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2004 06 18 CC Minutes .. LA QUINT A CITY COUNCIL í SPECIAL MEETING MINUTES ~ JUNE 18, 2004 A special meeting of the La Quinta City Council was called to order at the hour of 1'0:00 a.m. by Mayor Adolph PRESENT: Council Members Henderson, Osborne, Perkins, Sniff ,Mayor Adolph ABSENT: None PLEDGE OF ALLEGIANCE Mayor Adolph led the audience in the Pledge of Allegiance. CLOSED SESSION 1. Government Code Section 54957.6 - Conference with Labor Negotiators. Agency Negotiators: City Council acting as a committee of the whole. r- Unrepresented Employee: City Manager. I 2. Public Employee Performance Evaluation pursuant to Government Code Section 54957, Council-appointed position - City Manager. PUBLIC COMMENT - None CONFIRMATION OF AGENDA City Attorney Jenson advised the Consent Calendar should be taken up after the Closed Session. BUSINESS SESSION 1. CONSIDERATION OF FISCAL YEAR 2004/2005 PRELIMINARY BUDGET. City Manager Genovese presented the staff report, and Finance Director -- Falconer gave a brief overview of the preliminary budget. I I I , " City Council Minutes 2 ' June 18, 2004 In response to Council Member Sniff, Mr. Falconer stated the budget reflects a decrease In interest Income because of the number of investments maturing at a higher rate this year that will have to be reinvested at a lower rate. In terms of the City's portfolio, the budget shows an increase for the current fiscal year but it will probably be higher than projected. He indicated the City has a lot of short term investments with a current portfolio of approximately $140 million and approximately $50 million to be rolled over at the end of June, and the City will mbst likely stay with short term investments again in anticipation of interest rates going up. He stated the budget reflects an increase in sales tax based on a projection by Hinderlater De Llamas but $1.3 million will go to the State. The State will reimburse the City in three payments instead of 1 2, resulting in a loss of interest. In response to Council Member Osborne, Mr. Falconer advised the major increase in benefit costs is due to the retirement benefit increasing to 2.5% @ 55. He confirmed the sales tax and transient occupancy tax estimated revenues are more in line with the actual from the prior year. Mr. Genovese noted that reflects the maturity and stabilization of the City. He added the police and fire contractual agreements affect the increase in benefit costs. Council Member Perkins complimented staff on the budget, and asked about the separate listings for police and fire services. Mr. Falconer explained the two services are tracked separately but included on one page in the budget for easier reviewing. Council Member Perkins asked what percentage of the property tax does the City receive. Mr. Genovese advised if the City did not have a Redevelopment Agency, it would get approximately seven cents out of each dollar. Because of the Redevelopment Agency, the City is able to capture more of the property tax dollars, however, those monies can only be used for capital improvements, which is why SilverRock is important. He stated it provides a way for the City to reinvest in new revenue sources, such as transient occupancy tax or sales tax. He noted some cities receive a higher percentage of the sales tax because they incorporated before the State and County began taking so much of the revenue. In response to Council Member Perkins, Mr. Falconer stated staff is working on a way to publicize that information so citizens are more aware of where the property tax dollars are going. Mr. Genovese noted it's difficult for residents to understand why redevelopment monies cannot be used for police and fire services but a publication will be distributed in August or ----- - -.- - - ~- - - - - . .- - ....-.- . , City Council Minutes 3 June 18, 2004 ,- -' -- September to help.explainwhereproperty tax money comes. from and where .,.....- . t It goes. I . Council Member Henderson referenced the need for the Redevelopment Agency to incur bond debt in order to capture property tax monies. She noted the increased tax dollars that the Redevelopment Agency captures to sell the bonds and to create economic development avenues for the General Fund, will go to the County when the Redevelopment Agency expires. She asked about anticipated loss in sales tax when Champion Motors moves out of La Quinta. Mr. Falconer indicated staff has estimated ~ loss for the quarter ending April, May and June. Mayor Adolph asked about the status of the County helping financially with the new fire station. He understood from Supervisor Wilson that the County would help financially with the fire station because they service an area of Bermuda Dunes. Mr. Genovese stated the discussions are ongoing. In response to Mayor Adolph, Public Works Director Jonasson, stated the improvements to Avenue 58 are two separate projects. The first is the ultimate alignment of Avenue 58, which has a City unfunded portion of $1 million. The second project is street maintenance, and there is a project in - FY 2006/2007 for overlaying the street. However, he doesn't recommend ¡ moving forward with the maintenance work until the utility connections for , the new developments in the area are completed. In response to Council Member Sniff, Mr. Falconer stated the past practice has been to enter the amount of last year's financial support requests in the current budget. Council Member Sniff commented on the possibility of reducing the amount budgeted for Community Special Events. Council Member Henderson referenced the need to leave some there for the Cul~ural Arts Commission to use for concerts. Council Mèmber Osborne asked if there is a line item to increase reserves. Mr. Genovese advised there is no actual line item but an automatic