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Minutes 2005-05-16 408 MINUTES OF AN ADJOURNED REGULAH MEETING OF THE CYPRESS CITY COUNCIL HELD May 16, 2005 The adjourned regular meeting of the Cypress City Council was called to order at 5:30 p.m. by Mayor McGill in the Executive Board Room, :5275 Orange Avenue, Cypress, California. PRESENT: Council/Agency Board Members Luebben, McCoy, Seymore, Mayor Pro Tem/Agency Vice Chair Sondhi, Mayor/Aglency Chair McGill ABSENT: None Also present were City Manager, Assistant City Manager, Director of Finance and Administrative Services, Police Chief, Public Works Director, Recreation and Community Services Director, Administrative Services Manager, Finance Manager, and City Clerk. ORAL COMMUNICATIONS: None. Council Member McCoy stated that he was not able to stay for the entire meeting. He stated that he had reviewed the towing issue on the a!genda this evening and that his three issues regarding the tow company that the City contracts with are: 1) Are they providing the level of service to the Police Department that the Police Department feels is acceptable; 2) Are the costs that the towing company charge in comparison with like towing companies; and 3) It is important to do as much IJusiness in the City as possible. Council Member McCoy stated that staff does an excellent job putting the budget together and all of the issues the Council wanted addmssed in this year's budget have been accomplished. Council Member McCoy left the meeting at 5:36 p.m. and the record shall reflect that four Council Members were present from this point forward. WORKSHOP SESSION: Review of Proposed Fiscal Year 2005-2006 Annual Operatinq Budqet The City Manager stated that, consistent with years past, staff is presenting a balanced budget providing all of the services that the citizens are accustomed to receiving and taking into account all of the goals that the City Council has set forth in the past. The Finance Manager stated that the budget cycle is a five month process that involves the mid-year budget review, meetings with the City Manager and executive team, the adoption of the Capital Improvement Program, and bringing forth the proposed budget documents. The Finance Manager stated that the assumptions made when preparing the budget are: maintain the general fund balance/contingency for future revenue threats, approved City goals, adoption of the Capital Improvement Plan, financial restraints of certain monies with legal restrictions for use, limiting operating expenditures to within the estimated revenue growth, and maintaining focus on infrastructure needs and long- term financial stability. 409 CITY COUNCIL MINUTES MAY 16. 2005 He stated that the total City budget is $28.7 million, which is a decrease over last year of $1.3 million, largely a result of the CIP decrease of $2.3 million. The proposed operating budget is $23 million, which is a growth of ~~.8%. Of the $23 million, nearly $15 million is personnel costs. The Finance Manager stated that the Recreation and Park District budget is being offset by a general fund contribution of $272,000 as a subsidy to their operations. This is the second year in a row that the City has had to partially fund their operations. The Director of Finance and Administrative Services stated that this large increase is due to an ERAF shift of approximately $250,000 from the Recreation and Park District. Council Member Luebben asked if the City would ever dissolve the Recreation and Park District and take it in as part of the City as a regular department. The City Manager stated that staff has been providing information to the Council for the last several years on funding for the District and at some point in time, if all of the services are continued to be provided in the same manner, that the City Council will need to contribute funds. He stated that last year was the first year the City had to provide funds to the District. He stated that the District was a positive when it was implemented and he would recommend leaving it in place because it directs money assessed on property for the parks. The Finance Manager stated that for the Redevelopment Agency, there will be $7 million in loans from the general fund that will be maturing next June, which will be paid off or renewed again another term. He stated that $~5 million is reserved for facility improvements at the Community Center. Mayor Pro Tem Sondhi asked about funding for land acquisition in the proposed budget. The Director of Finance and Administrative Services stated that when the Redevelopment Agency buys property it does not typically show up as an expenditure because it then becomes an asset known as land resale. He stated that if the Agency supported a land development, that would be listed under development assistance in the budget. The Finance Manager stated that revenue projections are determined by looking at revenue sources and analyzing current year receipts as well as prior year receipts and factoring any trends that have developed through the years. He stated that development activity is looked at that might be relevant as well as what is occurring at the state level. The Director of Finance and Administrative Services stated that revenues have not changed much from the initial projections at mid-year. He stated that an 8.4% increase