2011/04/12ANAHEIM CITY COUNCIL
REGULAR AND REGULAR ADJOURNED MEETING
OF APRIL 72, 2011
The City Council meeting of April 12, 2011 was called to order at 3:00 P.M. and adjourned to
3:30 PM for lack of a quorum. The regular adjourned meeting was called to order at 3:35 P.M.
in the Chambers of Anaheim City Hall located at 200 South Anaheim Boulevard. A copy of the
agenda was posted on April 8, 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 2011/12 BUDGET WORKSHOP:
Finance Director, Bob Wingenroth remarked his presentation would review key budget
reductions in place, the current status of the City's finances, next fiscal year projections as well
as preliminary results from the City's zero -based budgeting efforts. At the last workshop, he
stated, Anaheim had addressed the impact of the economic downturn by cutting expenses and
drawing on reserves, always cognizant that expenses would need to be reduced to solve the
City's structural deficit. At the last workshop, the structural deficit was identified between $10-
12 million, a figure that must be solved to balance the next budget. He added, if by January, the
City continued to rely on reserves without reducing expenditures, those reserves would be
depleted by the end of FY 11 /12.
This year, in the current adopted budget, he emphasized, in the first eight months ending
February, Anaheim was projected to receive just under $143 million in revenues and anticipated
spending just under $160 million. Drawing on reserves was estimated at $16.6 million. Actual
revenues received were slightly over the original budget by about $1 million and expenses came
in at $153.7 million for that eight month time period, much less than originally budgeted due to a
number of efforts. Budget reductions had been made, the hiring freeze was continued and the
net impact on reserves was projected at $9.3 million less than the budgeted amount. Using
these figures as a base, staff projected ending the current fiscal year with $234.5 million in
revenues versus the budgeted amount of $233.5 million; and expenditures down from $252
million to $245 million. Drawing down on reserves was now projected to be $10.7 million with
an ending reserve balance of $14.5 million, or about 5.9 percent in reserves.
Currently he explained, the department was watching international events to see how the
devastation in Japan and the unrest in the Middle East and North Africa would have an effect on
trending revenues down or increasing expenses such as fuel costs. He added there had been
continued volatility in the financial arena and the books would not be closed until information on
sales tax was received in mid - August and expenditure details completed by mid - September. He
again stated his best estimate was a 5.9 percent reserve balance at the end of this current fiscal
year.
He added there was some good news regarding the daily cost of burning through Anaheim's
reserve balance. At the beginning of the year, staff planned to use $18.5 million in reserves,
which was about $51,000 a day. During January discussions and after some reductions were
made, the anticipated drawdown was $13.9 million in reserves or $38,000 a day. Currently, he
Council Meeting Minutes of April 12, 2011
Page 2 of 9
reported, the City had used about $9 million in reserves and projected ending the year with a
$10.7 million drawdown of reserves which was roughly $11,000 a day. He emphasized this
trend was going in the right direction and the goal for the next fiscal year was for zero dollars
per -day of city reserves.
Transient Occupancy Tax (TOT), the highest revenue category, was projected to be about $84
million, Sales and Use Tax at $52 million, Property Tax at $59 million, Other Revenues and
Transfers at $33 million for a total revenue projection of $229 million for FY 11/12.
Expenditures, he stated, were projected at $227 million for an increase in reserves of about $2
million, which if added to the expected ending reserve balance for this year, would leave the
City with $16.5 million as FY 11/12 ended or 7.3% of expenses.
Regarding expenditures, he stated, the City would be making reductions in the current level of
expenditures and services to reach $227 million. Some of those reductions included eliminating
five percent of management positions at a savings of about $1 million a year, the AMEA and
Management/Confidential 5% Pay Reduction with a $3 million impact for next year, reductions
in the Police Department through attrition reflecting $3.3 million and redeployment of resources
in the Fire Department resulting in $1.9 million in savings. He added the Community Services
Department was working on efficiencies in Libraries and Parks for $3 million, Public Works was
working on enhancements in some of the service contracts to provide $1.4 million and all other
departments combined with staff reductions and contractual efficiencies would provide $1
million in savings. These efforts would yield $14.6 million in reductions, some of which were in
place, some in progress and some that departments would be considering over the next three
months to implement by July.
