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Minutes 2001-01-29MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CYPRESS CITY COUNCIL HELD January 29,2001 The adjourned regular meeting of the Cypress City Council was called to order at 5:40 p.m. by Mayor McGill in the Board Room, West Wing of City Hall, 5275 Orange Avenue, Cypress, California. PRESENT: Council Members Keenan, McCoy, Piercy, Mayor Pro Tern Sondhi, Mayor McGill ABSENT: None Also present were City Manager Importuna, and staff members Acosta, Commerdinger, DeCarlo, Hensley, Liu, Sinn, and Storey. Bob Biddle, Chief of Staff for Assemblyman Tom Harman, introduced himself and said a meeting between the Assemblyman and City Council was being arranged for the near future. The City Manager stated the purpose of the meeting was to provide the Council with a snapshot at mid-year of revenues and expenditures. It is also a time to address things that may have come up during the first six months of the fiscal year that were not anticipated at the time of budget adoption, and to provide information on next year's budget process, which is currently in the initial stages of development. The Director of Finance and Administrative Services stated that by the end of the current fiscal year, the General Fund should have $23.4 million in revenues with $19.9 million in expenditures, increasing the fund balance from operations by $3.5 million. There was an increase of $2.4 million over the budget projections established last year. The major portion of the increase is $1.2 million in sales tax. The primary reasons for the sales tax increase is because of two major revenue producers of sales tax that have brought in almost $600,000 more than the previous year. The business park, through leasing facilities and development of the park, have also increased the sales tax revenues. He stated for Investment Earnings, the interest rates for this year were actually greater than projections made during the budget process, and that Motor Vehicle In-Lieu Tax projections are greater by $400,000 due to receipts by the State being greater than they originally estimated. The Transient Occupancy Tax (TOT) is higher because of the Homestead Village Hotel, and conservative estimates made by the City on Courtyard revenues because of potential renovations that might have occurred and reduced their TOT. ERAF reimbursements to the City of Cypress amounted to $142,000 and $106,000 to the Police Department, which are not budgeted because of uncertainty that the State will continue to fund. The City has also received grant monies, which weren't awarded until after the budget was adopted. Plan checking fees received are also estimated to be higher because of increased building activity in the business park. The Director of Finance and Administrative Services stated that expenditures are estimated to be $350,000 less than the adopted budget primarily because of the OCTA Gas Tax Exchange Transfer amount was less than half of what had been appropriated and salary savings on vacant positions. Supplemental requests were approved by the CITY COUNCIL MINUTES JANUARY 29, 2000 City Council for Capital Outlay (grants for police equipment) and Capital Projects (Ball Road). The City Manager's contingency account has spent about $4,000, and $28,000 has been designated for such events as the State of the City luncheon, the Council/staff retreat, and the City newsletter. Uses of the excess revenues include the City loaning $8.5 million to the Redevelopment Agency and setting aside money for capital projects. By maintaining the current contingency levels and Capital Improvement Program, the City will have approximately $60,000 of undesignated non-reserved fund balance, which is available for appropriations or to be carried over for next year. For the Cypress Recreation and Parks District, it is estimated that revenues will be $3.28 million and expenditures will be $3.19 million, which will be a net increase to the fund balance of approximately $92,000. The revenues increased $105,000 from property tax, because this is the first year the District's property valuation has not been hit with a reassessment. Additionally, ERAF money from the State sent to Districts caused revenues to be higher. Park Development Fees are projected to be greater than staff had budgeted due to the residential development on Lincoln Avenue and Orange Avenue. The Director of Finance and Administrative Services stated that with District expenditures, two increases have happened: part-time salary increases from the increase in the minimum wage, and supplemental appropriations for the Commissioner's travel and Cypress Children's Advocacy Fund. The fund balance will be increased by $92,000 contingent upon the rising energy