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HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 3/23/2010 *PLEASE NOTE: Since the Glendale City Council does not take formal action at the Workshops,Workshop minutes are not approved by the City Council. I GL P 4 MINUTES OF THE GLENDALE CITY COUNCIL BUDGET WORKSHOP SESSION Council Chambers—Workshop Room 5850 West Glendale Avenue March 23, 2010 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 2011 BUDGET— 1ST WORKSHOP CITY STAFF PRESENTING THIS ITEM: Sherry Schurhammer, Management and Budget Director and Horatio Skeete, Deputy City Manager for Administrative Services. This is a request for City Council to review the recommended operating budget for FY 2011 that is included in the Council budget workbook. The FY 2011 budget is balanced between estimated revenues and expenditures. The information to be addressed at today's workshop includes the following material found in the budget workbook: o The proposed operating budget for all departments and all funds. Please note that the FY 2011 General Fund (GF) operating budget does not reflect the proposed service and program reductions, the elimination of the 100.5 frozen positions, the furlough or the represented employees' adjustments. If Council provides direction to proceed with these recommended actions, then the FY 2011 budget will be adjusted accordingly for the tentative and final budget adoption documents to be presented in June 2010 to Council. o The proposed service and program adjustments for the GF totaling $14.7 million. 1 o The written report about the community's feedback regarding the proposed program and service adjustments. o The proposed revenue enhancement opportunities. In addition, alternatives to the proposed service and program reductions related to library operating hours and the Community Action Team (CAT) in the Police Department will be presented at today's workshop. The proposed capital improvement plan that is included in the Council budget workbook will be addressed at the March 30, 2010 budget workshop. Council's goals continue to serve as the foundation for the development of the city's annual budget regardless of whether the economy is growing or contracting. Vision, innovation, partnerships, and dedicated employees continue to play a central role in making the city's efforts over the past year rewarding and successful in areas of key importance to Council. The budget strategy proposed for steering the city through the rest of this economic downturn continues to keep the city ahead of the curve when compared to other municipalities and positions the city to be ready for the eventual economic turnaround. o For example, the city's Innovate initiative is directly tied to the budget process and the city's strategic business model. Employees have been, and continue to be, actively engaged in making business-based recommendations for adjustments that have helped us prepare a balanced budget. o Other steps that have positioned Glendale to be ahead of the curve include innovative expenditure management measures. For example, the City of Glendale is the only city where employees voluntarily stepped forward and offered to take a 5% pay reduction (furloughs) to help the city balance its budget. Pay reductions also were offered by the represented labor groups. Both of these measures are recommended to continue for FY 2011. o Revenue enhancements also have been pursued to improve cost recovery and to pursue innovative means for seeking additional revenue sources. The proposed revenue enhancement measures are discussed in more detail later in this council communication. In addition, a section of the Council budget workbook includes memos about each of the revenue enhancement opportunities included in the FY 2011 balancing. The state's FY 2011 budget that the Legislature passed on March 11, 2010, is awaiting Governor Brewer's signature as of the time this report was written. State shared revenue sources were left unchanged with the exception of Local Transportation Assistance Fund (LTAF) lottery monies, which are used in Glendale to pay for both Dial-A-Ride and fixed route bus services. At the time 2 this report was written, the League of Arizona Cities and Towns was in the process of seeking legal advice to determine if the elimination of LTAF is in violation of Proposition 105. The budget strategy for FY 2011 is built around a strategic, business- and service-based approach that will be implemented in phases over the next several months. This approach includes a mix of ongoing and one-time budget measures, as was done for the FY 2009-10 operating budget, that result in a balanced budget. The phased budget strategy is appropriate as it takes us through a series of steps that are designed to attain a fiscally responsible budget while not severely diminishing the valuable services we provide to the community. This budget strategy sustains core city services as defined by City Council Strategic Goals. These core services are health and safety related such as emergency response services provided by the Police and Fire Departments. The budget strategy includes several expenditure reduction steps that are summarized in Table 1 and explained in some detail below. o Eliminate 100.5 existing vacancies in the GF that were created as a result of freezing positions that became open due to the retirement program initiated in the spring of 2009 as well as normal attrition during the FY 2009 and FY 2010 (line 7, table 1). These vacancies exclude sworn positions in public safety. o Continue the same furlough program that was implemented on a voluntary basis during FY 2009 and became mandatory for FY 2010 (line 8, table 1). All non- represented employees participate in the plan. o Continue mutual consideration of adjustments to MOUs for represented employees (line 9, table 1). o Implement business-based reductions (line 12, table 1) to reflect the savings we anticipate in the GF as a result of additional program and service adjustments. Public safety provided reductions that equate to 10% of their respective operating budgets once vacant positions are included. All other departments provided reductions that equate to 10% to 27% of their respective operating budgets once vacant positions are included. o These proposed adjustments will be implemented in phases so any staff reductions can be minimized through attrition, retirements, and a reorganization and realignment of staffing and operations. o These proposed adjustments were developed after an extensive evaluation of operations and in conjunction with a comprehensive business plan review by the departments. This work included an in-depth evaluation of the needs of residents, 3 City Council Strategic Goals, demand for services and available resources. Specifically: • Programs that were not paying for themselves or achieving the targeted contributing rates were evaluated for reduction or elimination. • Services for which demand had diminished, and an uptick in demand is not expected for the next fiscal year or so, were identified for adjustment. a Hours of operation for some facilities were evaluated for adjustment during slower times of the day. a Activities offered by other organizations in the community were evaluated for elimination and low-use facilities are being evaluated for closure. Table 1 — GF Operating Budget Balancing Summary Line 1: Ongoing revenue $144.4M Line 2: Revenue enhancements (incl $1.5M lx) $2.9M Line 3: Total revenue $147.3M Line 5: Base budget $164.0M Line 6: GF transfers $14.9M Line 7: Eliminate 100.5 existing vacancies (as of 1/28/10) ($7.3M) Line 8: Continue 5%furlough ($3.0M) Line 9: MOU adjustments ($0.6M) Line 10: Reinvestment of other fund balances ($6.0M) Line 11: Remaining shortfall: $14.7M Line 12: Business-based program and service reductions ($14.7M) across all departments The budget strategy also includes revenue enhancement proposals (line 2, table 1). These revenue enhancement measures are an extension of the strategic, business-based approach undertaken on the operational and expenditure side. In this case, however, the focus is on recovering revenue for services already provided to the community and at a level that reflects the current market in the valley. In addition, the Innovate Initiative is directly tied to seeking revenue enhancement opportunities. The revenue enhancement measures include some items already approved by Council such as electronic billboards. Others will require Council action and are mentioned below. They will be discussed in more detail at today's workshop. 