Minutes 2013-02-11020
MINUTES OF A REGULAR MEETING OF THE
CYPRESS CITY COUNCIL
HELD
February 11, 2013
A regular meeting of the Cypress City Council was called to order at 5:30 p.m. by Mayor
Narain in the Executive Board Room, 5275 Orange Avenue, Cypress, California.
Members present:
Mayor Prakash Narain
Mayor Pro Tem Leroy Mills
Council Member Doug Bailey
Council Member Rob Johnson
Council Member Marielien Yarc
Staff present:
City Manager John Bahorski
City Attorney William Wynder
Director of Finance and Administrative Services Richard Storey
Police Chief Jackie Gomez - Whiteley
Public Works Director Doug Dancs
Recreation and Community Services Director June Liu
Assistant Finance Director Matt Burton
Assistant City Engineer Kamran Dadbeh
Planning Manager Doug Hawkins
Public Works Superintendent Bobby Blackburn
Recreation Superintendent Dena Diggins
Recreation Supervisor Jeff Draper
Recreation Supervisor Shelly Myers
Administrative Services Manager Andrew Tse
City Clerk Denise Basham
ORAL COMMUNICATIONS:
None.
WORKSHOP SESSION:
FISCAL YEAR 2012 -13 MID -YEAR BUDGET REVIEW
The Director of Finance and Administrative Services stated that the estimated revenues
for Fiscal Year 2012 -13 were up $.5 million due to the residual tax increment from the
Redevelopment Agency dissolution. He indicated that the six -month comparison sales
tax are down approximately $400,000 due to the audit requirement of having to accrue
one more month into the previous year which means one less month of sales tax
revenues.
The Director of Finance and Administrative Services explained that the Triple Flip is
when the State budget was attempted to being balanced five years ago, the State
would take part of local government's sales tax and repay it with the money that the
State gets from the ERAF shift.
The Director of Finance and Administrative Services stated that the estimated
expenditures are down because of Personnel savings due to a PARS retirement
incentive effective at the end of June 2012, along with vacancies and ongoing freezing
of positions.
Mayor Pro Tem Mills asked the Director of Finance and Administrative Services to
explain, for the benefit of the new City Council Members, the O.C. Transportation
Authority exchange transfer.
CITY COUNCIL MINUTES FEBRUARY 11, 2013
The Director of Finance and Administrative Services stated that several years ago the
O.C. Transportation Authority (OCTA) received money from the State but found out that
it could not be used for transportation. He stated that OCTA had money that it could
not spend and contacted cities to negotiate a trade of general fund monies for the gas
tax money. He indicated that the City had been doing that for the past several years,
however, this year ceased that exchange.
Council Member Johnson asked if there was an advantage to the exchange transfer.
The Director of Finance and Administrative Services responded that there was an
advantage to OCTA in that they would be able to spend the money on transportation,
however, there was no real advantage to the City.
The Director of Finance and Administrative Services stated that the General Fund
balance has a $4.5 million surplus in net operations. He stated that, as per the City
Council policy, $2.25 million is allocated for Capital Projects.
The Director of Finance and Administrative Services stated that based on City Council
action, committed funds in the City General Fund is $6 million which is a 25%
contingency. He indicated that certain items of the fund balance are staff assigned
internally and that it is expected that approximately $3 million would be used for future
infrastructure and to fund the $5 million Public Employees' Retirement System (PERS)
unfunded liability.
Council Member Bailey asked for clarification on the PERS funding.
The Director of Finance and Administrative Services responded that PERS has set
aside a rate that the City is charged and that a percent of the City's payroll is charged.
He stated that PERS provides the City with an annual funded /unfunded actuarial report
that is typically one year late. He stated that the most recent report of June 30, 2011,
indicates that in the general employees liability the City is approximately $4.6 million
underfunded and that the Police Department is part of a pool, however, it would be
probably approximately another $4 -$5 million underfunded.
Council Member Bailey asked about AB340 and the indication of the change formulas
in 2017.
The Director of Finance and Administrative Services stated that new employees are
under a new formula and that a formula change could be negotiated with current
employees. He indicated that the 2017 date was if the City wanted to negotiate for
employees to pay a portion of the normal cost related to the actuarial report and should
it come to impasse, the City could implement a certain percentage of the normal cost.
The Director of Finance and Administrative Services stated that monies loaned to the
State under Proposition 1A will have to be paid back this next year, however, it is
anticipated that the State would re- borrow the monies.
