2011/02/08ANAHEIM CITY COUNCIL REGULAR AND REGULAR
ADJOURNED MEETING OF FEBRUARY 8, 2011
The City Council regular session of February 8, 2011 was called to order at 3:00 P.M. in the
Chambers of Anaheim City Hall located at 200 South Anaheim Boulevard and adjourned to 3:30
P.M. for lack of a quorum. The regular adjourned meeting of February 8, 2011 was called to
order by Mayor Tait at 3:34 PM. A copy of the agenda was posted on February 4, 2011 on the
kiosk outside City Hall.
PRESENT: Mayor Tom Tait and Council Members: Gail Eastman, Lord Galloway, Kris Murray
and Harry Sidhu.
STAFF PRESENT: City Manager Tom Wood, City Attorney Cristina Talley, and City Clerk Linda
Andal
FY 2011112 BUDGET WORKSHOP
City Manager Tom Wood announced that at a previous workshop staff presented the overall
status of the City's budget and in particular, the status of the General Fund (GF). During that
presentation, Council was informed more than 70 percent of total GF expenditures were
compensation related expenses and requested an additional workshop to provide a greater
understanding of total compensation.
Kristine Ridge, Human Resources Director, announced she would provide general
demographics relative to total employees and would then focus on full time employees covering
base wages, medical insurance, and pension obligations, the three major components of
compensation.
EMPLOYEES Currently, she remarked, the City employed 1,880 personnel on a full -time (FT)
basis and another 1,300 on a part-time (PT) basis. The majority of the part-time individuals
work varied hours within Community Services Department and the Convention Center. Total
employee gender makeup reflected 62 percent male, and 38 percent female with the average
age of employees being 44 years old. Part- timers averaged eight years worked, considered
fairly long for this group, and full -time employees averaged 14 years, a reflection of the large
amount of recent retirees. She pointed out between January 2007 and January 2008,
employees had increased slightly but were still around 3,600 (both FT and PT) and from
January 2008 through January 2010, staff had slowly reduced. In January 2011, there was a
significant drop of 23 positions in public safety and 236 positions from other departments. Four
predominant labor groups now represented full -time employees; AMEA (Anaheim Municipal
Employees Association), Police Association (APA), Fire Association (AFA) and IBEW
(International Brotherhood of Electrical Workers). Seventy -two 72 percent of FT employees
were represented by one of these groups with the remaining 28 percent not represented.
COMPENSATION A chart identifying the total citywide outlay for the three major components
of compensation was provided and revealed the year -by -year growth in all three areas. She
remarked that growth in base wages included staffing changes as well as paid salary increases.
The increases in medical and pension components, she explained, were co- funded by the City
and employees, adding that the medical increase was primarily attributed to higher priced
medical insurance rates. The pension component growth was caused by changes in staffing
and base wages as well as changes to the annual required contribution determined by a yearly
actuarial to calculate risk or life expectancy.
Council Meeting Minutes of February 8, 2011
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Base Wages
Ms. Ridge reported that actual compensation was one of the most important elements in the
personnel system and in Anaheim, all established pay rates were adopted by resolution by the
City Council and had been available for many years on the City's website. The setting of the
compensation levels considered many factors to assure attraction and retention of qualified
employees and included fairness and equity, marketplace competitiveness and making certain it
was nondiscretionary in design. Although there was no formal policy on labor market positions,
she remarked, Anaheim had historically strived to be at the 75 percentile of the labor market.
She added all wages were a mandatory subject of bargaining for all employees represented by
unions.
She provided information on employees by pay range, identifying the number of employees in
each pay range, and their annual salary. The first peak in the chart presented represented 16
percent of employee population making between $50,000 to $59,000 a year and the largest
peak reflected 20 percent of employees falling between the $90,000 to $99,000 range. Overall,
she reported, about 78 percent of employees had an annual wage below $100,000. She also
provided information on contractually obligated base wage increases for represented FT labor
groups. AMEA, over several years had wage increases from about 2 3/ percent to four percent
and Police and Fire ranged from three percent to six percent, with IBEW falling between two
percent to four percent. In recent years, she pointed out, there were no further base wage
increases authorized, except for one position in the APA contract. Regarding non - represented
employees, she remarked this group consisted of police management, fire management and all
others. Included in police management would be lieutenants and above, a large pool in excess
of 30 persons. For the fire group, battalion chiefs and above were included and consisted of a
smaller pool of 10 members. The remainder would include all management, confidential and
non - public safety executives.
