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MINUTES of a special meeting of the City Council of the City of Redlands held in the
Council Chambers, Civic Center, 35 Cajon Street, oil February 10, 2009, at
8:00 A.M.
PRESENT Jon Harrison, Mayor
Pat Gilbreath, Mayor Pro Tem
Mick Gallagher, Councilineznber
Pete Aguilar, Councilmember
Jerry Bean, Councilmember(arrived at 8:25 A.M.)
ABSENT None
STAFF N. Enrique Martinez, City Manager; Daniel J. McHugh, City Attorney; Lorrie
Poyzer, City Clerk; Jim Bueermann, Police Chief; David Hexem, Chief
Infornnation Officer; Daniel Hobbs, Redevelopment Agency Director; Rosemary >�
Hoerning, Municipal Utilities and Engineering Director; Tina Kundig, Finance
Director/Cit Treasurer; Jeff L. Frazier Fire Chief-, Oscar W. Orci, Community f
Development Director; Deborah Scott-Leistra, Human Resources Director; Gary
van Dorst, Quality of Life Director
Public Comments - Mayor Harrison called the special meeting of the City
Council to order and explained to the standing-room-only audience that this
meeting was scheduled to review the current budget. Noting a number of
speaker sign-up forns were submitted expressing concerns about the senior
centers and Community Center, Mayor Harrison asked Police Chief Buecrmann
for his cotntneuts. Police Chief Bueermann reported that because of the
economic situation and declining revenues, six part-time workers were laid off
in the Recreation Division and three positions remain unfilled. At this time
there are no discussions to close the senior centers and Community Center.
Mayor Harrison provided all opportunity for the public to address them on the
subjects which were scheduled on the agenda. Speaker forms were submitted
by: Lajos F. Kardos, Frank Maloney, Richard Bussee, Lita Busse, Joe Sanchez,
Margaret Harding, Mary Reyes, Kathy King, Recreation Commissioners Patty
Peoples, Roy Cencirulo and Gabriel Jacob, Stella Cedano, Marilyn Drolet, Paula
Wadga, Patrice Bopknight, Pauline Stancliff, Barb Dixon, James Tuazon,
Dennis Stanley, Ray Arias, and David Baer. JoAnn Nash read a letter from John
F. Nash opposed to the building of a new Super Wal-Mart. Also addressing the
City Council were: Nancy Sudue, Kathy Van Dieter, Patricia Jones, Recreation
employees Kristen and Tiffany and Joan Andleman. Nineteen e-mails were also
received.
The City Council briefly recessed at 8:56 A.M. and reconvened at 8:58 A.M.
Mid-Year Budget Review - Finance Director/City Treasurer Kundig reported
that over the last several months the City Manager, Finance and departmental
staff have met with the Budget Committee to address the City's economic
outlook as a result of the major decline in the economy. The City Council has 01h,
been kept apprised of potential revenue shortfalls Hieing the City, as well as
recommended budget reductions to meet these shortfalls.
In October, department heads were asked to review their budgets and provide
budget reductions as a result of expected shortfalls in sales tax revenues ($1.2
million), property tax revenues ($700,000), motor vehicle license fee revenues
(5225,000) and a contingency for shortfalls in development revenues of
$575,000. Departments responded with budget reductions of $1,283,000. lin
addition, non-sworn employees were asked to furlough ten days to provide an
estimated savings to the General Fund of 5460,000 and sworn employees were
subsequently asked to participate with savings of$207,000 and $237,000 from
Police and Fire, respectively. Employees in all bargaining groups are to be
commended for their willingness to participate in the City's efforts to solve its
financial challenges, and sworn employees of the City of Redlands have set an
example for sworn employees in other communities.
Special Meetin
February 10.2009
029
As the economy has continued to decline, so have the City's revenues.
Additional shortfalls in development revenues have exceeded the original
contingency of 5575,000. A shortfall Ili development revenues of 5800,000 III
Community Development and $1,000,000 for Municipal Utilities and
Engineering was recently reported to the Budget Committee and to the Council.
Furthermore, the City's sales tax consultant has just reported all additional
decline Ili sales tax revenues at mid-year, with the estimated shortfall now
expected at S2 million by fiscal year-end. Other categories of revenues,
although individually not as major as property tax, sales tax and development
revenues, collectively, could result in a significant additional shortfall ill
ID
revenue, up to as Much as $800,000, if not more, by fiscal year-end. As a result
of these estimates, the City Manager and staff are preparing for all overall
shortfall in General Fund revenue of$5.525 million by June 30, 2009.
