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HomeMy WebLinkAboutMinutes 062497 Meeting Date: 7/22/97 Approved as Submitted ATASCADERO CITY COUNCIL JUNE 24, 1997 MINUTES 5:30 P.M. - BUDGET REVIEW SESSION Called to order at 5:30 p.m. ROLL CALL: Present: Councilmembers Luna, Carden, Clay, Lerno and Mayor Johnson Absent: None. Others Present: Marcia M. Torgerson, City Clerk Staff Present: Robert Grogan, Interim City Manager; Roy Hanley, City Attorney; Lt. Bill Watton, Acting Police Chief; Brady Cherry, Community Services Director; Rachelle Rickard, Accountant; John Neil, Assistant City Engineer; Alicia Lara, Personnel Analyst; Brian Sword, Streets Supervisor; Claudia Collier, Zoo Manager; Bill White, Parks Supervisor Mayor Johnson expressed his appreciation that the budget is in front of the Council in June as requested. Bob Grogan started his report with a brief overview, a history of Atascadero's budgets in the past, and a summary of the current proposed budget. He explained that the capital projects proposed are funded from impact fees, grants and improvement district revenues which have been accumulated over a period of years. He stated that he felt it was time to make the improvements and that the accumulated funds will allow for substantial improvements. Mr. Grogan went on to say that they include road, drainage, bridge and other public improvement projects. Mr. Grogan then stated that another very important program is the updating of the City's financial management system which is 7 years old and has never been updated. He also explained that the proposed police budget includes 3 additional police officers and funding for the police chief; the proposed Community and Economic Development Department budget includes funding for the director; the proposed Community Services budget includes 4 full-time maintenance workers. He stated that the proposed budget projects a $200,000 general fund reserve. He recommended re-paying an additional $100,000 to wastewater this year. Bob Hossli, Financial Consultant, reviewed the City's revenues. He stated that his main message to the Council was that the revenue estimates are conservative. Revenue estimates were achieved with the individual departments involved in the process. Rachelle Rickard, Accountant, reviewed some accounting changes. She explained that some funds have been included in with the general fund, i.e. recreation fund, weed abatement fund, COPS fast grant fund, Lake Pavilion fund, Zoo fund, etc. She reassured the Council that this will not affect her ability to track revenues and expenditures, however, it will greatly simplify accounting procedures. Mayor Johnson asked the Councilmembers who are part of the Finance Committee for comments. Councilman Luna expressed his thanks to staff and his pleasure with this proposed budget. Councilman Lerno agreed that this proposed budget is much easier to read than last year's budget and thanked the Finance Committee and the staff. Councilman Carden asked Rachelle to go over the increase in equity the City has achieved and what that means. Rachelle explained that in June 1995 the City had a negative $790,000 unreserved fund balance. She went on to explain that the City is now projecting at the end of June 1997 a $200,000 positive unreserved fund balance, which is a $900,000 turn-around in 2 years. Councilman Carden also asked Rachelle about future audits as compared to past audits concerning the City being an ongoing concern. Rachelle responded by stating that the 1996 audit might list Atascadero as a going concern because one year of positive history does not make a trend. She concluded by saying that, in her opinion, the 1997 audit will not list Atascadero as a going concern. Mayor Johnson asked some questions of staff. He asked that the items recommended to be reviewed at mid-year budget not be lost. Councilman Luna asked for an explanation of the Stadium Park issue. Rachelle stated that the general fund never borrowed from the Wastewater fund as originally thought. Councilman Luna also asked if services will be affected by this budget. Bob Grogan answered that if anything, some departments will be enhanced with equipment, etc. Councilman Clay asked for clarification of how much tax revenues Atascadero receives and where it goes. He explained that he understands that for every dollar of property taxes paid by the public, Atascadero gets $.18 which goes towards our police protection. He also stated that he understands that Atascadero get $.01 of the $.0725 per dollar of State sales tax which goes towards our fire department. And lastly, he stated that he understands that the $500,000 of gas tax received by Atascadero annually goes towards road maintenance. Bob Grogan and Rachelle Rickard responded that, yes, you could look at it that way. PUBLIC COMMENT Rush Kolemaine, P.O. Box 1990, expressed his pleasure with this proposed budget. He also questioned the labeling of grant funds as "other" funds. Sarah Gronstrand, 7620 Del Rio Road, spoke on behalf of Friends of the Library (see Exhibit A). She asked the Council to pledge money for the library even though the City Manager is not recommending doing so. She explained that when the first pledge was made for $35,000, the City manager