4 Adjust Existing Fees: o Account for new revenue from additional electronic billboard sites per the December 2009 license agreements presented to Council plus three new license agreements for fiber and gas lines, two of which Council approved in December 2009 except for the one identified below. Additional revenue is expected starting in FY 2011. • AGL Networks went to Council in December 2009, • Plains LPG Services went to Council in December 2009 and • NextG is in negotiations and will be presented to Council when they are completed. o Adjust fees charged for wireless facilities like cell phone towers placed on city property to reflect the fees charged by other valley cities with additional revenue expected in FY 2011 if Council provides direction to proceed. o Adjust liquor license fees to reflect the level and type of fees charged by other valley cities with additional revenue expected in FY 2011 if Council provides direction to proceed. o Adjust and restructure community development fees with additional revenue expected in FY 2012 if Council provides direction to proceed. Implement New Fees to Help Recover Costs o Implement a new annual facility program in development services to provide inspections and plan reviews for new construction and major remodeling projects routinely undertaken by medical and higher education facilities. New revenue is not expected until FY 2012 if Council provides direction to proceed. o Implement a premium parking fee for use of the city's covered parking garages during the city's special events held in the downtown area. This revenue source could begin in FY 2011 if Council provides direction to proceed. o Implement a transaction fee for pawn shops and second hand stores to reflect the cost of complying with state requirements to report all transactions to local police and to reflect the fees charged by other valley cities. This revenue source could begin in FY 2011 if Council provides direction to proceed. o Implement a fee for fire prevention inspection services provided by the staff of the Fire Marshal's Office. This revenue source could begin in FY 2011 if Council provides direction to proceed. In summary, the anticipated additional revenue as a result of the preceding revenue enhancement opportunities is shown in the following table. 5 Table 2 — Summary of GF Revenue Expected in FY 2011 Revenue Enhancement Opportunities FY 2011 FY 2011 Ongoing One-Time Electronic Billboards $480,000 $1,500,000 Fiber and Gas Lines License Agreements $66,901 Wireless Tower Contracts $210,200 Liquor Licenses (including special events) $171,300 Premium Parking, City Special Events $100,310 Pawn Shop/Secondhand Store Transaction Fees $148,500 Fire Prevention Inspection Services $240,837 TOTAL $1,418,048 $1,500,000 $2,918,048 Additional revenue opportunities that were not included in the FY 2011 budget balancing will be presented at this workshop. They were not included because the revenue either would be credited toward an existing special revenue fund, in this case the parks and recreation self- sustaining fund, or is difficult to estimate given changes in operating hours and/or the fact that the service currently is provided for a very low cost or no cost. These 3 revenue opportunities are categorized as follows: o Foothills Recreation and Aquatic Center— Corporate/Group Passes (parks and recreation self-sustaining fund). o Foothills Recreation and Aquatic Center—Advertising Opportunities (parks and recreation self-sustaining fund). o Library Cards for Non-Residents, Fees for Hold Pickup Failures, Lost/ Replacement Library Cards and Meeting Rooms (general fund revenue). In addition, there will be a discussion about a proposed revenue opportunity related to false alarm fees as a means to restore funding for the CAT. Also, a cost savings opportunity related to solar energy will be addressed in this discussion. Neither of these opportunities was included in the $2.9 million of revenue enhancements that are identified in Table 1. The budget strategy also includes a measure called "reinvestment of other fund balances" (line 10, table 1) that involves investing restricted funds in higher-yielding government obligations. This allows these funds (landfill and perpetual care) to earn higher rates of interest in a low- interest earnings market while reducing GF interest expenses. After accounting for the measures summarized in Table 1 above, the anticipated GF, budget- basis balance calculation for FY 2011 is shown in Table 3 below. 6 Table 3 — FY 2011 GF Fund Balance & Contingency Appropriation FY 2011 beginning fund balance (budget basis) $23.7M lx transfers to other funds ($7.7M) PAYGO capital ($0.8M) Econ development obligations/other ($0.5M) FY 2011 ending fund balance $14.7M 10% contingency appropriation $14.7M We expect to have a GF balance (budget basis) of $14.7M and this amount would be appropriated as the GF contingency appropriation for FY 2011. The $14.7M equates to a 10% contingency. The city's financial policies, as stated in the annual budget document, recommend a 10% GF contingency based on 10% of the expected GF revenue for the upcoming FY. Council was provided the FY 2011 budget workbook during the week of March 15, 2010. On February 16, 2010, Council reviewed the strategy for balancing the GF operating budget for FY 2010-11 in preparation for the first budget workshop scheduled for March 23, 2010. On June 23, 2009, Council conducted a public hearing and adopted a resolution approving the FY 2009-10 final budget. This final budget included a GF operating base budget that was $26.5M or 14.6%less than the FY 2008-09 GF operating base budget. 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 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 Council budget workbook materials are posted publicly along with the meeting agenda. Community-wide public meetings on the proposed program and service adjustments for FY 2010-11 occurred on March 3, 4, and 8. A document summarizing the $14.7 million in proposed program and service adjustments was posted publicly in advance of the meetings. 7 The public also was given the opportunity to provide feedback on the proposed program and service adjustments through the city's website and a telephone hotline, both of which were available through the close of business on March 11, 2010. A total of 200 responses were received plus 52 citizens spoke at the public meetings. The majority of comments from all sources reflected concerns about the proposed adjustments to the CAT and library hours. Today's workshop is for information only. Decisions on the FY 2010-11 recommended budget will not be requested until the last budget workshop, which is scheduled to occur either on March 30 or April 6, 2010. City Manager Ed Beasley introduced the workshop by stating that the recommended FY 2011 budget contained in City Council's workbooks, and posted on the city's website, is balanced and reflects no changes to the city's sales tax or property tax. In addition, the recommended budget reflects no changes to the number of authorized, sworn public safety staffing. Mr. Beasley noted that the recommended budget includes continuation of the current furlough as well as $14.7 million in proposed service and program adjustments. He said that the $14.7 million in adjustments is based on sound business practices and the subject of an extensive public input process. Mr. Beasley said the public feedback process was very successful. He noted that alternatives would be discussed today to address the public's most frequent comments about the proposed modifications to library hours and the CAT team. He ended his introduction by saying that $14.7M in program and service adjustments is significant but manageable. Deputy City Manager Horatio Skeete started the slide presentation by noting the summary of the recommended budget that slide 1 showed. He stated that despite the apparent gains in the economy, local governments continue to feel extreme pressure in coming up with a balanced budget because of the heavy reliance on sales tax revenue to fund a majority of operations. He said sales tax revenue is a lagging indicator in a down economy, particularly one characterized by high unemployment and low consumer confidence. Mr. Skeete said Arizona cities are required by state law to present a balanced budget and therefore must manage the expense components of the budget when revenue has declined significantly. He said the recommended budget includes proposed service and program adjustments that were developed after departments undertook an extensive review of business practices. He said all components of the recommended balanced budget will continue to be evaluated and adjustments will be made as needed. He discussed the budget measures implemented as part of the FY 2010 budget, such as furloughs, that will be continued for FY 2011. He noted that Glendale is the only city in the valley where employees across the organization took a 5% pay reduction to balance the budget at the same time they took on additional duties as vacant positions were not filled and contractual positions were eliminated. He said the furlough measure equates to $3 million in savings in FY 2011. Mr. Skeete made a point of thanking employees across the organization for the valuable contributions they made to help balance the budget and to continue providing exceptional services to the community. . 