HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 3/24/2009 (5) *PLEASE NOTE: Since the Glendale City Council does not take formal action at
the Workshops, Workshop minutes are not approved by the City Council.
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GLENIE
Minutes of the
GLENDALE CITY COUNCIL WORKSHOP SESSION
Council Chambers—Workshop Room
5850 West Glendale Avenue
March 24, 2009
1:30 p.m.
PRESENT: Mayor Elaine M. Scruggs, Vice Mayor Manuel D. Martinez, and
Councilmembers Joyce V. Clark, Steven E. Frate, David M. Goulet,
Yvonne J. Knaack, and H. Phillip Lieberman
ALSO PRESENT: Ed Beasley, City Manager; Pam Kavanaugh, Assistant City Manager;
Craig Tindall, City Attorney; and Pamela Hanna, City Clerk
1. FY 2009-10 BUDGET - 18` WORKSHOP - 1 HOUR
CITY STAFF PRESENTING THIS ITEM: Horatio Skeete, Deputy City Manager for
Administrative Services and Sherry Schurhammer, Management and Budget Director
This is a request for City Council to review the recommended General Fund (GF) operating
budget explained in the City Manager's memo that is included in your budget workbook. The
budget workbook also contains the City Manager's recommended operating budget for all funds
for FY 2009-10 and the proposed 10-year capital improvement plan.
There are no supplemental requests to review for any of the funds.
This item incorporates the Council's Strategic Goals while ensuring the city's financial stability
by presenting realistic analyses about the provision of city services and future revenue
expectations.
The Mayor and Council's Strategic Goals continue to serve as the foundation for the
recommended budget even as we manage operations through the economic downturn.
The recommended budget is being presented for review and discussion. It is financially
balanced, as required by Arizona state law.
The recommended budget reflects the constrained and challenging economic conditions that the
nation currently faces. For Glendale that means a projected $14.4M shortfall between existing
ongoing costs and projected ongoing revenue for FY10. This is discussed in more detail in the
"FY10 City Manager's Recommended Operating Budget" that is included in the Budget Workbook.
The FY10 GF operating budget includes a budget balancing strategy to address the projected
$14.4M shortfall. This strategy is a mix of one-time and ongoing measures and is based on a phased
approach that does not severely diminish the services the city provides to the community.
A municipality is a service organization, and knowledgeable, skilled employees are the most
important component of providing quality services to our residents and businesses. The phased
budget strategy is designed to attain a fiscally responsible budget while remaining open and flexible
to the changing environment of today's economy.
In preparing the recommended operating budget, staff was challenged to use creativity and
innovation in building a business case for departmental service delivery adjustments while
minimizing impacts to the Glendale community.
The Innovate Initiative is directly tied to the city's strategic business model that requires
departments and employees to ask two basic questions:
1) Should we do this? (Is it aligned with Council goals and does it make good business sense?)
2)Why and how do we do this? (Are there efficiency/productivity/customer service
improvements and what are the operational and financial impacts of the improvements?)
This approach engages departments and individual employees in making business-based
recommendations related to existing programs and services. Some adjustments have and will
result in changes in service delivery method(s) and some reduction of expenditures. Others,
through changes in process or structure, gain efficiencies that still meet customer demand and
also could lead to new revenues not currently captured through automation and other best
practices.
Overall, the intent of the recommended budget is to sustain the city's critical services and high
quality of life while carefully managing the city's limited resources during this current economic
downturn.
The Budget Workbook containing the City Manager's recommended budget for FY 2009-10 was
delivered to the Mayor and Council on Friday, March 13, 2009. A copy of the FY2009-10 City
Manager's recommended budget is also available on the city's website, glendaleaz.com.
Glendale's budget is an important financial, planning and public communication tool. It gives
residents and businesses a clear and concrete view of the city's direction for public services,
operations and capital facilities and equipment. It also provides the community with a better
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understanding of the city's ongoing needs for stable revenue sources to fund public services,
ongoing operations and capital facilities and equipment.
The budget provides Council, residents and businesses with a means to evaluate the city's
financial stability.
All budget workshops are open to the public and are posted publicly per state requirements.
The Budget Workbook provided to Council also is posted publicly as part of the budget
workshop agenda packet.
