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HomeMy WebLinkAboutMinutes 2009-05-20~x S~ MINUTE S ~o~ ,.,,,,,. o - ~ SPECIAL MEETING ~' ~ CITY COUNCIL OF THE c'~LIFOR~~~ CITY OF SOUTH SAN FRANCISCO P.O. Box. 711 (City Hall, 400 Grand Avenue) South San Francisco, California 94083 Meeting to be held at: MUNICIPAL SERVICES BUILDING COMMUNITY ROOM 33 ARROYO DRIVE SOUrhH SAN FRANCISCO, CA WEDNESDAY, MAY 20, 2009 6:30 P.M. Purpose of the meeting: 1. Call to Order: 6:33 p.m. 2. Roll Call Present: Councilmen Garbarino, Gonzalez and Mullin, Vice Mayor Addiego and Mayor Matsumoto. Absent: None 3. Public Comments -comments are limited to items on the Special Meeting Agenda. Sherene Metwally, daughter of Delal Metwally, expressed concern over the acquisition of her father's building located at 415/417 Grand Avenue stemming from the fact there was no mention of the property included the Capital Improvement Plans (CIP) for the next five (5) years. She questioned if there was money allocated for this project, or should the family look to other options such as leasing. Mayor Matsumoto stated Council could not comment due to the property in question being part of a closed session item and referred to City Attorney, Steve Mattas for further clarification. Attorney Mattas stated as of yet, there had not been a final deal consummated and to include information on the acquisition it in the current CIP would be premature. Ms. Metwally questioned if the tentative agreement was null and void. Vice Mayor Addiego questioned if Attorney Mattas was able to share the Redevelopment Agency's (Agency) financial situation and assure Ms. Metwally the funds were available should the Agency choose to go in that. direction. Attorney Mattas explained the Agency's funds are particularly allocated only for Capitol Projects, such as construction and acquisitions of property, and informed Ms. Metwally there was adequate funding should a deal be consummated. Attorney Mattas also offered to personally speak with Ms. Metwally if she required further information. CLOSED SESSION 4. Conference with Labor Negotiators. (Pursuant to Government CodE; § 54957.6) Agency designated representative: Kathy Mount Employee organizations: AFSCME, Local 1569, AFL-C'IO Confidential Unit, Teamsters Local 856 International Association of Firefighters, Local 1507 Mid-management Unit International Union of Operating Engineers, Loca139 South San Francisco Police Association Public Safety Managers Executive Management Unit. TIME IN: 6:36 p.m. TIME OUT: 6:45 p.m. Report out of Closed Session: Direction given. No action taken. STUDY SESSION General Fund Budget Outlook for 2009-10 through 2011-12 and Budget Options and, Capital Improvement Program Fiscal Year 2009-2010 City Manager Barry Nagel and Finance Department Director Jim Steele presented the Staff Report which highlighted the General Fund Budget Outlook and Options for 2009-2010 through 2011-2012 for the purpose of outlining the General Revenue funds and expenditures and obtaining feedback and direction from Council. The General Fund Budget would be brought back to Council for fc-rmal consideration on June 24, 2009. Manager Nagel outlined First Quarter and Midyear Financial Reviews, which had seen dramatic drops due to the recession. The largest categories affected included Property Taxes, Sales Taxes, Transient Occupancy Taxes (TOT), Building and Fire Permits. At the same time, Health Care Costs had continued to escalate with Kaiser projected to increase by 10% and Blue Shield by 15%. There was also the possibility of an additional $2.0 million dollar hit from rising Public F;mployees Retirement System (PERS) rates. Manager Nagel reported despite Council's actions midyear to close the gap and the cutting of the less critical Capital Improvement Programs, a shortfall of $6.9 million could occur next year if further corrective action was not taken. SPECIAL CITY COUNCIL MEETING MAY 20, 2009 MINUTES PAGE 2 Director Steele reviewed the projected expenses and revenues for 2009-2010, 2010 -2011 and 2011-2012 but concentrated mostly on 2009-2010 as the latter years were too speculative. Referencing the numbers reported from the Board of Equalization in regards to sales tax, Mayor Matsumoto questioned i.f they were projected numbers or actual numbers. Director Steele referenced Attachment C of the report and stated the decreases reported were projected and were expected to continue into the next year with a modest 1 % growth assumed. Director Steele continued to reference Attachment C as he outlined the expected revenue growths/declines and the expec;ted growth in expenditures. Manager Nagel presented a Summary of Budget Balancing Options which included amulti- pronged budget strategy using :reserves, additional budget cuts, consideration of continuing the wage freeze for another year, considering a TOT increase and/or a billboard tax for the voters in November 2009, and considering restructuring the of various employee benefits to make them more in line with other San Mateo County cities. These suggested actions would have no lay-offs and little effect for part time employees. If further action was required, there could be some significant employee effects as outlined in Attachment F of the Staff Report, Staff was trying its best to avoid this scenario. Mayor Matsumoto questioned if the forecasted numbers regarding TOT were based on the decline in occupancy and the decline of room rates. Vice Mayor Addiego questioned if there was a positive vote to increase the TOT by 1 %, could it take effect starting Jar.