HomeMy WebLinkAboutMinutes - Minutes - City Council - Meeting Date: 3/1/2011 *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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GLENDE
MINUTES OF THE
GLENDALE CITY COUNCIL WORKSHOP SESSION
Council Chambers—Workshop Room
5850 West Glendale Avenue
March 01, 2011
1:30 p.m.
PRESENT: Mayor Elaine M. Scruggs, Vice Mayor Steven E. Frate and
Councilmembers Norma S. Alvarez, Joyce V. Clark, Yvonne J. Knaack,
H. Phillip Lieberman, and Manuel D. Martinez,
ALSO PRESENT: Ed Beasley, City Manager; Horatio Skeete, Assistant City Manager; Craig
Tindall, City Attorney; and Pamela Hanna, City Clerk
1. FY 2010-11 SECOND QUARTER GENERAL FUND REPORT WITH UPDATED
NUMBERS THROUGH SEVEN MONTHS
CITY STAFF PRESENTING THIS ITEM: Sherry Schurhammer, Management and Budget
Director; and Don Bolton, Assistant Budget Director
This is a request for City Council to review the FY 2010-11 second quarter report, with updated
numbers through seven months, on General Fund (GF) revenues and expenditures.
o The GF revenue collections show significant improvement due to the strong holiday retail
sales figures that are included in this seven month report.
o The expenditure figures also show continued significant improvement.
The FY 2010-11 GF report is consistent with Council's goal of one community that is fiscally
sound by ensuring the city's financial stability and conducting timely reviews of expenditures
and revenues.
General Fund
o GF expenditures are $2.9 million or(3.3%)below budget.
o GF revenues are $3.7 million or(4.3%)below budget.
• This report shows significant improvements from the first quarter report, as noted below:
o At the end of the first quarter, the net gap between revenues and expenditures was a
negative $2.8 million. The net gap at the end of seven months, as shown above, declined
to a negative $800,000.
o City sales tax collections are $270,000 ahead of budget, an improvement since the first
quarter when collections were almost 8% ($987,000)under budget.
o Also, in a comparison of just January 2011 and January 2010 city sales tax receipts,
which reflect December retail sales, the January 2011 figure is 6.9% higher.
o Total GF revenue collections also show an improvement from the first quarter. This
report shows that GF revenues are 4.3% under budget. At the end of the first quarter, GF
revenue collections were almost 8% under budget.
• This report also shows significant improvement on the expenditure side. At the end of the
first quarter, expenditures were running about even with budget whereas this report shows
that expenditures are $2.9 million less than budget.
General Fund Expenditures
• The FY 2010-11 budget expenditures and actuals for the GF operating and pay-as-you-go
(PAYGO) capital expenditures are shown in the following table.
Expenditures Comparison
Budget to Actuals, FY 2010-11
(in 000s)
FY 2010-11 FY 2010-11 Amount
YTD Budget YTD Actuals Under/(Over) Budget
(7 months) (7 months)
GF Salaries/Benefits $61,813 $62,179 ($366)
GF Non-Personnel $21,473 $19,858 $1,615
GF Debt Service (leases) $2,624 $1,439 $1,185
PAYGO Capital $1,354 $876 $478
TOTAL $87,264 $84,352 $2,912
• Expenditures are $2.9 million or 3.3% less than the amount budgeted, an improvement from
the first quarter report when expenses were even with budget.
General Fund Revenues
• The following table reflects a comparison of the GF revenue budget and GF actual
collections for the first seven months (July 2010 through January 2011) of FY 2010-11.
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This comparison also shows improvement from the first quarter report as noted in the bullets
that are found after the following table.
YTD Comparison Budget to Actuals, FY 2010-11
(in 000s)
FY 2010-11 FY 2010-11 Percent
YTD Budget YTD Actuals Over (Under) Budget
(7 months) (7 months)
City Sales Tax $29,458 $29,728 1%
State Income Tax $13,796 $13,761 ---
State Sales Tax $10,323 $10,106 (2.1%)
State MV In-Lieu $4,958 $4,628 (6.7%)
HURF $7,875 $7,713 (2.1%)
Primary Prop Tax $2,190 $2,070 (5.5%)
All Other $17,336 $14,204 (18.1%)
Total $85,936 $82,210 (4.3%)
• GF revenue receipts through the seven months of FY 2010-11 are 4.3%under budget. At the
end of the first quarter, GF revenue collections were almost 8%under budget.