A second budget workshop is scheduled for March 31, 2009. Topics to be addressed at that
meeting include the recommended capital improvement plan and rate recommendations for the
enterprise funds. The recommended capital improvement plan is included in the Budget
Workbook. The rate materials will be provided under separate cover.
Today's workshop is for information only. Decisions on the proposed budget will not be
requested until the last budget workshop occurs.
Mr. Beasley introduced this item with a brief summary. He said the development of the
recommended operating budget was important not only to balance the budget based upon
council's goals, but also to position the city for future success in the long-term once the economy
turns around. He noted he did not want to minimize that a budget was a projection of what
could occur and not an exact road map. Therefore, should the times get worse, there are other
measures that may have to explored beyond those used to create the recommended budget for FY
2010. . He thanked the employees and committees who were a part of this budget and their
innovative concepts and efforts.
Ms. Kavanaugh proceeded with addressing the questions that some council members had asked
over the past several days regarding budget issues. One question concerned the General Fund
fund balance. She said approximately $23.6 million in one-time expenditures that were planned
and budgeted as part of the council-approved FY 2009 budget. She explained that the $23.6
million included the GF Pay-As-You-Go program, one-time items in the operating budget for
several departments and some one-time transfers.
Ms. Kavanaugh said another question concerned the furlough program. She said some
communities immediately eliminated positions to help balance their budgets. However, we
heard from you and staff that layoffs should be avoided if at all possible. Therefore the
alternative of a furlough program was developed. This furlough program would include 13 days
or the equivalent of 104 hours without pay for FY 2010 and will apply to all city employees
except those who are part of a represented labor group. . She said employees were asked to
volunteer to take up to four days of furlough during the last four months of FY 2009, and the
response has been better than anticipated. She said any hours volunteered this fiscal year will be
deducted from next fiscal year's 104 hours of furlough.
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Ms. Kavanaugh also discussed the voluntary retirement plan for employees who were eligible to
retire under the Arizona State Retirement System at the time the letter was issued. She said 120
letters were sent and over 50 employees had responded with letters of interest. Staff will be
evaluating those letters of interest and further information will be provided to Council once the
evaluation is completed.
Mayor Scruggs asked for clarification about the represented police and fire employees and what
they will be forgoing in place of furloughs and how their measures will be accounted for in the
recommended budget. Mr. Beasley said discussions with labor are underway and details will be
forthcoming. Mr. Beasley noted that civilian employees in public safety as well as those sworn
positions not covered by the union agreements are subject to the furlough program.
Mayor Scruggs remarked that since council was still waiting on that piece of information the
council really did not need to act on these recommendations today. She said the council should
wait until they know if they might be receiving additional funding for the budget. Mr. Beasley
stated that the Council did not have to act on anything today.
Councilmember Goulet asked for more information about implementation of the furlough
program. Ms. Kavanaugh said the implementation details were being worked out now and noted
that staff was working with the department heads on how to minimize the impact on operations.
Mayor Scruggs asked for clarification about the letters sent to employees regarding the voluntary
retirement program. Ms. Kavanaugh said letters were sent to those employees who currently are
eligible to retire under the Arizona State Retirement System rules. Mayor Scruggs asked if there
were additional funds provided to these employees that were taking retirement in the form of
buy-outs. Ms. Kavanaugh responded there was an incentive program based on years of service.
Vice Mayor Martinez asked if the furlough program applied to the city manager on down? Ms.
Kavanaugh stated he was correct. Mayor Scruggs commented that the furlough will not only
affect the salary aspect, but also sick leave and vacation. Mr. Skeete responded that she was
correct. Mayor Scruggs asked if sick leave and vacation time were included in these budget
calculations. Mr. Skeete responded that vacation time and sick leave had not been included.
Mayor Scruggs commented that since they were not included, there should be additional savings
in the budget figures once they were completed. Ms. Schurhammer explained that when they did
the calculation for the furloughs, they looked at immediate savings. She stated when an
employee accrues time for sick leave and vacation, they may not use it for two or three years
from now so that savings was not significant.
Mayor Scruggs asked if the recommended budget included wages, benefits and other
compensation in the base. Ms. Schurhammer responded, yes and explained that the base budget
numbers represented the current authorized annual salaries for individuals. Mayor Scruggs
inquired if the city budget carried accrued vacation and sick time as a liability. Ms.