at the time was directed by Council to contact the County and make arrangements for continuous additions, but that hasn't been done. CC 6/24/97 Page 2 Eric Greening, 7365 Valle, stated he agreed with Ms. Gronstrand that Atascadero should support the library. He also shared his concern that the Cuesta Grade construction will affect building revenues in Atascadero. Mayor Johnson asked for an explanation of the difference between contingencies and reserves. Rachelle explained that contingencies are set aside for unforeseen purposes. Reserves are an ongoing equity reserve of the general fund. Bob Grogan explained that the contingency fund cannot be touched without prior approval from the Council. Leo Korba, 10905 Santa Ana Road, expressed his pleasure with the proposed budget; well done and on time. Ellen Baer, Friends of the Library, expressed her support of Sarah Granstrand's comments. Grenda Ernst, Carmelita Ave, stated she feels the City should support the library and pledge to their fund drive. Gail Pierce, 4635 Viscano, Friends of the Library, stated that she agreed with the previous speakers that the library is important to the community. Bonita Borgeson, 4780 Del Rio Road, Friends of the Library, told the Council that fundraising is draining and asked that the Council renew their inspiration by pledging for the expansion of the library. Andrea Ritter, 10900 Portola Road, Friends of the Library, expressed his agreement with the previous speakers. He asked that the Council support the library. Jonnie Biaggini, SLO County Visitors and Conference Bureau, stated she wanted to thank the staff for this budget. She feels that tourism helped Atascadero improve its finances. She went on to state that she feels that the TOT will go up next year and help even more. --end of public testimony-- Mayor Johnson expressed that the Council as a whole is very supportive of the library and asked that staff make sure the Council addresses this issue at mid-year. Councilman Luna asked what the ERAF funds for Atascadero would be. Bob Grogan explained that there is a possibility that it will be based on a per capita basis; but it's more likely that it will be on the basis of what individual cities lost at a 10-year pay-off. He stated that Atascadero lost an estimated $480,000. Councilman Carden proposed pledging to the library based on financial criteria, i.e. an $800,00 reserve balance, etc. Mayor Johnson agreed with Councilman Carden but suggested that the issue be brought back at mid-year review. There was consensus of the Council for staff to build a program as suggested by Councilman Carden to bring back at mid-year budget review concerning pledging to the library expansion. CC 6/24/97 Page 3 Mayor Johnson stated that he appreciated all the hard work that went into this budget and that he is extremely pleased that this proposed budget will be approved before July 1, 1997. Mayor Johnson called for a recess at 6:36 p.m. 7:00 P.M. - REGULAR SESSION: CALL TO ORDER - 7:02 p.m. PLEDGE OF ALLEGIANCE - Councilman Luna COUNCIL COMMENTS Councilman Luna asked that the City send a letter to the County Board of Supervisors thanking them for their donation to the Zoo. Mayor Johnson said it has already been done; a letter was sent to each Supervisor. Councilman Clay announced that the Mormon Church would like to do a community service project, 7/19/97 (100-200 hours). Brady Cherry stated if Councilman Clay would give him a name and number, he would be glad to contact them and advise them on the needs of the community. Councilman Clay said the person to contact was Mr. Tony Thompson. SPECIAL PRESENTATIONS: • Presentation of service recognition plaques to outgoing Planning Commissioners Jim Edwards, Sid Bowen and outgoing Parks & Recreation Commissioner Vic Smart Jim Edwards and Vic Smart received their plaques. Sid Bowen was unable to attend this meeting. COMMUNITY FORUM Eric Greening, 7365 Valle, stated that concerning the Salinas River Dam expansion, the City Council needs to put this item on next agenda, 7/8/97 if they want to respond. The public review period will be closing on 7/25/97. He urged the Council to set this item on their next agenda so that their desires could be forwarded in a timely manner. Also, he told the Council that the public hearing on this issue in Atascadero will be Wednesday, July 9th. at 7:00 p.m. at the Lake Pavilion. Roy Hanley asked that it be on 7/22/97 meeting to give him time to prepare a Report for Council. Council would not have to take action; Council could give direction to staff to take a position and have that position delivered to the appropriate agencies. Mayor Johnson asked that the Salinas River Dam Expansion be placed on the 7/22/97 Council agenda. CC 6/24/97 Page 4 A. CONSENT CALENDAR: 1. REJECTION OF BIDS FOR THE STATE ROUTE 41/ATASCADERO AVE. STORM DRAIN PROJECT (Bid No. 97-02) [John Neill (Staff recommendation: Reject all bids/Re-advertise project w/revised scope of work) 2. RESOLUTION NO. 62-97 - Adopting a budget for the 1997-98 Fiscal Year and delegating to the City Manager authority to implement same [Rachelle Rickard/Robert Grogan] (Staff recommendation: Adopt) 3. RESOLUTION NO. 63-97 - Conveying the City's support of an "east-west" division of the 805 area