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HomeMy WebLinkAbout1994/06/09 - Agenda Packet AGENDA CITY OF RANCHO CUCAMONGA CITY COUNCIL REDEVELOPMENT AGENCY HRE DISTRICT BOARD Special Meeting June 9, 1994 - 5:30 p.m. Tri Communities Room 10500 Civic Center Drive Rancho Cucamonga, California A. CALL TO ORDER Pledge of Allegiance Roll Call: Buquet~-/~' Alexander/'2 B. ITEM OF DISCUSSION 1. DISCUSSION OF PROPOSED BUDGETS FOR FISCAL YEAR 1994/95 C. COMMUNICATIONS FROM THE PUBLIC This is the time and place for the general public to address the City Council, Redevelopment Board may receive testimony and set the matter for a subsequent meeting. Comments are to !knlted to five minutes per individual. D. ADJOURNMENT ' to the meeting per Govenunent Code 54953 at 10500 Civic Center Drive, Rancho Cucamonga, California. To: From: Date: Subject: Memorandum City Manager's Office Honorable Mayor and City uncil Jack Lam, Cir, d, May 4, 1994 Transmittal of Preliminary Budgets Preliminary Budgets. Transmitted herein for review are the proposed FY 1994-95 budgets for Rancho Cucamonga including a seperate document summarizing the General Fund. These preliminary budgets are comprised of: City General Fund: Capital Improvements: Redevelopment Agency: Fire District: $ 25, 928,560 $11,787,240 $ 56,284,470 $ 8,825,510 Of the four budgets, the most important to the City in terms of providing services or "operations" is the General Fund. The General Fund budget provides funding for virtually all direct services to the City including Police Services. The other direct service budget is the Fire District. While the District is a separate legal jurisdiction, it functions operationally as a City Fire Department. The remaining two budgets are comprised of revenues that are restricted in their use and such funds cannot be used for operational services. Significant revenue and expenditure requirements continue to affect Rancho Cucamonga's budget. The effect of the recession on City revenues, actions by the State and Federal Governments regarding revenue take-aways and mandates, as well as inflation have been addressed. The greatest changes affecting services are essentially beyond the control of the City: State and Federal mandates, regulatory requirements, continued reductions in resources, and new costs imposed by other governmental agencies. The proposed FY 1994-95 General Fund budget still remains depressed at levels well below the operating budget of FY 1990-91. Meeting The Challenges. The City has undergone a transformation since FY 1990-91. The organization has streamlined and downsized as well as reorganized functions to adapt to the new fiscal realities. Staffing reductions have resulted in over $4 million of annual cost savings to the General Fund. Even with these changes, new revenues were put into place for FY 1993-94 in order to replace other portions of the traditional local tax base lost to State revenue takeaways. Rancho Cucamonga had to cope with both the direct effects of the economy and the cumulative State budgetary actions that resulted in a significant $2.5 million loss of local tax base. The General Fund Budget as presented (with the exception of the transfer of library services) proposes no expansion of existing programs, but every effort has been made to maintain existing programs. However, in order to accommodate even these operational levels, 5 additional staff positions will need to be cut. This will raise the level of cutbacks since FY 1990-91 to 77 employees or 24% of our former workforce. The staffing level in Rancho Cucamonga in relationship to the level of services provided is more than lean. The new Library staff are only made possible through library tax transfers from the County to the City. Law Enforcement. San Bemardino County settled a bitter labor dispute with the Sheriff Employees Benefit Association (SEBA) that resulted in a multi-year contract which contains salary provisions that will require a $ 950,000 increase to our annual law enforcement contract, 3% on 4/94, 3% on 4/95, 3% on 10/95 and 5% on 1/96, (14% overall). Plans mast be made now for these cost increases, otherwise there will be no way to accommodate them in the future. Herein proposed is a designation of revenue to meet this requirement that will become fully activated in 1996. During the interim, until these revenues are fully engaged, one time expenditures for street preventative maintenance are proposed. (See Public tForks Maintenance). Furthermore, additional County Sheriff charges for record keeping, crime lab, and other contract services are anticipated. These costs, estimated to be $300,000 annually, should also be designated. The costs referred to above do not expand the level of law enforcement services beyond that which the city currently has. In FY 1993-94, however, the City Council authorized the expenditure of $700,000 in utility