Mr. Wingenroth pointed out revenues were comprised of mainly TOT, Sales Tax and Property
Tax and staff worked hard to determine a middle road, neither too optimistic nor too pessimistic.
He added if the $229 million estimated revenues came in within one percent, he would consider
that a good estimate. Currently TOT was up six percent over the prior year. He noted the City's
consultant, BKF, estimated an eight percent increase, however, through his discussions with
staff, other County agencies and Anaheim businesses, he believed the four percent growth was
justified given Japan's issues, raising oil prices and a possible loss of consumer confidence.
The current year -to -date sales tax revenue growth was five percent, however, he added, it
included a one time receipt of $700,000 in sales tax this year. Thanks to Public Utilities staff and
the auditor, those funds for the installation of turbines could have gone to the County pool and
Anaheim would have only received 10 percent. The City's consultant, MuniService
optimistically estimated a four percent growth factor for the next year, however, Mr. Wingenroth
pointed out, in discussing this with other cities and agencies versus the types of businesses in
Anaheim, staff felt that number should be around 2.4 percent growth for the next fiscal year.
Property Tax growth was projected at one percent. Last year he stated, the City received a
negative amount for the first time since Prop 13 was created and this year since the CPI was
positive and the difference amounted to about one percent, Property Tax income should go
back up to $59 million in FY 11/12.
Although a balanced budget would be presented for the next fiscal year, Mr. Wingenroth
remarked there were still risks out there; the pace of economic recovery, decisions that state or
federal government could make to balance their budget, increases in pension and medical costs
and other issues not yet discussed. The Zero Based Budgeting ( "ZBB ") would be a tool for both
management and Council to use to help make budget decisions in the future. The first
installment of zero based budgeting resulted in a document outlining all 208 service programs
that the General Fund delivers to the residents of Anaheim. This, he explained, was the result
of much work by all city departments, and staff was now in the process of finishing up the cost
Council Meeting Minutes of April 12, 2011
Page 3 of 9
information for each of these programs. When completed, Council would know the cost of
providing every service making it easier to make future decisions. He ended his presentation
remarking there would be another budget workshop in May, then the budget adoption process
scheduled for two meetings in June.
Mayor Tait asked why consultant's recommendations were not used with Mr. Wingenroth
responding that previous estimates had been off, sometimes by a significant amount. In
addition to using information provided by consultants, he believed there were staff members
with significant financial acumen about Anaheim and he tempered the consultant's figures with
information derived from those discussions held with staff, other agency's personnel and
Anaheim businesses. Mayor Tait stressed the fact that tripling pensions and employee medical
costs, along with revenues flattening out and expenses increasing, added to the current
structural deficit with Mr. Wingenroth concurring as CalPers had increased rates due to market
losses experienced a few years back resulting in a $5 million pension increase for the next fiscal
year. Mayor Tait added another risk was that the current 7.75 discount rate from CalPers might
adjust down to a more realistic rate and add a $3-4 million increase in pension costs.
Council Member Galloway remarked that last year she had questioned the use of consultants
when there was expertise and knowledge within Anaheim's staff, recommending the City draw
on that talent. Mayor Pro Tern Sidhu requested clarification on Other Revenues and Net
Transfers with Mr. Wingenroth indicating he would provide a greater breakdown of that
category. Mayor Tait commended staff for the ZBB program as well as the progress being
made.
ADDITIONS /DELETIONS TO CLOSED SESSION: None
PUBLIC COMMENTS ON CLOSED SESSION ITEMS: None
At 4:17 P.M. Mayor Tait recessed to closed session for the following items:
CLOSED SESSION:
CONFERENCE WITH LEGAL COUNSEL - INITIATION OF LITIGATION
Initiation of Litigation pursuant to Subdivision (c) of Section 54956.9 of the
Government Code — Two potential cases.
2. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION
Significant Exposure to Litigation pursuant to Subdivision (b) of Section 54956.9
of the Government Code — Tort Claim.