Ms. Ridge pointed out the other components related to total compensation, breaking it down by
bargaining units: a public safety employee at $184,364 total annual compensation, IBEW at
$111,677, AMEA at $82,932 and unrepresented at $133,764. The predominant increase in
public safety from the average base wage, she explained, reflected required overtime costs.
Medical Insurance
Ms. Ridge remarked all active full -time employees were offered medical insurance and Anaheim
contracted with two HMO's, one PPO and one high deductible plan. The employee could enroll
for individual coverage, two -party, or family and the plans all included vision and prescription
coverage. The monthly premiums for those four choices were listed identifying costs for 2010,
and the separate co -pays by the City and by the employee along with the percentage the
employee was paying of the total premium cost. This figure ranged from a nine percent low with
Kaiser HMO to a high of 26 percent for Aetna PPO plan. She also offered comparisons to other
large employers nationwide (both public and private). Anaheim ranked higher than average
because California costs were typically higher and because the average age of employees was
44; and the older the employees, the higher the premium costs. She added that 78 percent of
employees carried dependent coverage and 72 percent were covered by unions, additional
reasons for driving the cost upwards.
Another chart detailed the percentage and dollar amount employees paid towards their
premiums, compared to nationwide, (private and public blended) and municipalities with greater
than 500 employees. Anaheim employees were paying nine percent for Kaiser and ten percent
for Aetna while nationwide employers combined had their employees paying 24 percent for
individual coverage and 24 percent for family coverage. That figure dropped down for
Council Meeting Minutes of February 8, 2011
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nationwide public sector to 15 percent for individuals and 23 percent for family. Anaheim's PPO
plan was in line or below with all categories nationwide, with Anaheim employees paying 25
percent for individual coverage and 26 percent for family. She pointed out that while
percentages were in line, the actual dollar cost to employees simply for living in California, were
higher. Further graphs depicted comparisons of out of pocket co -pay expenses. She added
that over the years, Anaheim had been adjusting up the co -pays where possible to help keep
premium costs down.
Other Post Retirement Employee Benefits (OPEB)
For retired employees, Ms. Ridge, explained, the City was ahead of the curb. In addition to
pensions, most governmental agencies offered some type of defined benefit plan for medical
insurance for retirees and it often consisted of a percentage contribution to their premium in
their retirement years or a fixed dollar. She noted that Anaheim did have such a plan and over
time had stopped that benefit. For miscellaneous employees hired after 1996, there was no
longer a defined benefit retiree medical plan, and savings accounts were established for active
employees to set aside money to pay their medical premiums in retirement and if they retired
from Anaheim, would have access to group plan rates but with no City contribution towards their
premiums. This same program applied to public safety groups hired since 2001.
For the closed plan, she noted, those individuals hired before those dates and for which the City
still had an obligation, an irrevocable trust was established setting aside $63 million to fund it
and then a resolution was adopted committed to making the full level of funding for that
obligation each year. She added eventually the liability and obligations would end. An actuarial
every two years determined the annual required contribution which was then funded each year
by Anaheim. Mayor Tait asked for specifics on that annual cost with Ms. Ridge replying that it
was $7.2 million last year and she anticipated it would increase to about $10 million this year.
He then asked if that obligation would continue to rise with Ms. Ridge responding that because it
was a closed plan, it was expected to continue to rise as employees reached retirement age
and then drop. Mayor Tait emphasized that drop would not come for many years in the future.
Ms. Ridge also remarked that Anaheim was one of the few cities in the nation that applied for
and received approval to get reimbursement for early retirees through healthcare reform and
had received those funds. It covered the cost of supplying retiree medical benefits for those
retiring before age 65.
