Loading...
1998/01/24• • CITY OF ANAHEIM, CALIFORNIA - CITY COUNCIL MINUTES ADJOURNED REGULAR MEETING OF JANUARY 13, 1998 (HELD JANUARY 24, 1998) CITY HALL WEST GORDON HOYT CONFERENCE CENTER - 2nd FLOOR 201 S. ANAHEIM BOULEVARD, ANAHEIM The City Council of the City of Anaheim met in Adjourned regular session. PRESENT: MAYOR: Tom Daly PRESENT: COUNCIL MEMBERS: Shirley McCracken, ABSENT: COUNCIL MEMBERS: None PRESENT: CITY MANAGER: James Ruth CITY ATTORNEY: Jack White CITY CLERK: Leonora N. Sohl FINANCE DIRECTOR: Bill Sweeney Tom Tait, Bob Zemel, Lou Lopez Mayor Tom Daly called the Adjourned Regular Meeting to order for the purpose of a Budget Workshop (8:45 a.m.), all Council Members being present. City Manager, James Ruth. He opened the budget presentation (supplemented by slides, hard copies of which were contained in a 32 -page booklet entitled, Anaheim City Council Workshop, January 24, 1998). He first briefed the purpose of the meeting: to reaffirm the City's goals, guide immediate decisions, discuss the City's financial position and plan responsibly for the future. He then gave an historical review relative to the factors which have affected the City budget starting with the recession of the early 1990's, the State property tax shift, Orange County Bankruptcy, Proposition 218, competition for key business sectors and natural disasters. Today, the Council will see a balanced budget although it is "tight". He then briefed the goals which were endorsed by the Council two years ago: ensure public safety, build the economy, enhance neighborhoods and community services, maximize assets, maintain infrastructure. The balance of his presentation (Achieving Our Goals - Pgs. 5 through 11 of the booklet) was an explanation of all the things that have been accomplished under those stated goals and which continue to be achieved through ongoing efforts. During his presentation, he noted that there will be a recommendation during the budget hearings on the 1998-99 budget for an additional six Police Officers bringing the total of officers to 400. Based on population growth, it was determined there is a justifiable need for those six officers in the next year. Relative to the Police Substation in the Anaheim Hills area, staff is again considering the Dream Street location. By moving it northerly, they can save a substantial amount of grading costs. It will be a 30,000 square foot facility and staff will be coming to the Council shortly with a recommendation to build that substation. A store front substation in West Anaheim is also being considered, something in the Beach Blvd. area. The Magnolia School District is interested in possibly disposing of their administrative headquarters on Orange which might be an appropriate place for a substation and community center. Under, Maximizing Assets, the City Manager noted that on the agenda Tuesday night (1/27/98) is the Phase II expansion of the Convention Center in the amount of $113 million. Hopefully, they will be able to move forward with Council approval on Tuesday. It is over the estimate but within the budget. Staff has cut about $2.5 million out of the project to meet the budget, but the funds are there. Relative to Sportstown, they are very close to having a proposal for Council consideration and will probably bring it forward through a series of workshops or however the Council wishes. On the Utilities strategic options, proposals are due the end of next week. Those will be evaluated and staff will subsequently submit recommendations for a Council decision. ANAHEIM, CALIFORNIA - CITY COUNCIL MINUTES JANUARY 24, 1998 The Resort Area improvements of $546 million is about 20% complete. There are a significant amount of improvements in process in the City which will be completed in three or four years resulting in a substantially changed and improved Anaheim Resort Area (ARA). After his presentation, Mr. Ruth introduced Bill Sweeney, Finance Director to give the budget figures to show where they are at the half -way mark of FY 97-98. Bill Sweeney, Finance Director. His extensive presentation covered the General Fund FY 98 Update Summary, Preliminary Projection Detail (current budget, including carryovers and encumbrances) Total Revenues, $142,352.617 - Total Expenditures, $142,290,312 - supplus Shortfall, $62,305), Property Tax (1991 through 1998 and projection through 2002), Property Tax Dollar Breakdown, Transient Occupancy Tax (TOT) 1991-2002, Room Sales Subject to Tax, Sales Tax, Business License, Preliminary Projection Detail (revenues only), General Fund Transfers (from/to), General Fund FY 98 Update Recap, General Fund - Looking Ahead 18 Months (if property taxes continue to increase, sales taxes continue to grow, TOT increases due to new attractions, labor costs increase only moderately, all other costs held to inflation - then (there will be) a manageable shortfall), General Fund FY 99 Preliminary Projection Datails, Labor Expenditure Projections, Other Operating Projections, Projected Net of Revenues Over Expenditures, Future Status of Fund Balance (General Fund) 1997/98 - 2001/02. During his presentation, Mr. Sweeney noted that revenues are projected at $142.4 million with expenses just under that amount by approximately $62,000, TOT is projected at $46.8 million but it appears it will fall short of that perhaps on the order of 5% estimated at $44.5 million, the Convention Center will open in 2001 expected to be reflected in the TOT ($51.0 million) with the dramatic increase in TOT to $67.4 million in 2002 with 2,000 new hotel rooms coming on line, 750 of which will be Disney rooms (TOT projected at $67.4 million at that time). Currently, sales tax revenue is a success story due to major growth in new retail. Mayor Daly stated, in terms of future planning, similar to the way the City took the lead to help create the Hilton, they should start thinking about where they would like to see the new hotels rather than being reactive. He realizes the Specific Plan contemplates more hotels, but planning wise, they need to be more strategic as to where they want or do not want hotels