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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 3/28/2000 * PLEASE NOTE: Since the Glendale City Council does not take formal action at the Workshops, Workshop minutes are not approved by the City Council. MINUTES GLENDALE CITY COUNCIL BUDGET WORKSHOP SESSION 5850 West Glendale Avenue March 28, 2000 8:30 a.m. PRESENT: Mayor Scruggs, Vice Mayor Eggleston, and Councilmembers Goulet, Lieberman, Martinez, McAllister, and Samaniego. ALSO PRESENT: Martin Vanacour, City Manager; Ed Beasley, Assistant City Manager; Peter Van Haren, City Attorney; and Pamela Oliveira, City Clerk. FISCAL YEAR 2000-2001 BUDGET PROCESS CITY STAFF PRESENTING THIS ITEM: Mr. Ken Martin, Deputy City Manager; Mr. Mike Hoyt, Field Operations Director; and Mr. Charlie McClendon, Budget Director. This was the first of the scheduled City Council workshops to review the Fiscal Year 2000-2001 Annual Budget. At this meeting, staff was present to provide an overview of this year's budget process, focusing on the Landfill and Sanitation Funds, and Fund 16 (Duplicating/Mail, Telephone chargebacks and Equipment Management). The first step in the Fiscal Year 2000-2001 Budget Process was the City Council Goal Setting Retreat held in November of 1999. The Council came away from this meeting with goals that included projects such as Freeway Sound Walls, Paradise Storm Drain Completion, West Area Plan Update and Street Landscaping improvements. In addition to these infrastructure goals, the Council also approved 18 new police officer positions to maintain the current level of public safety within the City of Glendale and also converted 19.25 temporary employees to full-time employees (FTE's). The City Manager reviewed the budget requests of all departments and prepared a balanced budget for presentation to the City Council. The Council reviewed the Capital Improvement Plan (CIP) at its March 7, 2000 Workshop. The budget for the Fiscal Year 2000-01 CIP is $51 ,926,874. This includes $25,182,000 for Water/Sewer, $10,910,000 for Streets, $3,050,000 for Flood Control, $2,715,000 for Airport, $1,460,000 for Landfill, $1 ,420,000 for Parks & Open Space/Trails, and $1,000,000 for Economic Development. Public meeting notices will be posted in the same manner as regular Council workshops. 1 The City Council will review the Fiscal Year 2000-2001 budget at workshops to be held during March and April of 2000. The recommendations made at these workshops will direct staff in preparing for final City Council budget review and adoption in June of 2000. The recommendation was to review the first part of the Fiscal Year 2000-2001 Proposed Annual Budget and provide staff with direction. Dr. Vanacour introduced the budget, noting that it meets all goals of the Mayor and Council. He highlighted budget items that the Council had specifically requested and provided an overview of the budget process. He said that, based on the Council's goals, the City can have a very successful year without tax increases. He stated that the budget is conservative in terms of what might happen with the State and other initiatives that could pass. Councilmember Martinez pointed out that there was Council consensus to set aside $200,000 for improving the area of Maryland Avenue and 51st Avenue to 56th Avenue, with $100,000 going to Habitat for Humanity. He questioned where he could find the remaining $100,000 in the budget. Dr. Vanacour stated that the $100,000 was still in the budget and set aside. He explained that they would be working with Councilmember Goulet on how to use the funds. Councilmember Martinez stated that he would like the fund balance brought back up to $200,000. Councilmember McAllister noted that the sound attenuation walls are superior in the East Valley to those in the West Valley. He suggested it would benefit the City of Glendale to strive to at least equal what the East Valley has constructed. Dr. Vanacour stated that they were working on that and, between the Arizona Department of Transportation (ADOT) and the Mayor, he believed there would be positive changes. Mr. McClendon outlined the agenda for the day and the future meeting schedule. He also reviewed changes that have occurred in Glendale over recent years. LANDFILL Mr. Hoyt stated that the base budget for the Landfill Division is approximately $3.5 million, with a small carryover of $55,000 and supplemental requests equal to approximately $3.8 million. He updated the Council as to the services currently provided by the Landfill Division. He said that over the next few years they will be focusing more on air quality issues. Mr. Hoyt highlighted supplemental requests for the Landfill Division: Landfill Bulldozer ($94,700), Landfill Equipment Repairs ($97,000) and Landfill Air Quality Compliance Costs ($36,800). He provided a more detailed explanation of landfill growth, noting that in 1996 the City Council established a goal of bringing an additional 200,000 tons into the landfill from outside the City. He explained that this was to help minimize rates to residential customers. He stated that the goal is to have approximately 400,000 tons in the landfill and that total waste tonnage for Fiscal Year 1999 will be about 310,600 tons, an increase of 35,000 tons. He noted that the average annual increase in waste landfill since 1996 has been 39,230 tons each year. He stated that funding is necessary to accommodate that additional growth. He noted that the Landfill Mechanic ($230,142) is a new full-time position. He explained that they have contracted out the routine maintenance of all of the landfill equipment for the past ten years and that the cost has 2 risen sharply in recent years. He estimated the cost for that contract for Fiscal Year 2001-2007 would be $1.2 million. He pointed out that they are now diversifying their equipment manufacturers and the contract is outdated because they have to look at other manufacturers for service. He stated that they estimate saving approximately $400,000 by replacing just the preventative maintenance part of the program. He said that they would still rely on the dealers for major repairs. Councilmember Martinez asked why they have changed manufacturers if the original manufacturer had the equipment that the City needed. Mr. Hoyt explained that dealers use dealer parts with dealer markups and that other manufacturers can provide parts at a much-reduced rate. Mayor Scruggs asked if the average annual increase of 39,000 tons of waste is working towards the goal of 200,000 tons. Mr. Hoyt stated that, in 1996, they had about 200,000 tons and they are working towards a goal of approximately 400,000 tons. He stated that they are currently at 310,600 tons. Mayor Scruggs asked if they needed $224,400 ongoing to manage the cost of bringing in that tonnage. She also asked if the $224,400 was figured into the residential sanitation rate increase that will start in July. Mr. Hoyt stated that the $224,400 is needed to manage costs. He noted that most of the increase in tonnage is coming from outside the City. He stated that the outside customers will pay the majority of the $224,400 supplemental. Vice Mayor Eggleston asked if the landfill was an enterprise part of the City. Mr. Hoyt stated that it was. Vice Mayor Eggleston asked for confirmation that they were not asking the residents of Glendale to cover the additional expenses. Mr. Hoyt explained that there will be a significant amount of income in excess of the $224,400 to cover that cost. Councilmember Martinez asked how long the lease for the bulldozer would be. Mr. Hoyt stated that the bulldozer cost approximately $400,000 and that the lease term was for six years. Mayor Scruggs asked if a bulldozer was worn out in six years. Mr. Hoyt stated that they would extend the life of the bulldozer through their re-build program and keep it in service for a number of years. Vice Mayor Eggleston asked for an explanation of the one-time expense for hiring the Landfill Mechanic, as well as the expense for the lube truck and service vehicle. Mr. Hoyt explained that the lube truck was a complete service truck for heavy equipment and was a one-time expense. Mr. Norm Gumenik, Landfill Superintendent, explained that the service truck was for doing repairs, whereas the lube vehicle was for monthly preventative maintenance. Vice Mayor Eggleston asked if the purchase of supplies was a one-time cost. Mr. Gumenik stated that there was a one-time purchase of additional equipment that is not on the vehicle and then ongoing costs for oil, lubricants and filters. Councilmember Martinez asked for an explanation of the contract savings when costs are ongoing. Mr. McClendon explained that the expense of the outside contractor represents an amount they will subtract from the base budget to reflect that savings. 3 Councilmember McAllister expressed his opinion that preventative maintenance is the best investment a company can make. He pointed out that using outside contractors can mean delays in repairs. Councilmember Goulet asked if it was their goal to compact waste at 1,450 pounds per cubic yard and, if so, were they at that point. Mr. Hoyt confirmed that this was their goal and the bulldozer would play a large part in achieving that compaction rate. Councilmember Goulet asked if recycling would help them achieve better compaction. Mr. Hoyt explained that the curbside recycling program will not significantly affect compaction. He stated that the loose trash program does affect the compaction rate because wood is difficult to compact. Councilmember Martinez asked if the 75 hours of overtime per week in regards to recycling was for different individuals and he questioned whether they should hire another person to avoid the overtime. Mr. Hoyt explained that the materials coming in will vary from day to day and that there will be days when they see a lot more material. He stated that they anticipate overtime and that their staffing is at approximately 80% of their total anticipated production. He noted that it is more efficient to pay overtime than to hire additional personnel. Mayor Scruggs asked if the 75 hours per week was the average over 52 weeks. Mr. Hoyt stated that it was the average over a period of one year. He explained that the labor rate for sorting is low and allows for a lot more flexibility. Vice Mayor Eggleston asked if they were seeking an administrator for the Recycling Division. Mr. Hoyt introduced Mr. Kevin Roche, the Recycling Facility Administrator. He stated that Mr. Roche would be operating the facility. He noted that Mr. Roche will be starting his third sorting facility from scratch. Councilmember Lieberman asked if they would be using prisoners as part of the crew. Mr. Hoyt explained that this was not very efficient due to the limited hours that prisoners are available. However, he stated that they were talking with two groups, AZTEC and the Association for Retarded Citizens, which have mentally and physically challenged adults. He stated that these organizations have people who are very adept at the repetitive work that the facility would involve. Mayor Scruggs asked if the cost for staffing included regular hours and the additional 75 hours per week in overtime. Mr. Hoyt stated that it did. Councilmember Martinez asked for further information on the costs associated with the excavation of the landfill. Mr. Hoyt explained that they have lease payments for excavating the site, constructing the pad, the building itself, and the equipment in the building. He stated that this was the ongoing debt service for those activities. Mayor Scruggs asked how they would notify the public that they were buying recycling products. Mr. Roche stated that they would let all generators of scrap know, they would advertise in the yellow pages, and offer recycling services to their trash customers. Mayor Scruggs asked if there was an association of recyclers that would complain. Mr. Roche stated that the most important thing was to get existing trash customers