NO In addition to the initial budget reductions provided by departments and the
furlough savings by employees, additional reductions by departments have been
recommended. The Police Department has provided additional reductions of
$681,000, primarily resulting from salarysavings due to vacancies. Other
reductions Include salary savings of 5127,000 from Fire, $80,000 11-orn
Community Development, and $25,000 from Finance, and $7,500 in books from
the Library. Potential saving's from the golden handshakes ($100,000) and from
I
the contingencies for major crime overtime ($125,000) and health premium
increases ($100,000) add another$325,000 to help address the budget gap.
Another potential source to close the revenue shortfall is one-time revenue from
Redevelopment Agency Bond proceeds. The council has already initiated the
steps for reimbursing the City's General Fund and Enterprise Funds for certain
infrastructure and building improvements by moving City infrastructure
contracts to the Agency. City Staff estimates that approximately $1.08 million
from these bond proceeds will reimburse the General Fund for eligible street
construction contracts as a result of your February 3, 2009, action. This one-
time revenue has been earmarked to be used to replenish reserves for prior year
employee retirement payouts, for the golden handshakes, and to fund street
resurfacing, cut as a result of initial departmental budget reductions. In
addition, on February 17, 2009, staff will be presenting the City Council with
additional actions similar to the action taken on February 3, 2009, which will
generate nearly $1.9 million in facilities capital reimbursements which will be
transferred into reserves, with a recommendation to borrow $1 million for the
operating budget. The internal loan of Sl million would be repaid over a six-
year period with no payment or interest accrued over the first two years and
payments will begin at the end of the third year at the existing LAIF (Local
Agency Investment Fund) rate. Another $165,000 in staffcosts associated with
Safety Hall infrastructure repairs may be bond eligible and would provide an
additional source to close the revenue shortfall. Another $1.5 million of the
bond proceeds will be used to reimburse the Municipal Utilltes and Engineering
Department for water and traffic "Capacity" projects. Finally, approximately
$2.6 million and $.122 million will be used to reimburse the Municipal Utilities
and Engineering Department for the Lugonia and Stuart Storm Drain Projects.
�1 I I
All of these dollar amounts will be refined and summarized as part of your
February 17, 2009, action.
The City Manager and Executive Team are working to is additional cuts
of $900,000 between now and June 30, 2009, which when added to the other
budget reductions and reimbursement fi-oni bond proceeds, results Ill $5,587,000
available to close a revenue shortfall Currently projected at $5,525,000.
To the extent that budget reductions and other sources are identified to cover the
anticipated revenue shortfalls as they Occur, the City will preserve the
Special Meeting
February 10, 2009
030
Unreserved General Fund Balance of$4.9 million that it began fiscal year 2008-
2009 with, and its reserves of$5.7 million.
Each department director reviewed the reductions for their respective
department and the resulting impacts on service. Councilinernbers discussed the
Situation at length. COUncilmember Gilbreath moved to acknowledge receipt
and file the report. Motion seconded by Councilinember Aguilar and carried
with Counciltnernber Harrison voting NO,
PUBLIC COMMENTS
None forthcoming
CLOSED SESSION
The City Council rriecting recessed at 10:22 A.M. to a closed session to discuss
the following:
I. Conference with labor negotiator- Government Code Section 54957.6
Agency Negotiators: N. Enrique Martinez, Debbie Scott-Leistra and
Steve Filarsky
Employee Organizations: Redlands Association of Management
Employees; Redlands Association of Mid-Management Employees; General
Employees Association of Redlands (SBPEA); Redlands Civilian Safety
Employees Association (SBPEA); Redlands Police Officers Association;
Redlands Professional Firefighters Association; Redlands Association of
Safety Management Employees; and Redlands Association of Fire
Management Employees
2. Conference with legal counsel - Existing litigation- Government Code
Section 54956.9(A)
a. One case: The Redlands Association v. City of Redlands et at
3. Public Employee Performance Evaluation - Government Code Section
54957
a. Title: City Manager
ADJOURNMENT
No report was expected following the closed session. The next regular meeting
will be held on February 17, 2009.
---Mayor of (Sty of R6di'a`uds
Attest:
Al
City /rk
Special Meeting
February 10,2009