user fee revenue to enhance the level of services. The added workforce of 11 new employees began work mid-year. This new service included: Three swom officers to target gangs, graffiti and drugs; two swom officers targeting crimes against persons, auto theft and robbery; one sergeant to provide supervision and field support for these teams; two community service officers to provide crime prevention education and assistance to citizens and businesses; one crime analyst to gather and analyze crime data to accomplish more effective allocation of resources; and two support personnel. This additional Police level of service has increased station personnel by 11%. DARE Program Expansion. City Council has determined in May, 1994, that should the elementary school districts participate, the City would expand the Dare Program to 2 officers, resulting in DARE being made available to every 5th grade class in the City. However, to implement this shared program, the City must determine revenue for this expanded service. The cost for the City's share of this expanded program would be $ 57,805 (1/2) with $ 33,280 of capital start up costs. Some of the one-time start up capital costs can be funded from the DARE reserve and at the date of this report, the ongoing City share costs can be negotiated with the school districts or "netted" out of existing utility user's fee revenue. Implementation of Library Services. FY 1994-95 will see the full implementation of City Library Services made possible through the transfer of County Library Tax revenue to the City for Library purposes. Through a series of agreements approved by the County Board of Supervisors, the City will officially take over services beginning July, I, 1994. However, the County will continue to operate the County Branch Library until September, 1994, when the new Interim Library Facility is expected to be completed. FY 1994-95 will see a full year's budget in the amount of $ 984,800. The new Interim City Library will be double the size of the current County Branch Library and have a collection size 40% greater than the current County collection. Construction is currently underway for the interior improvements, the collection and automation equipment has been ordered, and a Library Manager has been hired. The many facets of transitional work are being accomplished despite constraints. The entire community will benefit from this expanded cultural and learning facility. It should serve as an excellent foundation and stepping stone for the future of the City's Library System. Capital Equipment. For the past four years, there has been no significant replacement of existing fleet equipment. In fact, depreciation schedules were lengthened for capital equipment due to budgetary constraints. As a result, some equipment, used on a dally basis is ready for the parts bin. However, because of the lengthened depreciation schedules, the capital replacement fund now has the revenue to replace this equipment. Included in the IGS Capital Fund are replacement for 2 street sweepers, and 1 walk-behind asphalt roller. As is the case with the typical passenger car, eventually the cost to repair a vehicle or piece of heavy equipment may exceed the cost of replacement. Excessive down time for repairs of old equipment also affects productivity and increases our liability exposure. For these reasons, it is important to continue to evaluate our city fleet and replace equipment when it is most cost effective to do so. Because of depreciation schedules, the IGS Capital Fund expenditure will not impact the General Fund. Public Works Maintenance. The pressures of declining resources have negative implications for street maintenance. Preventative maintenance is now unusually low owing to lack of funds. This means that streets will continue to suffer from deferred maintenance: more potholes, cracks, and poor radiability. This will continue to be a problem in the future. In addition, as maintenance is deferred, the cost to correct the situation increases dramatically. Since FY 1990-91, preventative maintenance has been so minimal as to negatively affect our long term ability to maintain over 400 miles of city streets. The City's Pavement Management Program idicates we should be spending an average of $1.9 million annually to prevent long term deterioration of city streets over the next four years. We have programmed $700,000 of local Measure I Funds to go towards preventative maintenance needs, however, this is well short of the funds that should be spent for this purpose. To meet the need for a law enforcement reserve caused by the multi-year labor contract adopted by the Board of Supervisors, these personnel costs must be phased in over two years. $ 950,000 is needed to insure the full annual amount is available two fiscal years from now. During the interim transition years, it is proposed that $ 757,150 be