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HomeMy WebLinkAbout07-01-1978MINUTES OF THE ADJOURNED REGULAR MEETING OF THB CITY COUNCIL OF THE CITY OF SANTA ANA, CALIFORNIA July 1, 19?8 The meeting was called to order by Vice Mayor James E. Ward at 8:05 A.M. in the City Council Chambers, 22 Civic Center Plaza. Councilmen present were Gordon Bricken, David F. Ortiz, Harry K. Yamamoto, David L. Brandt, and Vice Mayor Ward. Councilman John Garthe and Mayor Vernon S. Evans were absent. Staff members present were City Manager Bruce C. Spragg, City Attorney Keith L. Gow, Deputy City Manager Manuel Rede and Clerk of the Council Florence I. Malone. ANNUAL BUDGET 1978-79 City Manager Bruce Spragg PROCESS SUMMARIZED BY stated that today's CITY MANAGER Agenda is an endeavor to finish the informal Budget hearing process in order to prepare and present a balanced bud- get for the formal public hearing on the Budget for the 1978-79 fiscal year at the Council's regular meeting to be held on July 17 at 7:30 P.M. He stated that Council had tentatively reduced the proposed Preliminary Budget by $2,460,870, a portion of which represents elimination of 55 positions, 35 of which are presently vacant. He directed Council's attention to his report for July 1, in their packets, which included a recap of the specific reduc- tions recommended by each department head. The City Manager pointed out that there is now a total of 75 positions that are vacant and subject to the hiring freeze, and he suggested that the City reduce its work force by approx- imately 200 positions over the next year or so because of harder times predicted for the second and third years following Proposition 13's implementation. CA 6SB LIBRARY 1978-79 BUDGET At Councilman Bricken's RECONSIDERED request, Council reexamined $50,000 RESTORED the Library Department Budget. Mr. Howard Samuelson, Library Director, stated that in order to make the massive cut of $235,000 from the department budget and to keep both branches open five days per week, Council would have to restore four positions previously deleted; i.e. (1) Branch Librarian, (2) Library Clerk I, and (1) Library Page, represent- ing a total of $54,000. The Library Director stated that he would prefer to maintain the existing level of service at the Central Library, close both branches and discontinue the bookmobile to achieve the required 15 per cent reduction. Councilman Yamamoto stated that Council's policy has been to support outreach programs. Councilman Bricken agreed and expressed support for the bookmobile program. Councilman Bricken moved to restore $50,000 to the Library Departme ~n~, for the purpose of keeping branch libraries open a number of. hours each day, the hours to be determined by the Director. The motion was seconded by Vice Mayor Ward and carried 4:1, with Councilman Ortiz dissenting. CITY COUNCIL MINUTES 267 JULY 1, 1978 A subsequent motion by Councilman Bricken to maintain the bookmobile at its current level of operation to the maximum extent feasible was seconded by Vice Mayor Ward. An amendment to the motion to restore $10,000 to the depart- ment's budget for the operation was made by Vice Mayor Ward, and seconded by Councilman Bricken. The amendment and the main motion failed on the following vote (4 affirmative votes required to carry): AYES: Bricken, Ward, Yamamoto NOES: Brandt, Ortiz ABSENT: Evans, Garthe Mrs. Mickey Madden, 2319 N. Rosewood, think it would be a hardship to come stated that she did not to the main library. CA 65B PUBLIC iNFORMATION OFFICE Councilman Yamamoto BUDGET RECONSIDERATION stated that in his REJECTED opinion the Public In- formation Office budget was not justified, and he referred to his memo to Council on the subject dated June 28. He added that the office is a waste of taxpayers' money in its present form. Vice Mayor Ward observed that the PlO budget had been reduced by 20 per cent, and that there was no other member of Council who supported Councilman Yamamoto's position. CA 6SB SALARY INCREASES Councilman Bricken moved DELETED FROM COUNCIL'S to fund all departments CONTINGENCY FUND budget account numbers 111, 131, 141 and 841, Salaries, Regular and Temporary, Overtime and Employees Insurance, respectively, at their 1977-78 level. Councilman Ortiz seconded the motion. A lengthy discussion followed, during which Councilman Bricken stated that there is 2 million dollars in the budget proposed to be added to the subject accounts for this year automatically; and that if the accounts are funded at the 1977-78 level, there would be a 2 million dollar