percentage increase to the emergency reserves is done each year as a function of the operating budget. Mr. Falconer indicated 30% of the $3.3 million surplus for FY 2003/2004 r- will go into the emergency reserves. I I City Council Minutes 4 June 18, 2004 In response to Mayor Adolph, Mr. Falconer stated out of the $3.3 million surplus, $1.7 million will be carried over for encumbrances/projects that did not get completed in FY 2003/2004. He confirmed' the appropriation on June 15th of $5.8 million to Project Area No.2 for land purchase, leaves an emergency reserve of $ 5.7 million. Council Member Sniff stated he supports the budget as proposed:, by staff because there is not enough money to approve all of the financial support requests. Council Member Perkins stated he is not prepared to support the budget at this time. His biggest concern is police services. He is uncomfortable with having only 1 % officers per 1 ,000 residents and prefers 2 officers per 1 ,000 residents. He is satisfied the City's fire services are where they should be but feels little or nothing has been done to increase police services. He supports adding another motor officer and more patrol hours, and commented on the possibility of cutting $20,000 from the Community Special Events fund to use toward another officer. Council Member Henderson stated she agrees police services are important but questions the statement that the City is doing little or nothing for police services. Council Member Perkins stated he feels more could have been done. Council Member Henderson stated she understands the Police Chief had other requests but is in mutual agreement with the proposed budget. Mr. Genovese advised the priorities were discussed and adjusted. He indicated the requests submitted by each department are not always consistent with what the City can afford. Council Member Henderson noted the bigger issue with additional personnel is the long term commitment. She agrees the City has partially filled the paramedic need but noted it's not what was attempted in an assessment. In response to Mayor Adolph, Mr. Genovese confirmed the overall police services budget has increased $1.5 million from last year. The increase last year was 25 %, and this year's proposed increase is 20-25 %. He indicated some consideration is being given to adding a bike patrol in the Village. In reference to fire services, he noted the Fire Chief's request for three firefighters per station has still not been addressed, and that the City will continue to see double digit increases in police & fire services. ""--- ---"- -. City Council Minutes 5 June 18, 2004 Mayor Adolph agreed with the need to increase police services, and r- suggested the possibility of transferring money from the City's reserves. He ! indicated he doesn't have a problem with the grant requests but inquired . why there are two separate requests for the Soroptimists. Mr. Falconer explained the Soroptimist received a grant of $2,000 in the previous budget but the $3,465 request is a specific request. Mayor Adolph stated he assumes the money will only need to be approved in one area. Council Member Osborne stated he is pleased to see the personnel increase, and commented on the need to continue building the City's reserves. He supports increasing police services and feels that is being accomplished with the proposed budget. Council Member Sniff stated he believes it would be a serious mistake to diminish the General Fund reserves, and he will not support anything that results in an unbalanced budget. He pointed out the City is already going into the County reserves for paramedic services and will have to deal with that issue again next year. As for police services, he feels any shortfalls or r- needs can be dealt with during the mid-year budget review. In regard to the : Arts Foundation, he noted they are going through a major transition that , could put them at a disadvantage because of parking needs. He would like to hear about any funding they have from their property sale that could possibly be used for that. He supports dealing with the Soroptimist request under the Community Services Grant process. Council Member Henderson noted the proposed budget adds another Police Sergeant, Community Services Officer, and more patrol hours, even though it obviously doesn't address all of the police services concerns. Regarding the increased funding request by the Chamber of Commerce, she indicated. she is hesitant to approve it except for the increased publication costs for The Gem. She noted the Chamber has increased their dues and membership, and as a business organization, she would like to see them become self- sufficient. As for the visitors center., she noted that was the Chamber's decision and was not requested by the City. Council Member Sniff suggested the $125,000' allocation be adjusted internally to cover the increased publication costs. - Council Member Henderson stated she sees the publication cost as a , legitimate cost back to the City. . City Council Minutes 6 June 18, 2004 After a brief discussion Council concurred to leave the Chamber of Commerce allocation at $125,000. In regard to the Arts Foundation, Council Member Henderson stated she favors approving $75,000 with an additional $25,000 set aside as a contingency account to cover the cost increase for change in venue. In response to Council Member Osborne, Community Services Director Horvitz stated the City's revenue loss for facility use permit and normal activities will be approximately $25,000. Council Member Henderson noted they will have to pay soil stabilization and shuttle service costs, and maybe the cost of a traffic study. Council Member Sniff stated he doesn't feel. the City should have to subsidize all of the costs given the Arts Foundation's financial resources. He suggested