SALINAS
REDEVELOPMENT AGENCY
MINUTES
OF MEETING
JUNE
7, 2005
The
Agency convened in regular session at 6:15 p.m. in the Rotunda.
Present:
Chairperson Anna Caballero
Agency
member Janet Barnes
Agency member Gloria De La Rosa
Agency member Jyl Lutes
Agency
member Roberto Ocampo
Agency
member Sergio Sanchez (present during 7:30 p.m. session only)
Absent:
Agency
member Maria Giuriato (medical leave)
Also
Present:
Agency
Counsel Vanessa Vallarta
Secretary
Ann Camel
CONSENT RESOLUTION
Upon motion by Agency member
Barnes and second by Agency member De La Rosa, the Agency voted unanimously to
adopt the Consent Resolution.
Absent: Agency members Giuriato
and Sanchez.
Closed Session
The Redevelopment Agency
met in closed session pursuant to GovernmentCode Section
54956.8, conference with real property negotiator City Manager/Executive
Director Dave Mora, Redevelopment Director Alan Stumpf, and City
Attorney/Agency Counsel Vanessa Vallarta to discuss the price and terms of
payment for the sale or lease of property with Gerald Kehoe, Berkley Group for
property located at 100 Main Street (proposed hotel site on west side of 100
Main Street).
The Agency reconvened in join session with the City Council at 7:55
p.m.
JOINT CITY COUNCIL/REDEVELOPMENT AGENCY PUBLIC HEARING
1. 2005-06 Fiscal Year Budget and Capital
Improvement Program.
Finance
Director Tom Kever presented his report.
He reviewed the history dating back to April 2003, that included using
$10.4 million in General Fund reserves.
Budget deficits resulted from decreased revenues due to a weak economy,
State raids on revenues, increases in Monterey County charges, and CalPERS increases.
State raids on city revenues started in 1990 and equate to $3.2 million
annually. Proposition 1A
constitutionally protects future revenues but the diversion of funds that began
in 1990 will continue. Additionally,
ERAF shifts from the Redevelopment Agency total $400,000 annually.
Salinas’
per capita revenue is $423. It will
increase to $428 in 2005-06. It is
lower than all comparably-sized cities excepted Moreno Valley and Santa
Clarita, who contract out for police and fire services. This compares to per capita revenue of
$1,454 for Monterey; $1,087 for Santa
Cruz; $691 for Gilroy; and $625 for
Watsonville. Seaside’s per capita
revenue is comparable to Salinas’.
However, their library is part of
the Monterey County free library system
and they do not pay for library services from their general fund. The retail development experienced in the
1990s is over because of limited development opportunities and Monterey County
will not support Salinas in any major tax revenue generators.
Mr.
Kever stated that Monterey County’s 911 charges will increase by a total of
238% over a three-year period.
Mr.
Mora noted that Monterey County’s initial indications are that their
interpretation regarding the booking fee is different than the City’s.
Mr.
Kever stated that the City’s employees are covered by CALPERS health insurance,
with rate increases averaging 19% per year for over $2.7 million since
2002-03. Police and Fire employees
contribute 9% and non public safety employees contribute 7% of salary. Low investment returns are governing large
rate increases and the increases are a State-wide issue. It is believed that rate increases have
peaked.
Mr.
Kever stated that since April 2003, Council was forced to cut $8.3 million from
the 2003-04 and 2004-05 budgets. The
2005-06 structural deficit was reduced from $9.2 million to $8 million with the
passage of the business license tax increase.
In September 2004, the Council approved reductions totaling $7 million
for the 2005-06 budget. Since April
2003, the General Fund has been reduced by 24%, $15.3 million, resulting in the loss of 123 City jobs. The
$1
million structural deficit remains. Mr.
Kever stated that employee concessions range from 2% to 7.5%. The 2003-04 reserves were $10.4 million and
will be depleted by 2006-07.
Mr.
Mora noted employees concessions, including the Firefighters’ concessions in
order to continue providing paramedic service.
He noted that the City’s employees’ contributions have been constant
even when the City made no contribution.
Health increases appear to have peaked and will continue to increase but
at a more manageable rate. There is no
capital improvement funding or operating reserve. He forecast that it would take eight to ten years to restore
everything that has been cut and enhanced services cannot even be
considered. He believes further cuts
will not be necessary after the adoption of the proposed budget
In
response to Councilmember Barnes, Mr. Kever stated that the NPDES monitoring
program is being paid from gas tax fund, General Fund carry over, and some
residual storm sewer funds. Program
costs will increase to over $2 million.