made available as a one time expenditure FY 1994- f 95 and $278,470 be made available in FY 1995-96 to augment preventative street maintenance in the form of slurry seal and chip seal projects, until the full mount of the law enforcement cost comes into play in FY 1996-97. Over a 2 year period, between 30 and 40 miles of streets can be "reconditioned" making a very visible improvement in street conditions in the community. The useful life of the streets can be extended, postponing the inevitable major reconstructions that require even more funds to address. Many of the major streets in Rancho Cucamonga were built during waves of development. As a result, clusters of reconstruction will come at once. Those streets built between 1975-1985, mostly west of Haven, need chip sealing as well as reconstruction. Major streets built since 1985, mostly east of Haven, require slurry sealing for preventative maintenance. Reconditioning extends the life of a street 5-10 years. The proposed one-time expenditures for preventative maintenance will be a wise investment decision, especially in light of the fact that no other funds are available and the interim funds can be expended for this purpose. Capital Improvement Program. The Capital Improvements Program, or CIP, contains priority rankings of capital projects throughout the community. It is updated each year and its funding is dependent upon the availability of restricted capital funds from various sources. The most current estimate of complete CIP needs in 1994 dollars is $140 million. Needless to say, the list of capital improvements far exceeds the availability for funding. Such situations are not unusual as every community's capital needs have the same funding relationship. The CIP is a planning tool and capital funding is on an as available basis and implementation is by prioritization. Augmenting the $11.7 million CIP budget is an additional $9.9 million of Redevelopment Agency funding for the Archibald Avenue storm drain and the I-15 interchange. Nearly $500,000 is from other agencies and utilities through eligible joint projects. Nearly $3 million in Federal Intermodal Surface Transportation Efficiency Act (ISTEA) and State SB 140 grants will fund various eligible street improvement projects. The City continues to aggressively compete for State and Federal grants whenever these become available. National Pollution Discharge Elimination System (NPDES) Federal Mandate. NPDES is an unfunded mandate stemming from the 1989 Federal Clean Water Act and is a regulation that intends to prevent the discharge of non-storm water into the storm drain system. Its implementation in Califomia is delegated to various regional California Water Quality Control Boards. Failure of a City to comply with the Municipal Permit can result in frees of up to $25,000 per day for each day of non-compliance. The Municipal permit establishes a compliance schedule for the City that includes requirements to develop "Best Management Practices or BMP's" such as street cleaning, roadway and storm drain maintenance, public education, household hazardous waste collection, and used oil collection. In addition to these BMP's the City must perform videotape inspection and documentation of every storm pipe in the jurisdiction in order to identify and correct any illegal connections. Water quality monitoring and testing will also have to be done. These NPDES requirements are stringent and expensive to monitor, and the Federal Government provides no funds to meet these requirements. Videotape inspection of all connections is expected to cost $200,000 alone. Periodic testing and monitoring, as well as BMP's, will be an ongoing cost. As this program evolves, the BMP costs are expected to reach an additional $450,000 annually. If these programs are not implemented, the City will be subject to severe daily frees. Animal Control. Since 1985, the City has planned to improve Animal Control Services within the community. The County currently provides minimal services under contract. Bonds were sold in FY 1989-90 to construct a new Shelter which was completed in June, 1993. Plans were to implement the City's own service. However, the recession and the State budget crisis has sidetracked this planning, since the loss of tax base has left no revenue to fund this enhanced service. Unless new revenue is assigned to this service, the new Shelter will remain vacant and the County contract will continue. Revenue in the amount of $750,000 annually is necessary to fund the service. Alternatives for use of the shelter are to have it remain vacant and continue with the County service, assign new revenue to begin the City's own service, or seek an interim use for the facility as we continue with the County Contract Recreation and Programming. There has been a 29% increase in the Youth Sports Program between 1991 and 1993, and another 