Mayor Pro Tem Mills asked when relocation funding was used last.
The Director of Finance and Administrative Services replied that stabilization funding
has not been used because it is set aside in case major revenue producing businesses
leave or have operations disruption that cause a change in the City operations.
Council Member Bailey clarified that relocation funding would be for something
catastrophic self- insuring the City's sales tax.
The Director of Finance and Administrative Services commented that the City fund
balance is expected to increase by $294,000 by the end of the fiscal year
The Director of Finance and Administrative Services stated that the Cypress Recreation
and Park District General Fund has its own funding source which includes property tax
and fees, and it is estimated that revenues would be increased by $704,000 mostly due
to the additional property tax and residual tax increment from the dissolution of the
Redevelopment Agency. He stated that the excess revenues would be used to pay
2
021
CITY COUNCIL MINUTES FEBRUARY 11, 2013
down the promissory note between the Redevelopment Agency, the City, and the
Cypress Recreation and Park District. He indicated that the Cypress Recreation and
Park District has $2 million worth of cash flow and a contingency of $1 million.
The Director of Finance and Administrative Services commented on mid -year budget
issues including the economy and the impact of Proposition 30.
Council Member Bailey asked if Proposition 30 would impact more expensive revenue
sources such as an auto mall, and commented that the purchase of building materials
has been affected.
The Director of Finance and Administrative Services stated that the sale of construction
items has been impacted by the economy. He stated that there are still unknowns
related to the 13 acre site as a result of the dissolution of the Redevelopment Agency.
The Director of Finance and Administrative Services stated that mid -year budget issues
include the Promissory Notes between the City and the Redevelopment Agency, and
the impact of the State budget. He assured that this year's budget is still within the
City's goals.
The Director of Finance and Administrative Services stated that a PERS pension issue
for Fiscal Year 2013 -14, is that the miscellaneous employees unfunded accrued liability
is $4.6 million as of June 30, 2011. He indicated that it is proposed to do a one -time
transfer of $5 million from the City General Fund.
Council Member Johnson asked if there is a risk to putting this money into the unfunded
actuarial accrued liability fund.
The Director of Finance and Administrative Services responded in the negative, and
stated that excess General Fund monies would be moved into the employee benefits
fund, not PERS. He stated that those monies would reduce future operation costs and
that it could be moved to other operations if it is needed.
Council Member Bailey asked of the benefit of having the unfunded actuarial accrued
liability fund with negotiating groups.
The Director of Finance and Administrative Services responded that the City could fund
more operations annually.
Mayor Narain asked if there is any disadvantage or if other projects would be affected.
The Director of Finance and Administrative Services responded that other projects
would not be affected and that the funds could be moved in the future into infrastructure
funding or back into the City General Fund. He indicated that the City would still have
control over the monies.
The Director of Finance and Administrative Services indicated that repayment of the
Redevelopment Agency loans has not been resolved by the State. He stated, however,
that $860,000 in the City General Fund has been collected and $902,000 in the
Cypress Recreation and Park District for a total of $1.7 million in residual tax increment
that would not have been collected in those funds if the Redevelopment Agency
remained. He indicated that the amount should be reduced an additional $500,000-
$600,000 by the end of the Fiscal Year and this money is being used to reduce the
$23.9 million loan with the Redevelopment Agency.
Mayor Narain asked where the $1.7 million would be allocated.
The Director of Finance and Administrative Services indicated that the $1.7 million
would be allocated into the infrastructure fund because that is the fund that originally
loaned the monies.
The Director of Finance and Administrative Services stated that for Fiscal Year 2013-
14, the budget is expected to remain status quo with operations, capital projects, and
that vacant positions would remain frozen. He stated that the residual tax increment
3
022
CITY COUNCIL MINUTES FEBRUARY 11, 2013
would be used to pay back the City loans and that there are ongoing negotiations with
the Police Management Association and negotiations will soon begin with the Police
Officers' Association. He stated that Management, Mid - Management, Executive
Management, and unrepresented groups benefits would be under consideration for
salary adjustments also.
Mayor Pro Tem Mills asked if the City could sustain for one year without revenues.
The Director of Finance and Administrative Services responded in the affirmative.
Council Member Yarc asked for clarification on the residual tax increment.
The Director of Finance and Administrative Services responded that the
Redevelopment tax increment was eliminated and turned into property tax, and the
Redevelopment Agency's remaining cash was reallocated to taxing entities as one -time
revenue.