transferring $25,000 from the Community Special Events fund to the Arts Foundation for a total allocation of $100,000. Council concurred Council Member Henderson spoke in' support of allocating $10,000 toward the Santa Rosa & San Jacinto Mountains National Monument Documentary funding request, and noted sections of it can be used for promotion of SilverRock. Council Member Osborne suggested the possibility of taking the money out of the marketing budget. Council Member Henderson stated she would support that. Council Member Sniff stated he would support $5,000 to $10,000 if it comes from the marketing budget. Council concurred A brief discussion ensued regarding the Bob Hope Chrysler Classic funding request with concurrence for an allocation of $50,000. Council Member Henderson suggested the Institute of Critical Care Medicine be referred to the grant process. Council concurred. .~- ---- , City Council Minutes 7 June 18, 2004 Council Member Osborne stated he feels the City has a responsibility and r commitment to the arts and education in the Valley. However, he cannot ! support funding to the McCallum Theater or Gal-State San Bernardino , University at this time because he feels balancing the budget and mair:-taining the City's reserves have to come first. Council Member Henderson noted the City has given the McCallum $2,000 in the past, and suggested increasing it to $4,000 by taking the additional amount out of the Community Special Events. Council Member Osborne stated he would like to leave enough in the Community Special Events fund for the Cultural Arts Commission to use for events. Mayor Adolph noted the McCallum's request is for a more substantial amount to provide for a La Quinta night at the theater. Council Member Osborne stated he could not support it at this time but , would like to keep it in r:nind for the future as a responsibility for the City. Council Member Sniff agreed, and commented on the unknown effects of ;- the State budget crisis. ¡ ¡ I I , In response to Mayor Adolph, Mr. Genovese advised the expenditure portion of the proposed budget is very tight, and staff will have a better handle on the revenues at the mid-year budget revieW. He noted the last three years staff has come back with additional requests for increased service levels because of growth. He further noted the City contracts for some of its services, such as building inspectors, to handle the current need so it does not have to layoff personnel when development slows down. Mayor Adolph stated he is disappointed about riot being able to do something for the McCallum because he feels it would be a worthwhile cause and the City is supportive of the arts. He understands the need to balance the budget, and noted the $50,000 could be taken from the $87,000 surplus. He was also disappointed about not being able to fund another Community Services Officer. Council Member Osborne noted that can be looked at during mid-year budget review. ~ Mayor Adolph stated he would like to do it sooner because it takes time to ; get someone on board once the funding is approved. , City Council Minutes 8 June 18, 2004 Council Member Henderson stated she hopes the City will reach a point where it can participate In some of the larger community activities. However, she feels it would be a challenge to give money to the McCallum when the Arts Festival event is in need. Mayor Adolph stated he appreciates the conservative approach the City has always taken but noted a $ 90 million budget indicates the City is no longer a rural community. He agrees the City must come first but feels it's important to take part in other community events as one of the leaders in the Valley. MOTION - It was moved by Council Members Sniff/Henderson to adopt the Fiscal Year 2004/2005 Preliminary Budget as modified in the discussions with the following specifics as it relates to the Riverside County Sheriff's Police Services budget: 1) an overall budget increase of $1,449,835, resulting in part from an increase in rates in the amount of $421,522 ($379,089 of which covers salary and benefit increases for the existing level of service personnel); and 2) the addition of two new positions and increased patrol hours (one additional dedicated Sergeant and one additional Community Services Officer, and twenty additional hours per day at an estimated cost of $1,028,313); and direct staff to prepare a final version of the budget to be presented for adoption on July 20, 2004, reflecting the above listed changes. Council Member Perkins indicated he will reluctantly support the preliminary budget. Motion carried unanimously. MINUTE ORDER NO. 2004-78. MAYOR AND COUNCIL MEMBERS' ITEMS Mayor Adolph referenced a letter from the City Attorney regarding the appointment of non-residents to Commissions, and indicated he agrees the City Code should be updated to reflect the changes adopted under City resolutions. Council concurred The City Council recessed to the Redevelopment Agency Council reconvened and recessed to the Financing Authority. Council reconvened and recessed to Closed Session as delineated on Page 1. -, -~ - ----"- -- -- --- -- City Council Minutes .' 9 June 18, 2004 The City Council meeting reconvened with no decisions being made in Closed po--- ¡ Session which require reporting pursuant to Section 54957. 1 of the Government ! Code (Brown Act). . CONSENT CALENDAR 1 . APPROVAL OF RESTATED AND AMENDED EMPLOYMENT AGREEMENT WITH THE CITY MANAGER. MOTION - It WéiS moved by Council Members Sniff/Henderson to continue Consent Item No.1 to July 6, 2004. Motion carried unanimously. MINUTE ORDER NO. 2004-79. ADJOURNMENT There being no further business, it was moved by Council Members Sniff/Henderson to adjourn. Motion carried unanimously. r Respectfully submitted, I I, ~-ef.~ JUNE S. GREEK, City Clerk City of La Quinta, California - f , r !