Schurhammer said the accrued leaves were not reflected in the budget but are reflected in the
city's CAFR [comprehensive annual financial report]. Mr. Lynch commented that Mr.
Schurhammer was correct and further explained that the CAFR includes a recognition of the
city's liability for accrued leave to address the costs when employees leave city employment.
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Mayor Scruggs commented she still had not come to terms with the mandatory 13 days of
furlough. She indicated she was wondering if figuring in sick and vacation time would reduce
the recommended mandatory 13 days furlough. Mayor Scruggs inquired if vacation and sick
accruals would be affected. Mr. Lynch explained that the whole focus of this was not losing
vacation or sick time, but rather the intent of the furlough was a voluntary effort by employees to
avoid having permanent pay reductions implemented. Mayor Scruggs remarked that she still had
much to say on this issue; however, would express her views at a later time.
Councilmember Clark asked for clarification on the accruals issue. She said the Mayor was
concerned the furlough affected sick and vacation accruals. However, what she was hearing
was that those computations were based on years of service. Therefore, 13 days of furlough
would occur in the upcoming year and did not affect years of service.
Ms. Carmichael, Human Resources Director, clarified Mr. Lynch's comments. She stated the
loss of sick and vacation accruals would be very minimal. She explained they had looked at
possibly changing their policy to allow employees to accrue sick and vacation time even if they
were on furlough and therefore not being paid. She said the city's current policy says there are
no sick and vacation accruals if an employee is not being paid as with unpaid leave. She said the
concept would be the same for the furlough program. She said it was important to be consistent
with this policy. She further added that exempt employees will feel it more than the non-exempt
employees because they accrue more leave every pay period based on their years of service.
Councilmember Lieberman asked for an explanation of exempt and non-exempt employees. Ms.
Carmichael said employees were classified as exempt or non-exempt based on their jobs, the Fair
Labor Standard Act and overtime provisions. Councilmember Clark asked about the number of
exempt and non-exempt employees at the city. Ms. Carmichael said the city currently has about
2,100 FTEs with about 1,550 classified as non-exempt and another 500 as exempt.
Councilmember Clark clarified that the non-exempt employees will be less affected by the
furlough than the exempt employees. Ms. Carmichael stated she was correct.
Mayor Scruggs asked Ms. Carmichael to explain how all this ties together with sick leave
accruals. Ms. Carmichael explained sick leave was like vacation leave in that it is a benefit that
an organization provides an employee. This benefit is provided only if the time was earned as
one works. Mayor Scruggs commented that this whole concept of not earning sick or vacation
time if employees did not work was a bit questionable when employees were being forced not to
work. She said the city was not carrying the sick and vacation accruals expense in the budget
and therefore it would cost the city nothing if those employees were to continue to accrue sick
and vacation leave while on furlough. She added that what the city was essentially doing was
mandating mandatory furloughs and telling employees the city will be taking their sick and
vacation time too when it is costing the city nothing to provide it. She noted she had serious
concerns with the furlough issue.
Councilmember Lieberman asked what benefits would be retained. Ms. Carmichael said only
sick and vacation accruals are affected by the furlough program; all other benefits remain
unaffected. She reiterated that sick and vacation accruals were based on hours worked.
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Councilmember Clark said she supported the furlough concept. She stated many other
companies were requiring mandatory furlough days for their employees as a way to saves jobs.
However, she agrees with Mayor Scruggs on the sick and vacation accrual issue. Ms.
Carmichael said there were other issues to consider such as Worker Compensation laws. She
added this method was the cleanest way to keep this consistent with the policy that states when
employees are on unpaid leave there will be no vacation or sick accruals. She said this was done
to insure the city does not increase further liability by this goodwill gesture. She further added
that because the amount was so minimal in terms of what an employee would actually lose in
vacation, it was determined to be the best protection for the organization to keep the policy
consistent. Councilmember Clark commented that staff had used the standard policy to develop
the frame work for the furlough; however, she would have thought they would have developed a
standalone policy because this was a different set of circumstances. In addition, if staff had been
concerned with liability, they should have developed some sort of waiver or disclaimer during
furlough periods.