savings for the year. He stated that in his judgment the City is faced with a situation where Council must pause in its growth curve to reexamine what the implications are of the entire cost structure and that his motion will accomplish that. The City Manager pointed out that the motion would require a reduction in salaries and benefits and did not represent just a "holding of the line", and he reminded Council of its 90-day moratorium placed on salaries, wages and fringe benefits last Saturday. Councilman Brandt stated that what is budgeted in the subject accounts is money to meet the City's obligations under the Memoranda of Understanding that were negotiated with the employees representatives two years ago; and that the motion would consti- tute a reduction of salaries, wages and benefits, the very same proposal on which the moratorium was placed last week by Council. Councilman Bricken explained that the intent of his motion is to continue the accounts at the June, 1978 level and not to go backward or forward from that amount. CITY COUNCIL MINUTES 268 JULY 1, 1978 Councilman Bricken proposed a substitute motion, accounts 111, 131, 141 and 541 at the June 1978 motion was seconded by Councilman Ortiz. to maintain levels. The Following discussion, the foregoing motion was withdrawn with the consent of the second. Councilman Bricken moved to delete 1.2 million dollars from the contingency fund which had been allocated for salary increases. The motion was seconded by Councilman Brandt, and carried unan- imously 5:0. During the discussion on the motion prior to the vote, in response to Councilman Yamamoto's question, City Attorney Gow stated that the motion would not have any impact upon carrying out last Saturday's moratorium motion; that it does not impose any reduction in wages and salaries; and that the effect is to reduce the proposed expenditures by 1;2 million dollars; that it has no effect upon the course or scope of the meet and confer process; that Council will have to face any funding problem that would be raised at the conclusion of the meet and confer process; and the motion does not foreclose the meet and confer process. The Attorney's comments were in response to questions raised by Mr. John O'Malley, representing the Santa Aha City Employees Association. In summarizing the effect of his motion, Councilman Bricken stated that Council started out with a 66 million dollar proposed preliminary budget which they reduced by 2.46 million, and that the motion will further reduce it by 1.2 million dollars, which still leaves an imbalance of expenditure over income of approximately 6.3 million dollars. CA 65B RECESS members present. At 9:25 A.M. Vice Mayor Ward declared a recess. Council reconvened at 9:35 A.M., with the same RETIREMENT SYSTEM The City Manager called REFERRED TO STAFF Council's attention to the reports in their packets from the Director of Finance and the City Attorney dated June 23 and June 29, respectively, regarding rate changes in Public Employees Retire- ment System (PERS) effective July 1, and payment options and the possibilities of providing separate but equal retirement sys- tems for new hires under a recent Charter amendment. Councilman Brandt moved to refer the existing employees retire- ment system to Staff for further investigation and for negotia- tion purposes, and to instruct Staff to immediately look into what would be available to the City for future hires in the way of retirement benefits to save money from the existing system. The motion was seconded by Councilman Bricken and carried unani- mously 5:0. CA 50.20 PUBLIC SERVICE RETIREMENT City Manager Bruce Spragg SYSTEM - LUMP-SUM PAYMENT reported that the State APPROVED PERS (Public Employees Retirement System) has raised the City's retirement rates based on new actuarial assumptions and benefits currently provided employees; that the City has budgeted $263,000 for retirement purposes for fiscal year 1978-79; that the total PERS increase for that period of CITY COUNCIL MINUTES 269 JULY 1, 1978 time is $1,184,$79; therefore a lump-sum payoff will require $921,379 to be added to the retirement budget. Councilman Yamamoto's motion, seconded by Councilman Brandt, to allocate an additional $921,379 to the retirement budget from the $2,632,500 that the City will be receiving from the State, and to pay the entire amount in a lump-sum one year payment in fiscal year 1978-79, was approved 4:1, with Council- man Bricken dissenting. A subsequent motion by Councilman Bricken, seconded by Vice Mayor Ward, to adopt a policy that