Pensions
Ms. Ridge stated Anaheim contracted with California Public Employees Retirement System
(CALPERS) for employee pensions and this participation had been established in the City
Charter. There were three separate plans covering fire (3% @ 50), police (3% @50) and the
miscellaneous group (2.7% @55). Included in the miscellaneous group was AMEA, IBEW,
along with all unrepresented and a few Teamsters and SEIU. Current fiscal year contribution
rates for the city and employee were illustrated. Ms. Ridge explained CALPERS set the
employee rate and it would not change unless there was a contract amendment. She stated the
employer contribution rate fluctuated year -to -year based on actuarial assumptions and the
valuations performed. For this current year, police employees would pay zero percent of the 9%
employee share, fire employees would pick up the full nine percent of the employee rate and
miscellaneous employees would pay 1.6734% of the eight percent employee rate. On a graph
showing cost sharing between the three groups and the City's paid portion, the employee paid
rate increased since 2005 when the City entered into cost sharing as part of its personnel rules
and established a maximum wherein if the employer rate ever increased above that maximum,
the employees would have to pick up about 42.6 percent. For fire personnel, the employee -paid
portion remained constant at nine percent while the employer -paid contribution declined, then
rose again. The police plan ranged from a high employee contribution of 11.5 percent down to
Council Meeting Minutes of February 8, 2011
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the current zero percent. For FY 2012, police rates would increase from the current 26 percent
up to 30 percent.
A history of the funding status for all three plans was provided. From 2003 to 2006, the City
funding status for all three plans varied between 80 percent to 100 percent in 2007 and
declining in 2008 and 2009 to about 60 percent. The 2009 CALPERS actuarial determined
funding status was the most recent available and reflected CALPERS market performance from
7/1/2008 to 6/30/2009 and included the severe drop in the stock market that happened in the fall
of 2008. Staff anticipated the market value of assets from the next valuation to reflect an
increase.
Ms. Ridge ended her presentation remarking that despite holding the line on base wages, the
City continued to be challenged by increases in medical and pension costs. Solutions, she
stated, were simple but difficult to implement. Costs could be reduced through wage decreases,
reductions in the work force or by reducing the current level of benefits or having employees
contribute more towards medical or pensions.
Council Member Eastman thanked staff for the detailed information which afforded Council a
better understanding of where the City stood. Council Member Galloway asked why the last
actuarial was for FY ending 2009 with Ms. Ridge responding there was a two year lag in
receiving valuations from CALPERS. The next one would be available in October 2011 and
would be the valuation as of June 30, 2010. This next valuation she anticipated would show an
increase in market value of Anaheim's assets as there was a 12.5 percent increase just
released by CALPERS for the last calendar year.
Mayor Tait remarked CALPERS had valued cities benefit assets at a 7.75 discount percent rate
and he understood there was some discussion that this rate was generous and optimistic and
that other private pensions valued assets at five percent. He added if Anaheim's assets were
valued similar to private pensions, the gap would be greater and the funding status would be
lower than 60 percent. Ms. Ridge remarked that this month the CALPERS board would be
reconsidering the discount rate and there were talks about adjustments down either 25 or 50
basis points and a reduction in the discount rate would increase Anaheim's required contribution
significantly and staff should know this figure by the end of the month.
Council Member Murray asked what that discount rate dollar amount would reflect with Ms.
Ridge indicating a 25 percent reduction would have an impact of between $2 to 3 million per
year; however, the earliest financial impact of that news would be in FY 2012/13. Council
Member Murray asked what impact changes in the federal requirements for health care would
have on the City and employees. Ms. Ridge replied the majority of the changes would impact
the City in 2014; however, she did not have a dollar figure for those impacts yet. The City
already had some increases in premium costs as a result of health care reform, specifically
retaining dependents up to age 26 regardless of whether the dependents were in school or not
plus some other exclusion on limitations. Mayor Tait thanked all the unions and other interested
persons for attending the presentation remarking there was a structural deficit of $10 million and
the City was losing $38,000 per day by not taking action. He looked forward to finding a
resolution for this deficit and working together to solve it as quickly as possible.