in the City of Glendale on board with recycling services as well. Dr. Vanacour noted that all cities do this. 4 Vice Mayor Eggleston asked if there was a lot of networking in terms of the recycling business. Mr. Roche stated that there was and they needed to get the word out. However, he pointed out that there is not as much competition in the West Valley as there is in other areas in the Valley. He said that the location of the facility will help them secure materials from all over the West Valley. Councilmember Martinez asked for an explanation of the capital equipment management charges. Mr. Hoyt stated that they were shop charges they have to pay to have their vehicles maintained by the shop. The meeting was recessed for a short break. SANITATION Mr. Hoyt reviewed the budget for Sanitation, noting that there were carryovers for front- load and roll-off bins for commercial sanitation and for the second part of the recycling public relations campaign. Councilmember McAllister asked if they would be looking at recycling more things. Mr. Hoyt explained that their philosophy was to go after those items that have a stable market rather than maximizing diversion. He stated that if they could focus on getting citizens to recycle paper products, as well as plastics and cans, they would have a very respectable diversion rate that is equivalent to what other major cities in the country are doing. Councilmember Lieberman asked if the recycling public relations spending included the picnic for the grand opening of the facility. Mr. Hoyt stated that it did. Mr. Hoyt reviewed the Curb Service supplemental requests: Growth Containers ($58,118), Replacement Trucks ($135,000) and Landfill Tonnage Fees ($65,934). Councilmember Lieberman asked if the Landfill Tonnage Fees were the cost of the service or the cost of the landfill being used. Mr. Martin explained that they were the actual landfill charges that Sanitation pays to the Landfill. Mr. Hoyt also reviewed supplemental requests for Commercial Sanitation Growth ($292,946) and Replacement Front Load Sanitation Truck ($44,651). Councilmember Lieberman asked if the replacement fund for the containers was funded every year. Mr. Hoyt stated that the containers last a lot longer than the lease payment. He noted that, in the past, they have paid cash for the containers and their financial advisors suggested that a lease/purchase would be more appropriate. He stated that there are five years on the lease. 5 FUND 16 (CHARGEBACKS) Mr. Hoyt stated that the major items covered under the Equipment Management budget include a vehicle replacement fund, welding and fabrication, fuel services, and paint and body. Councilmember Lieberman asked if the expenses for paint and body, fabrication welding, etc. were the fees that they paid to the City's shop. Mr. Hoyt stated that this was correct. Councilmember Lieberman asked what percentage of increase in fuel costs was factored into the budget. Mr. Martin stated that the second supplemental covers a supplemental for fuel and that they put in $85,000 for the increase in fuel. Councilmember Martinez asked if it has ever been considered, since the city has the Sure Pay program, that they do away with the information that is sent to customers. Mr. McClendon explained that it was their finding that customers still want an accounting of what they have been charged, what their usage was and a comparison over time. He pointed out that they also use this as a means to send information to citizens about what is happening in the City. Vice Mayor Eggleston noted that Sure Pay was a savings to the City in terms of bill processing. Councilmember Lieberman asked about the two electric vehicles that the City had to return to General Motors. Mr. Martin explained that they were recalled due to an electrical fire hazard and that they were supposed to be coming up with a settlement. He stated that the Council has a goal to put $300,000 into alternative fuel vehicles and the policy they have adopted is that they would buy originally manufacturer equipped alternative fuel vehicles when they become available. He stated that they have been trying different alternative fuel vehicles and keep running into problems with the technology. He stated that this is why they were buying propane duel fuel vehicles, when possible. Councilmember Martinez asked if the $85,000 increase in fuel services was adequate. Mr. Martin stated that they had made their best guess as to what would be necessary, but that it may need to be adjusted later. Mayor Scruggs noted that the City of Mesa was figuring a $50,000 increase, which estimate made her feel comfortable. She asked Mr. Martin to explain the State's mandate on local governments to pursue alternative fuels if they are not available. Mr. Martin stated that the State Legislature passed a law in 1994 that imposed on all local governments and school districts a requirement to convert their fleets to alternative fuels. He noted that they had worked with CNG (compressed natural gas) for ten years and have had numerous problems with various pieces of equipment. He explained that they had decided years ago to go to propane; however, when they tried to convert the 6 vehicles they ran into warranty problems. He stated that they then went to the Council and asked to have money put aside to show their commitment to buying alternative fuel vehicles, but not to purchase them until manufacturers determined that they were ready and willing to provide a warranty for them. He noted that the City was the first local government in the State of Arizona to lease an EV1 (Saturn electric vehicle). He stated that they were looking at the new hybrid vehicles that are being produced. Councilmember Martinez asked if the $30,000 cost for Paint/Body Shop was an ongoing or a one-time expense. Mr. Hoyt replied that it was an ongoing expense. Mayor Scruggs noted that the next budget hearing would be held on April 4, 2000 at 8:30 a.m. ADJOURNMENT The meeting was adjourned at 10:45 p.m. 7