• GF city sales tax collections are $29.7 million or $270,000 ahead of budget, an improvement
since the first quarter when collections were almost 8% ($987,000)under budget.
• State-shared revenue collections are $28.5 million. This amount is $582,000 under budget
with more than half of that amount due to motor vehicle in-lieu collections, which are uneven
over the course of any fiscal year.
• HURF revenues are commonly called the gas tax even though there are several other
transportation-related fees that comprise this revenue source. This revenue source is based
primarily on the volume of fuel sold rather than the price of fuel. HURF receipts are
$162,000 under budget.
• Property tax collections are $120,000 under budget. We believe this result is because of the
timing for property tax remittances to Maricopa County.
• The All Other category, which includes such items as court fees, permit fees, business
licenses and recreation revenue, is $3.1 million under budget. The revenue sources
comprising this category come in unevenly over the course of a FY. Further, the revenue
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enhancements included in the FY 2011 balancing plan, most of which are included in this
category, are expected to come in during the last half of the FY.
Designated Sales Tax Receipts
• Revenue collections through seven months show that each of the designated sales taxes are
showing significant improvement since the first quarter report when collections for each were
about 6%to 7%less than budget. The bullets below provide more details.
• The transportation sales tax actuals are $430,000 or 4% ahead of budget, a significant
improvement from the first quarter when collections were $327,000 or 7%less under budget.
YTD Comparison
Budget to Actuals, FY 2010-11
(in 000s)
FY 2010-11 FY 2010-11 Percent
Budget Actuals Over/(Under)
(7 months) (7 months) Budget
Transportation Sales Tax $10,879 $11,309 4%
• The following table shows a comparison of budget to actuals for FY 2010-11 for the two
components of the public safety sales tax.
YTD Comparison
Budget to Actuals, FY 2010-11
(in 000s)
FY 2010-11 FY 2010-11 Amount Over/(Under)
Budget Actuals Budget
(7 months) (7 months)
................. .............
Police sales tax $ 6,986 $7,092 2%
Fire sales tax $3,463 $3,537 2%
• The police component of the public safety sales tax was $106,000 ahead of budget and fire
was $74,000 ahead of budget. These results are a significant improvement from the first
quarter when collections were 6%under budget.
• Similar to the General Fund, the expenditures of these funds are being paced to match the
revenue levels.
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• The FY 2010-11 first quarter status report was presented to Council at the November 16,
2010 workshop.
This is a status report on the General Fund covering the seven months of FY 2010-11. This is for
Council information only. Staff is available to answer any questions regarding the information
provided.
Ed Beasley, City Manager, stated today's presentation was the status report on the General Fund.
This report reflects significant improvement in revenue collections since the 1st quarter report in
November and the five month report in January. This report shows significant improvement
from the prior reports because today's report includes the results of strong holiday retail sales.
These results mirror the national news we mentioned during the January update regarding a
better holiday season for retailers than the prior few years.
Sherry Schurhammer, Management and Budget Director, started the slide presentation. She explained
that today's report provides a summary of the GF revenues and expenditures through the first seven
months of the FY. The seven month report shows significant improvement from the first quarter report
when the summary expenditure and revenue figures resulted in a net gap of negative $2.8 million. The
seven month figures show the net gap now is only a negative $800,000.
On the expenditure side, Ms. Schurhammer said the city saw a favorable change from the first quarter.
She indicated that the city essentially went from a break-even position at the end of the first quarter to
spending $2.9M less than budget at the end of seven months. That equates to a 3.3% savings on the
expenditure side.
Ms. Schurhammer stated that the current report also shows a favorable change from the first quarter on
the revenue side. At the end of the first quarter, GF revenues were running 8% under budget whereas
this seven month report shows GF revenues at 4.3%under budget.
This improvement in revenues is due primarily to city sales tax receipts, with the December and January
collections reflecting the strong holiday retail sales reported both nationally and locally during the
January update. She explained that the city sales tax receipts were 8% [$987,000] under budget at the
end of the 1st quarter and through seven months city sales tax collections were now 1% [$270,000]
ahead of budget. Also, when comparing just January 2011 and January 2010 city sales tax receipts, the
January 2011 figure was 6.9% more than the January 2010 figure. She said that consumer spending this
past holiday season was clearly much higher than a year ago. Overall, staff believes the city sales tax
receipts are a positive signal of the economy's gradual improvement and are an encouraging sign that
consumers have resumed spending on more than just essential purchases. In addition, the last half of the
fiscal year is when the city usually sees better sales tax receipts.