Council Meeting Minutes of February 8, 2011
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ADDITIONS /DELETIONS TO CLOSED SESSION: None
PUBLIC COMMENTS ON CLOSED SESSION: None
At 4:14 P.M., Mayor Tait moved to closed session for the following item:
CLOSED SESSION
CONFERENCE WITH LEGAL COUNSEL- ANTICIPATED LITIGATION:
Initiation of litigation pursuant to Subdivision (c) of Government Code Section
54956.9 (one case).
At 5:04 P.M., the Anaheim City Council meeting was reconvened.
Invocation: Scholar Sukwinder Kaur, Guru Nanak Sikh Temple of USA, Inc.
Flag Salute: Council Member Kris Murray
Presentations: Proclaiming February 2011, as Make Kindness Contagious Month
Mayor Tait announced that for the past six years "Make Kindness Contagious Week" had been
celebrated, drawing awareness to how an act of kindness would transform both the giver and
the receiver. To draw even greater attention to acts of selflessness, Mayor Tait was calling upon
residents, businesses and guests to draw on this theme for the entire month to further set the
tone for building a culture of kindness in the City. Dr. Jaievsky thanked Council for continuing
this tradition in honor and in memory of his daughter Natasha Jaievsky
Acceptance of Other Recognitions (To be presented at a later date):
Proclaiming February 2011, as Career Technical Education Month
Jordan Brandman, Anaheim Union High School District, thanked Council for recognizing Career
Technical Education Month. He also thanked Dr. Michael Worley, North Orange County
Regional Occupation Program Superintendent and other board members for attending this
meeting. He remarked the mission of NOCROP was to provide a high quality career technical
education to a diverse student population.
ADDITIONS /DELETIONS TO THE AGENDA: None
PUBLIC COMMENTS (all agenda items):
Marcus Gonzales, Orange County Human Relations, provided a status report to Council. He
indicated his organization worked on creating safe schools, mediating conflicts between diverse
residents, and providing police /community reconciliation. The annual report detailing specifics
relating to Anaheim's use was submitted to the City.
William Fitzgerald, resident, suggested charging a small admission fee to Disneyland in order to
help eliminate the City's budget deficit.
James Robert Reade, resident, discussed gang activity and its impacts and recommended a
program of repeated arrests, heavy fines and insistence on parent responsibilities.
Council Meeting Minutes of February 8, 2011
Page 6 of 9
David Lake, resident, discussed speeding traffic, gang activities and graffiti in his neighborhood.
Rahm Kapour, resident, requested accommodation for hearing- impaired persons attending City
Council meetings and offered a solution called induction looping. Mayor Tait asked staff to meet
with Mr. Kapour regarding his suggestion.
Derek Fowls, medical marijuana patient, urged enforced regulation and taxing of dispensaries
rather than eliminating them.
Robert Nothoff, OCCORD, presented the City with The Rubber Stamp Process, a report
detailing flaws in local planning processes favoring special interests over local residents,
remarking he looked forward to reviewing this document with staff or Council.
Gordon, offered words of hope for the future.
Jim Adams, LA/OC Building and Construction Trade Council, informed the City his organization
did not endorse nor support the OCCORD "rubber stamp" study. He emphasized the Trade
Council was all about jobs and supported the Platinum Triangle's projects that brought needed
work to Anaheim.
David Chavez, resident, expressed concern regarding gangs and crime activity.
CONSENT CALENDAR: Mayor Pro Tern Sidhu removed Item No. 2 from the consent calendar
for further discussion, Council Member Galloway pulled Item No. 8 and Council Member Murray
removed Item No. 9. Mayor Pro Tern Sidhu then moved to waive reading in full of all
ordinances and resolutions and to adopt the balance of consent calendar in accordance with the
reports, certifications and recommendations furnished each council member and as listed on the
balance of the consent calendar, seconded by Council Member Galloway. Roll Call Vote: Ayes
— 5: Mayor Tait and Council Members: Galloway, Eastman, Murray and Sidhu. Noes — 0.
Motion Carried
1.