~uary 1, 2010. Mayor Matsumoto questioned if the room rates would stay at the current rate of $2.50 per night and if that were the case., what kind of percentage overall could the City expect. In response to Mayor Matsumoto's questions Manager Nagel stated the numbers were based on both the decline in occupancy and room rates. The $2.50 per night rate would remain with an overall increase between 12 to 12.5%. In response to Vice Mayor Addiego, Manager Nagel confirmed the TOT increase would take effect beginning January 1, 2010. Regarding the potential Billboard Tax, Mayor Matsumoto questioned if there was the potential for lawsuits. She requested reports from neighboring Cities and questioned the possibility of sharing in legal costs. Attorney Mattas explained thE; same groups who had previously opposed the tax could pursue the same course of action. Structuring of the Ballot Measure and legal risks must be considered by Council. Councilman Garbarino requested the item be discussed in greater detail at a later time. Manager Nagel stated there were additional items needed to be taken into consideration such SPECIAL CITY COUNCIL MEETING MAY 20, 2009 MINUTES PAGE 3 as the State borrowing $2.0 million of the City's Property Taxes through Proposition lA. Under the Proposition, the loan. would be required to be paid back, with interest, within three (3) years. Due to these constitutional protections, Staff recommended these funds be taken from the Reserve Fund. Manager Nagel reiterated the possibility of an additional $2.0 million dollar hit from rising Public Employees Retirement System (PERS) rates. Councilman Mullin questioned. if the $2 million was to be taken from the General Fund or the Redevelopment Fund. Manager Nagel stated the money would come from the General Fund and mentioned there was a recent court case that ruled taking the money from Redevelopment would be unconstitutional. Manager Nagel suggested other items to be streamlined or reorganized including making the City newsletter mainly online, travel, meetings and dues, and food items such as meals for the Citizen's Academy. Also noted were several Department vacancies slated to remain unfilled, and programs to be combined or reduced. Funding shifts from the General Fund to the Redevelopment Fund would be considered wherever possible. Mayor Matsumoto questioned the shifting of expenses from the General Fund to Redevelopment and why this had not been happening all along. She further questioned if the City could shift items retroactively. Director Steele stated $2.5 million had been shifted approximately five (5) years ago and lately it was realized, after looking harder at the services the Agency receives, more could be shifted. Attorney Mattas stated the proposed shifted items had been properly vetted in the attorney's office and deemed permissible;. Manager Nagel went on to explain further items under consideration which included library hour reductions, holding vacant positions in the Parks and Recreation Department, closing Orange Park Pool on Sundays, and trimming the hours of Senior Centers by two (2) hours per day. The Police Department had left a Parking Enforcement and Police Officer position open and delayed Police Academy activities for this year. Programs such as D.A.R.E. and Every 15 Minutes would be scaled down, but remain. Manager Nagel added Public Works crews could be combined and noted Director White's confidence that City crews would be able to complete a lot of the v~~ork in-house, and charged to the CIP Budget. Mayor Matsumoto stated she ,and former Police Chief Raffaelli had discussed the importance and cost effectiveness of County-wide tasks forces and noted while they are beneficial, they also create problems by having to backfill. She stated her previous support of such involvement, but considering the City's current Budget situation, she questioned if it would be prudent to remain involved with these activities. She was not looking to make this a permanent cut, but wanted it t:o be taken under consideration. Manager Nagel stated there was atrade-off in the fact that task forces do generate a savings in terms of the training they provide but they also remove Officers from the street. SPECIAL CITY COUNCIL MEETING MAY 20, 2009 MINUTES PAGE 4 Mayor Matsumoto asked for the frozen positions and departments that would be impacted. With that said, Manager Nagel explained Attachment F needed to be addressed as these would be additional items to be- considered should the $1.9 million shortfall remain. Director Steele advised the items outlined in Attachment F were not recommended, but the Finance Department wanted to show the impact if the next round of cuts was necessary. Vice Mayor Addiego questioned if the items should be discussed and felt it was a sensitive topic seeing as it pertained to real people. Councilman Garbarino agreed with the Vice Mayor's statement. Manager Nagel stated he undet•stood Council's position but he still must bring forth a balanced budget on the June 24 and requested Council provide direction on which way to go should the problem not be solved. If desired, Council could provide Staff with specific policy direction. Vice Mayor Addiego stated Cc-uncil needed to assess the purpose of the reserves. He further stated the idea of reserves in business, was to keep itself whole during tough times. He felt this was a bona fide use of resf;rve dollars. Mayor Matsumoto questioned what the balance in the reserve fund would be should we take $2 million. Director Steele referred to Attachment B stated the entire reserve would go down to $12.2 million with the $2 million reduction. Vice Mayor Addiego clarified the City currently had $14.2 million in the total Reserve Fund. Mayor Matsumoto questioned if there were some criteria to determine how to use reserve funds. Manager Nagel stated the criteria were all discretionary, set forth by Council policy. Councilman Gonzalez questioned if the Finance Subcommittee had informed the local or Union representatives and associations involved in Attachment F. Manager Nagel stated they may have seen the attachment now, but it was not provided beforehand. He reiterated that he wished Council provide policy direction such as, no full time position effected, if this was to be the consensus. Mayor Matsumoto stated she did not want to hear of these items for the first time on June 24 and if further study sessions were needed to address the issues at hand then so be it. Councilman Mullin stated the: idea of tabling the discussion for a later date would be different if we were looking further into the future, but the obligation to air the current SPECIAL CITY COUNCIL MEETING MAY 20, 2009 MINUTES PAGE 5 possibilities was there. In terms of use of reserves, he questioned if Manager Nagel was looking for direction now or would there be flexibility the night of June 24, based on the document presented that night. Manager Nagel stated Council had the discretion, but he still wanted to know if there was going to be policy direction to avoid further stirring of emotions. Mayor Matsumoto stated she struggled with $2 million coming out of reserves and, realistically with current state of the State, she does not foresee it being paid back constitutional or not. Her main concern was to protect South San Francisco residents. That being said, she stated the need for more information before deciding to use money from the Reserve Fund. Manager Nagel suggested that another Study Session be set after the next Finance Subcommittee meeting if necessary. Furthermore, he suggested Council come with revenue ideas, policy direction, review what was presented tonight. He urged Council to consider the ballot issues, particularly TOT, as November is right around the corner. Vice Mayor Addiego stated he would not want the City to be the type of employer that hires then does lay-offs six months later. Also, he felt the recession would not extend out into a decade, but he wanted to be respectful to those who have committed their careers to City government. Mayor Matsumoto concurred with Councilman Mullin's statement; the real possibilities of the City's options had to be aired. Manager Nagel stated Staff would be instructed to find additional dollars for inclusion in the Budget. Councilman Gonzalez stated he would study Attachment F further, but he did not wish the City to conduct any lay-offs. Mayor Matsumoto questioned where the City would cut if jobs were not affected. By the same token, residents needed t:o know which services would be cut and what was going to be given up. Councilman Mullin questioned if the budget being presented on June 24 would be the final recommended budget or would alternative options be presented as well. Manager Nagel stated that Council would see a balanced, recommended budget. Options would be presented and there would be the ability to mix and match. Changes would be optional until finalized. Director of Public Works, Terry White then presented Staff Report for CIP which outlined infrastructure improvements throughout the community. There were no CIP projects being funded by the General Fund, except for the "Bay Trail Improvement Project," in the amount of $65,500 as General Fund allocation was required in order to receive $131,000 in grant funding form the Metropolitan Transportation Commission. SPECIAL CITY COUNCIL MEETING MAY 20, 2009 MINUTES PAGE 6 CIP Project Engineer, Tracy Scramaglia presented projects slated for the next year and requested Council. interject if they had any questions or concerns. Project details and funding sources were discussed in the following areas: Bridge improvements, Storm Drain