12% increase anticipated in 1994, an increase of from 8,749 in 1991 to 12,571 in 1994! The youth Sports Program is supported by only a 3/4 time Recreation Specialist and one part-time Recreation Leader. An additional Recreation Coordinator is needed to properly attend to the growing Youth Sports section. Youth sports create greater staff demands compared to adult programs, and this past year has been very stressful as increasing demands have been placed on a limited staff. As a result, a Recreation Supervisor slot which has been left vacant for the past two years will be re-filled from special funds. Youth Sports is a program that is subsidized. Therefore, any more increases in participation in these programs will require more contributions from the General Fund in the future. During FY 1993-94 and continuing into FY 1994-95 is the effort to renovate and improve the existing community centers. The Neighborhood Center and Lions Community Center are heavily used by the community and are "shop worn" and in need of refurbishing. A major renovation of the Neighborhood Center was completed this year and planning will be done for a renovation of Lions Community Center that will straddle FY 1994-95 and FY 1995-96. Meanwhile, planning for the renovation of the old County Branch Library building for youth and family oriented programs such as Playschool and other recreation classes will also begin FY 1994-95. Stadium Programming. There has not been any staffing developed for the programming of Stadium use given the fact that a contract was signed with Valley Baseball to operate and produce non-baseball entertainment events. The Sports Park and Stadium are operated as an enterprise program. However, the current contract has not been very successful and, to the extent the Stadium is not booked for non-baseball events on available dates, revenue is lost to the City. The Stadium is not only a community facility, but a business resource that should not be underestimated as a revenue producer. City Council should consider directing staff to seek other proposals from more experienced operators in the field to weigh the alternatives. Meanwhile, the inability of the current operator to manage non-baseball programming results in both loss of revenue and a burden being placed on the Community Services Department which has no staffing for this function, yet ends up with increasing pressure to book events. Action should be taken to remedy this situation by seeking other alternatives. Redevelopment Agency. Tax Increment revenue for the Redevelopment Agency remains fairly flat due to the fact that property values have been held down by the Recession. In addition, actions by the State legislature to resolve their budget deficit have required the Agency to pay $4.8 million through FY 1993-94 to offset State obligations, with an additional $1.1 million required in FY 1994- 95. With the State budget deficit still outstanding, there is continuing expectation that the State will again, take away more revenue. Therefore, all remaining undepleted funds should be reserved to protect against any such liability, as inability for the Agency to pay will result in liabilities transferred to the City's General FuneL Redevelopment "reform" legislation (AB-1290), adopted by the State in Fiscal Year 1993-94, restricts the Agency's ability to pursue commercial and sales tax generating projects. The Agency will, however, continue to work within these new limitations on its overall goal of improving the economic conditions of the City. This year, the focus will be to develop a revised economic development strategy in view of these new limitations, to assess the City's strengths and identify programs to assist in the attraction and retention of business. The Agency will continue to participate in the BRACE (Business Retention, Attraction, Creation, and Expansion) effort. The Agency will also participate with the Northtown Housing Development Corporation, a neighborhood based non-profit organization, in the development of 88 units of family housing. The Agency has recently entered into an Option Agreement with Broadway Towers, Inc. for the development of 125 units of seniors' housing which will be adjacent to the Interim Library Facility. Fire District. Revenues for the District remain fiat. Last year, the State budget crisis interfered with the annual Tax and Anticipation Notes (TRANS) sales needed to fmance the District. Inadequate fund equity does not allow the District to operate without borrowing money through the financial markets at the beginning of each fiscal year. Since the June 1993 TRANS sale was blocked, the City extended the District a loan from City reserves after the District spent all its remaining reserve funds. The $1.4 million loan is due and payable back to the City by June 30, 1994 with proceeds from District property tax collected after January 1, 