At 5:26 P.M., City Council session was reconvened.
Invocation: Pastor Roger Stalhut, Calvary Chapel Open Door Anaheim
Flag Salute: Council Member Lord Galloway
Presentations: Recognizing the 2011 City of Anaheim student ambassadors to Mito, Japan
Mayor Tait remarked that each year, four student ambassadors from Anaheim were sent to
Japan to experience Japanese culture although this year it would be suspended due to the
earthquake disaster which occurred in that country. John Nguyen, Anaheim Sister City
Commission recognized the four students (Brian Cully, Sophmore at Canyon High School;
Council Meeting Minutes of April 12, 2011
Page 4 of 9
Amanda Doss, Junior at OC High School of the Arts; Alex Krebs, Sophmore at Oxford
Academy; and Lisa Marshall, Senior at Luteran High School) for their participation in the
rigorous application process and also encouraged the community to join in the Letters of
Kindness campaign and other fund - raising activities for Mito, Japan.
Acceptance of Other Recognitions (To be presented at a later date):
Proclaiming April 10 -16, 2011, as National Telecom municators Week
John Carter, Anaheim Police Department and Tracy Nolan, Metronet Fire, supported by a group
of dispatchers, thanked Council for recognizing emergency dispatchers, remarking it was an
honor to service the citizens of Anaheim.
Proclaiming April 2011, as DMV /Donate Life California Month
Carol Hooper, Donate Life Ambassador, encouraged participation in the fund - raising activities
taking place during Donate Life California month.
Proclaiming April 25 — 29, 2011, as Tree Appreciation Week
Recognizing the recipients of the 2011 Orange County Hispanic Chamber
of Commerce Estrella Awards
At 5:45 P.M., Mayor Tait called to order the Anaheim Public Financing Authority and Anaheim
Redevelopment Agency (in joint session with the City Council).
ADDITIONS /DELETIONS TO THE AGENDAS: Staff requested Public Hearing Item No. 3 be
continued to the April 26, 2011 meeting.
PUBLIC COMMENTS (all agenda items):
Scott Van Horn, Anaheim Fire Association, commented on the labor concessions made by the
association to accommodate the City's budget shortfall and its resulting impacts on fire safety.
William Fitzgerald, Anaheim Home, referencing a basketball franchise proposed for the City,
encouraged citizens to sign a petition allowing the public to decide on a related $75 million bond
issuance.
Edwin Crane, resident on North Road Street, complained of a safety issue due to inadequate
lighting on his street and asked for the City's assistance. Mayor Tait suggested Mr. Crane meet
with Public Works Director Natalie Meeks who would look into his request and report back to
Council.
Another resident on North Road Street supported the request for additional street lighting in his
neighborhood.
Christina Guerrero, North Road Street, remarked that the neighborhood had petitioned the City
for street lighting 10 years ago and she hoped the City would respond quickly to this request.
At 5:58 P.M., the Anaheim City Council session was recessed to consider the Public Financing
Authority and Anaheim Redevelopment Agency. Mayor Tait reconvened Council session at
6:05 P.M.
Council Meeting Minutes of April 12, 2011
Page 5 of 9
3. JOINT CITY COUNCIUREDEVELOPMENT AGENCY PUBLIC HEARING
A joint public hearing between the Anaheim Redevelopment Agency and the City to
consider a Commercial Lease Agreement by and between the Anaheim Redevelopment
Agency and Anaheim Arena Management, LLC, regarding certain real property located
at 290 S. Anaheim Blvd.
At the request of staff, this joint public hearing was continued to April 26, 2011 at
5:00 P.M.
CONSENT CALENDAR: Mayor Tait indicated he would abstain on Item No's 6 and 7 due to a
potential conflict of interest. Mayor Pro Tern Sidhu moved to waive reading in full of all
ordinances and resolutions and to adopt the consent calendar in accordance with reports,
certifications and recommendations furnished each council member and as listed on 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
4. Receive and file minutes of the Cultural and Heritage Commission meeting of January
8105 20, 2011, Golf Commission meeting of January 27, 2011, Community Services Board
meeting of February 10, 2011, Public Utilities Board meeting of February 23, 2011 and
Sister City Commission meeting of February 28, 2011.