in sales tax receipts is projected and with the growth in values of homes, an estimated 10% growth in property tax is anticipated for next year. Unfortunately, most of this will be offset by the ERAF shift. An increase in the transient occupancy tax is expected as well as increased investment earnings due to an increas'e in market rates. The Director of Finance and Administrative Services stated that revenue impacts in the budget include the ERAF shift from property tax of approximately $860,000, and redevelopment tax increment ERAF shift of $320,000. Revenue impacts not included in the budget are state budget takeaways and the impact of streamlined sales tax project. He stated that future revenue threats include state ta.keaways to balance the state budget, business relocation of major revenue producing businesses within the next three years, the loss of Measure M funding in 201"1, mandated costs, and labor legislation. The Finance Manager stated that the proposed personnel changes are the elimination of one part-time maintenance attendant due to contracting for park building security 2 410 CITY COUNCIL MINUTES MAY 16, 2005 lock up services and reclassification of the Recreation Manager position to Recreation Supervisor. The Finance Manager stated that other noteworthy budget items include the establishment of the storm drainage fund, focus on long-term infrastructure planning, and maintaining fully funded internal service funds. The Director of Finance and Administrative Services stated there are not any amounts in the budget for membership in the Orange County Regional Airport Authority and the Orange County Firefighters Memorial Fund. Mayor Pro Tem Sondhi stated she feels it is important to include the O.C. Regional Airport Authority in the budget because the City needs to maintain membership and support of an ongoing operation for long-term opportunities. She suggested placing it in the budget with the idea in mind that it is not necessarily an automatic funding stream and take it on a month to month basis. The City Manager stated that this item could be brought back before the City Council with an update about the organization from Mayor Pro Tem Sondhi. Mayor McGill stated that the Orange County Fallen Firefighters Memorial Fund received two loans from the O.C. Fire Authority of $175,000, which has been paid back. He stated that the City of Cypress has donated $2,000 and he is hoping the City will continue to back the fund with $1,000 a year donation up to $7,500. The Finance Manager stated that there is approximately $600,000 in Capital Outlay, of which $450,000 is being funded with replacement monies and the balance is being funded by operating funds. This includes one marked and one SEU van for the Police Department, replacement of one water truck, four % ton pick-ups and one sewer vacuum trailer system for the Maintenance Department, replacement/addition of mobile audio video system on 17 police vehicles, and replacement of one Building Official vehicle. The Finance Manager stated that the budget is balanced and is consistent with the City goals, and the reserves in the General Fund have been maintained. He stated that an emphasis has been placed on the maintenance of infrastructure in concert with City Council direction. The budget will be brought to the City Council for adoption at the June 13, 2005 meeting. The meeting was recessed at 7:08 p.m. The meeting was reconvened at 7:17 p.m. Discussion ReQardinq Vehicle Towinq and StoraQe Service Contract: The Assistant City Manager stated that Council had directed staff to report on the level of satisfaction with the services provided by Cypress Auto Tow and their compliance with the terms of the contract, and survey of proposed rate increases compared to prevailing market rates. He stated that the Chief of Police prepared a report that details the Police Department's general satisfaction with services provided and Cypress Auto Tow's compliance with the terms of the agreement. In addition, six of the surrounding cities were contacted regarding rates and services. With one exception, Cypress Auto Tow rates are below or well below those contacted. Staff's recommendation is to continue with Cypress Auto Tow and present an amended and restated contract for approval at the next City Council meeting. Council Member Luebben thanked staff for providing all of the information he had requested. He asked if it had been verified that Cypress Auto Tow had refunded money to the people they had overcharged. 3 CITY COUNCIL MINUTES 411 MAY 16, 2005 The City Manager stated that the owner, Chuck Hanson, told him the funds had been refunded. The Assistant City Manager stated it is staff's recommendation for the Council to approve a three-year contract with a one year, one time extension. It was the consensus of the City Council to proceed with the amended and restated contract. ORAL COMMUNICATIONS: None. ITEMS FROM CITY COUNCIL MEMBERS: Mayor McGill stated he will be holding a "Meet the Mayor" at the Acacia Adult Day Care open house on May 21,2005. ITEMS FROM CITY MANAGER: None. ADJOURNMENT: Mayor McGill adjourned the meeting at 7:30 p.m., to Monday, May 23, 2005, beginning at 5:30 p.m. in the Executive Board Room, 5275 Orange Avenue, Cypress, California. ~~ MAYOR OF THE CITY OF CYPRESS ATTEST: Y CLERK OF THE CITY OF CYPRESS 4