Council Member Johnson asked if frozen positions include the Police Department and
Redevelopment/Economic Development Manager.
The Director of Finance and Administrative Services responded in the affirmative.
STAFF REPORTS /DEPARTMENT COMMUNICATION
The City Manager indicated that if staff decreases due to elimination and /or frozen
positions as mentioned in the budget review workshop, there would be a concern with
staff e-mail addresses and phone numbers on Agenda Reports. He stated that City
Council held a workshop on communication and protocol, and that based on staff's
survey, the City of Newport Beach is the only City that puts staff information on Agenda
Reports. He stated that there have been no complaints from the public and that there is
a 95 %+ customer satisfaction rating based on an independent survey. He stated that
there could be operational issues by doing such.
Council Member Bailey asked for clarification on the operational issues that could
occur.
The City Manager stated that it could cause the City Council Member frustration if a
staff member is on vacation and /or not available.
Mayor Narain stated that the City Council could reach the City Manager should
questions arise, and asked how the public would address Agenda Item issues and if a
central phone number could be listed.
The City Manager responded that general department phone numbers could be placed
on the Agenda Report face sheet.
Mayor Narain expressed concern with the public addressing Agenda Item concerns.
Council Member Bailey commented that the City Council should be able to contact staff
with Agenda Item questions and /or concerns.
Mayor Pro Tem Mills stated that he raised this matter at the City Council meeting and
that there were no comments and /or objections. He stated that based on implied
consent, that reports for the next City Council meeting would reflect the e-mail address
and phone number of the staff who authored the report. He indicated that the City
Manager stated that an implied consent was insufficient and that a vote by the City
Council would be needed. Mayor Pro Tem Mills clarified that he asked for an Agenda
Item so that a vote of the City Council could be taken, and that he did not ask for a staff
report or survey of the matter.
Mayor Pro Tem Mills stated that on a recent public hearing, he was likely to vote
against the item, however, dialog with staff assisted him with making a decision in favor
of the item.
4
023
CITY COUNCIL MINUTES FEBRUARY 11, 2013
The City Manager commented that there is a coercive effect when the City Council
holds a quasi - judicial hearing with staff.
The City Attorney stated that the context of a public hearing should be asked in a public
arena, otherwise one or more of the City Council Members could be accused of
prejudging the outcome of the hearing. He stated that he and the City Manager have a
tell one, tell all duty to the City Council Members, and that it is difficult to what is being
told to a Council Member by City staff.
Council Member Bailey asked how a balance could be reached.
The City Manager stated that the City Council should work though the Department
Heads and the City Manager, and that directly contacting junior staff members could
cause issues that they may not be aware of.
Mayor Pro Tem Mills stated that if the City Council is not to contact staff for public
hearings, how would other matters be handled.
The City Attorney stated that questions that illicit facts do not pose a problem.
Council Member Bailey asked Mayor Pro Tem Mills if he feels that he is not getting
information.
Mayor Pro Tem Mills stated that he attempts to have his questions resolved prior to the
City Council meetings and that if there is something particularly noteworthy, he would
raise that matter at the City Council meeting. He indicated that he is aware that he not
state his vote until the public hearing has been closed.
Mayor Narain stated that a Department Head can direct City Council to staff who
prepared the staff report.
The City Manager cautioned that a conversation between a City Council Member and
staff could easily go from purposes of inquiry to directing staff.
Mayor Narain stressed the importance that all City Council Members should have the
same information.
Council Member Bailey stated that he does not have a concern with other Council
Members speaking directly to staff.
Council Member Johnson asked for clarification for the benefit of the new Council
Members on the chain of command and that a phone number should be listed.
The City Manager indicated that general phone numbers could be placed on the
Agenda Report.
Mayor Narain stated that the rules for the general public are clear and that he
understands the issues raised by the City Manager and Mayor Pro Tem Mills. He
indicated that the City Council is a policy maker and that they do not manage the City,
as it would be disruptive to staff. He commented that there is a delicate balance
between getting information from the source or going through the Department Head
and that could be viewed as an unintentional interference with management.
Mayor Narain clarified that City Council Members are not to call staff members directly.
Mayor Pro Tem Mills clarified that a Department Head may be contacted as long as the
Council Members have access to the author of the staff report.
CLOSED SESSION:
The City Attorney reported that the City Council would be meeting in Closed Session
regarding Conference with Legal Counsel — Anticipated Litigation, pursuant to
Government Code Section 54956(d)(4), Number of Cases: One.
