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Budget Advisory 1996/07/17• MEMORANDUM CITY OF ANAHEIM FINANCE DEPARTMENT • DATE: SEPTEMBER 19, 1996 TO: CITY CLERK FROM: CHARYL MC CULLY SUBJECT: BUDGET ADVISORY COMMISSION MINUTES RECEIVED SEP 20 12 52 PH '99 OFFICE OF CITY LLEI K CITY OF 4NAHEIM The attached Minutes from the Budget Advisory Commission meeting held July 17, 1996 were approved at the September 18 meeting, and are being submitted for filing. !i/ • 0 BUDGET ADVISORY COMMISSION MINUTES JULY 17, 1996 - 3:30 P.M. SIXTH FLOOR CONFERENCE ROOM MEMBERS PRESENT: Gene Brewer, Jeff Farano, Phil Knypstra, Dan Van Dorpe, Shirley McCracken, Bill O'Connell MEMBERS ABSENT: Jimmie Kennedy STAFF PRESENT: William G. Sweeney, Jeff Stone, Robb McIntosh, Charyl McCully GUESTS PRESENT: John O'Malley, Orange County Employees Association; John Kaiser, Anaheim Resident 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 May 8 and 22 Budget Workshops, and the May 15 meeting. Seconded by Mr. Knypstra. MOTION CARRIED (6 - 0 - 0). DEVELOPMENT OF FY 1996/97 WORKPLAN: Chairman Brewer asked for an explanation of the analyses on salary compression and cost prepared by Mr. Knypstra. Mr. Knypstra explained that his findings do not support the conclusions in the report that proposes the Fire and Police Department upgrades. He further stated that it would be difficult to deny other groups the same compensatory considerations proposed for Fire and Police, in light fairness and equitability, especially in terms of total cost to the City. Mr. Knypstra stressed his belief that wages need to be controlled and that controlling them for high wage classifications is imperative to maintaining control at lower levels. Mr. Sweeney agreed that wages need to be kept in check. Mr. Knypstra explained that this is an area of special interest to him outside of his association with the Commission. Chairman Brewer indicated that he does not believe this issue is within the purview of the Commission to consider, and asked for clarification of the jurisdiction, responsibility, and authority of the Commission to look at such matters. Mr. Sweeney stated that although the City Council had not referred this matter to the Commission, pay policies have always been a part of the Commission's area of review, and they could examine the matter at the macro level, as part of their mission is to explore the salary issue. Mr. Van Dorpe stated that he feels it important that the Commission have all salary information, but not attempt to suggest salary levels. Mr. Knypstra said he expected to get the information on a diskette, in the format originally requested, so that it could be analyzed. Mr. Sweeney indicated that the City Council authorized the release of information in a certain format, and we followed that directive. Mr. Knypstra said that Anaheim is the only City in Orange County to provide this information to the public. Ms. McCracken suggested that the compression issue should be included in the Workplan for this year. Mr. Knypstra said that the internal structure which dictates the design of our compensation package could also be studied. Anaheim's CR system is different from other cities, with more control over employees progress. He asked that Human Resources explain their method of establishing salary ranges. Mr. O'Connell asked if there is 0 Budget Advisory Commission, July 17, 1996 Page 2 a method of determining management salaries based on APA and AFA MOUS. Mr. Sweeney explained that non -managers move automatically through steps based on time in class. Management salaries have not increased to the extent that bargaining units have. The City Council approves all salaries. In response to Mr. Knypstra, -Mr. Sweeney explained that our Budget is distributed in executive summary format, although we compile line item detail. Mr. Sweeney stated that in the past Anaheim printed more extensive data, but found that there were few users, and therefore tried to strike a balance. Chairman Brewer indicated that the budget should show dollars spent for services performed, otherwise an important linkage is lost. He feels it important to be able to see the results of expenditures. Mr. Sweeney stated that the Commission could suggest a different kind of budget for the City. Mr. Knypstra stated that he's been successful in getting detail from staff. Mr. Van Dorpe feels it necessary to have more specific statistics from departments. Mr. Sweeney stated that a consortium of large cities (coordinated through ICMA) is currently looking at reporting, with the objective of getting uniform performance reporting. Performance measures must be limited to be effectively examined. He indicated that with the next two-year budget, some changes may be implemented, and additional performance measures could then be incorporated. In response to Mr. Van Dorpe, Mr. Sweeney indicated that he would request the departments to provide us