Mayor Scruggs explained the furlough, sick and vacation time situation on a personal note. She
noted some people, such as her, still work when on furlough which makes the workers
compensation argument a mute issue. Mr. Tindall interjected that Workers Compensation laws
will need to be checked to confirm what would happen. However, he believes if Mayor Scruggs
was conducting city business while on furlough, she would be covered by Workers Comp.
Vice Mayor Martinez asked if it had to be a specific day when taking some of the 13 days of
furlough. Mr. Beasley stated the days off would be taken when it was best applied for. He
explained they would be using common sense with this process. In addition, it might not even be
necessary for employees to take the full 13 days. He stated this was only an option they were
exploring as an alternative to layoffs. He added things might change in the new fiscal year. He
noted the flexibility of the program was being looked at prior to implementation before July. He
added they could easily go back and assess the situation looking at all the processes and laws to
make adjustments. He stated they were trying to be as transparent as possible and communicate
up front with everyone with this initial presentation. Vice Mayor Martinez commented that
based on budget discussions he has had with staff he believes a furlough was needed and he
would support it. He noted he would like employees to have the option of choosing their days
off.
Mayor Scruggs commented staff had already communicated with the employees that a furlough
might happen; however, when they leave here today, they still would not have settled it. She
explained that staff was still in negotiation with the unions and there was still a chance of further
reductions in programs, activities, and services that might lessen the impact of affecting
employee pay. Mr. Beasley explained that Council charged him with looking at Council's goals,
try not to impact services to a high degree and balance the budget, all of which is reflected in the
recommended budget. However, if council decides to make adjustments to the budget, such as
eliminate programs, which would still affect services to residents, it would be council's
prerogative because ultimately it was the council's budget. He added that he had brought them
an initial balanced budget based upon a concept that they used to make sure everyone
understands how it affects them before it is put into effect. He noted a budget was a projection
and this process was utilized by several other organizations. Additionally, if council decides
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there is a program or an unnecessary service then the council has the flexibility during this
process to adjust the recommended budget.
Mayor Scruggs responded it would be very hard for council to look into which programs could
be cut because council receives lump sums to review. Additionally, the whole furlough idea has,
in her opinion, taken off without really realizing the impact it would have on families. She
provided some examples of people she knew who where dangerously close to financial
devastation. She noted she knows she was in the minority on this issue but cannot support this
idea without trying to find other options. Mr. 13easley explained he completely understood her
view on this matter, and did not want to give the impression he was not aware of the situation.
He stated he had told employees that the highest priority the city has is the avoidance of layoffs.
He noted they were trying to make it as fair as possible and trying to keep from having any
layoffs. He explained that when this was offered as a trial program, employees favored this as a
first step before layoffs. He added this program had been conducted with a lot of dialog and not
in isolation.
Mayor Scruggs inquired as to how many employees had said the furlough process was the way
to go. Mr. Beasley explained the voluntary program and the employees' response to it indicated
there was support for it. He said he also encouraged comments from employees on the issue.
Mr. Beasley explained the expected GF savings from the furlough program is about $3.5 million
for FY 2010. He said the quarterly discussions about GF revenues and expenditures provide an
opportunity to foresee any changes in revenues. He reiterated that there is the possibility that the
full 13 days will not be needed. He noted they still had some time for flexibility in the budget to
make some changes and still balance the budget. He also discussed how this program was
beneficial because it gave the department heads and employees time to plan their schedules. He
noted there was still the possibility that if things got worse, 13 days will not mean that much and
they would need to do something else.
Councilmember Clark said she had asked for the average salary of employees paid out of the GF
and was told it was 58,000 dollars a year [includes the cost of benefits]. She said the $3.5
million in savings expected from the furlough program equates to about 60 full-time positions.
She noted that layoffs were always painful in any situation so the use of furloughs might
possibly save jobs in the long run. She reiterated her support for the furlough concept.
Mayor Scruggs said the number of jobs that would be saved was 65. Councilmember Clark
stated 65 were still significant because those people would hate to lose their jobs if there was an
alternative to layoffs. Councilmember Clark said support for the 13 day furlough program
provided the organization with flexibility. She felt confident all 13 days would not be used if
revenue improved.