to be located. During and after his presentation, questions were posed and discussion took place between Council Members, Mr. Sweeney and City Manager Ruth. Mr. Sweeney reported for Council Member Lopez that relative to Business License, they are not recommending any increases in any categories or application fees. One adjustment that was made was the addition of a Hobby Category to answer a concern expressed by Council Member Lopez last year regarding the disparity in some small business fees. A lengthy discussion also took place revolving around the sale of property for Fire Station #3 ($1.6 million), a • one-time gain and how that amount is accounted for in the budget. Mayor Daly. Relative to how the fund balance works, it is a separate category of funds. It is the continuing hold over and continuing carry over. Tracking the fund balance every year will show how it fluctuates over a period of years. The fund balance is a liquid, fluctuating number at the end of each budget year. Mr. Sweeney's point was, if they try to put all those numbers into the budget each year, it would be hard to track the status of the budget. The excess monies that show up in a budget year are generally put into that fund balance; Mr. Sweeney confirmed that was correct. If he could have, he would have accrued it. However, if not legally encumbered at the end of the year, all appropriations are gone. Council Member Tait. He has a problem taking any long-term assets and using those funds for current expenditures without Council approval; Mayor Daly. It never has and never can go into the operating budget without Council approval. After additional discussion on the subject, Council Member McCracken requested that for those members not sophisticated in governmental accounting, if he (Sweeney) could show that even if it is a footnote that says they have additional monies that are being held over and they have this income of $1.6 million and there is someplace where the Council can decide what is going to happen to that money. 2 ANAHEIM, CALIFORNIA - CITY COUNCIL MINUTES JANUARY 24, 1998 Bill Sweeney. For the budget hearings, he would change the schedule to show the operating difference, no one-time money, and he will footnote it to tell the Council how it is financed. When the money comes in from Caltrans, he will notify the Council and ask for an action as to where they want to put it. Council Member Zemel. In talking about what defines a balanced budget, if they are using the sale of one-time properties, it is not a balanced budget. City Manager Ruth. In concluding, probably the most significant issue in the short term is going to be the Utilities RFP due in at the end of the month which will come back to the Council for policy direction. The others are the $5 million Neighborhood Program in the Anaheim Resort Area development. They are looking at possibly private partnerships with some housing opportunities and will be coming back to the Council with a final program on what they propose to do. Relative to downtown completions, Disney Travel will be coming on board, staff is still working with the Automobile Club, construction of the Community Center is proceeding -- progress is being made downtown. The new Police substation has been a high priority which they will continue to pursue and will be coming to the Council shortly on that. Council Comments: Council Member Lopez. His main concern relative to the Police substation is that it will not be outgrown by the time it is complete; City Manager Ruth. It is being designed to accommodate a second phase. There is 30,000 square feet in Phase I. Ultimately, they are planning for 40,000 and they are trying to build all 40,000 square feet and shell out 10,000 of it so that would not have to be done in the second phase. Council Member McCracken. Along with Redevelopment in West Anaheim, she is interested in the possibility of a Police substation in that area as well. Council Member Lopez. They will be condemning a lot of property on Beach Boulevard and he feels that would be a good location for a Police substation; Mayor Daly stated he agrees. Council Member McCracken. Garden Grove and Orange have been very aggressive in hooking on to Anaheim's resort development. She would like to see a direction for West Anaheim with the development that is going on at Knott's Berry Farm. She would like to look at some kind of strong development or an effort to convince investors to come in and work with Redevelopment. She would like to see more retail, commercial, hotels, etc. -- an economic development effort. She also believes it is necessary to look at low income residential and housing for people presently living in the area's motels. This was done in the is downtown area and through Redevelopment, the area has been transformed. The City should not provide the housing but facilitate it. The need is to develop a strategy to get investment into that part of the City. That is her vision for the area. Later in the meeting, she added what she feels is a need to look at some capital investments for some of the City's Fire Stations -- those built some time ago that can no longer accommodate the new vehicles and equipment as well as providing for firefighting teams made up of both men and women; Mr. Sweeney. He noted that they allocate about $200,000 a year for Fire Station improvements. City Manager Ruth. They can go back and look at Certificates of Participation to take care of some of the needs right away if the Council wishes. Mayor Daly. He emphasized, it is necessary to put this in context -- all the money they have spent in the last few years. Nobody spends more on fire equipment in Orange County than the City of Anaheim. A member of the public commented that some communities are looking into doing shift work for firefighters whereby they do not have to provide separate facilities. It is radical, but it is worth looking into. They could actually have more firefighters that way too. 3 ANAHEIM. CALIFORNIA - CITY COUNCIL MINUTES JANUARY 24,199 Council Member Tait. Relative to West Anaheim, he agreed with Council