8 Management and Budget Director Sherry Schurhammer said the departments developed the proposed program and services adjustments by analyzing city services in light of strategic business criteria. The strategic business criteria are based on a business and service standpoint. A key element of the proposals is the continuation of core services to the community as identified through Councils goal setting process. Those core services are health and safety related, such as emergency response services provided by police and fire as well as water, sewer and sanitation collection services. Ms. Schurhammer said that part of the city's strategic business criteria also includes continually evaluating how the city provides services. Programs will be looked at to see if they are paying for themselves and, if not, adjustments have been proposed. She said this means that programs were evaluated to determine if the numbers justified the cost of the program. She noted that this evaluation was done and will continue to be done to ensure the city is using best business practices that maximize the use of the limited resources. Ms. Schurhammer continued the presentation by saying that final decisions on the proposed adjustment cannot be made until a variety of factors are determined. Therefore the adjustments will be implemented in phases. She said those factors include determining the number of staff positions that would be affected, and that determination will be affected by normal attrition including retirements, as well as organizational realignment. Vice Mayor Martinez commented on the legislature's decision last week to sweep funds normally allocated to cities. He asked if this adds to the $14.7 million deficit facing the city today. Mayor Scruggs said she too would like to know how this sweep affected the city's FY 2011 budget since the state's budget had been signed and the money was gone. She explained that the Dial-A-Ride program is supported by state funds; however the recommended FY 2011 budget showed this program continuing. Mr. Brent Stoddard, Intergovernmental Relations Director, explained that the anticipated sweep of the cities' share of state sales tax did not succeed and therefore this proposed funding reduction was not included in the state's final, signed budget for FY 2011. However, Mr. Stoddard said the Local Transportation Assistance Fund (LTAF), which supports the city's Dial- A-Ride program, was swept and therefore the city will be working with RPTA (Regional Public Transportation Authority) to assess what service reductions will be required. He noted that a process will occur that is separate from the city budget process to address this public transit issue. Mayor Scruggs remarked that City Council is deciding on a budget now and therefore resolution of this issue could not be delayed. She explained that the Dial-A-Ride program must continue because it's federally mandated so the funding for the program would have to appear from somewhere in the city's budget to pay for this program. She recommended that this item also be included in today's budget discussion. Mr. Ed Beasley, City Manager, said transportation staff is conducting an analysis of the options in concert with RPTA and will bring alternatives back to Council for consideration. 9 Vice Mayor Martinez asked how much money was involved. Mr. Stoddard stated the figure was $1.5 million. Councilmember Clark said she believes the deficit is $16.2 million instead of$14.7 million. Mr. Beasley reiterated there were still issues that needed to be examined before options for consideration were brought back to Council. For example, he said there might be some bus routes that were no longer functional or have low ridership. Councilmember Clark remarked that she does not think this was a separate issue and believes the city's operating deficit has just grown. Mr. Beasley indicated there was still time to consider this issue since this was not the last budget meeting they were having. Councilmember Clark expressed her disagreement on how they were approaching this budget item. Councilmember Lieberman asked for clarification on the number of FTE's identified. He stated that after looking at the data he believes the recommended budget proposes eliminating 196.5 positions in the General Fund and HURF fund. Mr. Skeete said the 196.5 is correct. Councilmember Lieberman said that there might be as many as 90 of those positions could be found through the normal attrition that occurs as a result of employees leaving the city for other jobs or because of retirement. Mayor Scruggs asked to clarify the upcoming budget meeting schedule. She indicated that next week's meetings will cover the CIP. The following month's budget workshop meetings are scheduled for April 6, and 20. She asked if that was correct. Ms. Schurhammer indicated that those meetings were scheduled, if needed. Mayor Scruggs stated it was clear they are needed to address transportation issues. Mr. Beasley agreed to address the transportation issue once the needed information is obtained. Mayor Scruggs stated that anything agreed upon today was not final until they deal with the transportation issue. Mr. Beasley agreed. Councilmember Goulet agreed with Councilmember Clark that the LTAF cuts significantly impacted the city's budget. He asked if anyone knew the likelihood of the city becoming involved in a lawsuit over this issue. Mayor Scruggs explained that the League of Arizona Cities and Towns would be the organization that would bring forward a suit if its board decided to pursue that action. She said there could be an assessment charged to each of the 91 cities and towns if this course of action was pursued. She noted that the League had reduced the membership costs for each city and town this year in consideration of the economy. Ms. Schurhammer resumed the budget presentation by discussing the public input process undertaken to solicit the community's feedback on the proposed program and service adjustments. She said the community-wide public meetings occurred on March 3, 4, and 8. A document summarizing the $14.7 million in proposed program and service adjustments was posted publicly in advance of the meetings. The public also was given the opportunity to provide feedback on the proposed program and service adjustments through the city's website and a telephone hotline, both of which were available through the close of business on March 11, 2010. The majority of comments from all sources reflected concerns about the proposed adjustments to the Community Action Team (CAT) and library hours. She stated Ms. Cathy Gorham, Deputy City Manager and Police Chief Conrad will address these two issues as part of this budget workshop presentation. 10 Ms. Gorham stated that based on comments heard at the public meetings and submitted to the website, one of the main concerns was library hours. She stated library staff had reevaluated the schedule and had come up with an alternative plan. The city can ensure public access to at least one branch everyday of the week under the new proposal. They recommend keeping the same Sunday schedule as this fiscal year with the Main Glendale Library open 1-5 p.m. and the two others closed. In addition, they will extend the Main Library hours to 8:00 p.m. four days a week, Foothills three days a week and Velma Teague two days a week. She believes this plan can accommodate some of the concerns raised by the public. She stated the amount of hours in the original proposal was the same as the new schedule. There is no change in the reduction to the budget recommendations, but the new schedule staggers the hours to better address the public's comments. Councilmember Goulet commented that some group meetings ran past 8:00 p.m. He asked if they had a procedure in place for those situations. Ms. Gorham stated that they may extend the hours for meetings; however, there would be a charge to the organization to address the additional cost of providing security guard services and utility costs. This cost would be approximately $25.00. Councilmember Clark quoted from staff's memo regarding library hours. She stated staff had preferred not to have different hours for three different locations since it might prove unmanageable. However, staff's recommendation now is having different hours at different locations. She suggests they modify their changes to have more consistency so as not to confuse the public. Ms. Gorham explained the memo was written as they were going through the public comment phase and stated the rationale for the original recommendation. She remarked that the original proposal to Council was the best business decision staff could make relative to how they were currently managing operations at all three branches. Nevertheless, they also have a commitment to the citizens of this community who provided input at those meetings. As a result, staff developed an alternative plan in an attempt to address the public's concerns and for Council's consideration Mayor Scruggs commented that however this issue is decided, the fact remains that it will be about three years before this economy turns around. She indicated she does not believe this will be the last year the city will be looking at reductions. She commented on the amount of concerns the public had regarding the reduction of library hours. She understands that citizens use the libraries for their meetings; however, providing meeting space at the libraries is not a core service. She said the city has been able to accommodate the public on this issue this year, however, she believes next year there will be another round of reductions. She suggested staff work with other entities that have buildings used for holding meetings at night and might have extra space available. She noted the city could not jeopardize core services in order to keep a building open for meeting space. She added that retaining and preserving a city employee's job was more important than an open library for group meetings. Councilmember Knaack stated that she absolutely agreed with Mayor Scruggs. Furthermore, many groups that meet at the libraries were not from Glendale. 