Councilmember Clark continued by saying she believed council should let the people who run
the organization on a day-to-day basis have the flexibility to make some decisions while council
has authority to review and approve or reject the overall concept or policy. She indicated that
council could not possibly go to each department and recommend cuts as she believed that was
the job of the department heads because they know more about their departments and what is
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needed and valuable to the citizens they serve. She said departments have already substantially
reduced their ongoing budgets. She believed it was very presumptuous of them to think they
know more than the department heads and staff when it came to cutting programs. She indicated
staff had worked very hard on this budget in order to bring council a plan that council can live
with and appreciate. She added that she would like to thank staff for the work done so far. She
stated that this was the least painful budget she has seen compared to the budgets for most other
cities in the valley,
Mayor Scruggs remarked Councilmember Clark had done an excellent job on selling the notion
of why these employees should take 13 days off without pay. She stated she did not agree with
her statement that it was presumptuous of the Council to look for cuts in programs and services
to possibly lessen the burden on employees. She explained she would like to contrast that to
what Mr. Beasley and management were repeatedly saying. She indicated that everything staff
has come up with was based on addressing the Council's goals and priorities. However, at times
that was not the case. Additionally, she asked how could it be presumptuous of them to present
or offer any opinion on a budget that was created on, presumably, their goals. She disagreed that
presenting opposing views was micro-managing when the purpose of this budget workshop was
to do precisely that. She added if that was not the purpose of these meetings, then why have a
workshop session?
Mayor Scruggs asked how many unfilled FTE are in the city. Ms. Schurhammer stated there
were approximately 125 positions across all funds. Mayor Scruggs explained this was precisely
what she was trying to come up with. She would like to come up with different ideas that could
work without having to reduce employee pay. She suggested not filling those FTE jobs that are
now being carried in the budget: that savings could possibly be used instead of the having the
furlough.
Vice Mayor Martinez commented on his meeting with staff on the budget. He stated staff had
done a great job on a very difficult budget in this current economy. However, as Mr. Beasley
has said repeatedly, this budget was only a road map with projections. He noted that until they
came to the last day of discussions, things were still up for debate. He also commented on a
gathering he attended at a church and the furlough situation was mentioned. He stated he was
surprised to hear the pastor's comments that the diocese was imposing a three week mandatory
furlough. He noted that times were hard and many cities were turning to furloughs as a way of
staying ahead of the crisis.
Councilmember Lieberman commented on figures using 262 working days and employee pay.
He explained that a person making $50,000 would earn $2,484.91 or 5%less pay.
Councilmember Frate asked if employees were allowed to take vacation days to offset their lost
pay. Mr. Beasley responded that employees cannot use vacation or sick time in lieu of a
furlough day because the employee would still be paid.
Councilmember Lieberman remarked that his earlier figures needed adjusting because they did
not take into account insurance and FICA. He stated that his figures should be discounted 15%
to 22%.
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Councilmember Knaack asked for staff to continue their presentation.
Mr. Skeete returned to the slide presentation and explained that the budget balancing strategy
was based on the most current information available. He stated staff was consistently assessing
information throughout this economic downturn and making the necessary adjustments. This
information is used to make sure they have a responsible, balanced budget. He noted that most
economists across Arizona and the nation are predicting the recession will probably take them
through the rest of the calendar year with recovery expected to occur over an extended period of
time.
Mr. Skeete noted that some cities in the valley were feeling the impact of the recession in
different ways. He noted it was important to understand there were differences in their
fundamental economic structure and that information is what guides staff to compare themselves
to other cities and come up with initiatives. He pointed out an important starting point for the
budget: the FY 2010 budget continues to focus on council's long-term strategic goals, even as
the city faces reductions and realignments. He said this approach means smart business
decisions must be made when paring down costs to ensure to address revenue shortfalls. He
explained they had a balanced budget presentation that is based on a series of reductions. He
noted the reductions being recommended were not taken lightly. He stated it was important for
staff to consider the effects and objectives and keep those intact when making their
recommendation reductions in the budget. He explained they had also evaluated that cost and
the benefits for the services being provided, as well as business practices. He stated the end
result of this budget was to minimize the impact of the reductions on the community. He
indicated that the budget presented was a good option and staff believes it is workable. The
budget is also keeping intact the city's readiness to move forward when the economy begins to
show signs of turning around.