code, with the west retaining the existing 805 area code [Robert Grogan] (Staff recommendation: Adopt) Motion: By Councilman Luna, seconded by Councilman Carden to approve items Al, A2, and A3. (Motion passed by a 5:0 vote.) B. PUBLIC HEARINGS: [None scheduled] C. REGULAR BUSINESS: 1. PG&E ACCELERATED DEPRECIATION OF DIABLO CANYON - Referred at the 6/5/97 Special Joint Meeting of the City Councils of San Luis Obispo County for action by individual cities [Presentation by PG&E representatives] (Staff recommendation: Provide direction) Councilman Carden stepped down due to a potential conflict of interest as he works for PG&E. Bob Grogan explained that the purpose of having this on the agenda was for PG&E to give a presentation to Council as they were unable to do so at the Joint City Councils' meeting. Mr. Pat Mullin, PG&E, submitted a letter from Dennis Hennessy, PG&E, which suggested some amended language to the resolution that was presented at the Joint City Councils' meeting (see Exhibit B). He explained that PG&E did not have a chance prior to that meeting to review the resolution and, therefore, were unable to comment on the document at that time. CC 6/24/97 Page 5 Councilman Luna mentioned that Mayor Novak of Morro Bay asked that the Mayors meet before making any changes. Mr. Mullin agreed with that request and then answered additional questions from the Council. PUBLIC COMMENT Leo Korba, 10905 Santa Ana Road, stated the taxes that are paid by PG&E for the Diablo Canyon Plant represents about 16% of SLO County's revenue which is very significant. --end of public testimony-- There was consensus of the Council that this item be returned to the Council's agenda after the Mayor's meeting in August, 1997. 2. SENATOR O'CONNELL REQUEST FOR SUPPORT OF $500,000 AUGMENTATION IN THE STATE BUDGET FOR THE CALL BOX PROGRAM IN S.L.O. COUNTY [Robert Grogan] (Staff recommendation: Review & provide direction) Bob Grogan explained that SLOCOG has approved this item and Mr. Peter Rodgers of SLOCOG is here to answer questions and/or make a presentation. Since Mr. Rodgers was not present at this time, Councilman Carden, who is also the chairman of SLOCOG, explained that Senator O'Connell is attempting to raise funds to help kick-start this program. Even though our previous council voted against this in the past, there were enough City Council's in the County who voted in favor of this program and therefore, it's in effect. Councilman Carden answered questions of the Council PUBLIC COMMENT Peter Rodgers, SLOCOG, arrived and gave a brief report. Councilman Luna asked how many people have cellular phones and therefore won't use these call boxes. Mr. Rodgers stated that as of now, 15% of the public have cellular phones and that figure will probably go up to 20-23% in the future. Eric Greening, 7365 Valle, stated his support for the call box program but expressed concerns about the funding process involved. --end public testimony— Councilman Carden stated that he hates to see the taxpayer dollar wasted. He explained that he fought this item before the program was implemented and feels that delaying these things only costs more. Motion: By Councilman Carden, seconded by Councilman Luna to have the Mayor sign the letter submitted by Senator O'Connell. (Motion passed by a 5.0 vote.) CC 6/24/97 Page 6 D. COMMITTEE REPORTS 1 . Economic Round Table - Bob Grogan explained that Bob Lilley, Assistant SLO County Agriculture Commissioner gave a presentation concerning the wine and grape industry and the impact it will have on the local economy. E. INDIVIDUAL DETERMINATION AND/OR ACTION: None. Mayor Johnson adjourned the meeting to Closed Session at 7.50 p.m. CLOSED SESSION: CONFERENCE WITH LABOR NEGOTIATOR (G.C. Sec. 54957.6) Agency negotiator: Roy Hanley Employee organizations: Mid-Management/Professional, Atascadero Fire Captains, Atascadero Firefighters, Service Employees Intl. Union Local 620 SPECIAL CLOSED SESSION: CONFERENCE WITH LEGAL COUNSEL - CITY MANAGER RECRUITMENT (G.C. Sec. 54957) Roy Hanley, City Attorney, announced that there was no action taken on the items in closed session and Mayor Johnson adjourned at 9:15 p.m. MINUTES RECORDED AND PREPARED BY: 01(AAC4l Marcia M. Torgerson City Clerk Attachments: Exhibit A - Prepared statement - Sarah Gronstrand Exhibit B - Letter from Dennis Hennessy, PG&E CC 6/24/97 Page 7 EXHIBIT A 6/24/97 City Council In April,Marjorie Conner, a board member of Friends of the Library,and I,met with Mr. Groggan to talk about the library. At Mr. Groggan's suggestion we wrote him a letter outlining our needs. Our letter contained our request for the same amount of funding from the City which we received in 1990. Last week I received a letter from Mr. Groggan in which he stated that he was very supportive of the library but, and I quote, "We were not able to recommend funding this year because of severe budget constraints and continuing uncertainties of state funding." I am asking you to reconsider the decision`not recommend fundingtor the library. We are not asking for money now. We are asking for a pledge. You know that we are a City/County library. The County specifications are that the City pay half of any capitol improvements. In this case, the total improvement will