11 Chief Conrad said the public comments indicated that there had been some confusion about the Community Action Team (CAT) proposed program modifications. He explained that if the budget moves forward as recommended, the police department will continue to have a CAT team. Should layoffs be necessary, they will not impact the police department's commitment to working with neighborhoods and keeping the city safe. Chief Conrad also said there had been some concerns about officers being too busy to handle CAT duties. Under the department's plan, Chief Conrad said police officers will be assigned full time to the CAT program and will result in more officers being on the street and in neighborhoods. Chief Conrad also said these officers will have the tools, training and flexibility to handle the assignments. Chief Conrad said there is a potential revenue stream should it become necessary to help pay for the cost of the CAT program as it exists today. He explained that through the creation of a false alarm reduction program, many objectives could be accomplished. An alarm reduction program will reduce the number of false alarms, utilize officer time in more productive and proactive ways, and generate revenue to cover the cost of administering an alarm reduction program as well as a portion of the CAT program costs. He stated that a full report about this proposed alarm reduction program had been made available to Council. Chief Conrad said the report includes information about an educational component and a grace period during the initial implementation. He said he believes this proposal makes good business sense and has the potential to generate in excess of $400,000 of gross revenue in its first year of operation. If Council approves the recommendation, staff will come forward with the proposed ordinance change and make this program operational by the end of this calendar year. Councilmember Clark said she appreciated Chief Conrad's creativity but believes departments that generate revenue should not retain the revenue for their specific operations. She recommends the revenue go into the general fund and be used where it was most appropriately needed. Vice Mayor Martinez disagreed with Councilmember Clark's comment about the revenue going into the general fund. He said it made sense for the police department to retain the revenue to cover the costs of responding to false alarms as well as use it to retain the community action team. He believes this was a good way to generate funds to keep something that the public obviously wanted to continue. Mayor Scruggs said the police department provided a core service that must be maintained. She recommends that Council separate the false alarm funds from the CAT program. On a separate note, she explained she had serious concerns about the police department's budget. She noted that Councilmember Clark had done a lot of work concerning the police budget. She indicated that the proposed budget for fiscal 2010 shows a reduction of 66 FTEs in the police department. She noted there was a large discrepancy from current figures to the figures of 2005. As a result, she believes the city is moving backwards. She sees this as a major concern. Additionally, she would like the opportunity to discuss the police department's budget separately from the CAT issue. Councilmember Clark agreed. 12 Councilmember Goulet commented that 98% of the alarm calls were unnecessary calls taking police department time. He agreed that having a program to reduce false alarms was critical. Councilmember Knaack remarked on the amount of revenue that will be generated by this program. She stated that $400,000 was a lot of revenue the city was not currently receiving. She supports the program. Councilmember Lieberman also agreed this program was needed. He stated that charging fees to merchants for false alarms was very effective. He related a story about his own experience dealing with false alarms when he was a business owner. Mayor Scruggs stated there was support for an alarm ordinance. She asked staff to bring this item to a workshop to review and discuss before it goes to an evening meeting. She questioned the expectation of continued revenue since the goal was to reduce false alarms. She indicated that the city might not see a constant revenue stream over the long run. Chief Conrad explained that the revenue projection was based on three different components: annual licensing fees for alarm service companies, annual user permits for residents and businesses that have alarm service and fees for continued false alarms. He stated that the objective of the false alarm ordinance is to reduce false alarms and educate business and resident owners. He said the revenue projections assume a reduction in false alarms of approximately 2/3 in the first year of operation. Mayor Scruggs responded by saying she now remembers why this item did not go through when it was brought forward to Council in the past. She said they had just lost her support for this proposed program because she will not support charging residents for the right to pay a company to provide an alarm service, nor a program that mandates every home has to pay an annual fee just for having an alarm. Chief Conrad said the annual user permit fee is proposed to ensure the department has current information on the alarm, as well as the correct contact information should there be a false alarm at a business or residence. Mayor Scruggs said that issue can be resolved without charging the resident or business an annual user permit fee. She reiterated she will not expose the citizens of Glendale to yet another fee on top of the fees already paid to an alarm company every month. Councilmember Lieberman disagreed. He explained that as a business owner, he has to pay many business fees to the City of Glendale. Councilmember Knaack said she agreed with Mayor Scruggs on the annual user permit fee issue. She added that as an insurance agent, she encourages people get an alarm system in order to obtain a discount on insurance coverage. It did not make sense for the city to charge users a fee for having a burglar alarm system. However, she would still like to discuss the issue of false alarm fees and the licensing of the installers and technicians. Vice Mayor Martinez asked Chief Conrad if other cities charged an annual user permit fee. Chief Conrad said yes. Vice Mayor Martinez asked about the amount of the annual user permit fee. Chief Conrad said his recommendation was a $30.00 fee for initial registration and then $15.00 annually thereafter. 13 Councilmember Clark commented on her own experience when she was a business owner. She stated that since her business was in an old building, the alarm did accidently go off and they had to find the problem since it became very expensive. However, never did they have to pay a fee for the privilege of having the alarm. She does not support the idea of an annual user permit fee. She would support the idea of licensing the companies that provide the service, as well as an escalating fee structure should a residence or business continue to have false alarms. Councilmember Frate remarked that this ordinance was primarily to reduce false alarms, not to collect money. He had read that the City of Phoenix charged $105for a second false alarm. He suggested a compromise on the fee structure and user fee. Mayor Scruggs suggested this item come before the Council in a workshop. Mr. Beasley explained that at the next workshop meeting, Council can discuss any department's budget along with the CIP. Mr. Skeete continued with the presentation. The next slide summarized the proposed revenue enhancements included in the council budget workbook and the council communication for today's workshop. He said these revenue enhancements will help recover costs and therefore they are consistent with a business approach. He also said the enhancements are consistent with the measures other cities have undertaken to support the cost of providing programs and services. Councilmember Clark read from a prepared statement. She said this year's budget reflects a $30 million dollar deficit. Staff has already identified approximately $16 million in cuts. City Council will have to make the necessary decisions about the remaining $14.7 million in cuts. She thanked the City Manager and every employee for the sacrifices they have made and will continue to make. She stated that a 5% pay cut in