Ms. Schurhammer began by talking about the operating budget strategy. She said the
recommended budget represents a phased approached as this allows staff to address the
economic down-turn while minimizing the impact on the public. It also provides an opportunity
to communicate clearly and consistently with the public and employees. It involves an ongoing
evaluation of revenues and adjustment of ongoing expenses so we can evaluate options based on
the most recent trends. She said the quarterly reports to Council will include the best
information available and will include any issues requiring policy action.
Ms. Schurhammer explained the phases implemented so far and the steps planned for next fiscal
year. She said they tried to minimize the impact to areas of high priority for Council, such as
code compliance and public safety. She explained they also focused on contractual positions to
avoid affecting regular employees. Those contractual positions have been and will continue to
be reduced as the contract terms end. She said the FY 2009 savings for contractual and
temporary positions was estimated at about $1.3 million.
Ms. Schurhammer reported that the City Manager's budget memo outlined the balancing steps
planned for FY 2010. These steps include the 15% ongoing reductions for all general fund
departments except public safety and 5.4% reductions for police and fire. She explained that
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these reductions were based on a business evaluation of services and their cost, as well as best
practices combined with creativity and innovation to improve service delivery. She said these
reductions were outlined in attachment "B" of the city manager's memo in their budget
workbook.
Ms. Schurhammer went on to say that their budget workbooks show that a $14.4 million shortfall
in GF ongoing revenue is expected for FY 2010. To address that shortfall, two types of
balancing steps were being recommended: administrative actions and those that are council
policy considerations. She said decisions were not required today so council has time to think
about the budget recommendations. She said the administrative actions include the city's
innovate program that emphasizes teamwork, restructuring departments to reflect their current
workload, and improving business processes to gain savings. The policy actions include revenue
generation enhancements such as electronic billboards, an issue that will be brought forward in
the future. Mayor Scruggs interjected to say that the electronic billboards item was on the
council agenda for tonight's meeting. She remarked that the item would be pulled from the
agenda if council did not get enough information on this item.
Ms. Schurhammer commented on the status of temporary and contractual and positions. She
explained that Table 5 in the city manager's memo in their budget workbooks showed 6% and
15% reductions. Included in those numbers are the reductions made for temporary and
contractual positions. She added Table 6 on page 12 reflects $2.4 million in savings expected as
a result of the hiring freeze. She said the recommended operating budget already accounted for
those vacant positions to help close the $14.4 million gap.
Vice Mayor Martinez asked for clarification on the public safety step plan increase. He asked
Mr. Beasley if the city was bound by contract or were there negotiations being held on the issue.
Mr. Beasley stated the agreement they had with labor was that the scheduled increase was
subject to budget. He added they had some great discussions and expect before the end of this
budget process to be able to come back with a recommendation for Council. Vice Mayor
Martinez commented that the base number that had been floated was $1.2 million. Mr. Beasley
agreed, however, negotiations were still ongoing.
Mr. Skeete remarked that as they continue to receive relevant revenue and expenditure
information, they will continue to bring that information to the quarterly updates for Council's
action. He reiterated they will be continuing to monitor the budget, both revenues and
expenditures, and keep them as balanced as possible. He noted that next week they will be
presenting the capital improvement program and enterprise funds.
Councilmember Lieberman had some comments on the general fund balance on table five. He
explained that the fund had dropped from $50 million to $15 million in approximately two
budget years. He questioned how they had used up so much of the general fund money. Ms.
Schurhammer explained that the beginning fund balance for FY 2009 was $47.3 million on a
budget basis. The Council's adopted GF budget for FY 2009 included $23.6 million for one-
time expenditures. She explained that $23.6 million subtracted from $47.3 million provides the
FY 2010 estimated beginning fund balance of$23.7 million dollars. Councilmember Lieberman
inquired if the drop was caused by lost revenue streams. Ms. Schurhammer explained that prior
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to fiscal year 2008, general fund revenues were coming in above budget, which helped the
general fund balance grow. However, that was no longer the case. She noted that the council-
approved FY 2009 budget included significant one-time expenditures totaling $23.6 million.
Councilmember Lieberman commented and expressed concern about the secondary property
debt service. He indicated that this debt worried him because he does not believe the city will
be doing better economically in 2010. He believes it will take a lot longer for the economy to
rebound.
Mr. Skeete indicated that the capital program numbers had changed because of additional
information that was just received. He said adjustments to the capital improvement plan will be
discussed next week.