1994. Until such time as the District accumulates enough reserves, borrowing from the financial market will need to continue. Assuming the State does not threaten District revenues next year, it is anticipated that District will participate in the June, 1994 TRANS sales. A long term consideration is to build adequate fund equity so the District will not have to depend upon borrowing to operate. Any financial instability including threats posed by any suggested State action can and will interrupt the ability of the District to obtain full funding. Another serious issue that the District faces (as of the date of this report) is the unresolved Labor Arbitration case between the District and the Fire Union. The disposition of this labor arbitration case, should it go against the District, will have severe financial impacts that will require major restructuring of the Preliminary Fire Budget The FY 1994-95 budget incorporates a number of actions to reorganize the Department for more long term cost effective operations. The elimination of a Deputy Chief position and realignment of work duties and schedules of other positions will result in both immediate and long term savings to the District as well as establish better service to the public. Changes in plan checking and inspection services will also result in eliminating duplication and improvement in efficiency for these services. Implementation of plans to civilianize certain positions just as the Police Department has done will also result in greater long term cost effectiveness while maintaining levels of service. Revenues. The City's General Fund revenues appear to have leveled off after four years of downward spiral. Property taxes are at virtually the same level as last year; franchise fees are holding steady and sales tax continues to move up modestly. Development-related revenues continue to lag but the leveling off of permit valuations suggests the bottom has been hit. Another significant revenue which is still feeling the impact of the recession is Motor Vehicle In-Lieu Fees, down nearly $400,000. The utility users fee was adopted in April, 1993, to replace the cumulative and anticipated loss of tax base as a result of State budget actions. The annualized revenue estimate for a full fiscal year was $5.6 million. However, because the first year of enactment would not result in a full year of revenue collection, $3.2 million was budgeted for FY 1993-94. This budget mount is close to the current estimate of year end collection. It is still estimated that a full fiscal year of collection in FY 1994-95 will be $5.6 million. In the original estimate of State takeaway, a portion of the $5.6 million replacement base was calculated to anticipate a State announced takeaway of Fire District AB-8 ~mds, which would have amounted to $2.5 million. The State, however, reversed its direction in the last days of budget deliberation. Instead, the State decided to "roll over" a $2.5 billion deficit to this current fiscal year. It has grown to over $5 billion and the State has not determined how it will deal with this deficit, although in the past, the State has taken away local revenue. This fact alone leaves local agencies to fear further takeaways until the State deficit is resolvett When the utility users fee was first adopted, City Council direction was to insure no significant loss in services, especially public safety. After the "dust settled" there would be a determination of the precise amount necessary to maintain the base, then a decision would be made regarding any revenues remaining above the necessary base. Assuming an annualized $5.6 million collection and netting out the $3.2 million cumulative loss of prior tax base and added police services, the $1.25 million County approved police labor costs and proposed law enforcement reserve, the $ 57,805 to expand the DARE program, the $ 450,000 for the Federally mandated NPDES, a projected $642,195 would remain. A hierarchy of altematives exist. First, should a decision be made about what to do with the $.6 million remaining prior to any State action on the State budget deficit? If not, any other decision is postponed until after the State makes such final decision. If so, altematives range from reducing the utility user's fee by .5% to utilizing it for program services including activating the city's animal control services, or further enhancing the city's law enforcement program. These policy options should be discussed by Council and direction given. The following is a summation of issues that require Council policy direction: POLICY ISSUES OPTION OR COST Budgeting for County/SEBA labor dispute resolution cost. Creating Law Enforcement Contract reserve Expand jointly funded DARE program to 2 officers Street Maintenance Option for FY 1994-95 and FY 1995-96 (funding made available by reserving $950,000 for sheriffs costs) Handling