5
024
CITY COUNCIL MINUTES FEBRUARY 11, 2013 025
At 6:46 p.m., the Mayor recessed the meeting.
7:00 P.M. SESSION:
The 7:00 p.m. session of the City Council meeting was called to order at 7:11 p.m. by
Mayor Narain.
Members present:
Mayor Prakash Narain
Mayor Pro Tem Leroy Mills
Council Member Doug Bailey
Council Member Rob Johnson
Council Member Marielien Yarc
Staff present:
City Manager John Bahorski
City Attorney William Wynder
Director of Finance and Administrative Services Richard Storey
Police Chief Jackie Gomez - Whiteley
Public Works Director Doug Dancs
Recreation and Community Services Director June Liu
Assistant City Engineer Kamran Dadbeh
Planning Manager Doug Hawkins
Administrative Services Manager Andrew Tse
City Clerk Denise Basham
PLEDGE OF ALLEGIANCE: The Pledge of Allegiance was led by Mayor Narain.
INVOCATION: The invocation was given by City Attorney Wynder.
REPORT OF WORKSHOP AGENDA/CLOSED SESSION:
The Mayor asked for the report of the Closed Session Agenda items discussed earlier
in the evening.
The City Manager reported that the City Council held a workshop regarding Fiscal Year
2012 -13 mid -year budget review. He stated that the City is on track in regard to
revenues and expenditures.
The City Manager reported that the City Council held a workshop regarding staff
reports /department communication. He stated that the City Council discussed the
changes they would like to see on the Agenda Reports and that staff would be moving
forward with making those changes.
The City Attorney reported that the City Council met in Closed Session regarding
Conference with Legal Counsel — Anticipated Litigation, pursuant to Government Code
Section 54956(d)(4), Number of Cases: One. He stated that a privileged and
confidential opinion regarding the City's obligation options was provided, and that a
litigation avoidance strategy was discussed and will be brought back to the City Council
at a future Closed Session. He indicated that Council Member Bailey was opposed to
this approach.
No other action was taken in Closed Session, nor was any solicited.
ORAL COMMUNICATIONS: LIMITED TO ONE -HALF HOUR. (THREE MINUTES
PER SPEAKER, SPEAKING ONCE.)
Mayor Narain asked anyone who wished to speak on any topic not included on the
meeting Agenda to come forward.
Tim McLellan, Assistant Superintendent of Cypress School District, expressed
appreciation to the City Council and staff, and provided a brief District update.
6
CITY COUNCIL MINUTES FEBRUARY 11, 2013
Mayor Narain recognized audience member Brian Nakamura, President, Cypress
School District Board of Trustees, and thanked him for his attendance at tonight's
meeting.
Mike McGill, Cypress, spoke regarding placing campaign disclosure Form 460's on the
City's website.
It was the consensus of the City Council to agendize the item for discussion.
Tim Keenan, Cypress Chamber of Commerce, provided an update on upcoming
activities and events.
CONSENT CALENDAR:
All matters listed on the Agenda under "Consent Calendar" are to be considered by the
City Council to be routine and will be enacted by one motion approving the
recommendations listed on the Agenda.
It was moved by Council Member Bailey and seconded by Council Member Johnson, to
approve Consent Calendar Items No. 1 through 5.
The motion was unanimously carried by the following roll call vote:
AYES: 5 COUNCIL MEMBERS: Yarc, Johnson, Bailey, Mills and Narain
NOES: 0 COUNCIL MEMBERS: None
ABSENT: 0 COUNCIL MEMBERS: None
Item No. 1: APPROVAL OF CITY COUNCIL MINUTES OF THE MEETING OF
JANUARY 28, 2013.
Recommendation: That the City Council approve the Minutes of the Meeting of
January 28, 2013, as submitted.
Item No. 2: MOTION TO INTRODUCE AND /OR ADOPT ALL ORDINANCES AND
RESOLUTIONS PRESENTED FOR CONSIDERATION BY TITLE ONLY AND TO
WAIVE FURTHER READING.
Item No. 3: REJECTION OF ALL BIDS AND AUTHORIZATION TO SOLICIT NEW
COMPETITIVE BIDS FOR SEWER REHABILITATION AT VARIOUS LOCATIONS,
PUBLIC WORKS PROJECT NO. 77.
Recommendation: That the City Council reject all bids and authorize the Director of
Public Works to solicit new competitive bids for Sewer Rehabilitation at Various
Locations, Public Works Project No. 77.
