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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 6/1/2004 (7) * 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 CITY OF GLENDALE CITY COUNCIL WORKSHOP June 1, 2004 1:30 p.m. PRESENT: Mayor Elaine M. Scruggs, Vice Mayor Thomas R. Eggleston, and Councilmembers Joyce V. Clark, Steven E. Frate, David M. Goulet, H. Phillip Lieberman, and Manuel D. Martinez ALSO PRESENT: Ed Beasley, City Manager; Pam Kavanaugh, Assistant City Manager; Jon Paladini, Interim City Attorney; and Pamela Hanna, City Clerk It was moved by Frate, and seconded by Clark, to go into Executive Session. The motion carried unanimously. The meeting was called to order at 4:05. 1. DISCUSSION CONCERNING SEARCH FOR NEW CITY ATTORNEY CITY STAFF PRESENTING THIS ITEM: Ms. Alma Carmicle, Human Resources Director This is a request for the City Council to discuss and provide direction to the City Manager and the Human Resources Director, regarding options related to the search for a new City Attorney. Human Resources Director Alma Carmicle provided a brief presentation to Council regarding search options, timetables and estimated costs. The recommendation was to provide the City Manager and Human Resources Director with direction regarding the search for a new City Attorney. Ms. Carmicie stated the Human Resources Department can conduct the search internally or, if Council so desires, it is willing to work with outside firms. Councilmember Frate asked if a national search would require the assistance of an outside search firm. Ms. Carmicle said the Human Resources Department provides the same services an external consultant would provide. She stated the decision of whether or not to go with the department depends on whether or not a national or local search is desired. 1 Councilmember Goulet suggested applicants should have expertise in areas new to the city, such as sports and entertainment venues, as well as public policy and contract negotiations. Ms. Carmicle stated such skills would be given consideration. Councilmember Frate asked if the time frame involved differs in a national versus local search. Ms. Carmicle said they can expect the time frame for a national search to be double that of a local search. She stated the Human Resources Department could conduct a full search in about 30 days, whereas the minimum for a national firm is 90 days. She said the location of the search firm and the applicants' travel time all contribute to the longer timeframe. Councilmember Martinez asked Ms. Carmicle if she can or will be able to recommend any firms. Ms. Carmicle said they have worked with several firms in the past, including the Mercer, Arvani and Maximus groups, and can ask them to submit a proposal. Councilmember Clark stated, regardless of whether they eventually hire the interim City Attorney or someone else, she wants to be assured that a comprehensive and extensive search was conducted and that they arrived at the most qualified person for the job. She said, in her mind, it would require a national search; therefore, she would like to see submittals from the Arvani and Maximus groups. Councilmember Lieberman agreed they should broaden the scope of the search, but should not eliminate the interim City Attorney as a viable candidate. He said, while The Mercer Group did not fulfill the role as well as he had hoped the last time they conducted a search for the city, he would like them included in the Request for Proposal. Councilmember Goulet asked how long it would be before they receive a response to a Request for Proposal. Ms. Carmicle said the proposals could be submitted as early as next week. Councilmember Clark said she was disappointed in the Mercer Group and would prefer that only Arvani and the Maximus Group be asked to respond to the Request for Proposal. Councilmember Frate stated he supports a national search and believes Ms. Carmicle should be directed to immediately contact search firms. Councilmember Lieberman pointed out it would not cost the city anything to include The Mercer Group in the Request for Proposal, noting they successfully filled two other positions in the city. Vice Mayor Eggleston agreed a national search should be conducted. He said he sees no reason at this point to exclude the Mercer Group. 2 Councilmember Goulet asked if unsolicited submittals are ever received and, if so, are they given consideration. Ms. Carmicle said they would review all submitted proposals. Councilmember Martinez agreed submittals should be requested from all three firms. Mayor Scruggs directed staff to request proposals from all three-search firms. She asked how the consultants would interface with the Council. Ms. Carmicle recommended the consultant's work directly with the Human Resources Department, stating certain elements, including brochure advertising the position, would likely be handled in-house. 2. 3RD QUARTER REPORT ON THE GENERAL FUND CITY STAFF PRESENTING THIS ITEM: Ms. Sherry Schurhammer, Budget Director This is a request for the City Council to review the Fiscal Year (FY) 2003-04 third quarter report on General Fund expenditures and revenues. The FY03-04 third quarter report on the General Fund is consistent with the Council's goal of ensuring the city's financial stability through timely reviews of actual expenditures and revenues. In response to requests from the Council, staff committed to providing quarterly reports on the General Fund. City Council was informed at the July 15, 2003 workshop that the FY03-04 third quarter reports would be brought forward in mid- to late-May 2004. The FY-end report will come forward in mid- to late-September 2004. The General Fund's third quarter revenue budget and actuals are as follows (in 000s): 3rd Qtr Budget 3rd Qtr Actuals City Sales Tax $ 33,122 $ 37,958 State-Shared Revenues $ 33,815 $ 34,611 HURF $ 11,366 $ 11,118 Primary Property Tax $ 2,618 $ 2,141 All Other $ 19,549 $ 19,650 TOTAL $100,470 $105,478 As the preceding list shows, FY03-04 third quarter General Fund revenues were 5%, or $5 million ($5,008,000), more than expected according to the revenue budget. Of particular note are the following facts: City sales tax actuals are 15%, or$4.8 million ($4,836,000), higher than expected at the three-quarter mark in FY03-04; and City sales tax actuals this FY, $37,958,000, are 20%, or almost $6.3 million ($6,289,000), higher than the same period last fiscal year, when city sales tax actuals totaled $31,669,000. 