist 1.00 $74,913 Police Corporal 1.00 $133,504 Police Records Clerk 0.98 $34,519 Community Parking Regulations Officer 1.00 $57,678 Development Code Conformance Officer 0.33 $28,264 City -Wide Unfunded Positions 27.38 $2,334,942 * Gcncral Fund, Library Fund, Parks Fund & Nutrition Center 12 Capital Improvement Projects - transfer 5165,000 to the General Fund The following projects were approved by the CIP committee to release funding: I ibrary Hooring/Counter 10,000 Las Palmas Pool Elect Room 50,000 Casa De Salud Roof 15,000 Kimball Rec Roof 20,000 Kimball Park Transformer 40,000 1.as Palmas Pool Drains 30.000 Total to General Fund 165,000 Civic Center Electric Room* 9,000 Recommend funds to go back to Civic Center Refurbishing Fund Council Priorities • No reduction in services in the following: — Nutrition Center Program — Code Enforcement Program 13 Implementation of Service Reductions • Voluntary Separation Incentive Program • Reduced Library Service from 7 clays operation to 4 or 5 day operation — Requires Council Direction on phased approach • Reduced Community Services Programs — Requires Council Direction on phased approach Police Department • Managed attrition & retirement incentive — Freeze up to 10 sworn police positions over a 2 year period • Reduce police programs such as K9, S\VAT, School Resource Officers — Subject to labor negotiations Assumption: 800,000 department savings 14 Fire Department • Managed attrition & retirement incentive • Fee increases and contract negotiations • Drop to 3 fire fighter staffing level — Subject to labor negotiations Assumption: $500,000 department savings Public Works • Transfer positions from GF to Restricted Funds • Managed attrition and retirement incentives • Reduced programs & services — Street sweeping • Postpone capital projects • Defer maintenance of equipment Assumption: $400,000 department savings 15 Development Services • Managed attrition and retirement incentives • Reversal of fee rollback in Development Services Assumption: $400,000 department savings Library • 4 or 5 day library operation — Service reduction in part time staff • Managed attrition and retirement incentives Assumption: 200,000 in department savings 16 Community Services • Managed attrition and retirement incentives • Close recreation centers one day a week • Close senior center and pool on Sundays • Reduce staffing at community events • Reduce Neighborhood Councils program Assumption: $200,000 in department savings FY 2010-11 Budget Plan • Staff will closely monitor the General Fund budget and will update council on budgetary goals on a quarterly basis • Staff will recommend revisions to the budget in Mid - January • If department savings assumptions arc NOT met, there are 3 options: — Use contingency reserves again or — Service Reductions or Combination of both 17 Budget Forecasts Description l Y 11-12 FY 12-13 Estimated Revenue * 35.4 M 36.1 M Estimated Expenditures ** 37.6 M 38.7 M Surplus/ <Deficit> <2.2 M> <2.6 M> * I?xcludes one time transfers from ocher funds. ,Assumes a 2% increase in overall revenues. ** Include; reallocation of overhead from General Fund to CDBG of S500,000. ;Also includes subsidies to Library, Parks and Nurrition Center. ,Assumes a 3% increase in overall expenditures. Projected Sales Tax and District Tax 2016 — District Tax terminates co$25 0 $20 $15 $10 $5 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 ■ Sales Tax ■ District Tax ".Assumes District Tax n; S 8 million/year and Sales Fax increase 2%/year 18 S 1.5 million loan from the Sewer Fund for Street Resurfacing Project Purpose of the $1.5 million loan • Continue paving program in the Neighborhoods • Take advantage of favorable bidding environment • Save money by fixing streets vs reconstruction • Now is the time to continue investment in infrastructure 19 FY 10-11 Street Resurfacing Funding Sources Funding Source Amount Sewer Loan * 5 1,500,000 Prop A, Prop 1B, Gas Tax (Prop 42) 2,500,000 Safe Routes. to School 200,000 Total $ 4,200,000 Subject to Council approval Loan Payment Schedule and available funds for street maintenance I;iscal Year Payment Date Payment Amount 'Minimum Projected Remaining Funds for Maintenance 2010 2011 June 30, 2011 200,000 4.2 million program 2011-2012 Fune 30, 2012 250,000 250,000 2012-2013 June 30,2013 325,000 300,000 2013-2014 June 30, 2014 350,000 900,000 2014-2015 June 30,2015 435,865 900,000 * Amounts will increase should Proposition 42 pass 20 Terms of the $1.5 million loan • Repayment through Gas Tax Funds and Proposition A Funds beginning June 30, 2011 and final payment is June 30, 2015 • Interest rate is 1.3% • General Fund will collateralize the debt Community Development Commission FY 2010-11 Operating budget 21 vzv vX- Revenues & FY 2010-11 Estimated Expenditures Description Revenue Expenditures Tax Increment (80%) $ 13.1 M S 12.1 1\I Housing Set Aside (20%) 3.1 M 1.3 M Section 8 9.5 M 9.3 M HOME .7 M .5 M CDBG 1.4 M 1.4 M I 3 Council Direction • Authorize $1 million contingency reserve for Voluntary Separation Incentives • $ 1 5 trillion Sewer Fund loan for Street Resurfacing Project • Approve $165,000 CIP transfers to the General Fund Zyr�f/� • Library operating schedule — 4 or 5 day operation? • Reduction in Community Services Pool closure on Sundays Recreation center closure one day a week Senior Center closure on Sundays — Neighborhood Councils program • Development Services Fees — Reinstate 2008 rates or remain at 2005 rates? 01111d A mrL WI 1 Vit 1th V 22 Next Steps • June 22 Budget adoption/additional workshop • June 29 Budget Adoption (if needed • July 1 Budget posted on the City's website • July 30 Hard copies of the budget available in the finance department • Mid -November First quarter update of the General Fund budget • Mid -February Midyear General Fund Budget update 23