Don Bolton, Assistant Budget Director, stated that the final slide presented today shows the upcoming
calendar for developing the FY 2012 balanced budget and the Council's budget workshops. He said it
also includes some very good news for businesses and residents which was mentioned in the January
budget presentation. He said staff thought it was worthwhile to mention it again. Specifically, Mr.
Bolton said staff will be proposing no water, sewer or sanitation rate increases for FY 2012.
Additionally, the dates shown on this slide for the FY 2012 budget have not changed since the January
presentation.
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Councilmember Lieberman stated many property owners just received their property tax
statements for FY 2012 and his property value had decreased 33.68%. He expressed his
thoughts about the valuation decline in Glendale. He said he believes the city will continue to
see a huge decrease in property taxes.
Ms. Schurhammer explained that income tax lags the economy by two years and property tax by
three years. This lag means that the preliminary notices property owners just received (versus
the property tax bills that are paid this fall and reflected in the city's FY 2012 revenue) will be
reflected in the revenue the city collects in FY 2013. She noted that those preliminary valuation
notices are subject to an appeal process. Therefore, the final notices from the county will be
mailed to property owners in February 2012 and subsequently reflected in the city's FY 2013
revenue. Councilmember Lieberman restated his concern for the dramatic decreases in property
values and how it may affect Glendale.
Mayor Scruggs remarked that since the property taxes lagged by three years, the city will be able
to budget for the decrease. Ms. Schurhammer said staff was aware of the city having three
consecutive years of decreases and has been preparing for it. She reiterated that the preliminary
notices that property owners just received could change because of the appeal process. Mayor
Scruggs stated the big drop in secondary property tax revenue for the city is in FY 2011 and FY
2012. Ms. Schurhammer stated she was correct; however, another double digit drop is
anticipated for 2013 based on the preliminary notices that county just sent to property owners
because those preliminary notices reflect the 2010 real estate market.
Councilmember Clark remarked that they could not use Councilmember Lieberman's 33%
decrease for everyone's property value. She stated the bill she received reflected a much lower
number.
Councilmember Clark said the revenue number that concerns her is the "all other category" with
a performance of 18% less than budget through the first seven months of FY 2011. Ms.
Schurhammer explained that the 18% was an improvement from the 1st quarter report when
collections were 21% under budget. She also explained that revenue from the "all other
category" typically does not come in until near the end of the year. Further, she noted that most
of the revenue enhancements discussed last spring for the FY 2011 budget were not expected to
come in until the last six months of FY 2011 due to the timing of their implementation. For
example, some of those fees were not implemented until mid FY. She noted that the city might
not meet the revenue projections for those revenue enhancements given the continuing economic
down cycle. Councilmember Clark asked if the $200 deposit for new water accounts was under
the enterprise fund or under"all other". Ms. Schurhammer stated the new deposit was related to
utilities and therefore that revenue will be deposited to the utilities fund.
Councilmember Clark remarked that these numbers appear to be more positive than what they
have been over time. However, she believes they should not assume the worst was over. She
added this might just be a boost from the holiday season. Ms. Schurhammer replied she could be
correct; however, when an economy is recovering, it is common to see some steps forward
marked by occasional setbacks along the way. She said this kind of uneven performance is
expected over the next 12 to 24 months as the economy recovers. Councilmember Clark noted
she heard on the radio that by the end of 2012 the unemployment rate might be closer to 7.7%;
however, it will be a long time before they reach the levels of what they used to be. Ms.
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Schurhammer explained that the employment rate was always the lagging indicator in an
economic recovery cycle.
Councilmember Martinez stated this was a day for good and bad news. He was pleased with the
GF revenues and expenditures through the first seven months of the FY. However, he was
concerned with the decrease in property values. He remarked that they still have to be very
cautious and conservative in anything the city undertakes. Additionally, he was pleased with the
city not having to increase water rates; however, was concerned whether it was the right move
since most cities were increasing their rates. He questioned how the city was able to do this
when they were told how expensive the equipment and federal regulations were and wonders
how the city was able to offer it at this time.