3 This growth in city sales tax revenues is surprising, especially when compared to the expectations that were prevalent at this time last fiscal year. A year ago, in February and March 2003, the city's economic outlook for FY03-04 was pessimistic. However, the turnaround in city sales tax revenues that was experienced during the 4th quarter of FY02-03 has continued through the first nine months of FY03-04. Third quarter revenue actuals included $1.6 million ($1,565,000) in one-time revenue, specifically from the sale of parcels at the Northern Crossing development. Not reflected in the 3rd quarter actuals figure is $4.7 million from the sale of parcels that closed in April 2004. This $4.7 million will be reflected in the year-end report. The FY03-04 third quarter budget and actuals for the General Fund operating and pay- as-you-go (PAYGO) capital expenditures are as follows (in 000s): 3rd Qtr Budget 3rd Qtr Actuals GF Salaries/Benefits $61,032 $58,440 GF Non-Personnel $23,526 $22,307 GF Debt Service $ 1,526 $ 1,524 PAYGO Capital Expenses $ 1,866 $ 1,676 TOTAL $87,950 $83,947 As the preceding list shows, FY03-04 third quarter General Fund expenditures were $4 million ($4,003,000) less than budget. At the end of the 3rd quarter, the budget basis General Fund fund balance is $44,128,000. The FY03-04 2nd quarter report was presented to City Council on February 17, 2004. The community benefits from periodic reports to City Council on the General Fund's revenues and expenditures because it is a means to evaluate the city's financial stability. This is a status report on the General Fund through the first three quarters of FY03-04, and no Council action is required on this part of the report. Ms. Schurhammer explained staff talked to the Council last summer about improvements to the budget process, at which time Council requested periodic status reports on General Fund revenues and expenditures. She said the first quarter report was given in November 2003 and the second quarter report was made in February 2004. She stated today's report will cover the General Fund for the period July 2003 through March 2004. Ms. Schurhammer showed a comparison of budget versus actuals for General Fund (GF) revenues, pointing out that total GF revenues are $5 million or 5% above budget. 4 She stated that city sales tax alone was $4.8 million or 15% higher than expected. She said state income tax and state sales tax revenue came in close to expectations, while motor vehicle in-lieu revenue exceeded expectations by $493,000 or 8%. Ms. Schurhammer reported HURF actuals are 2% or$248,000 below expectations. She explained that the city's HURF revenue budget for the current fiscal year assumed a growth rate of 6% over FY02-03 actuals, whereas statewide HURF collections are actually running 5.8% ahead of last fiscal year. The slight difference in the rate of growth the city assumed for this fiscal year's collections and the actual rate of growth explains why Glendale's HURF revenues are running about 2% or$248,000 less than anticipated. She reported that property tax receipts were $124,000 or 7% ahead of the budget at six months, and they are now 18% or $477,000 below budget at the 9-month mark. She explained this variability in collections by noting that property tax revenue is not collected evenly over the fiscal year, with the largest shares coming in during the second and fourth quarters. She said the city expects to exceed or meet the budget for this revenue source by the end of the fiscal year. Ms. Schurhammer explained that the "all other" category actuals have exceeded expectations at the 9-month mark by$101,000 or 1/2 of 1%. She then reviewed details for the "all other" category. She explained that Northern Crossing parcel sales represent one-time revenue that is collected as the sales are completed. She said $4.7 million in parcel sales that closed in April are not reflected in the $1.5 million actuals figure because they occurred in the 4th quarter. Ms. Schurhammer said revenue from development permits and fees continue to outpace expectations, with actuals running $281,000 or 7% ahead of budget at the end of the third quarter. Ms. Schurhammer explained that recreation revenue is not collected evenly over the year, with the largest share coming in during the fourth quarter. She stated that the Director of the Parks and Recreation Department expects recreation revenues to meet the FY03-04 revenue budget by the end of the fiscal year given the actuals received in April and May. Ms. Schurhammer reported that revenue from library fines and fees are running ahead of expectations at the end of the third quarter, as are cable, gas, and electric franchise fees. Franchise fees are running $57,000 or 2% ahead of the budget. Councilmember Lieberman asked if the City collected $198,000 in library fines in the third quarter. Ms. Schurhammer responded no, explaining that the total of$198,000 reflects revenue collected since July 1, 2003 through the end of March 2004. Councilmember Lieberman commented $198,000 seems to be a tremendous amount to collect in fines over nine months. Councilmember Clark pointed out the city increased its fines and fees for library materials in August 2003. 