Item No. 4: AMENDMENT NO. 1 TO COOPERATIVE AGREEMENT NO. C -1 -2466
BETWEEN ORANGE COUNTY TRANSPORTATION AUTHORITY (OCTA) AND THE
CITIES OF CYPRESS, ANAHEIM, GARDEN GROVE, LOS ALAMITOS, ORANGE,
STANTON, VILLA PARK, THE COUNTY OF ORANGE, AND THE STATE OF
CALIFORNIA DEPARTMENT OF TRANSPORTATION (CALTRANS) TO EXTEND
THE TERM OF THE AGREEMENT FOR THE KATELLA AVENUE TRAFFIC LIGHT
SYNCHRONIZATION PROGRAM (TLSP) PROJECT.
Recommendation: That the City Council approve Amendment No. 1 to Cooperative
Agreement No. C -1 -2466 for the Katella Avenue TLSP Project, and authorize the Mayor
to execute the amendment on behalf of the City.
Item No. 5: APPROVAL OF COMMERCIAL WARRANT LIST AND WIRE
TRANSFERS FOR FISCAL YEAR 2012 -13 FOR WARRANTS NO. 24836 THROUGH
24985.
Recommendation: That the City Council approve the attached warrant register and
wire transfers for Fiscal Year 2012 -13.
7
026
CITY COUNCIL MINUTES FEBRUARY 11, 2013 027
END OF CONSENT CALENDAR
NEW BUSINESS:
No items.
RECREATION & PARK DISTRICT MATTERS: The Cypress City Council, Acting as
the Ex Officio Governing Board of Directors.
No items.
SUCCESSOR AGENCY TO THE CYPRESS REDEVELOPMENT AGENCY MATTERS:
The Cypress City Council, Acting as the Successor Agency to the Cypress
Redevelopment Agency.
No items.
ORAL COMMUNICATIONS: For Matters Not on the Agenda.
None.
ITEMS FROM CITY COUNCIL MEMBERS:
Mayor Narain requested reports from the Council Members on their respective
committee assignments.
Council Member Johnson:
Met with O.C. Fire Authority Chief Richter. Attended the Courage to Remember
Holocaust event in Santa Ana. Met with Jenelle Godges from Southern California
Edison. Attend the O.C. Business Council installation of new officers. Attended a town
meeting at the Cypress Library with Assembly Member Sharon Quirk - Silva. Attended
the State of the County luncheon. Attended Opening Day ceremonies for Cypress Girls
Softball League. Wished Cypress High School girls and boys basketball good luck in
their championship quest. Spoke of recent health concerns of Father Patrick Moses,
St. Irenaeus Catholic Church.
Mayor Pro Tem Mills:
Attended the Courage to Remember Holocaust event in Santa Ana. Met with Assembly
Member Sharon Quirk - Silva. Attended a town meeting at the Cypress Library with
Assembly Member Sharon Quirk - Silva. Attended a SCAG Cal Environmental
Protection Agency Environmental Health Screening Tool workshop. Attended the
SCAG Bylaws Committee meeting. Attended the SCAG Transportation Committee,
Regional Council, and Joint Policy Committee meetings. Congratulated Harmony
Estates on selling 13 of the 16 homes on Moody Street/Orange Avenue.
Mayor Narain:
Interviewed by a reporter for the Korea Daily newspaper. Attended the swearing -in
ceremony for Congressman Alan Lowenthal. Attended the State of the County
luncheon.
Council Member Bailey:
Thanked everyone for the cards and well wishes. Stated he was elected President of
O.C. Vector Control.
Council Member Yarc:
Attended a town meeting at the Cypress Library with Assembly Member Sharon Quirk -
Silva. Attended the Woman's Club of Cypress general meeting. Attended the State of
the County luncheon. Participated in a Woman's Club of Cypress event at Long Beach
8
CITY COUNCIL MINUTES FEBRUARY 11, 2013
Veterans Hospital. Attended an O.C. District Board Meeting for the California
Federation of Women's Clubs.
ITEMS FROM CITY MANAGER:
No items.
ADJOURNMENT: Mayor Narain adjourned the meeting at 7:46 p.m. to Monday,
February 25, 2013, beginning at 5:30 p.m. in the Exe u i Board Room.
ATTEST:
fah. 7 ° zI1 1
CITY CLERK OF THE CITY OF CYPRESS
9
0 0.--(AF ‘.________.
MAYO OF THE CITY OF CYPRESS
028