with ten key indicators they use to measure performance. Mr. Farano said he feels our performance is better measured against our goals than against other cities. Ms. McCracken suggested that the Workplan include performance measures, salary compression, changes in budget format, and that these items be reviewed before the new budget is prepared. She said that certain Economic Development issues could also be included. Chairman Brewer indicated and the others agreed that the compensation issue should be top priority. Mr. Sweeney said he would pull together all available data, and have Human Resources attend the next meeting to answer questions. Some Commissioners indicated displeasure at the criticism of the Commission at the City Council meeting the previous evening. Mr. Sweeney indicated that, although the public/private comparison was part of the Workplan, the Commission had studied compensation at length and determined that disclosure was its primary concern, but the City Council still wanted the additional comparison information. Mr. Knypstra said it is difficult to make comparisons to other government agencies, much less the private sector. He said that the County compensation report might be useful, and could serve as a basis for the Commission to make its statement on this issue. Mr. Van Dorpe complimented Mr. Knypstra on his report and acknowledged the work involved. He went on to say that the Commission needs information such as this to be able to accurately evaluate the compensation issue. In response to Chairman Brewer's stated exception to the comments made at the City Council meeting, Mr. Farano stated that he feels it was a communications problem, and suggested that the Commission advise the City Council of its activities vis a vis the Workplan and its intention to continue its study of certain issues. Mr. Van Dorpe moved that the Chairman prepare a report defining the Commission's activities for 1995/96, with a reiteration of intent to complete those action items not already completed, and ask for any further guidance and direction they might have for the Commission. Seconded by Ms. McCracken. MOTION CARRIED (6-0-0). Budget Advisory Commission, July 17, 1996 Page 3 Mr. Knypstra requested a copy of the financial plan on the Disney expansion. Interest was expressed in the current Redevelopment activity. Ms. McCracken indicated that there has been a move to include citizens in the plans for the downtown area and a suggestion to change the name of West Harbor Place. Mr. Sweeney suggested that, with the compression issue on the next agenda, Redevelopment be agendized for a future meeting to update the Commissioners on plans, funding sources, and outstanding finances. He said that this issue should be part of the Workplan. Outstanding Redevelopment debt is serviced by tax increments; to the extent property values decline, coverage is reduced. We must be careful to protect the General Fund from having to contribute to that debt. The Workplan draft will be reviewed at the next meeting, along with the compensation issue. A review of Redevelopment Agency projects will be included in the Workplan, along with the Budget and related issues. The Disney deal and Convention Center expansion will also be discussed at one of the next meetings. Mr. Sweeney stated that the RFP for Information Services was completed and distributed to the Subcommittee on Privatization. He said the RFP was prepared in-house, reviewed by Risk, Legal and Management staff. He would like to have it finalized and distributed soon, with responses no later than October. Mr. Van Dorpe (Subcommittee Chair) indicated that he thought it to be an excellent document and that the Subcommittee would meet next week. Mr. Farano said he had some minor changes. PUBLIC COMMENTS Mr. O'Malley requested, and was assured that he would receive notification of the Privatization Subcommittee meeting. Mr. Kaiser stated that, as the previous owner of two downtown Anaheim markets, he is concerned about the manner in which City employees' pensions are handled. He feels that the cost of government is impacted by the City's contribution to the retirement system. He also said that, while he has no quarrel with salaries, especially for good police and fire protection, he feels that the City should not have to contribute toward those retirements. In the discussion that followed, various points of the State public employees retirement system were explained. Mr. Kaiser indicated that it appears the argument against such expenditures must be aired at the State level, and reiterated his feeling that employees should be made responsible for their retirement savings. AGENDA FOR NEXT MEETING Election of Commission Chair. Compensation issue - public vs private. Summary of AB 1934. ADJOURNMENT The meeting was adjourned at 5:35 p.m., by Chairman Brewer. Respectfully submitted, ��� Charyl McCully, Secreta W PBAC/M INMJULY96/CPM