Mayor Scruggs indicated that Councilmember Lieberman was talking about how they were
going to pay for Camelback Ranch and how the debt was going to go up. She explained that
Councilmember Lieberman was asking about the $7.5 million in debt service from FY 2010 to
FY 2011 shown in Table 1 of the city manager's budget memo. Ms. Schurhammer explained
that the debt service figure shown for FY 2011 in Table 1 was based on constructing the new
courthouse and implementing several economic development projects. Ms. Schurhammer said
the debt service figures in Table 1 did not include Camelback Ranch. Mayor Scruggs remarked
that the Camelback Ranch debt service would show up on the general transfer sheet.
Mr. Lynch agreed saying that the baseball facility is an excise tax backed bond for a component
of the overall project costs. Additionally, there was the Arizona Sports and Tourism component
as well as the City of Phoenix component. Councilmember Lieberman explained that all he has
read and seen on the news was that the Arizona Sports and Tourism Authority were not
collecting anywhere near the amount of money it had expected and that it will take them longer
to pay off their debts before they will be able to come up with money for Glendale. He noted
this had him very concerned.
Councilmember Lieberman asked to discuss the residential assessed valuation declines. Ms.
Schurhammer stated that the assessed valuation process was confusing. She explained that
Glendale's residential assessed valuation will decline 13% as of FY 2010 although this decline
will be partially offset by an increase in commercial property assessed valuation. She said the
FY 2010 assessed valuation figures are based on the notices the assessor's office sent property
owners a year ago in February 2008. She said the February 2009 notices that property owners
received will affect the property tax revenue the city collects in FY 2011, and these notices
reflected a 33% decline in Glendale's residential assessed valuation.
Mayor Scruggs commented that it seemed the majority of the Council agreed with the budget
thus far and had no further questions.
Vice Mayor Martinez stated it was his understanding that this workshop was for discussion and
information only and staff will come back later with the final budget. Mayor Scruggs explained
that based on the discussion today; there have been no real adjustments or arguments for
modifications to the recommended budget. Councilmember Lieberman remarked that Mayor
Scruggs had brought up a good point. He would like staff to go through what they have
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proposed. Mayor Scruggs agreed and added if the majority agreed, that was the end of the
budget discussion for the year, She indicated that the budget will then be built based on today's
discussion.
Mr. Beasley stated that if the council were to have questions on this part of the budget, they
could certainly ask them at the meeting on March 31s`. He explained this was only the
introduction and the public now knows about the discussions and concerns heard today. He
stated staff was always available for questions or discussion. In addition, a public forum could
be scheduled if council would like one. He said he will ask the Human Resources Department
and City Attorney's Office to follow up on council's earlier questions about the furlough
program.
Councilmember Clark inquired about the Fire Department's operations budget noting a large
decrease the fire training budget. She asked what kind of training was being reduced and how
they justified a 90% reduction. Chief Burdick explained that the reduction was mainly from a
budgetary and organizational standpoint. She also inquired about the increase in fire
administration from 13.55% to 17.5%. She asked if that was a function of moving people
around. Chief Burdick said it was. He added it was also a function of reorganization within the
department.
Mayor Scruggs commented that she will save her comments until the time comes to approve the
budget. She noted that it seemed most of the Council agreed with the budget thus far.
Councilmember Knaack said she agrees staff should look into the sick and vacation leave accrual
issue that came up during the furlough program discussion. She noted she was also anxious to
see how the negotiation with labor went to see if it affects the furlough issue. She added that
other than that, she believes staff has done a very good job on the budget. She stated staff was in
a very awkward position and they were doing the best they could.
Vice Mayor Martinez commented on several smaller programs being reduced such as the graffiti
removal and speed mitigation programs. He said he hoped to find some way not to reduce the
graffiti program. He stated he had made a recommendation at the last retreat with respect to
each councilmember's discretionary funds [$15,000 per fiscal year] and possibly using them for
the city. He explained he will be asking staff to take his allocation and allocate it to whatever
programs they see fit. He added he will also be returning approximately $40,000 from his
budget and asked the rest of the council members to follow suit. He said council needed to send
a message that it also was willing to cut back on their individual budgets.
Mayor Scruggs said there were several things in the budget she did not agree with. She agreed
with Vice Mayor Martinez that funding for the graffiti removal program should not be reduced.