a form of a mandatory furlough was not pleasant for anyone, however, in so doing, it saved jobs. Collectively, she believes they have come up with new and innovative ideas such as new revenue opportunities. She appreciates everything Glendale's employees have done. She stated that their commitment and loyalty was not only for the organization, but also for the citizens of Glendale. She personally wanted to thank employees for their efforts. Councilmember Clark continued by saying that there are facts that will impact this year's budget and budgets for years to come. She stated that the state's sweep of local transportation assistance funds is a case in point. As a result of this state budget action, she said the City of Glendale will lose an additional $1.6 million in revenue and that this loss is not yet reflected in the FY 2011 recommended budget. She noted that cities might proceed with legal action, but in the meantime, the city must address this revenue loss. She continued her comments by noting that property tax revenues will continue to decline. She said the Arizona Republic has reported that the median price for a home in Glendale had declined from $184,900 to $113,000, a decline of 39%. In addition, while the number of residential sales has increased, the number of foreclosure sales throughout the city has doubled. She said that foreclosed homes are selling for one-half to two-thirds of the median price of traditional homes. She said the implication for the general fund is that those who currently are purchasing homes of lesser value usually have less disposable income and, as a result, our sales tax collections will 14 continue to underperform. The implication of diminished property tax revenues for the capital improvement program is that the Council must continue to push back, scale back or eliminate proj ects. Councilmember Clark continued by noting that the distribution of state shared income tax receipts lag because the city receives payment two years after the state collects the revenue. A national and state unemployment rate of nearly 10% only reflects people who are actively looking for work; those not looking for work any longer are not included in the unemployment rate. Therefore, Councilmember Clark believes the amount the state distributes to the city for income tax revenue will continue to decline. While she agrees with the City Manager's assessment that there will be an economic recovery, she respectfully disagrees that a recovery will occur by 2012. Councilmember Clark said she continues to believe that there is a new norm and therefore the city should not continue to look to short term fixes on an annual basis while waiting for growth to materialize once again. She believes, as some economists do, that it could take a decade before the pre-recession revenue levels are attained again. She noted that an economic turnaround will not occur until the housing market stabilizes and job creation improves. She said she heard it would take eight years to reach the level of employment attained before the current recession if the country started creating 250,000 jobs per month immediately. Councilmember Clark continued her comments by noting that the term "shadow inventory" refers to another 50,000 homes across the valley that are ready to come on the market for sale but are not on the market yet. She noted that some of these homes have been taken back by the lenders who wish to resell them and some have become available as home owners simply walk away because they are upside down on their loan. Until this "shadow inventory" disappears and is absorbed in the market, she believes the city will continue to face a decline in revenues. Councilmember Clark said that city sales taxes and state shared revenues are the life blood of the city's general fund. She noted that these general fund revenues had receded to a level last experienced in FY 2005. She remarked that staff projects the FY 2011 general fund revenue to be about $147.3 million. She said there were factors impacting how this revenue is allocated such as for debt service, that has occurred since FY 2005, as well as a 68% increase to the employee benefit program since FY 2006 just to keep pace with the market. In addition, over that five year period, there has been a 4% market increase in employee salaries, as well as merit increases of 3% to 6%. She stated that all of these factors put pressure on how the general fund revenue is allocated to cover expenses. She stated that all of these facts led her to believe that all departments must revert to the budgets they had in FY 2005. She said she was presenting a rather simplistic view because she had not listed all of the factors involved. Nevertheless, she believes that if all departments did this then the city could further reduce the general fund expenses by approximately $16 million dollars. She said she believes this strategy will help mediate the continued drop in revenues she believes the city will experience in the next few years. Councilmember Clark said she appreciates the revenue enhancement opportunities that have been proposed and it is her hope that these enhanced revenues are placed in the general fund to 15 be allocated where most needed. She does not support a department's retention of these additional revenues because there are departments that do not have the capability of creating those additional revenues. She believes all enhanced revenues should end up in the general fund for further discussion by Council. She concluded her comments by noting that the employees of Glendale have had challenges never seen before since the Great Depression and the employees are to be commended for their willingness to meet those challenges. She knows there have been many sacrifices. Everyone recognizes that they were not out of the woods yet and there was still a lot more to do. She stated she was confident they can and will meet those challenges. She thanked everyone and added that she just wanted to share her philosophy of what she believes needs to be done and that more cuts will be forthcoming. Mayor Scruggs stated that they will now be reviewing Revenue Enhancement Opportunities. Mayor Scruggs stated the first item was billboards. She inquired if there were any opportunities left since they might have already tapped out this market. Ms Schurhammer stated that the most recent electronic billboard license agreement went to Council in December and therefore we were recognizing the additional revenue that is expected to come in during FY 2011. Mayor Scruggs asked if the revenue shown was for six new electronic billboard sites. Ms. Schurhammer said the revenue projection of almost $2 million shown in the council communication accounted for four additional sites, not six, since there was some uncertainty whether all six would be operational for all of FY 2011. Ms. Schurhammer noted that the same approach was taken with the new underground utilities licenses. Ms. Schurhammer explained the next revenue enhancement opportunity shown in Table 2 in the council communication. The item is wireless cell phone towers on city land. She explained that this item accounts for the additional revenue expected as a result of changes to existing agreements. Mayor Scruggs explained her concern about the process used to address cellular wireless equipment on city property versus those facilities on private property. She asked if the existing process for placing cellular equipment is being restructured to match the process for private land. Ms. Schurhammer said that the Economic Development Department had addressed this concern and would be bringing an item forward for City Council's consideration before the end of FY 2010. Mayor Scruggs noted she believes the city should not embark on this until the private sector has exactly the same process afforded to them. Councilmember Goulet asked if something like this would have to go through the Corporation Commission first for approval. Mr. Skeete said no and explained that these were license fees that the city currently charges for operations and equipment in the city. Councilmember Goulet agreed with Mayor Scruggs's concerns about the current process in place that should be modified. Ms. Schurhammer stated the next item listed in Table 2 concerns proposed adjustments to liquor license fees. The proposed adjustments reflect the level and types of fees being charged by other valley cities. These adjustments are expected to generate an additional $171,000 dollars in general fund revenue. Councilmember Clark inquired about the person-to-person transfer fee 16 that the City of Phoenix charges. Ms. Schurhammer said staff would follow up to obtain more information about this Phoenix fee. Ms. Schurhammer started to discuss new fees that would help recover the cost of providing servicing, the first of which is related to community development fees and a new annual facility program. She said additional revenue is not expected to come in until FY2012. Councilmember Clark asked for additional information about the annual facilities program proposal. Ms. Debbie Mazoyer, Building Safety Department Director, said