Receive and file minutes of the Golf Commission meetings of September 23, 2010 and
B105
October 28, 2010, Library Board meeting of November 8, 2010 and Public Utilities Board
meeting of December 15, 2010.
3.
Waive the sealed bid requirements of Council Policy 4.0 and approve the First
AGR.3933.1
Amendment to Agreement with Merchants Building Maintenance, LLC, extending
services for up to three months, at a cost of $90,273 per month, for custodial services.
4.
Waive the sealed bid requirements of Council Policy 4.0 and authorize the Purchasing
D128
Agent to issue a purchase order to Ledstar, Inc., in the amount of $52,137.19, for 15
message sign controllers for the Public Works Department.
5.
Accept the bids of Schweitzer Engineering Laboratories, in the amount of $306,766, and
One Source Distributors, in the amount of $25,122, bringing the total amount to
D128
$331,888 (including tax and freight), for the purchase of relay automation equipment for
the Public Utilities Department, in accordance with Bid #7476.
6.
Award the contract to the lowest responsible bidder, Vasilj, Inc., in the amount of
$1,031,180, for the Citywide Sanitary Sewer System Repair and Rehabilitation Program,
AGR.6664
Phase II, Group 3 and authorize the Finance Director to execute the Escrow Agreement
pertaining to contract retentions.
Council Meeting Minutes of February 8, 2011
Page 7 of 9
7.
Waive Council Policy 4.1 and approve the Professional Services Agreement with Robert
AGR.6665
Borders and Associates, in an amount not to exceed $100,000, for as- needed design
and architectural planning services for various City projects.
10.
ORDINANCE NO. 6203 (ADOPTION) AN ORDINANCE OF THE CITY OF
ANAHEIM establishing the campaign contribution limit for the election cycle commencing
M142
January 1, 2011, pursuant to Anaheim Municipal Code Section 1.09.050 (Introduced at
Council meeting of January 25, 2011, Item No. 30).
11.
RESOLUTION NO. 2011 -013 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM vacating a public service easement located at 700 East South
Pilo
Street pursuant to California Streets and Highway Code Section 8330, et seq. -
Summary Vacation (Abandonment No. ABA2011- 00215).
12.
RESOLUTION NO. 2010 -014 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM requesting temporary closures to Caltrans State Route 57
R100
northbound offramp for the Angels Foundation 5K and Fun Run (northbound off -ramp at
Katella Avenue; scheduled for March 27, 2011).
13. Approve minutes of the Council special meeting of January 18, 2011 and regular
meeting of January 25, 2011.
End of Consent:
2. Approve the renaming of Toyon Park to Ronald Reagan Park in honor of President
D150 Ronald Reagan.
Larry Pasco, Community Services Department, reported that an earlier staff report had
researched various Anaheim parks in which to honor Ronald Reagan. The park that was
selected was Toyon Park, he remarked, a 16 -acre park located in East Anaheim, with two
lighted ball fields, soccer fields, a small recreation facility as well as a tot lot facility. It was a
well used community park and recommended for renaming to Ronald Reagan Park.
Mayor Pro Tern Sidhu moved to approve Item No. 2, seconded by Council Member Eastman.
Council Member Eastman remarked that Mr. Reagan began his political career in Anaheim
when he announced his first run for governor of California. Roll Call Vote: Ayes — 5: Mayor Tait
and Council Members: Eastman, Galloway, Murray and Sidhu. Noes — 0. Motion Carried.
8. Approve a License Agreement with the Boys and Girls Club of Anaheim to install and
AGR.6666 operate a single -wide trailer at Edison Park for after - school recreation activities for
children.
Lynn Smith, Community Services Department, reported the Boys and Girls Club of Anaheim
contacted the Department as they were receiving a donated trailer from the Disney Corporation
and wanted to be able to offer recreation to children in an under - served area of the community.
At that same time, she explained, City staff was working with East Street Community Renewal
Initiative (ESCRI) and looking at Edison Park as a potential site for additional services to
children who were underserved in that area. Both organizations informally agreed to move
forward with this collaboration and staff identified a location at Edison Park that would
accommodate the installation of the trailer at no cost to the City for its operation.