She added that the community might prefer retaining that program at current funding levels
rather than keeping a fireworks display on the 4s' of July for $35,500 a year. She explained those
were the type of discussions she had hoped council would be having today. She explained that
the Police Department had deemed graffiti a sign of a community in disarray and believes the
graffiti removal program was more important than the fireworks display. She believed there
were a number of things within this budget where the council could provide another direction.
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She explained that neighborhoods were in great distress at the same time the city was planning to
reduce funding for everything from cleaning the right-of-ways to street sweeping. She noted
these decisions will have an impact on visual presentation of Glendale as a city.
Vice Mayor Martinez agreed with Mayor Scruggs and stated that now was the time to bring
these items forth. He indicated he would also like staff to possibly check on how to cut back on
special events rather than city maintenance.
Councilmember Frate agreed it was important to avoid cutting programs that affect the city's
appearance. He said he did not think it was acceptable to reduce street maintenance from
monthly to quarterly. He explained that his other maintenance questions had been explained and
added that staff was trying to come up with new and innovative ways to save money. He
indicated staff had not said they were going to do away with the graffiti removal program but
rather reduce the amount of paint purchased. He noted he too will be returning his discretionary
funds for his district.
Mayor Scruggs commented on staff reduction recommendations. She believes there still might
be ways to find cuts other than cutting programs that citizens often use. She explained she had
serious questions about special event and park and recreation programs. She noted that in times
when money was very tight, cutting these programs would not pass the test of public scrutiny.
She said she voiced these concerns because she had heard four council members express their
support for the budget as presented.
Vice Mayor Martinez indicated that city staff and Council were trying to not cut basic services
from the budget and build from there. He stated he agreed with Mayor Scruggs that staff needed
to hear their concerns and comments on the budget to see if they could modify and adjust the
budget.
Mayor Scruggs agreed and stated that it started with basic services first, then what will build the
future, health and wealth of this community. She added they should not let this time of extreme
hardship go by without positioning themselves for better days in the future.
Councilmember Knaack commented that they were having an economic development meeting
tomorrow. She noted she did not believe this was the end of their discussions and was not
providing direction to accept this budget as is. She stated that in regards to the fireworks
display, she had suggested to staff to move it to Westgate and let the business community put on
the show. She also commented that an employee had spoken to her about not liking the furlough
option; however, was more than happy to do it because they were happy to have a job.
Additionally, the question about the city continuing to support city events when there were talks
of furloughs did come up. She added they might have to take a harder look at that aspect.
Ms. Kavanaugh commented that the department heads had done a lot of work in the last few
months really looking at programs and services. She explained that if council had questions on
why programs had been cut or reduced, she believed the department heads would have very good
reasons why they had recommended that program be reduced. However, the council makes the
final decision.
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Mayor Scruggs commented on programs she had already looked at and had found some
concerns. She stated that the majority of comments had been that staff had done a great job;
however, she believed they should still look at some items closer to see their impact. She added
that she did find staff had initiated good, innovative ideas.
Mayor Scruggs ask if staff had adequate direction from Council to proceed.
Mr. Beasley stated they would be looking at the fireworks event as well as the graffiti removal
program and street sweeping. He indicated they will bring back a proposal on the vacation and
sick leave accrual issue related to the furlough program. Mayor Scruggs asked if staff was
looking for individual inquires or does it have to be the majority. Mr. Beasley explained he will
bring back information on the issues discussed today as well as answer any other questions
council may have in more detail.
Councilmember Frate said he would like to learn more about the special events program. He
explained that some businesses felt they were not getting their money's worth. He noted that he
knows a lot of cities were scaling back on special events. However, believes having programs
for seniors and young people was very important.
Mayor Scruggs remarked that most of the council was questioning the scheduled special events
and how employees and the public perceive them when there were negative impacts in their
neighborhoods and throughout the city. She discussed many of the events or programs that
could be cut or reduced such as the Youth Sports Field and the Cooper Canyon High School
Youth program.
Mr. Beasley stated that staff will be ready and happy to answer any questions the council may
have on any issue. He indicated staff will be able to explain that some programs had contractual
obligations, as well as many other components not readily seen just by looking at the budget. He
noted staff will be ready to provide the information at the next session or before, if possible.
ADJOURNMENT
The meeting was adjourned at 3:45 p.m.
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