5. Accept the lowest responsive bid of Marina Landscape, Inc., in the amount of
D128 $378,648.88 (including sales tax), to furnish and install water - efficient irrigation
controllers and sprinkler nozzles in the Anaheim Resort Area, in accordance with Bid
#7495.
6. Approve three Memoranda of Understanding with the Orange County Transportation
AGR.6712 Authority (OCTA) for the traffic light synchronization of Katella Avenue, La Palma
AGR.6713 Avenue, and Yorba Linda Boulevard as part of OCTA's Traffic Light Synchronization
AGR.6714 Program.
An abstention recorded for Mayor Tait due to potential conflict of interest.
(Approved 40 -1)
7. Approve and authorize the Public Utilities General Manager to execute, implement and
administer the Lease Agreement, and any related documents, with Orange County
AGR.6715 Water District (OCWD) that grants the City the right to enter on certain real property
owned by OCWD to install, construct, reconstruct, redevelop, inspect, operate, maintain,
and improve a new water production well (Well No. 58); and adopt the Negative
Declaration as the appropriate environmental documentation for the water well project
per the California Environmental Quality Act.
An abstention recorded for Mayor Tait due to potential conflict of interest.
(Approved 4-0 -1)
8. Approve an Amended and Restated License Agreement with the West Anaheim Little
League to allow usage of Parcel No. 070 - 801 -27 (baseball fields located near the
AGR.1995.1 intersection of Magnolia Ave. and 1 -5) in exchange for consideration in the form of
payment for all expenses, taxes and other costs related to the property as well as paying
for all costs associated with the maintenance, repair and operation of the property,
including parking, appurtenant easements and the baseball fields.
Council Meeting Minutes of April 12, 2011
Page 6 of 9
9. RESOLUTION NO. 2011 -044 A RESOLUTION OF THE CITY COUNCIL OF
P124 THE CITY OF ANAHEIM accepting certain deeds conveying to the City of Anaheim
certain real properties or interests therein (City Deed Nos. 11412, 11413 and 11414).
10. RESOLUTION NO. 2011 -045 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM rescinding permit parking for Westhaven Drive and Westhaven
D175 Circle in Permit - Eligible Parking District No. 5 (Twila Reid /Stonybrook District).
11. RESOLUTION NO. 2011 -046 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM designating Vine Street from Wilhelmina Street to Sycamore
D175 Street, south side of Wilhelmina Street from the railroad to Vine Street and Alberta Street
from Vine Street to the west end of the street as "Permit Parking Only" street within
Permit - Eligible Parking District No. 20 (Permit Parking Area No. 20).
12. RESOLUTION NO. 2011 -047 A RESOLUTION OF THE CITY COUNCIL OF
Pilo THE CITY OF ANAHEIM vacating a public utility easement located at 1500 North Miller
Street, pursuant to California Streets and Highway Code section 8330, et seq. -
Summary Vacation (Abandonment No. ABA2010- 00204).
13. RESOLUTION NO. 2011 -048 A RESOLUTION OF THE CITY COUNCIL OF
R100 THE CITY OF ANAHEIM approving the plans and special provisions prepared by
Orange County Flood Control District for the Santa Ana River Interceptor Sewer (SARI)
Relocation: SARI Mainline Project.
14. RESOLUTION NO. 2011 -049 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving the submittal of the Euclid Street Corridor Traffic
R100 Signal Synchronization Project to the Orange County Transportation Authority for
funding under the M2 Regional Traffic Signal Synchronization Program (Grant).
RESOLUTION NO. 2011 -050 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM authorizing the Director of Public Works or designee to submit
a grant application to the Orange County Transportation Authority for funding under the
M2 Regional Traffic Signal Synchronization Project on behalf of the City of Anaheim, and
if awarded, authorizing the acceptance of such grant on behalf of the City and amending
the budget for fiscal year accordingly.