costs. The projected ending unreserved fund balance for the District is just under $600,000. Some of the possible uses for these funds include mandatory playground equipment upgrades and park maintenance. The Redevelopment Agency is in a holding pattern in a couple of the project areas and still running a deficit in the other project areas. During this year, the Agency rolled over $1.5 million dollars worth of debt that could not be paid off. The Redevelopment Agency received $8.5 million for economic development from the General Fund. The Civic Center Project Area brings in $2.3 million in tax increment, which makes it a significant project area for the City. The Pass-Through Agreements are $550,000. The total outstanding debt, which includes loans to the City, the Lighting District and Certificate of Participation is $13.1 million, with the fund balance being $1.7 million. The Lincoln Avenue Project Area has a $384,000 tax increment and Pass-Through Agreements are $176,000. Currently, the City is not receiving enough tax increment to cover the debt and other commitments of the district, which is why money has been loaned to the project area. The Los Alamitos Race Track & Golf Course Project Area tax increment is $430,000, with Pass-Through Agreements at $213,000, which, like Lincoln Avenue, is showing a deficit. Housing Funds, which receive approximately $640,000 from the project areas each year, have a fund balance of $900,000. The City is required to spend the money and can only have a maximum of three years accumulation. The City projects spending $650,000 on loans for rehab and first time homebuyers. Some mid-year budget issues are: 1. For the first time, local governments are under the State minimum wage requirements. An impact of approximately $20,000, primarily in the Parks District, is anticipated. 2. Energy cost increases. Total costs for the City is approximately $700,000 per year on electricity. 2 CITY COUNCIL MINUTES JANUARY 29, 2000 3. City is unsure if Franchise fees from Edison, which is $300,000, will be received. 4. Firing range approval costs have been taken from the fund balance and appropriated. 5. A park playground equipment survey showed that $700,000 to $1,000,000 in upgrades are needed. The State has mandated that cities meet certain guidelines. 6. Park grants for the City were approved this year by the State in the amount of $650,000. 7. Binding arbitration for the police department could have an impact on the City. 8. The Town Center development in the Los Alamitos Race Track Project Area. 9. Eligibility for transportation funding from the state, in the amount of $350,000, is being reviewed by staff. The Director of Finance and Administrative Services stated that projections for revenue for next fiscal year are approximately $1.8 million greater than the current year. The Capital Improvement Program will continue with a $1.3 million transfer, which includes residential street resur[acing at $800,000, sidewalk repair at $250,000, and public facility repair/remodel/renovation at $250,000, of which $50,000 is for ADA improvements. Other proposed projects include remodeling of the Council Chambers, storm drainage improvements, and parkway improvements. For the Park District, there are bond funds that must be spent within seven years. Input from commissioners and staff on projects will be evaluated before these funds are spent. Other projects include the playground equipment upgrade, an irrigation upgrade at Oxford Academy, and additional funds set aside for community center renovations and park land purchase development. Issues for the next budget year include the energy crisis, negotiations with four employee associations, participation by the City for the Boys and Girls Club gymnasium, a minimum wage increase in January 2002, and the Wicker Drive property. The Director of Finance and Administrative Services stated the City's intent is to follow the goals established in the Strategic Plan. The City Manager stated the purpose of the Strategic Plan is to provide direction. The Director of Finance and Administrative Services stated that at the beginning of March, a workshop will be held on general budget direction and the CIP portion of the budget. ORAL COMMUNICATIONS: LIMITED TO ONE-HALF HOUR. (THREE MINUTES PER SPEAKER, SPEAKING ONCE.) None. ITEMS FROM CITY COUNCIL MEMBERS: Mayor McGill requested reports from committee assignments. No items to report. ITEMS FROM CITY MANAGER: No items to report. the Council Members on their respective CITY COUNCIL MINUTES JANUARY 29, 2000 ADJOURNMENT: Mayor McGill adjourned the meeting at 7:23 p.m., to Monday, February 12, 2001, beginning at 5:30 p.m. in the Executive Board Room, 5275 Orange Avenue, Cypress, California. MAYOR OF THE CITY OF CYPRESS ATTEST: