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Budget Advisory 1996/04/170 0 MEMORANDUM CITY OF ANAHEIM FINANCE DEPARTMENT DATE: MAY 16, 1996 TO: CITY CLERK FROM: CHARYL MC ULY SUBJECT: BUDGET ADVISORY CO 10 2"S SION MINUTES W i7 CIT The attached Budget Advisory Commission Minutes from the April 17, 1996 meeting are being submitted to you for filing. BUDGET ADVISORY COMMISSION MINUTES APRIL 17, 1996 - 3:30 P.M. SIXTH FLOOR CONFERENCE ROOM MEMBERS PRESENT: Gene Brewer, Jeff Farano, Phil Knypstra, Dan Van Dorpe, Jimmie Kennedy, Shirley McCracken, Bill O'Connell MEMBERS ABSENT: None STAFF PRESENT: Jim Ruth, Bill Sweeney, Lisa Stipkovich, Dave Hill, Dan Amyx, Jeff Stone, Charyl McCully GUESTS PRESENT: John O'Malley, Orange County Employees Association; Ted Cooper, SCT; Rick Brown BRC; Debra Reams, ISD The meeting was called to order by Chairman Brewer at 3:35 p.m.. APPROVAL OF THE BUDGET ADVISORY COMMISSION MINUTES: Ms. McCracken moved to approve the Minutes of the March 20, 1996. Seconded by Mr. Kennedy. Mr. O'Connell abstained. Mr. Farano was absent for voting. MOTION CARRIED (5 -0-1). Chairman Brewer and the Comrnissioners welcomed newly appointed Commissioner, Bill O'Connell. Mr. O'Connell was unanimously approved by the City Council on April 9, 1996, to fill the vacancy created by the resignation of Kathryn Freshley. Mr. O'Connell, a Partner in Stovall Hotels and Pacific Coast Sight Seeing, indicated his enthusiasm to serve on the Commission. SELECTION OF COMMISSION VICE -CHAIR: Mr. Knypstra moved that Ms. McCracken be appointed to serve as Vice Chair of the Budget Advisory Commission, replacing Kathryn Freshley. Seconded by Mr. Kennedy. There were no further nominations or discussion. Mr. Farano was absent for voting. MOTION CARRIED (6-0-0). Chairman Brewer announced that the Subcommittee report on privatization would arrive with Mr. Farano, who expected to be late. He asked the indulgence of those guests whose attendance was based on their interest in the outcome of the RFI study. 0 Budget Advisory Commission, April 17, 1996 Page 2 OVERVIEW OF THE AGREEMENT WITH DISNEY BASEBALL ENTERPRISES, INC.: Chairman Brewer stated that the Commission should show its support for the City's position in the matter of Anaheim Stadium. He said that the public side of public/private partnerships is sometimes at a disadvantage during negotiations. He went on to say that the Stadium is a public asset that must be protected. The Chair recommended that a letter of support for the Agreement between the City and Disney Baseball Enterprises be sent to the City Council. Mr. Knypstra indicated that his review of the MOU document, sent to each Commissioner with their Agenda packets, had raised several questions, which were subsequently answered by Messrs. Ruth and Sweeney and Ms. Stipkovich. Mr. Van Dorpe stated that he favored the Commission's support of the City in the Stadium matter. Mr. Van Dorpe reminded the Commission of the need to refurbish the Stadium, and the cost to the City to do that. Mr. Ruth emphasized the significance of the agreement's securing an "anchor tenant" for the next thirty years, which will serve to encourage the further development of that property and surroundings. Without that, the chance of getting Sportstown would probably be very slim. The tenant's improvements, as negotiated, are key components of further development. Without the Disney agreement, the City would have had to spend substantial sums on improvements for the remainder of the Angels contract. In answer to Mr. Farano, Mr. Ruth restated that, without a deal, the Angel's current owner would have sold the team to a buyer who planned to relocate the team outside Anaheim; the team owner's control of theparking lot for the next six years made development during that time highly unlikely; the owner also refused football in the parking lot as long as the current lease was active. Furthermore, the president of the American League indicated that there was no way to keep the team from being relocated by a new owner, and that it was unlikely that Anaheim would get another team. Many communities can offer state of the art facilities, and finance them through taxation, and other sources, whereas, the City will impose no new taxes upon its residents for the Stadium renovation. Mr. Ruth stressed that the loss of the Angels would probably spell the end of baseball for Anaheim. All potential buyers planned to move the team to their areas, where financing opportunities were liberal and extensive. With the current deal, Anaheim has an opportunity to have a state-of-the-art facility, with baseball for thirty years. The City's $30 million portion of the cost would probably have been spent on necessary refurbishing and repairs. Mr. Van Dorpe reiterated his support of the City in this matter, and urged the Commission to concur. Chairman Brewer moved that the [Budget Advisory] Commission authorize the Chair to write the Mayor and City Council stating that the position of the Commission is as follows: 1). the currently negotiated agreement, given current circumstances, is equitable for the citizens of the community; 2). the