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1997 06 18 CC Minutes/ LA QUINTA CITY COUNCIL MINUTES JUNE 18,1997 SPECIAL MEETING Special meeting of the La Quinta City Council was called to order at the hour of 1:30 PM by Mayor Holt. PRESENT: Council Members Adolph, Henderson, Perkins, Sniff, Mayor Holt ABSENT: None PUBLIC COMMENT None BUSINESS SESSION 1. CONSIDERATION OF FISCAL YEAR 1997/98 BUDGET FOR THE CITY OF LA QUINTA, LA QUINTA REDEVELOPMENT AGENCY AND LA QUINTA FINANCING AUTHORITY. Mr. Genovese, City Manager, proceeded to review the format of the FY 1 997/98 budget with the City Council advising that the format is similar to those of the last two years. He advised that even though this year's budget reflects an increase in a number of revenue sources, the budget has a deficit of $342,975. The significant revenue increases are from Transient Occupancy Tax $150,000); Sales Tax 220,000); Property Taxes $90,000); motor vehicle in lieu fees $30,000) and $60,000 in general fund interest projects. Some of these revenues are a result of the successful implementation of the city's economic development plan. Regarding the deficit, he noted that the General Fund has taken on more of a burden this year due to the impact of Proposition 218, which impacted the General Fund in the amount of $375,000. The assessed valuation in Project Area No.1 has seen a tremendous decrease with it affecting the General Fund by $800,000. Due to these impacts on the General Fund, staff has been diligent in preparing their departmental requests and have trimmed $250,000 and no new positions have been added, but the budget does include a 1.2% Cost of Living Increase for the employees and there will be a need to replace the existing copy machines due to expiring leases, in the amount of $15,000. Regarding requests for funding from various service organizations, some of the requests are included in the budget at last year's fund levels in most cases). Mr. Genovese asked that Council review the budget presented and advised that BIB] 07-30-1997-U01 10:38:58AM-U01 ADMIN-U01 CCMIN-U02 06-U02 18-U02 1997-U02 /City Council Minutes Page 2 June 18, 1997 staff is looking for adoption of a preliminary budget with the final budget coming back before the Council on July 1 5th Mr. Falconer, Finance Director, presented a brief overview of the budget process advising that Council begins the process with review of the Capital Improvement Program. He then reviewed the budget format and organizational chart. He advised that there are 69.25 employees proposed for 97/98 which is one less than 96/97. He then reviewed the community profile in comparison to last year. A review of various pie charts followed1 which included General Fund Revenue; General Fund Operating Expense, Expenditures by Component. He concluded with a review of reimbursements by fund and a summary of the Capital Improvement portion of the budget. Mr. Miller, Consultant with Rosenow, Spevacek Group presented a review of the Five Year Resource Allocation Plan advising that the City has now been preparing such a plan for the past five years. It takes the current budget and forecasts it out for the next four years to show what we're looking at in the way of expenditures and operating revenues and it indicates what we'll have to deal with in terms of trends. Regarding personnel, he advised that staff anticipates adding four new positions within the next four years. He noted that the projection of General Fund Revenue was very conservative in a 2%-2Y2% range anticipated. Development related revenues were left flat since they're very difficult to project. He concluded his report by reiterating that the reason for the General Fund deficit is due to Proposition 218 and a reduction in assessed values within Project Area No.1. Jack Klein, representing the La Quinta Chamber of Commerce presented a slide presentation depicting the functions of the Chamber. He stated that there are four main elements to their contract: 1) the newsletter, 2) Mainstreet Marketplace, 3) Visitor Information Center; and 4) Business Retention and Economic Development. Their mission is to promote and enhance business growth, civic well-being, quality of life and preservation of our unique natural environment. He then proceeded to review the value of the contract they're proposing, stating that if the City did the work internally, it would cost $384,415 and they're requesting 42% of that amount, or $162,200. Fiscal Year 1 998 is going to require a 25% increase in the circulation of the newsletter to 1 0,000 due to growth, but the Chamber is going to absorb that additional cost. He then reviewed each of the components along with contract value and actual contract amount. He concluded by advising that the total contract being requested is $162,200 and the Chamber is making a $113,595 contribution toward a contract value of $275,795 and if the City were to perform these functions internally it would cost $384,41 5. BIB] 07-30-1997-U01 10:38:58AM-U01 ADMIN-U01 CCMIN-U02 06-U02 18-U02 1997-U02 /City Council Minutes Page 3 June 1 8, 1 997 Council Member Sniff felt that the Chamber is doing a great job. He suggested the possibility of some personnel coverage over at least part of the weekends on both Saturdays and Sundays- particularly during the