Council Meeting Minutes of February 8, 2011
Page 8 of 9
Council Galloway thanked Disney Resorts for their donation as well as for their support of the
Boys and Girls Club. She was appreciative of the private sector helping to aid an underserved
area, especially a community plagued by gang activity and graffiti and offering a safe site for the
community. Mayor Pro Tem Sidhu remarked this effort fit in with the City's celebration of
"Kindness Month."
Council Member Galloway moved to approve Item No. 8, seconded by Council Member Murray.
Roll Call Vote: Ayes — 5: Mayor Tait and Council Members: Eastman, Galloway, Murray and
Sidhu. Noes — 0. Motion Carried.
9. Authorize the City Manager to pursue legislation in the state legislature providing clarity
M142 on the regulation of medical marijuana dispensaries at the local level.
Greg Garcia, Deputy City Manager /Administration, reported this item was requested by Council
at the last meeting asking for a proposal that would authorize staff to work with state
representatives and state advocates to seek clarifying legislation that would help deal with the
medical marijuana issue. He explained this was part of the City's continued efforts to look at all
the options available, both legal and legislative and staff had already been in discussion with
Senator Lou Correa, as well other State representatives. He added with Council's approval,
those efforts would be continued.
Council Member Murray highlighted this effort to pursue not just immediate action pertaining to
the operation of medical marijuana dispensaries in Anaheim but also to consider long -term
statutory enforcement options. She thanked Senator Correa and others in the Anaheim
community for collaborating on a comprehensive approach.
Council Member Galloway assured residents that staff and the Police Department were a strong
partnership and thanked Police administration for their work with the community and focusing on
finding answers as quickly as possible. Mayor Tait remarked Council and staff had been
working diligently on this complicated issue and would find solutions.
Council Member Murray moved to approve Item No. 9, seconded by Mayor Pro Tem Sidhu.
Roll Call Vote: Ayes — 5: Mayor Tait and Council Members: Eastman, Galloway, Murray and
Sidhu. Noes — 0. Motion Carried.
Report on Closed Session Actions:
City Attorney, Cristina Talley reported that the City Council authorized the City Attorney to
initiate litigation related to Item No. 1 under Closed Session.
Council Communications:
Council Member Murray thanked the members of local neighborhoods and the community, as
well as leadership from many non - profits that came to the forum regarding the marijuana
dispensaries for constructive dialogue. She thanked Senator Lou Correa for attending and
Police Chief John Welter for his insight. She added this was not to be characterized solely as
an Anaheim issue because every single city in California was dealing with how to govern in a
post Proposition 215 environment where voters approved an initiative to provide some mercy to
those suffering from chronic illness and yet had turned into something quite different because of
how broadly that issue was written.
Council Meeting Minutes of February 8, 2011
Page 9 of 9
She thanked Bobby McDonald for addressing the Metropolitan Water District meeting, a
member of Buffalo soldiers in full regalia, and announced the GOLD exhibit at the Muzeo and
3rd Annual Family Justice Fundraiser to be held at the Brea Improv on February 13
Council Member Galloway thanked the City Attorney's Office for their efforts on the marijuana
dispensaries issue. She discussed "Make Kindness Contagious" month and recognized City
employee Megan Anzalone for her act of kindness featured on the "Acts of Kindness" site on
www.anaheim.net
Mayor Pro Tern Sidhu announced the Downtown Anaheim Art Crawl Experience to be held on
February 12 and the Orange County Symphony performance at Servite High School. He
spoke of his attendance at the opening of the Battle of the Dance dinner show, a new
experience in Anaheim and stated Council would continue to address the graffiti and the
marijuana dispensaries issues.
Council Member Eastman thanked staff for the budget workshop presentation and also
announced events related to the Downtown Anaheim Art Crawl Experience.
Mayor Tait also thanked staff for the budget workshop presentation and spoke of the Make
Kindness Contagious" month site on www.anaheim.net
Adjournment: At 6:23 P.M., Mayor Tait adjourned the February 8, 2011 meeting.
Res ctfu y submitt d,
Linda N. Andal, CIVIC
City Clerk