of National Pollution Discharge System (NPDES) Federal Mandate Costs City Animal Control Program Stadium Special Events Programming How to Factor In State Budget Decisions $ 242,850 for FY 1994-95 and $ 721,530.for FY 1995-96, $ 950,000 annually, thereafter $ 300,000 annually $ 57,805 city share for FY 1994-95 and $ 33,280 one-time capital start-up costs $ 757, 150 for FY 1994-95 $ 278,470 for FY 1995-96 in transition funding $ 450,000 annually $ 750,000 annually Pursue alternatives ~ Wait until a final StateUL~eCision/Take action now L/O~ Cfi ~JDJ~3 Conclusion. The budgets transmitted herein are conservative and are balanced. No new State revenue takeaways have been factored into the budgets since the State has made no decisions at the time of this transmittal. Any future State decisions that affect local revenue can only be factored in at the time these decisions have been handed down. While the budgets presented are balanced with existing revenues, Council decisions on a number of policy decisions may affect the outcome of the final budgets. There remains uncertainties concerning the economy, although current thinking is that the recession has hit bottom. The best effort has been made to maintain services taking into consideration all the relevant financial, economic, State and other factors known up to the date of this transmittat memorandum. The City continues to strive for excellence and will continue to meet the challenges of the future by providing the best services possible within the constraints of limited resources. Peter & Linda Bryan 9466 Hillside Rd. Alta Loma, Ca 91737 June 8, 1994 P, ITY OF RANCHO CjC;~M[)NG~ ~DMtNiSTREr~r~,~, JUN 0 8 1994 Dear Mayor Stout and City Council Members: My wife, family and I reside within the City of Rancho Cucamonga because of the quality of life, the services and activities available, the equestrian aspect and the level of emergency services. We are proud of Money Magazines evaluation that Rancho Cucamonga is among the safest cities over 100,000 population. With the California recession still very much present we desire to express some concerns regarding the 94-95 proposed budget. They are in no particular order of priority, but are important enough for us to feel compelled to request your attention. * The 94-95 revenues from Proposition 172 1/2 cent sales tax is estimated at 149 thousand. It should be clearly indicated in the budget what Police and Fire services are to be "added" to based on the voters approval for emergency services. I am confident that the public would like these revenues utilized by both Police & Fire in some shared form. * Recalling the Utility Tax hearings last year it was evident that the community had, and still has, concerns with the use of those funds. While it is a General Fund revenue, it was many times stated that those revenues should be utilized to "shore up" existing programs (General Fund Replacement, Police Officers, Fire District bail out) not new programs. As you consider the 94-95 budget please be cautious with our money - new programs are not appropriate at this time. * The Police services may increase approximately $ 1M for salaries/benefits increase, the Fire services may increase based on the "binding arbitration" issue. A majority of the salaries and fringe accounts are again increasing in 94-95; all employees deserve periodic increases and step increases - but cautioned moderation is urged and if you utilize the utility tax or prop 172 revenues to cover increased personnel costs for some departments - all departments should be treated equally for budgetary purposes (in short its unfair to use utility tax for Police and ask others to absorb the increased within their budgets). * The sports complex revenues are down approximately $300 thousand -- strongly urge better management of that facility to ensure fiscal solvency. * RDA will again take severe hits due to the inept ability of our State legislators. Emergency service facilities drastically need completion and should not bear the brunt of administrative costs or State payments. * Finally, it has been said that ingenuity and creative ideas will get us through t'he 90's. Perhaps it is worth another look at fire service consolidation studies (at least worth funding the study to determine if it is feasible - not killed by political whims of other city politicians. Rancho Cucamonga is capable of participating in such a study even if the Ontario politicians are "pound foolish" and irresponsible to their citizens). Perhaps other services can be consolidated in the future ~ better service at the same or lower costs - but we won't know if you don't ask and examine it. Your staff and Mr. Lam have been very helpful in discussing our concerns during the last year and providing information when requested, thank you. Thank you for your consideration. Sincerely, Peter and Linda (909) 980-2331