season. He suggested that they venture into it on an exploratory basis. Michelle Dallas, President of the Chamber of Commerce, advised that there are other Chambers that utilize local Realtors to man the office on weekends which benefits both them and the Chamber. They sent out a mailer last year to gauge interest and there were no responses. However, recently there has been an interest expressed, so they will attempt it again. In response to Council Member Adolph, Mr. Klein advised that they intend to continue sponsoring the mixers, but they are the total responsibility of the Chamber along with the Toys for Tots Program and golf tournament. Council Member Adolph stated that he gave the Chamber a challenge last year to make it more productive and reduce the costs and it appears that they took the challenge. Council Member Henderson stated that she appreciated the approach they've taken and that she strongly supports all of the activities they've undertaken. Council Member Perkins commented that their application contains much of the information he's been requesting for the past few years and that there are a number of things they are doing that is very beneficial to the community. He also sensed an increase in communication that hasn't existed in the past. Mayor Holt commented on the value of the Chamber to this community, and felt that things are increasing and improving. However, she pointed out that the Council has a very difficult task ahead of them this year because they are looking at a deficit, but we're going to look forward to being successful together. Council Member Sniff felt that the Council should indicate support for their request. Council Member Henderson commented that such action would be premature, since the Council hasn't discussed the budget yet and how to deal with the deficit. She felt that the budget package as presented is excellent and staff has consistently prepared the backup material necessary to look at. We have known for a year that we would be faced with a challenge this year because of Prop 21 8, which was the voice of the voters. As a result, we're being forced to look at issues which in the past were easier to look at. BIB] 07-30-1997-U01 10:38:58AM-U01 ADMIN-U01 CCMIN-U02 06-U02 18-U02 1997-U02 /City Council Minutes Page 4 June 18, 1 997 Council Member Perkins agreed that the budget needs a more thorough review prior to making any commitments. Council Member Sniff referred to the deficit and suggested deleting or deferring) the $200,000 for bus stops, deleting the $52,000 for monument signs and $50,009 for the Skins Game advertising. Mayor Holt stated that she would love to have bus stops, but it should be looked at well as the Skins Game advertising. These things are of value, but an organization Chamber of Commerce) that works with the community on a year- round, daily basis versus a one-time luxury Skins Game) can't be measured. She suggested looking at eliminating or deferring) the bus stops and monument signs and reducing the infrastructure set-aside amount from $200,000 to $1 00,000. She would also be willing to look at a cut back in one issue of the newsletter, but that would be the only cut she would be willing to make at this time. Council Member Sniff referred to the infrastructure set-aside and suggested that the entire $200,000 be eliminated, commenting that if it's going to create a deficit, then it doesn't make much sense. He also suggested setting aside $90,000 for the Cultural Commission to work with when deliberating their recommendation on the grants. He didn't wish to see a cut in the newsletter. Council Member Perkins advised that he hasn't had sufficient time to review the Chamber's request and hoped that he wouldn't see a decision forced on that issue at this time. Council Member Sniff stated that he could not support the funding for the Skins Game advertising especially over the Chamber's funding. Council Member Henderson suggested that before making a decision on the Skins Game that it be reviewed by the Cultural Commission since that advertising does promote the quality of life in La Quinta. Council Members Sniff and Adolph stated that they could not support sending the request to the Cultural Commission. Mayor Holt suggested eliminating the deficit by eliminating the bus stops, monument signs and cutting the Phase VI fund from $200,000 to $100,000. Council Member Sniff agreed. BIB] 07-30-1997-U01 10:38:58AM-U01 ADMIN-U01 CCMIN-U02 06-U02 18-U02 1997-U02 / City Council Minutes Page 5 June 18, 1 997 Mr. Genovese advised that if the Capital Improvements Budget is adjusted, that the remainder of the requests would be left as currently allocated and when the recommendation is returned from the Cultural Commission, the Council may have to re-allocate some of those funds to other requests. Council Member Henderson commented on how the Council struggled this year on the CIP and they made a commitment to the people who have been complaining about lack of infrastructure. Some head-way was made this year, giving some hope back to the people. Regarding the monument signs, she stated that APP funds could easily be utilized for these signs. She could support a reduction in the number of bus stops this year, but not all them, pointing out that we are encouraging public transit, so we need