the City will not treat the retirement debt as if it were a bonded obligation, (an available alternative but one that would impose a tax upon the City's property owners), was unanimously approved 5:0. CA 50.20 GENERAL REVENUE SHARING The proposed General APPROVED AS RECOMMENDED Revenue Sharing Budget, described on Pages 12 15 of the Preliminary Budget, in the total amount of $2,700,500 was approved on the unanimously carried S:0 motion of Councilman Bricken, seconded by Vice Mayor Ward. During the discussion on the General Revenue Sharing Budget, the consensus was that no GRS moneys should be used for operating costs and that the $99,000 deleted from the Police Department Building Alterations budget activity (401-116 and 621) should be returned to General Revenue Sharing to be reallocated for other uses. CA 65B; CA l12A CAPITAL PROGRAM The proposed Capital Pro- REDUCED BY $860,000 gram budget, in the amount of $2,465,995, was reduced by $860,000 on the unani- mously carried 5:0 motion of Councilman Bricken, seconded by Councilman Yamamoto, subject to converting $99,000 from General Revenue Sharing funds to Capital program purposes, for a net reduction of $761,000, with the total capital budget being re- duced to a total of $1,605,995. CA 6SB USE OF CITY VEHICLES The City Manager directed JUSTIFICATION REPORT Council's attention to REQUESTED a report in their packets listing the job classifi- cations authorized to drive City vehicles home after hours. He stated that 46 City vehicles are involved, mostly used by Police, Building, and Public Works employees. Councilman Bricken moved to instruct the City Manager to prepare a report justifying the use of the City vehicles by the people who are authorized to drive them home after hours. The motion was seconded by Councilman Brandt, and carried unanimously 5:0. CA 65B REDEVELOPMENT PROGRAM The proposed Redevelopment BUDGET APPROVED AS PRESENTED Program Budget in the total amount of $4,631,255.00 in the City's 1978-79 preliminary budget was approved as presented by the Director, Richard Goblirsch, on the motion of Councilman Bricken, seconded by Vice Mayor Ward, and carried 4:1, with Councilman Yamamoto dissenting. CITY COUNCIL MINUTES 270 JULY 1, 1978 For the record, Councilman Yamamoto stated that he was opposed to the Agency renting space outside the City Hall, and to its issuing bonds at this particular time when "everyone is pinching pennies". CA 65B BALANCING FUTURE BUDGETS Councilman Bricken stated COUNCIL COMMENTS that there is still a lot of spade work to do before the Council can determine how to deal with the question of growth control of the City's costs. He complimented the City Manager's response of 3une 28 to his own memo on the subject dated June 26, adding that he hoped there would be some suggestions in terms of what Council is going to do in future years. Vice Mayor Ward concurred, stating that this year the City would receive about 2.5 million dollars from the State, but next year it will probably be half that amount. Councilman Bricken further stated that it may turn out that the City will have more revenue than it should be spending in terms of other considerations, and that Council should not be lured by the siren call to spend the money because it is there. CA 65B FREEZE ON AUTOMATIC STEP Councilman Bricken moved INCREASES FOR EMPLOYEES to freeze all automatic NOT APPROVED step increases until negotiations have been completed and to direct the City Attorney to prepare the appro- priate resolution. The motion was seconded by Vice Mayor Ward, and it failed to carry 3:2, with Councilmen Brandt and Ortiz dissenting. During the discussion on the motion, the City Manager stated he did not recommend approval and that the cost impact is approxi- mately $105,000, and that the City's newer employees would be the ones affected most. The City Attorney stated that it is a meet and confer question, and could not be effected without that process. Vice Mayor Ward stated that his intent is to have the City stop spending money until the meet and confer process is completed, and that the spirit of Proposition 13 is to hold costs down. The following persons spoke against the motion: John O'Malley, Representative of the Santa Ana City.Employees Association Mrs. Mickey Madden, 2319 N. Rosewood Mrs. Charleen Hunter, 1119 N. Baker Councilman Brandt stated that the negative impacts of the motion far outweigh the benefits; that the City should work hard to negotiate with the employees; that insurance can be changed, retirement for future hires can be changed, and retirement