improvements, Sanitary Sewer improvements, Park improvements, Traffic improvements, Information Technology, Public Facility and Agency Facility improvements. Councilman Gonzalez mentioned the unhealthiness of the air quality located at Airport Boulevard under the rail road bridge and questioned if something could be done about cleaning the accumulated pigeon droppings and bodies at least one (1) to two (2) times per year. Director White stated typically both the Airport Boulevard and East Grand underpass areas received thorough cleanings of'the railings and so forth, once a year. He also noted the areas were part of the normal sweeping schedule, which took place on the 5th Friday of each month, approximately four (4) times per year. Councilman Gonzalez questioned if cleaning could be done more often to cut back on complaints. Director White stated he understood the concern and would have Staff follow up. Regarding the Caltrain Station relocation item included as part of the Public Facility improvements, Mayor Matsumoto understood the project was placed on hold. City Engineer Ray Razavi stated construction was on hold, but Council had directed Staff to continue with the acquisition of the property located at Airport Boulevard and Grand Avenue. However, lease of the airspace had not been continued. Manager Nagel recalled Council directed Staff to keep progress moving forward with planned purchase as it was a critical piece of property for redevelopment. Formal action was yet to come. Mayor Matsumoto, citing the Cypress and Baden Projects, questioned if the matching funds, came from the Redevelopment or the General Fund. Engineer Scramaglia stated for the particular projects gas tax was used, but when prohibited by Measure A, such as the Bay Trail Project, the General Fund was used for the matching funds. Councilman Gonzalez questioned if it was possible to check storm drain located at the 200 block of Grand Avenue as an odor was emanating. Director White stated the odor could stem from stagnated water, but he would have Staff check on it the following day. Manager Nagel informed Council Staff anticipated presenting the final CIP on June 24 along with the Budget. SPECIAL CITY COUNCIL MEETING MAY 20, 2009 MINUTES PAGE 7 Mayor Matsumoto stated she expected the CIP to be presented with options. Manager Nagel concurred options would be presented, but ultimately Staff will have a recommendation with options discussed this evening as well as subsequent options developed during the next Finance Subcommittee Meeting. ADMINISTRATIVE BUSINESS 6. Resolution approving South San Francisco Joinder to consent to Assignment and Amendment of Ground Leases for Parcel B, Parcel C, Parcel D-1, Parcels E, E-l, E-2, E-3, E-4 at Oyster Point Marina from King Ventures to Oyster Point Ventures LLC Attorney Mattas presented Stai:f Report which included a document referred to as a joinder regarding the MOU with OystE;r Point Ventures LLC (Developer), a joint venture between Shorenstein Properties and SKS Investments LLC, for the development and planning of Oyster Point Marina and Oyster Point Business Park. Said MOU had been approved by the City and Redevelopment Agency on May 13, 2009. The Harbor District and the Developer have negotiated Consent to Assignment and Amendment agreements related to the assignment of the King Leases to Developer. The Developer has requested the City to join the consent to the assignment of the King Leases to Developer as part of the redevelopment of Oyster Point Marina. Staff recommends Council approve the Resolution approving South San Francisco Joinder to consent to Assignment and .Amendment of Ground Leases for Parcel B, Parcel C, Parcel D-1, Parcels E, E-l, E-2, E-3, E-4 at Oyster Point Marina from King Ventures to Oyster Point Ventures LLC. Mayor Matsumoto questioned if she should open the Special Meeting for the Recreation and Park District so as to make a motion and vote concurrently on the resolutions. Attorney Mattas advised Mayor Matsumoto she could convene the Special Meeting and vote on the resolutions sequentially. Mayor Matsumoto opens Special Meeting for the Recreation and Park District for Wednesday May 20, 2009. Motion -Councilman Garbari.no/2°d -Councilman Gonzalez: to approve Resolution No. 39- 2009. The motion was approved by the following roll call vote: AYES: Councilmen Garbarino, Gonzalez and Mullin, Vice Mayor Addiego. NOES: Mayor Matsumoto. ABSTAIN: None. ABSENT: None. SPECIAL CITY COUNCIL MEETING MAY 20, 2009 MINUTES PAGE 8 CLOSED SESSION 7. Conference with Legal Councik: Anticipated Litigation. (Pursuant to Government Code § 54956.9(b)) Significant Exposure to Litigation: One Case. RECESS: 8:33 p.m. MEETING RESUMED: 8:38 p.m. TIME IN: 8:38 p.m. TIME OUT: 8:55 p.m. Report Out of Closed Session: Direction Given. No reportable action. ADJOURNMENT Being of no further business, Mayor Matsumoto adjourned the meeting at 8:55 p.m. Submitted by: ~- Anna M. Hernandez, Deputy City le:~ City of South San Francisco 0 tir~rnvar~ SPECIAL CITY COUNCIL MEETING MINUTES MAY 20, 2009 PAGE 9 City of South San Francisco