to provide shaded structures for the riders. She also referred to the $40,000 for a grant program and asked if that is necessary noting that it's separate and above all of the other requests. Mayor Holt asked if APP funds can be used for monument signs and Ms. Honeywell responded that she would have to review the ordinance before making a specific report; however, she believed that there are specific prohibitions about creating a sign. Mayor Holt stated that she would not object to using APP funds if it is appropriate. Council Member Perkins stated that the Council has been discussing monument signs since he's been on the Council five years ago) and witl not vote to give them up as they are very important to the city to distinguish it from other cities and to identify it when people are arriving. He was willing to reduce the number of bus stops and begin installing them in prominent locations. Mayor Holt advised that the Phase VI project has been a heartache and frustration for her, too, and supported starting a fund, but said that she had a problem with setting up the $200,000 fund knowing that we were going to have a deficit. She commented that each of the Council was elected by a different constituency with a dif*erent view on what services a community should have in terms of services, programs, infrastructure, etc. A community is not just about infrastructure nor is it just about services and programs--there has to be a balance and a mix. Everyone on the Council has a different view as to what that balance should be which is why it's so challenging and complicated. She was a stickler for the $40,000 for the contingency program and understood that not everyone feels the same way. She would love to put in all of the shaded bus stops and improve the streets, but right now there are other things that are on a more significant basis that are part of the community. BIB] 07-30-1997-U01 10:38:58AM-U01 ADMIN-U01 CCMIN-U02 06-U02 18-U02 1997-U02 /City Council Minutes Page 6 June 18, 1997 She hoped that revenues will be significant enough to bring these things back on-line. If entrance monuments is something everyone feels we should fund then perhaps we can come up with some creative ideas such as APP funds. If we have to cut the $40,000 grant program by $10,000-si 5,000 she would support that. She wished to see the deficit eliminated first and then establish an amount that can be divided up among some of the grant applications. Council Member Perkins stated that he felt strongly about the Phase VI Improvement Project because people have been requesting it for years. He felt that the $200,000 fund should be upheld. He would like to see the bus stops, but they haven't been promised to anyone. Council Member Adolph stated that he has always felt that $25,000 for a bus stop is ludicrous---he supported eliminating them. He was not in favor of eliminating the Phase VI funds as it's time to proceed with trying to fund those improvements. He supported leaving in the monument signs as it's time that the City have them. He felt that there are other areas that can be addressed and asked the City Manager for direction. Mr. Genovese advised that staff has made all of the cuts they felt they could, but certainly, the Council has the option of making additional cuts, but they would impact the City's service level. In response to Council Member Sniff, Mr. Genovese advised that the budget contains no allocation for the Open Air Museum, it contains $50,000 for the Skins Game and $50,000 for the La Quinta Arts Foundation. Council concurred on sending the grant applications to the Cultural Commission with a $80,000 figure. Council Member Sniff suggesting eliminating the $50,000 for the Skins Game and he wished to deal with the Chamber request advising that he supports it. Mayor Holt again stated that she was willing to reduce the newsletter from 10 issues to 9 issues. In response to Council Member Henderson, Ms. Honeywell advised that the question of whether or not the Chamber is a public organization because the City is funding them in excess of 50% of their total budget has never been answered because we ve never had the information necessary to make that conclusion. However, they should be aware that someone could challenge whether or not they are in fact a public organization and need to follow all the rules. BIB] 07-30-1997-U01 10:38:58AM-U01 ADMIN-U01 CCMIN-U02 06-U02 18-U02 1997-U02 / City Council Minutes June 18, 1997 Council Member Perkins asked that Council hold the matter of the Chamber contract over to another meeting because he has to leave for an appointment. Council concurred. Council Member Henderson noted that the enhancements to the Chamber's Village Office is also negotiable. Council concurred on continuing the discussions regarding the budget to 2:00 PM on June 25, 1997. Council Member Sniff asked that staff prepare a series of items the Council could deal with in order to assist the Council in expediting the issue, but still allowing for discussions. There being no further business, the meeting was adjourned upon motion by Council Members Henderson/Sniff. Motion carried unanimously. Res e tfully submitted, uND**HOLA, City Clerk City of La Quinta, California BIB] 07-30-1997-U01 10:38:58AM-U01 ADMIN-U01 CCMIN-U02 06-U02 18-U02 1997-U02