for existing employees can be changed if the program is similar. Councilman Ortiz stated that employees who have proven they can produce for the City deserve the step increases; and that they have the right to expect the City to abide by its own rules in effect when they accepted the job. Councilman Bricken stated that there are no rules in private employment that say what you give you cannot take away; that the rules of the road change; if the taxpayer gave he can take away; that when the circumstances change, you have to change CITY COUNCIL MINUTES 271 JULY 1, 1978 the rules of operation; and step increases should be pulled out of the Budget and identified as negotiable items. Mr. Spragg stated that all step increases are based on merit; that step increases have never been a negotiated item; that they are part of the pay system developed by this City and by almost every city; and that it is wrong to change the system at this point. CA 6SB; CA 50.1 RECESS the same Councilmen present. At 11:00 A.M. a recess was declared by Vice Mayor Ward. The meeting recon- vened at 11:20 A.M., with POTENTIAL ADDITIONAL REVENUES The City Manager reviewed CONTINGENCY FUND REDUCED BY the budget reductions: $900,000 &BUDGBT BALANCED $2,410,000 from depart- ments, $1,200,000 from salaries, net capital cut of $761,000 State surplus, after pay- ment of new retirement rates, $1,600,000, for a total of $S,971,000 toward a reduction goal of $?,600,000. He directed Council's attention to his report in their packets regarding potential additional revenues. He further stated that the City would receive $2,632,500 of State surplus funds; that approximately $900,000 of that, by Council's action, will go to pay retirement costs for the year; that the State money is based on the City maintaining the level df police and fire services provided last year, on not granting a cost of living increase to employees in excess of that granted to State employees with the State saying there will not be an increase, and maintaining a contingency fund that does not exceed S per cent of the entire budget, excluding equip- ment replacement. Councilman Bricken moved to reduce the Council Contingency Fund by $900,000 (one half of the proposed amount, $1,800,000). Coun- cilman Ortiz seconded the motion, and it carried unanimously 5:0. The Vice Mayor noted that there is still a budget reduction need of $800,000 with a potential income of $1,810,000. Councilman Bricken moved to leave the expenditure side of the budget as it now stands and that any revenue adjustments in the balancing process that exceed $800,000 be routed into unfunded capital projects, subject to those unfunded capital projects not being implemented for six months, at which time Staff was instructed to report back to Council for approval of recommended implementation. The motion was seconded by Vice Mayor Ward and carried unanimously S:O. The Vice Mayor announced that the budget balancing process was completed for the formal public hearing on Monday, July 17. The City Manager stated that the only remaining task on this Agenda is to set some policy guidelines of how the City is going to balance and meet the fiscal problems of the second, third and fourth years that lie ahead. CA 6SB CITY COUNCIL MINUTES 272 JULY 1, 1978 CITY ATTORNEY'S BUDGET City Attorney Keith Gow FULL-TIME SALARY ACCOUNT reported for the record UNDERSTATED that in the course of calculating the 15 per cent budget reduction directed by Council for his department, he had discovered an error in calculations of the amount necessary for the regular full-time salary account which under- stated the account by $17,500, and that the correction had been reflected on Page 9 of the report in Council's packet which reviews departmental operating budget reductions. CA 6SB ORAL COMMUNICATION A proposal, presented PROPOSAL FOR BUDGET & SALARIES by Mr. Michael McNulty, COMMISSION ~ RERERRED TO STAFF 123 14th Street, Hunting- ton Beach, to form a citizens commission to review and recommend action to the Council on the budget, salary and other fiscal areas of the City, was referred to Staff for evaluation, with the request that consideration be given to the value of a joint commission or separate commissions for budget and salary review. The motion was seconded by Councilman Yamamoto, and it carried unanimously 5:0. CA 80.9 ADJOURNMENT At 11:55 A.M. the meeting was adjourned on the unanimously carried 5:0 motion of Councilman Bricken, seconded by Councilman Brandt. I~ENCE I. MALONE CLERK OF THE COUNCIL CITY COUNCIL MINUTES 275 JULY 1, 1978