the cities of Mesa and Phoenix have a successful annual facilities program. Ms. Mazoyer said this program would apply to very large facilities such as hospitals, universities and schools and is very popular in those cities that offer the service because it provides the facility with a dedicated team of inspectors who complete the plan review expeditiously. Ms. Mazoyer said the program is voluntary. Councilmember Clark asked how staff will handle creating a team on short notice as these facilities require a quick turnaround time. Ms. Mazoyer said there are staff members who are familiar with these types of facilities. Councilmember Clark asked about the additional revenue that could be generated with this kind of program and Ms. Mazoyer said about $160,000 a year. Councilmember Knaack said she was not concerned with compliance issues since most of these institutions want to do the right thing. She believes it is to their advantage because time is money and most do want to comply. Mayor Scruggs indicated that she was more concerned with them already doing this without a permit. Mayor Scruggs remarked that she sees no expense to the department and believes this is a good pilot program. Councilmember Goulet asked if schools were exempt. Ms. Mazoyer said no and noted that Phoenix already had schools signed up for this program. Ms. Schurhammer said another new revenue enhancement opportunity is related to a premium parking fee for the use of the city's covered parking garages during special events. Councilmember Goulet inquired if a discount parking rate would be available if the event occurred for several days. Ms. Julie Frisoni, Marketing and Communications Department Director, said her staff would investigate that idea as an option. Councilmember Knaack asked how much capacity was being used for this program. Ms. Frisoni indicated that Bank of America had 600 spaces, while City Hall had 300. She explained they have been very conservative when assessing the number of possible available spaces. Councilmember Clark asked if vendors were allowed to park by their stands to unload. Ms. Frisoni stated that they are allowed to do so only before and after the event. Mayor Scruggs inquired about shared parking from the festivals and private events already scheduled. Ms. Frisoni explained that since the departments work hand-in-hand, they were able to recognize if an event conflicts with another and quickly remedy the situation. However, to date that has not occurred. Mayor Scruggs said there were some details that still needed resolution but believes staff will be able to handle them. Ms. Frisoni said her staff will be working with transportation staff to understand the best options for parking. Mayor Scruggs inquired if this will only be done for festivals. Ms. Frisoni explained that the plan was just for festivals unless Council would like staff to consider other options. The parking fee will be $10.00 to park. 17 Ms. Schurhammer introduced the next item, a transaction fee for pawn shops and second hand stores and said Police Chief Steve Conrad would address any questions that council might have. Councilmember Goulet asked if the department has had discussions with pawn shops and second hand stores about the proposed transaction fee. Chief Conrad said discussions had not occurred yet because this idea had not yet been presented to council for direction. The model proposed was used in the cities of Phoenix, Peoria and Mesa. Those cities are charging $3.00 per transaction. Chief Conrad explained that state law requires the reporting of transactions that have a fair market value of$100.00 or more. Additionally, to be consistent with state law, they will also bring forward, as part of the ordinance change, the requirement that all transactions be reported. He added that currently the police department was responsible for the printing cost for the reporting forms. The forms are serialized and the numbers are entered into a database. The information is used to search for possible stolen property and identify people who are involved in illegal activity. He explained they will charge these businesses in advance for the receipt of the blank transaction forms. This allows the city to collect the fees in advance. Mayor Scruggs commented on problems the City of Peoria had regarding consignment stores. She stated she needs more information on this item since she believes not all stores can handle the fees, especially consignment stores. Chief Conrad indicated that current state law applies to pawn shops whereas city code currently applies to pawn shops and second hand stores although city code specifically exempts antique stores from the definition of second hand stores. Mayor Scruggs said she would not support a fee mandated on consignment or goodwill shops. Chief Conrad clarified that current city code requires items over $100.00 be reported, while state law requires any transaction involving a pawn shop. Several other councilmembers expressed concern about making secondhand and consignment stores, including those operated for a non-profit like Goodwill, the Salvation Army or a church, pay a transaction fee. Chief Conrad said his recommendation was not to charge stores like Goodwill. However, he is currently dealing with four pawnshops and 15 second hand dealers who are currently completing reports. He is recommending a fee be charged to the stores that are currently involved in this program. He explained that the current participants who report transactions had been identified over time based on the definition laid out in the city's ordinance. Councilmember Knaack suggested revisiting the ordinance to identify how the businesses were licensed. Councilmember Clark stated she believes this program is reasonable to recoup the city's cost and believes $3.00 was not excessive. Mayor Scruggs reiterated that she still needs additional information on this item to make a decision. Chief Conrad indicated that the original ordinance was enacted in 1992 and revised in 1996. He expressed his concern about relieving the current secondhand dealers from the responsibility of reporting these types of transactions to the police departments. This information is used to identify and reunite people with potential stolen property. He noted he would hate to lose this investigative tool. 18 Vice Mayor Martinez remarked that he was previously leaning towards not including secondhand stores, however, after Chief Conrad's comments about jewelry and firearms being sold at those venues, he would support it for those 15 stores. Mayor Scruggs commented that she was still not comfortable with the information received today on this item. She asked that they go back and reevaluate the process of what is required from these secondhand stores. Mayor Scruggs indicated there was support for this ordinance, however, would like staff to continue to evaluate the item and bring it before Council for review. Ms. Schurhammer said the next revenue enhancement item was related to inspections done as part of fire prevention efforts. She stated that Fire Chief Burdick was here to answer any questions. Councilmember Clark asked for clarification on the "cost recovery program fee" outlined in the memo. Chief Burdick explained that when the original study was done, Council had asked for a cost recovery figure based on 80% cost recovery. Based on the growth the city has had, he believes there was approximately 35% not being recovered. Councilmember Clark asked if this program would bring the city equal to an 80% recovery or possibly 100%. Chief Burdick responded it would be more in the area of 80%. Councilmember Frate asked why it was not possible to obtain 100%. He indicated that Glendale should run like a business and businesses could not afford to operate at a loss. Chief Burdick responded he will bring in that information for their review. Mayor Scruggs noted it was very difficult to get a 100% recovery since other agencies were already paying numerous fees. Councilmember Frate asked if there were other departments that recover 100%. Chief Burdick responded that for fire, there was only an 80% recovery. Mayor Scruggs asked for additional information on other departments and the different cost associated with them. Councilmember Clark agreed that Council needed more information on 100%recovery. Councilmember Knaack stated that as a business owner, she would not appreciate being hit with a large fee up front. She suggested if they were to modify it to 100%, she recommends they gradually make the change and have it phased in over a few years. Councilmember Goulet commented about the challenges of owning your own business. He discussed the many fees associated with it. He believes it was excellent judgment for the city to demonstrate concern for the business owners in Glendale. He noted that it was very reasonable to gradually make adjustments to fees. However, he would not recommend 100%. Councilmember Clark remarked that by not recovering 100% from business owners, the tax payer was essentially paying the other 20%. Mayor Scruggs strongly expressed a different point of view. She stated that these businesses bring money into the economy and the tax payer recuperates the 20% plus more. She explained that businesses were contributing to the city and the economy. Therefore, she does not feel the tax payers were keeping business afloat by any means. She indicated that businesses help build an economy so that citizens have a nice city in which to live. Councilmember Clark explained that businesses and their business models should be able to account for the cost recovery of doing business. She believes it should be part of their business model. 