Gas taxes may not be used for approximately $1 million of the program
costs and would become a General Fund liability.
Councilmember
Sanchez asked for the specific strategy to reduce workers’ compensation claims.
Mayor
Caballero requested a report on whether the State legislation resulted in
workers’ injury compensation savings to determine whether they should consult
with State legislators.
In
response to Councilmember Sanchez, Mr.
Mora stated that First Tee is the model for the Fairways golf course. But the MOU and workforce commitments must
be addressed and staff would return with recommendations before the end of the
calendar year. The priority is to cover
the debt service and the City gets the course back debt free and maintained.
Eric
Peterson suggested that the City should consider internal 911 operations to
control costs.
Brett
Landon stated that the rate of employees’ pay must be addressed. The average employee’s cost increased from
$80,000 to $111,000, when inflation was only 7%. The firefighters made heroic concessions to continue paramedic
service, but more could be done.
Mark
Dierolf stated that sales taxes are going up and the City is receiving in-lieu
property taxes. Concessions would not
be necessary except for irresponsible pay raises. He stated that the City Manager should be terminated.
Wayne
Schapper stated that he had recent need to review the 1963-64 budget, which
reflected that 85% of the budget went
to personnel costs. He referenced Mr. Landon’s complaints about the current
83% of the budget that goes to personnel costs. This is a service organization, and employees are being paid to
provide services.
Lynne
Steele stated that after being galvanized by anger regarding library cuts, she
has become satisfied after examining the budgets. She hopes to work with the City on solutions
Joe
Vierra blamed the Democratic Party and stated that the City Council is the
cause of the loss of services.
Sally
Torres, Salinas resident, stated that services are required so Salinas’ young
people can flourish
Mr.
Mora stated that the budgets from 2001-02 through 2003-04 document that there
was no was no in-lieu sales tax provided to cities or counties during those
years. The in-lieu category began in
2004-05. Salinas’ sales tax revenues decreased from $21,211,759 in 2001-02 to $20,683,582 in
2003-04.
In
response to Mr. Dierolf, Mayor Caballero stated that the sales tax in-lieu
revenue is not additional sales tax.
Mr. Kever stated that the sales tax in-lieu came about as part of the
cities’ bail out of the State, which required a pledged revenue for the $15
billion bond issue. So they took one
quarter cent of the one cent that the City receives from the 7.25 cent sales
tax. They backfilled it with property
tax.
Mayor
Caballero stated that the State did this because property taxes only get paid
twice per year, which now leaves cities in a short-fall situation.
Mr.
Mora stated that the Finance Directors’ prior projections have been sound. The City would have been bankrupted had the
City relied on the publicly made revenue projections made by Mr. Dierolf and
Mr. Landon. Police and firefighters
would have been laid off. The General
Fund allocation by departments shows that 65% of the General Fund is allocated
to public safety. When considering
dedicated revenue, e.g. permitting revenues being restricted for the Permit
Center, public safety represents 70% of
discretionary General Funds. No
one has advocated for reductions in police or fire staffing, or to compensate
them at below the market rate.
Mr.
Mora stated that local television stations examined the City’s budget and
looked for issues. His interpretation
of their programs is that there is no money for services. This finding is consistent with that of
outside financial experts. There were
comments regarding retirement benefits being higher than the private
sector’s. Moreno Valley and Santa
Clarita contract with the Sheriff’s Office because they are in a large
metropolitan county. The Monterey
County Sheriff’s office is not organized to provide urban police services. Moreno Valley is served by the California
Department of Fire. Watsonville
residents decided on a separate property tax levy for retirement benefits. Seaside does not pay for its library. In the 1980’s, the City
had record Police
Officer vacancies. He believes that
market-rate compensation for all employees provides the best employees for the
residents.
Councilmember
Lutes stated that the 237% increase in Monterey County’s fees is
astronomical. Only 150,000 of the
residents that they serve do not live in incorporated cities. She believes the two policy bodies should
meet.
Councilmember
Barnes stated that people who detest government do not listen to facts. She is proud of the City Manager and it is
thanks to his actions that the City is not in worse shape. She is proud of employees who have made
concessions; people who are doing multiple jobs; and of the Council who is
doing everything it can and yet has to suffer unfair attacks every week.
Mayor
Caballero agreed with the suggestion of having a meeting with the Board
regarding fees. She continued the
budget hearing to June 14, 2005 at 4 p.m.
ADJOURNMENT
- The meeting adjourned at 9:45 p.m.
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