RESOLUTION NO. 2011 -051 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM approving the submittal of the Tustin Avenue Corridor Traffic
Signal Synchronization Project to the Orange County Transportation Authority for
funding under the M2 Regional Traffic Signal Synchronization Program.
15. ORDINANCE NO. 6206 (ADOPTION) AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF ANAHEIM amending Chapter 18.62 of Title 18 of the Anaheim
C280 Municipal Code pertaining to administrative reviews (Zoning Code Amendment No.
2011 - 00095; Introduced at Council meeting of March 22, 2011, Item No. 26).
16. ORDINANCE NO. 6207 (ADOPTION) AN ORDINANCE OF THE CITY OF
C280 ANAHEIM amending the zoning map referred to in Title 18 of the Anaheim Municipal
Code relating to zoning (Reclassification No. 2010 - 00238; DEV 2010 - 00087; Introduced
at Council meeting of March 22, 2011, Item No. 34).
Council Meeting Minutes of April 12, 2011
Page 7 of 9
17. ORDINANCE NO. 6208 (INTRODUCTION) AN ORDINANCE OF THE CITY
COUNCIL OF THE CITY OF ANAHEIM amending Section 18.20.170 of Chapter 18.20
M142 of Title 18 of the Anaheim Municipal Code, nunc pro tunc, to correct clerical errors in
Ordinance No. 6192 previously adopted (Platinum Triangle Mixed Use Overlay Zone).
18. Approve minutes of the Council meetings of March 22, 2011 and March 29, 2011.
END OF CONSENT CALENDAR
19. RESOLUTION NO. 2011 -052 A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ANAHEIM (i) approving the issuance of not to exceed $95,000,000
aggregate principal amount of revenue bonds of the Public Financing Authority; (ii)
13137.1 approving the form of and authorizing the execution and delivery of an Installment
Purchase Agreement, an Indenture of Trust, a Continuing Disclosure Agreement, a
Purchase Contract and other related documents; (iii) approving the delivery of a
Preliminary Official Statement and an Official Statement; and (iv) approving certain
actions in connection therewith (related to Public Financing Authority Item No. 02).
Amend the fiscal year 2010/11 budget accordingly by the amount of the bond.
Public Utilities (PU) General Manager Marcie Edwards provided a brief presentation which
covered Item No. 2 on the Financing Authority Agenda and Item No. 19 on the City Council
Agenda. She indicated this resolution would authorize issuance of electric revenue bonds not to
exceed $95 million proposed for a variety of electric system infrastructure projects. The Public
Utilities Board unanimously voted their support of the bond issuance at their March 23r
meeting. She explained this proposal was an important part of the Department's strategic
financial plan which incorporated the need for capital investment in the infrastructure to provide
customers with safe and reliable electric service. These investments, she remarked, were long -
lived fixed assets that benefitted customers for decades. She further explained borrowing,
rather than raising rates and financing the program by cash, was intentional to allow for the cost
of the borrowing to be spread over an approximate 30 year life of the assets so customers
receiving the benefit of the assets over time, were also the customers paying the cost. To do
otherwise, she stated, would place the entire burden on current rate payers.
She also stated this borrowing would have no impact on the electric rates since previous
Council's actions had approved electric rates anticipating the need for debt service associated
with the bond issue. She added the department's strategic financial plan incorporated the
estimated capital needs of the electric system over a long -term planning perspective which
helped the department determine the best mix of borrowing and use of reserves and available
revenues to fund capital projects, The Department had also reviewed and prioritized its capital
requirements and deferred certain projects which could be delayed without having negative
short term operational consequences or limiting the ability to serve customers, and this was
done, she stated, in order to minimize the size of the borrowing proposed at this time. She also
added this borrowing would address capital needs only and would not be used for any on -going
expenses such as labor, pensions, maintenance or other operating expenses incurred in day -to-
day operations. Additionally, the requirement to make payments on these bonds did not create
any obligation to the City's general fund as the City's electric revenues were pledged for bond
repayment.