Member McCracken and feels at this time, there is a window of opportunity to do some great things in that area. Even though there is no discretionary money in the budget for the next year or two, he feels the Utilities Department is the key to making the difference depending on the responses to the RFP. They are looking at the budget being tight for the next three or four years. If they get creative, he feels there is long-term strategic value to the Utilities through a sale or lease and perhaps more money than they know. He then posed questions relative to labor costs, other operating costs, and funding of capital improvements. Council Member Lopez. He supports more Police Officers, taking care of resident's needs and also funding for activities for kids and youth and for the continuation of Park and Recreation programs. Mayor Daly. He reiterated his support of what Council Member Lopez previously suggested -- if they are going to invest in Police facilities on the west side that they put it in people's faces -- on Beach Blvd., Magnolia or on a major street and package it with a community center of some type. They need to seek choices and ideas and sooner rather than later and the same with private investment opportunities -- ideas from staff and choices for the Council at the earliest opportunity and not rely on the pace of Redevelopment. Council Member Zemel. He has five issues: (1) The Task Force on Sex Oriented Businesses (S.O.B.'s) is about to get started tying in with the issues on the west end of the City. One of the recommendations that will come from the task force to the City Council is to increase "stings" and Police operations. As stated by the City Manager, there is going to be a recommendation for six additional Police Officers for the following year. If there is not some reorganization within the department, perhaps the Chief could start thinking about a full-time task force for this effort. (2) A Community Center in Anaheim Hills. He has been involved with this issue since the 1980's and one of the legal ways to have Parks and Recreation budget for a Community Center out of development fees was to have the City Council and Planning Commission designate what the specific needs would be for that area. It was his understanding the Community Center was part of that. He wanted to know how much of the development fees that were supposed to go to the Community Center were spent -- what happened to the money and why they cannot get Parks and Recreation to build that center. (Discussion followed relative to the efforts made over the years to establish a community Center in Anaheim Hills). (3) The Arena (Arrowhead Pond) payments and the $2 million out of the General Fund. Last year, they talked about setting up some goals and ways to eliminate that. He feels they ought to spend some effort on the issue and although he offered his services, it never happened. City Manager Ruth addressed the matter noting that during the last few months, they came very close to t coming to Council with a proposal that would have dealt with the issue. He then explained some of the things that had been done as well as the efforts to bring an NBA team to the Arena, efforts in which Ogden has been very aggressive as well. He noted, however, that initially it was an eight-year commitment of 2.5 million that was reduced to 1.5, they negotiated away three years with Ogden for a five-year commitment, refinanced the debt on the land acquisition and got enough money for an additional two years, and now only three additional years are left and if they can get the financing package he previously outlined, they may only have one year. (4) Re: Budget reporting and Council policy on how to do that reporting as discussed earlier revolving around the revenues from land sales. It is a huge issue for him and he would like to see them visit that and perhaps get Council direction on how they would like that to show. (5) Stadium Enterprise Account. That account is not in any of the figures. He feels they should be looking at that as well. He wants to look at the balance in that account, the revenues, what is going out, and what it is going to do to the General Fund. They should be looking at that longer term. 4 ANAHEIM, CALIFORNIA - CITY COUNCIL MINUTES JANUARY 24. 1998 Bill Sweeney. He does not see any other funds out there that are going to have a problem. He might want to do all of the enterprises as a series including Golf; Council Member Zemel. He would like to see it done sooner than later. Mr. Sweeney asked if he would like to have a workshop on the subject; Council Member Zemel. If the Council is not supportive, he would want one personally. Council Member Lopez. He is attending the National League of Cities Meeting in March and would like to take with him some of the more pressing issues of the City. City Manager Ruth. Three major issues are (1) deregulation, (2) anything in terms of law enforcement that will assist local law enforcement efforts, and (3) transportation; Council Member McCracken added, there should be no unfunded mandates handed down to cities. City Manager Ruth. Staff will prepare a briefing document outlining all the legislation that could potentially impact Anaheim and will also set up a series of meetings with the City's legislative representatives for Council Member Lopez to meet with them and who will also be attending the conference. Council Member Lopez. He feels that staff is doing a great job especially having taken into consideration the impacts of construction on the TOT. He feels the City is in good shape even if revenues decrease a little further. If they don't go down, it will be a plus. Mayor Daly. He thanked staff for the presentation and even though they have to decipher numbers they are not familiar with, the budget presentations are so much clearer than six, seven, eight or nine years ago. It is nice to see the "apples -to -apples" comparison ADJOURNMENT: By general Council consent, the Adjourned Regular Meeting of January 13, 1998, held January 24, 1998, was adjourned (11:00 A.M.). LEONORA N. SOHL CITY CLERK 5