Ms. Schurhammer explained that staff will cover this issue in more detail once they begin the
budget workshops. However, steps that helped on the water and sewer side included the deferral
of some growth related projects that were originally part of the first five years of the water and
sewer capital plan. The growth-related capital projects could be deferred to the last five years of
the plan because growth was at a standstill to a great extent. Councilmember Martinez indicated
he would be interested in the full presentation made at the March budget workshops. He added
he was very concerned with the city's old infrastructure in some parts of the city and how this
might play into it.
Vice Mayor Frate commented on the solar industry and how it was becoming more affordable.
He explained he knows of a company that has work backed up for three years because of the
popularity of the product. He commented on the new buildings being built in Westgate and was
pleased to see all the foot traffic in the area. He also mentioned the last hail storm and how it
had helped local businesses. Additionally, there is much more foot traffic at the mall and valley
hardware stores. He stated Arrowhead Towne Center was 95% occupied. He believes these are
strong signs the economy was recovering and they should be optimistic.
Mayor Scruggs remarked that today's report was very good news. She would also like to
mention the vast improvement in the transportation and public safety sales tax area.
2. COUNCIL ITEMS OF SPECIAL INTEREST
This is the quarterly opportunity for City Council to identify topics of interest they would like the
City Manager to research and assess for placement on a future workshop agenda.
On December 7, 2010, Council asked that staff provide information on an item of special
interest. This item of special interest requested by Council will be addressed at today's
workshop.
Staff is available to answer any questions regarding information provided. Staff also requests
Council to identify items of interest for follow-up by staff during the next quarter.
PRESCRIPTION DISCOUNT CARD PROGRAM
CITY STAFF PRESENTING THIS ITEM: Erik Strunk, Community Partnerships Director
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Mayor Scruggs asked Councilmember Clark if she had any questions since she had requested
this item.
Councilmember Clark stated she did not have questions; however, would like to ask Council for
their support to provide direction for staff to explore and pursue this item further. She expressed
how pleased she was this item was being considered. She believed this was a win-win situation
for all.
Councilmember Martinez stated his support to move forward on this item. Councilmember
Knaack agreed.
Mayor Scruggs asked if the 40 hours mentioned in the report was continuous or just to begin the
program. Erik Strunk, Community Partnerships Director, explained it was a bit of both. He
explained the process and stated he was comfortable with the 40 hour limit. Mayor Scruggs
stated there was a consensus to move forward with the recommendation to go out with an RFP
for a prescription discount card under the conditions that it generates revenue for the city and
staff's impact will be no more than 40 hours. Mr. Stunk agreed.
New Council Items of Special Interest
Mayor Scruggs asked the Council for their items.
Councilmember Lieberman stated he had received several requests about doing something with
the second floor of the Adult Center. His second request is to have a plaque or display for Marty
Robbins showing he was born and raised in Glendale. He also asked to move the public
participation portion to the first part of the Council meetings, as it was in the past. He explained
he has received several calls from people stating at times they have to wait for hours and then
end up leaving because of the length of the meeting. He stated he would also like to see a report
on all finances related to Camelback Ranch.
Councilmember Lieberman restated his request to have an annual dinner meeting with Luke Air
Force Base, Avondale, Peoria and Surprise. He believes this would enable them to become
closer and help each other in this present economy.
Councilmember Lieberman also expressed his concern that Council was losing control of their
involvement and approval of financial items. He cited the purchase of a new fire truck ladder
that was $890,000, as well as approval of five police motorcycles which he does not remember
ever approving. He stated the Council used to vote on anything over $50,000; however, believes
Council was not being consulted. He believes they are not controlling this any longer and the
public has no idea what they were spending money on. He would like spending to be controlled
once again by the rules of the Charter. This includes consultants on the payroll, such as for
parking space studies and other such matters not discussed at the Council level.
Vice Mayor Frate stated he was not clear as to what Councilmember Lieberman's special interest
request was regarding the last item. Mayor Scruggs explained Councilmember Lieberman would
like staff to discuss how expenditures above $50,000 get made without the Council's vote. She
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stated Councilmember Lieberman would like the Council to vote on every single expenditure
over $50,000.