Ms. Edwards added the projects proposed would add, expand or retrofit electric substations and
associated equipment along with adding to the fund for expanding new technology. She noted
all details associated with the design engineering and construction of specific projects would
Council Meeting Minutes of April 12, 2011
Page 8 of 9
come before Council on an item -by -item basis and Council would have an opportunity to review
each project in detail.
She ended her presentation remarking whenever funds were borrowed, the status of the Utility
and the City, it's financial viability and long -term plans were reviewed by rating agencies and
typically, this information was presented to Fitch, Standard & Poor's and Moody's. Fitch had
affirmed the City's AA- rating with a stable outlook which was welcome news, noting no other
ratings had yet been received.
Mayor Pro Tern Sidhu moved to approve RESOLUTION NO 2011 -052 OF THE CITY OF
ANAHEIM (i) approving the issuance of not to exceed $95,000,000 aggregate principal amount
of revenue bonds of the Public Financing Authority; (ii) approving the form of and authorizing the
execution and delivery of an Installment Purchase Agreement, an Indenture of Trust, a
Continuing Disclosure Agreement, a Purchase Contract and other related documents; (iii)
approving the delivery of a Preliminary Official Statement and an Official Statement; and (iv)
approving certain actions in connection therewith; seconded by Council Member Murray. Roll
Call Vote: Ayes — 5: Mayor Tait and Council Members: Eastman, Galloway, Murray and Sidhu.
Noes — 0. Motion Carried.
Report on Closed Session Actions: None
Council Communications:
Council Member Eastman recognized Security Officer Angel Garcia for his act of kindness in
helping a stranded motorist and her family. She spoke of her attendance at the Boys and Girls
Gala recent fund raiser and expressed her interest in creating an ad -hoc taskforce, comprised of
city residents, to help develop community garden(s) urging those with a passion in gardening to
get involved.
Mayor Pro Tern Sidhu congratulated the Anaheim Ducks on reaching the NFL pla�roffs. He
announced the YMCA Good Friday breakfast at the Anaheim Marriot on April 22" and wished
everyone a happy holiday.
Council Member Galloway thanked the Anaheim Firefighters Association for attending the
meeting and offering concessions to address the budget deficit. She reported her attendance at
a meeting with the League of United Latin American Citizens (ULAC), the oldest Latino
organization in the nation in Chicago with the purpose of encouraging them to choose Anaheim
as the location for the 2014 National LULAC convention. Lastly she recognized Anaheim's
female department heads remarking they were a testament to the quality and excellence of the
City's management team.
Council Member Murray reported that the Sister City Commission would be sending thousands
of letters of encouragement to families in Mito, Japan and encouraged the community to submit
their letters by April 29. She acknowledged the 90 birthday of Marianne Harvery and
recognized Bruno Serato for being honored by CNN as Hero of 2011, Everyday People
Changing the World, due to his support of Caterina's Club, Grandma's House of Hope, Anaheim
Beautiful and Support for Motel Children. She announced the 2 nd Annual Easter Egg Hunt
hosted by the Anaheim Rotary at Ronald Regan Park on April 16, Tip a Cop Fundraiser for
Special Olympics on April 21 st at the Bubba Gump Shrimp Company and discussed
Disneyland's State of the Resort held on April 8 During that presentation, Disneyland
acknowledged all of the new attractions to be open up in the next few years, Cars Land, themed
Council Meeting Minutes of April 12, 2011
Page 9 of 9
California historical attractions, underscoring the economical value that benefits the region and
county.
Mayor Tait thanked staff for the budget workshop presentation and was especially appreciative
of the progress the City had been making in reducing the deficit. He added the Zero Based
Budget Program Inventory detailing 208 service functions by the General Fund was not typical
of cities and took a great deal of time and effort to provide but that it would allow for a cost
benefit analysis on the city services delivered. Mayor Tait added that because of Council's
earlier actions in paving the way for another sports franchise, he would be representing the City
at the NBA Board of Governors' meeting to invite an NBA team to Anaheim.
Adjournment: With no further business to conduct, Mayor Tait adjourned the April 12, 2011
meeting at 6:29 P.M.
Linda N. Andal, CIVIC
City Clerk