5 Vice Mayor Eggleston asked if the motor vehicle in-lieu tax is the annual tax paid to the state to license a car. Ms. Schurhammer responded yes. Ms. Schurhammer continued her presentation, stating a year-to-date comparison shows city sales tax receipts through the third quarter of FY03-04 are $4.8 million or 15% higher than the revenues collected for the same time period last fiscal year (July 2002 thru March 2003). She noted that the FY03-04 figure includes receipts collected as a result of new retail development, the adjustment of the telecommunications tax rate, and the elimination of the rental housing tax exemption. Councilmember Clark asked if the city receives any portion of the gasoline sales tax. Ms. Schurhammer explained the city receives a portion of the state's gasoline tax through HURF revenues. She explained that the gasoline tax is charged on a per gallon basis, not on the price charged per gallon. Consequently, the steep rise in gas prices does not automatically equate to a rise in gasoline tax revenues. Ms. Schurhammer explained the slide that provides selected details of the city's sales tax receipts through the third quarter of FY03-04. She pointed out that city sales tax receipts include over$2.8 million from new retail development. The $2.8 million is $895,000 or 45% more than the city expected to collect from new retail development through the third quarter of this fiscal year. She noted that revenue generated from the Wal-Mart store at the Northern Crossings development is not included in the actuals figure because the store did not open until April, which is in the fourth quarter. The city sales tax figure also includes over $2.3 million that is attributable to the telecommunications rate adjustment and $214,000 from the elimination of the rental housing tax exemption. The city expected to collect just over $2 million as a result of the telecommunications rate adjustment, so the actuals are $325,000 or 16% more than expected. However, the revenues from the change to the rental housing tax exemption are $21,000 or 9% less than expected. Ms. Schurhammer reported that current state-shared revenues are about 2% or $796,000 more than expected through the third quarter, but are 6% or $2.1 million less than last fiscal year. She stated the city knew that state-shared revenues would be less this fiscal year and planned for it. This year's actuals are less than last year's actuals because state income tax revenue lags by two years, and this year's actuals reflect the week economy of 2001. Ms. Schurhammer reviewed General Fund expenditures through the third quarter, noting the city achieved its annual goal of$1.1 million in salary savings after the first quarter. She said the city has added almost $1.5 million more since that time, resulting in just under $2.6 million in salary savings through the end of the third quarter. She stated the non-personnel line item is about $1.2 million under budget and debt service payments are $2,000 under budget. She explained that pay-as-you-go (PAYGO) capital, which is funded with GF operating dollars, is $190,000 under budget through 6 the end of the third quarter. Overall, total operating expenditures are running just over $4 million less than budgeted through the third quarter. Vice Mayor Eggleston asked if the non-personnel line item represents a real savings, or will spending in this category be at budget by the end of the fiscal year. Ms. Schurhammer explained that the departments have under spent their GF operating budgets through the third quarter. However, some of the non-personnel spending is cyclical so it is possible that the city could be right at budget by the end of the fiscal year. She expressed her opinion that the city will retain at least a portion of the savings, since most departments do not spend their entire operating budget by the end of the fiscal year. Ms. Schurhammer then reviewed the GF fund balance slide, which reflects the fund's budget-basis status, at the end of the third quarter. She stated that the GF started the fiscal year with a beginning fund balance of$31.6 million. Revenues of just under $105.5 million have been received through the end of the third quarter. Other transactions within the GF include $6.8 million in transfers out of the fund, $83.9 million in expenses charged to the fund, and $2.2 million set-aside as designated funds. She noted the one time lump sum payment that employees received in their February 13 paycheck is reflected in the expenditure figure. She explained that the General Fund balance is just over $44.1 million, on a budget basis, at the end of the third quarter. Councilmember Lieberman asked if the ending fund balance is considered the contingency fund balance. Ms. Schurhammer explained that the contingency appropriation for FY 2003/04 was $8 million, of which just over $2 million was used to provide the one-time lump sum payment to employees in February 2004. She stated the remaining $6 million is part of the ending fund balance. She explained that the GF contingency appropriation is not a separate fund, but rather an appropriation within the General Fund. Councilmember Lieberman expressed his opinion that the ending fund balance speaks well of the city's government. Councilmember Clark asked if the $44 million represents an unappropriated fund balance. Ms. Schurhammer responded no, stating a portion of the balance is appropriated. CITY MANAGER'S REPORT No report was made. ADJOURNMENT The meeting was adjourned at 4:50 p.m. 7