Councilmember Alvarez stated she would like staff to review the massage and tattoo parlor
requirements. She also asked staff to review the Code of Ethics and Charter. Mayor Scruggs
asked Councilmember Alvarez to clarify her request. Councilmember Alvarez asked staff to
inquire if the massage and tattoo parlors require licenses and what their fees were. She would
also like a review and refresher course on the Charter and Code of Ethics.
Horatio Skeete, Assistant City Manager, stated he would like further clarification on some of the
items being requested. In reference to Councilmember Lieberman's request, what specifically
would he like staff to explore on the Marty Robbins item since this request has already been
addressed and information presented. Mayor Scruggs explained to Councilmember Lieberman
that staff has already presented information on this item; therefore, would like him to be more
specific as to what he would like staff to research this time. Councilmember Lieberman stated
Marty Robbins was a citizen in Glendale's history who received the most national publicity and
there was nothing anywhere in this city honoring this prominent citizen of Glendale. The city of
Wilcox will be honoring Marty Robbins this weekend. He will be the Master of Ceremonies for
that event and wished it was being held here. He hopes Glendale will consider a plaque of some
sort honoring Marty Robbins' birthplace. Mr. Skeete stated he will explore that possibility.
Mr. Skeete explained the item concerning dinners with Luke Air Force Base has already been
explored and staff has offered alternatives. He was not clear as to what else staff can bring
forward. Councilmember Lieberman stated he would like staff to bring forth positive reports to
Council instead of always negative ones. He remarked that instead of giving him reasons why
they cannot do a request, he would like them to provide reasons on how they can get it done. He
would like to see some results on these items so he does not have to keep bringing them up to
staff. He added staff was welcome to come to his office and discuss these items in more detail.
Mayor Scruggs asked Mr. Skeete if he had an answer to his question from Councilmember
Lieberman. Mr. Skeete stated he did not. He explained the process of Council Items of Special
Interest was that staff presents Council with the research that has been done and then the Council
provides staff with guidance on whether or not to proceed. He noted it had nothing to do with
positive or negative reports.
Mayor Scruggs explained during Items of Special Interest a Councilmember requests
information on an item then the item is placed on a list. Staff researches the item and brings the
information back to City Council at a Workshop. After Council discussion, if there isn't a
consensus to move the item forward then it is taken off the list. When the item is being
requested, is not the time for Councilmembers to say yes, no or to lobby for the item.
Vice Mayor Frate apologized for his colleague's remarks in telling staff that he wants this done
and they cannot tell him no and they must agree with him. He remarked this puts staff in a very
bad position. He believes everyone agrees this was not the way to handle this matter.
Vice Mayor Martinez stated he would like more information on what Marty Robbins ever did for
the city of Glendale other than being born here. He added he does not see this item as being a
city function. Councilmember Lieberman explained that the other items he requested had not
been items brought up before and would like information on those. He noted there have been
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many other items he has not brought up again after not being supported. He remarked he does
not expect anyone to apologize for him and his comments. He does not appreciate them doing
so. He stated the make-up of the Council had changed and would like to see an open discussion
on these items.
Mayor Scruggs stated that for her item, she would like some guidance as to whether it belongs in
Special Interest or in a budget forum. She would like staff to research what can be done when
the city pays for people to attend functions and those people do not show up. She would like to
consider a policy for those individuals to reimburse the city's budget. Mr. Ed Beasley, City
Manager, stated it could be a budget item; however, it could possibly go into either one. He
stated part of that discussion can take place under Council's goals and guidelines. He added that
as to Councilmember Lieberman's comments regarding funds being spent on lobbyists, the Adult
Center and Camelback Ranch finances, they were all covered under budget discussions.
Mayor Scruggs asked that her item go under Council Items of Special Interest to keep it simple
since it could go into either category.
Councilmember Alvarez asked if the city inquired first if those individuals would be attending
before making their reservations. Mayor Scruggs responded yes. She stated an e-mail is first
circulated and if that person states they will attend, the money is paid out of Council budget.
However, when the person does not show-up, that is money wasted. Therefore, she would like to
have a discussion on what can be done when someone signs up to attend a function and that
person does not show-up. She would like to know if that person should reimburse the city.
Councilmember Alvarez believed it should be a given. Mayor Scruggs stated it was not and she
would like to discuss this matter in three months.
As no further business was discussed, Mayor Scruggs adjourned the meeting.
ADJOURNMENT
The meeting was adjourned at 2:30 p.m.
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