cost 2 million dollars,making the City's share 1 million. We,Friends of the Library, pledged to help raise the City's half of the needed funds. We have raised about$500,000 and we need to raise$500,000 more. And we need your help and your support. As you know,our City has grown considerably in the last few years. The library's capacity,however, has not kept pace with the City's growth nor with library usage. When our library was dedicated in 1988 we had 5244 patrons. As of January 1, 1997,we had almost 16,000 active patrons. These 16,000 patrons do not all live in Atascadero. Our library is one of the three regional libraries in the San Luis Obispo library system, and is,therefore,a magnet for the surrounding areas. The current library structure simply does not have space to accommodate the demands made on it. AiTbe Friends of the Library take our commitment to the library expansion very seriously, and our efforts have been successful and impressive. And it is reasonable to expect that the City will participate with us in this endeavor. We invite you to participate now by pledging funding for the library expansion. EXHIBIT B 6/24/97 City Council Pacific Gas and Electric Company Los Padres Division Dennis Hennessy 4325 S.Higuera Street Manager June 18, 1997 P.O.Box 8592 San Luis Obispo,CA 93406-8592 805/546-3864 Mayor Ray Johnson City of Atascadero 6500 Palma Avenue �+ Atascadero, CA 93422 a Dear Mayor Johnson and Council Members: Thank you for the opportunity to submit this letter regarding the Council's consideration of a resolution supporting the County and Coastal Schools efforts to obtain relief from damaging loss of property tax revenue as an unintended consequence of electric industry restructuring. I understand this item originated at the request of the county administrator at the June 5,Joint Cities meeting. Following a number of questions and discussion, the item failed to pass at that meeting. If the City is interested in adopting a resolution on this issue, I would like to submit the following information and recommendations for the council's consideration. First, it is important to look at the larger and more critical issue of making Diablo Canyon Power Plant cost competitive so that it has the best chance to continue to operate in a fully competitive environment. Last summer,the California legislature passed and the Governor signed into law legislation(AB 1890)which requires that the California electric utility industry become fully competitive, and mandated an electric rate decrease for all residential and small commercial customers starting January 1998. PG&E's recently adopted rate structure for Diablo Canyon is designed to comply with AB 1890. A component of this includes the accelerated depreciation of the plant,which allows the outstanding capital costs to be recovered by 2002. Although this will impact property tax payments,after the year 2000, no one can project what the total amount of these impacts will be since the State Board of Equalization's formula for property tax valuation is scheduled to be renewed or revised at that time. On the other hand,only if the plant is competitive and able to operate will it be able to continue to provide the local benefits of being the largest single property tax provider,with an annual payroll in excess of$100 million and employment for over 1600 residents. Mayor Ray Johnson June 18, 1997, Page 2 During the past year and a half, PG&E, the County, Senator O'Connell and Assemblyman Bordonaro have been meeting to address the impacts associated with accelerated depreciation of Diablo Canyon. Since PG&E and the County have enjoyed a beneficial relationship, it is in our collective best interest to find a mutually agreeable legislative solution which helps Diablo Canyon continue to provide economic benefits to the County while at the same time mitigating the impacts of electric industry restructuring on County property tax revenues. In light of this information, I would appreciate that the council consider including the following amendments to the resolution: Add the following to the "whereas"clauses: "WHEREAS, electric industry restructuring will provide County citizens, businesses, schools, hospitals and agriculture with the ability to choose their energy suppliers and to obtain competitively priced electricity; and" "WHEREAS, AB 1890 will provide County residential and small commercial customers a reduction in their electric rates beginning January 1, 1998, and" Revise the Resolution to read as follows: "...that these cities do support the significant competitive benefits of customer choice and lower electricity prices resulting from electric industry restructuring, including the efforts to make Diablo Canyon Power Plant competitive so that it can continue to operate and provide jobs and economic benefits to the County; and that these cities also support the effort of San Luis Coastal Schools and San Luis Obispo County to protect the community from a serious and damaging loss of tax revenue as a result of electric industry restructuring." PG&E is committed to continuing to enhance the social and economic viability of the communities we serve. I appreciate the council's consideration of this matter. S' erely, Dennis Hennessy