currently negotiated agreement results in the retention of a quality anchor tenant, baseball, for City -owned property. Seconded by Mr. Van Dorpe. (MOTION CARRIED 7-0-0). Mr. Ruth offered his appreciation to the Commission for their time and effort in reviewing the material associated with the Stadium issue. Budget Advisory Commission, April 17, 1996 Page 3 REPORT FROM THE PRIVATIZATION SUBCOMMITTEE REGARDING THE DATA PROCESSING REQUEST FOR INFORMATION The Subcommittee's report was distributed. Mr. Van Dorpe reported that each proposal was reviewed by at least two subcommittee members, most by all three. Of the ten responses to the RFI, the Subcommittee judged five companies capable,of providing information services commensurate with those currently provided in-house. Those companies, in no particular order, are Affiliated Computer Services, Inc. (ACS); Business Records Corporation (BRC); Litton Computer Services; Systems & Computer Technology Corp. (SCT); and UNISYS. Mr. Van Dorpe indicated that three of the companies, ASC, BRC, and SCT, proposed partnership approaches, whereby current City staff would be hired and existing equipment utilized. Litton and UNISYS proposed off-site processing, utilizing high powered mainframe computers. The Subcommittee observed that several respondents were operating systems providing data processing similar to Anaheim's, while some are operating larger systems which perform dissimilar functions. While some respondents claim to have the technology and resources necessary to perform an adequate data processing function for Anaheim, and indicated their capability and desire to take on such projects, none has contracted with a city the size and make-up of Anaheim; although some have contracted with smaller cities. A copy of BRC's contract with the City of Irvine was distributed for informational purposes. Mr. Sweeney reaffirmed his position that the purpose of any privatization effort would be to spend less for better service; and that any contract must be all-inclusive to ensure compliance. He suggested that if the Commission wants to see hard costs, they should recommend that staff issue an RFP, summarize responses, and report back. The Subcommittee recommended that staff prepare a long range plan for the City's future data processing needs, which would include a Request for Proposal for complete or partial privatization, identifying the needs of the City. It was recommended that the proposals describe overall outsourcing approach, scope of services, long-range strategic plan development/ implementation, staff retention/development, structure, technological transformation and resources, Year 2000 issues, term, and cost of such services. Mr. Sweeney stated that staff will prepare and distribute an RFD. PUBLIC COMMENTS: Messrs. Cooper (SCT) and Brown (BRC) were asked to comment on the issue of outsourcing the data processing function of the City. Mr. Cooper stated that an elaborate, long-term proposal is not required. He suggested that the City devise a "vision" or basic framework, around which contracted services could be designed, and ask the bidders to describe, in detail, how a master plan would be created that would meet the City's "vision". He stressed that the master plan should be devised by the company that would be required to implement it. In answer to Mr. Knypstra, he went on to say that his company usually hires and trains current staff. A large percentage of these employees remain with the company. Mr. Brown indicated his concurrence with Mr. Cooper's concept and the long-range concept, but stressed the need to know the amount of savings the City would realize from any privatization, without jeopardizing product quality. He stated that the master plan should be developed after the RFP. Budget Advisory Commission, April 17, 1996 Page 4 In answer to Mr. Knypstra, Mr. Cooper indicated that his company could provide the service "cheaper, better, safer". It would not only save the City money, but would be accountable for delivery of service. The City would have control over staff retention. He suggested that the RFP include an organization chart. In answer to Mr. Farano, Mr. Cooper stated that all SCT's clients use their own equipment. AGENDA FOR NEXT MEETING: Mr. Sweeney suggested that a special workshop be held for preliminary discussions of the budget. After a brief deliberation, it was decided that a Special Workshop of the Budget Advisory Commission for the purpose of discussing the 1996/97 budget, would be held on Wednesday, May 8, 1996, at 3:30 p.m., in the sixth floor conference room of the Civic Center. The Secretary will post the appropriate notice. At the regular meeting on May 15, there will also be a discussion of the 1996/97 proposed budget. ITEMS BY COMMISSION MEMBERS: In response to the Chair's suggestion, Ms. McCracken moved that the Commission send a card to Dave Morgan to wish him a speedy recovery. There was a second by Mr. Kennedy. MOTION PASSED (7-0-0) ADJOURNMENT: The meeting was adjourned at 6:20 p.m., by Chairman Brewer. Respectfully submitted, Charyl McCully Secretary to the Coe6mission 'A' PB AC/X4 [N AP R96/C P M