19 Councilmember Lieberman commented it was good to note that of every 100 businesses that open this year, only 17 will survive five years from now. Mayor Scruggs asked if staff will be bringing back figures on how they can reach 100% recovery, as well as the formula for 80%. Chief Burdick agreed to do so. Ms. Schurhammer stated that the only other items in the revenue enhancements section of the council communication are three memos related to the community services group. Mayor Scruggs asked if staff's intent was to move forward with them. Ms. Schurhammer responded yes. Mayor Scruggs indicated there was one item she had concerns about; however, would like to review all of them. She would like to start with the proposal to adjust the fees associated with the Foothills Recreation and Aquatic Center Corporate/Group Passes. Ms. Gorham stated this program was for an annual corporate group rate pass that was established prior to the opening of the Foothills Recreation and Aquatic Center. This pass is available to groups of up to 20. She noted that this was separate from the monthly annual corporate pass. She explained that the adjustment was to modify those fees to bring them in line with similar facilities across the valley. Mayor Scruggs asked if the $3,500 was what other cities were charging. Ms. Gorham stated that the fees were comparable. She asked Ms. Becky Benna, Recreations Director, to speak on this item. Ms. Benna stated that Rio Vista in Peoria charges $1,500 for an annual pass for 10 people. Glendale's pass would be $3,500 for 20 people. She added there were many other types of passes available. Mayor Scruggs inquired as to the amount of companies that purchase these annual passes. Ms. Benna responded that this last year 72 companies had purchased the passes. Mayor Scruggs asked if the monthly corporate group recreation fee of$300 raised to $350 was also comparable. Ms. Benna responded, yes. Councilmember Lieberman commented on the justification for what they were spending on many of these centers including Foothills Recreation and Aquatic Center. He questioned holding cost recovery at 78%. He noted that this last year, they lost $417,249 and that he has a hard time understanding the 78%. He remarked on how the city was trying to save and add revenue while cost recover at this facility was set at 78%. He would like to find a way to approach the 100% recovery mark. Mayor Scruggs remarked that she would like to speak candidly on this issue while the media was still in the room. She stated there was no other recreational facility in the city of Glendale that has a cost recovery program. When the Foothills Recreation Center opened, Council agreed that they would settle on a 78% recovery cost. She listed the many centers that did not have a cost recovery program. She explained that if people wanted to find a hole in city finances, they need only to look to the libraries. She expressed her aggravation on how the 78% cost recovery was being communicated. She explained that they as a Council had approved this process, even though it had been a hard thing to explain to the citizens. Citizens were already paying taxes and now they had to pay extra to use this facility. She added that they did not employ that model at any other city facility. Councilmember Lieberman disagreed. Mayor Scruggs asked Ms. Gorham to disclose how much revenue was generated at the Adult Center, Rose Lane Center and the O'Neil Center. Ms. Benna stated she could have that information for the next meeting. Mayor Scruggs remarked that she 20 would like to straighten this out and made clear that the decision had been made by the Council to aim for a 78% cost recovery. She reiterated they had no such policy for any other facilities in the city. She asked that for the next meeting, staff include information on cost recovery at other city recreational facilities. Vice Mayor Martinez agreed with Mayor Scruggs' statements. He discussed the workshop Council had regarding the 78% cost recovery issue. He explained that back when the center was to open, a big stumbling block was the maintenance and cost to operate the facility. Staff was asked to analyze a business model that would recover a partial cost to the facility. The model formed would start at 73% and would increase to 78% by year five. He noted that the Foothills Recreation and Aquatic Center was the only center that operates in that fashion. He added that if not for the cost recovery, he doubts the center would have opened in the first place. Councilmember Clark remarked that Parks and Recreation is not a core service which the city is obligated to offer its citizens. She stated this was a discretionary service and when the city could afford discretionary services, she would support a cost model that implements partial recovery. She explained that not all the Council had supported this item back then, which she did not. She supports having the other centers implement a cost recovery program in these economic times when the city cannot continue to offer services that do not pay for themselves. Mayor Scruggs responded that she was free to support that idea, however, believes they will not find any cost recovery in those other facilities. She noted the Adult Center had once tried to implement a fee and almost had a revolt on their hands. Ms. Gorham indicated that the Adult Center had a cost recovery of 19%, the Glendale Community Center's cost recovery was .7%, the O'Neil Community Center was 1.4% and Rose Lane was 2.2%. She noted that these were 2009 figures. Councilmember Lieberman asked what the loss for the Adult Center was. Ms. Gorham responded that she did not have that information with her. Councilmember Clark asked to also see expenses, revenues and attendance numbers for each facility for the last year. Ms. Gorham noted that staff had all those figures and would provide them to Council. Councilmember Goulet explained that Glendale has a duty to not only provide core services, but to also provide a quality of life in this community so it is where people want to live. He said it was short sighted to believe that citizens weren't here because of certain amenities. He remarked that closing down a facility simply because they were not making enough profit was a self defeating argument that will harm the city irreparably. He indicated he will vehemently oppose any argument that justifies closing a facility simply because it does not make a profit. Councilmember Lieberman stated he never once used the word profit. He simply asked for a 100% cost recovery and nowhere did he use the word profit. He would like to know how close staff was to a 100% cost recovery. He noted they were not here to make a profit; however, the word profit was not a dirty word. He explained that the reason they were here was because they were trying to cover a 14.7 million deficit. Councilmember Clark commented on Councilmember Goulet's remarks that profitability should not be the model in determining whether a business stays open or closes. She indicated if that 21 was the case, that example should be applied to all Parks and Recreation programs. Nevertheless, Park and Recreation selectively chooses facilities not meeting cost recovery and has them stay open while others that do meet the criteria are terminated. She stated it should only be one way or the other and apply that model across the board. Additionally, each program should be analyzed on its ability to sink or swim on its capability to recover cost. She noted that the quality of life as Councilmember Goulet talked about was only for those who can afford it. She remarked that Councilmember Lieberman had a point in questioning the cost recovery for these programs as the city was now facing a $14 to $16 million dollar deficit. She noted that if they were not in this economic recession, she would be far more likely to approve subsidizing these programs. Councilmember Goulet interjected stating that quality of life was not only for those who could afford it, as Councilmember Clark suggested, but it was how people lived their life. He said that putting a price on it was not the way to deal with it. Vice Mayor Martinez stated he agreed with Councilmember Goulet's assessment. He noted he had read an article a long time ago which talked about cities having to provide core services for their citizens. However, the article went on to say that the thing separating great cities was amenities that improve quality of life for their citizens. He believes Council had to strive to do the best they can to be sure the quality of life is maintained to the best of their ability. He referred back to the Council's mission statement. Councilmember Lieberman noted it was ridiculous to have to defend himself for questioning the loss of$800,000 in two years, when they were arguing about pennies and nickels trying to make up $14.7 million. Councilmember Frate commented for the viewing public that they were simply having a healthy discussion about budget practices and for the public to bear with them. He stated this was only the first of the budget meetings and has confidence in the process and how they can make it work. He noted cuts were inevitable; however, Council will go through this process and analysis while looking at staff's recommendations as well as the public. He explained it did not hurt to ask questions or make comments that were unpopular to some. Councilmember Knaack explained that getting rid of a recreational facility because the recovery was not 100% was not realistic, especially in this economy. She noted the city had to invest in the community and agrees it was a quality of life issue. She said this was not an expense, but simply an investment for the citizens. She noted how upset the community had been when the city proposed cuts to library hours. She stated staff was being reasonable and admired the time and energy they put into this. She asked them to be realistic when deciding to close facilities because of cost recovery. Councilmember Goulet asked to talk about revenue enhancements. He stated that they had some prohibition on what they can collect statutorily. He suggested the city lobby for changes since some statutes cost the city thousands of dollars. As an example, he noted requests for public information can go through many departments before the information is generated. This action also includes personnel devoting many hours to produce information for the public. He noted that this takes away the ability to do other necessary tasks. He suggests staff examine this issue as a long term goal to see if they can possibly change it. 22 Vice Mayor Martinez stated that based on the discussions today, he would like to discuss an issue related to the budget. He remarked on a memo he sent to council regarding the council office operating budget. He stated that each councilmember in each district receives $15,000 a year to help neighborhood revitalization efforts. He noted the mayor's office was on a different program, therefore, did not have discretionary funds to return. He recommends that each district return these funds to the general fund. This will total $90,000 dollars and believes it would be better served in the general fund. He noted the council receives an additional $18,000 which is used for professional development, communications and miscellaneous items. He recommends the council returns at least a portion of those monies. He stated that by doing this, the total returned could be as much as $106,200. Many departments have taken a hit of anywhere from 10% to 27% while the council office's operating budget has remained untouched. He urges the council to consider returning those funds back to the general fund. Councilmember Lieberman noted that last year, he had given $14,000 back to the general fund. He indicated he is planning to give back funds at the end of the year if not used. However, he uses the funds provided by the city wisely. At this time, he did not think it was a wise investment to return the money when it could be used to better the community. He disagrees that the office of the mayor did not receive any funds. He stated the mayor's office receives $299,551 for a budget. The mayor's office has returned only $82,297. He added that he will be happy to match whatever the Mayor gives back in percentages. Mayor Scruggs explained that the mayor's office consisted of four people. She stated that after they take salaries and benefits out, the office is left with $31,000 for office supplies, travel, incidentals, the Mayor's Youth Advisory Commission, Information Technology and many other items. She noted that many factors make up that budget. The rest of the council receives $15,000 each. However, the mayor's office only accounts for $31,000 for four people and runs an office. This includes things from buying paper clips to overseeing Luke Air Force Base issues. She added that the mayor's budget has already been stripped down to the bare essentials. She noted that each councilmember receives over $80,000 a year including salary and benefits. She stated it was incomprehensible that the Mayor's office is being attacked over a budget of $31,000 which had to meet the budget of four people and run the mayor's office. In addition, she also pays for all her business lunches out of her own personal funds. Vice Mayor Martinez expressed his disappointment in Councilmember Lieberman's remarks. He explained that Councilmember Lieberman has only given up $2,700 out of his $18,000 account. He stated it was reasonable to expect the council return some funds since budget talks were about cutting expenses. He noted he has cut his budget by not traveling as much and using email for his newsletters. He reiterated that they as a whole needed to find ways to cut cost. The council's budget was the one place they could cut without hurting anyone. He does not understand the reluctance of some councilmembers. Councilmember Clark pledged to return $15,000 of her budget for neighborhood improvements on an individual basis. She explained that those were discretionary budget funds that she is willing to give back. She noted the $18,000 for communications she uses for two district newsletters a year and one district dinner to thank the people who serve in her district. She does 23 not charge the city for her cell phone or her mileage. She noted she was not willing to reduce the $18,000 since her office was already at the bare minimum. Councilmember Goulet also agreed to return the $15,000. However, he believes the communication budget of$18,000 was needed for newsletters and like items. Constituents in his district have thanked him for the newsletter and its information since many do not receive newspaper or use email. He added that he did not charge for his gas, meals or hotels and hardly travels. Even, if he supports returning the $15,000, he still has reservations since that money goes toward the quality of life issue. He stated he would like to see if at the end of the year, if not needed, the funds could be returned to the district rather than rolling them over. Councilmember Knaack stated that she supports Vice Martinez Mayor's recommendation and will return the $15,000. Councilmember Frate agreed to also support the Vice Mayor's recommendation. Mayor Scruggs reiterated the challenges of running the mayor's office with the budget it has. She explained they were always trying to cut cost anywhere they could. She provided an example of the office cancelling mail delivery to the office to save $100. She noted other areas that the $31,000 budget had to cover. She noted that when deducting those funds the amount dwindled down to only $11,000 for four people and running an office. She explained that her only travel was necessary for vital meetings such as to the Pentagon for the F-35 related to Luke Air Force Base. Councilmember Lieberman stated he will support the return of the $15,000. In addition, he will do what he did last year and return funds that his office did not use at the end of the year. He commented on the issues regarding the F-35. He noted that he will do everything possible to protect Luke Air Force Base. Mayor Scruggs remarked on the topics that will be discussed at the April 6th and 20th meetings. She looks forward particularly to discussing the explanation as to how moving employees out of the general fund and into the public safety fund meets the commitment to the voters in terms of the use of funds from the public safety fund which precludes supplanting. She would like something from the city attorney that says that this is in total conformance with the ballet language and the promises made to the public. Councilmember Clark agreed with Mayor Scruggs. She will be interested in finding out their process on this issue. Mayor Scruggs reviewed the items for next week's meeting. She explained that on the pawn shop issue, Chief Conrad will research the item for Council's review and bring to a workshop. Chief Burdick will bring forth cost figures on cost recovery on the fire inspection revenue item. Council will also discuss the person to person liquor fee that the City of Phoenix assesses. In addition, they will be discussing the public safety sales tax, cost recovery across the board for facilities, LTAF and LTAF II and how the reduction in funds impacts service and the budget. Other items to be discussed at a workshop will include library hours, alarm ordinance and the CAT budget. 24 Mayor Scruggs remarked that she was pleased everyone had expressed their opinion and put their views on the table. She stated these times called for more candor than usual. As there were no further comments, Mayor Scruggs adjourned the meeting. ADJOURNMENT The meeting was adjourned at 5:25 p.m. 25