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Home My WebLink AboutCC MINUTES 2007 06 12 (SPECIAL)MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL TUSTIN, CALIFORNIA JUNE 12, 2007 CALL TO ORDER-4:00 P.M. ATTENDANCE Present: Mayor Lou Bone; Mayor Pro Tem Jerry Amante; and Councilmembers Doug Davert, Tony Kawashima, and Jim Palmer Absent: None City Clerk: Pamela Stoker Others Present: William A. Huston, City Manager PUBLIC INPUT- None WORKSHOP -Fiscal Year 2007/2008 Budget City Manager Huston presented the proposed Fiscal Year 2007-08 Budget: The draft operating budget for all funds ensures that reserves are at levels that protect the City's financial interests and provide the flexibility to adjust in the future if needed. In the past several years through prudent financial planning, the City has been able to sustain consistent levels of services while: • Maintaining a 15% General Fund operating reserve for cash flow, investment income and unforeseen contingencies; • Absorbing the annual loss of property tax revenue shifted to the Educational Revenue Augmentation Fund (ERAF) as mandated by the State; • In fiscal years 2004-05 and 2005-06, absorbing the loss of over one million dollars in additional General Fund revenue shifts to the State; • Transferring monies to the capital improvement and park development funds in order to complete essential projects; • Transferring monies to the liability fund to meet obligations for the City's self-insured retention level. • Cash flow for large-scale CIP projects would not be possible without the use of Reserves. Summarized the following: FY 2007-08 Total Revenues General Fund $46,259,995 CIP Fund $11,967,123 Measure M Funds $5,439,500 Gas Tax Fund $1,772,500 City Council Meeting June 12, 2007 Minutes Page 1 of 5 CDBG Fund $1,153,206 Special District Funds $11,807,690 RDA Funds $29,652,248 Water Enterprise Funds $30,236,250 Internal Service Funds $2,713,737 All Other Sources $744,000 Park Funds $462,500 Tustin Legacy Enterprise Fund $1,040,000 Community Facilities District Fund $49,206,078 Reserves $16,382,774* TOTAL= $208,837,601 *Staff noted that cash flow for infra structure and long-term projects not feasible without the use of Reserve funds; reserves used for unfunded expenses, as well as special projects. FY 2007-08 Total Expenses General Fund $48,207,029 CIP Fund $14,513,135 Measure M Funds $7,117,842 Gas Tax Fund $1,090,000 CDBG Fund $1,153,206 Special District Funds $12,676,717 Tustin Legacy Enterprise Fund $5,002,727 RDA Funds $29,454,076 Water Funds $34,403,464 Internal Service Funds $1,564,327 All Other Sources $6,337,912 Park Funds $8,110,000 Community Facilities District Fund $39,207,166 TOTAL= $208,837,601 FY 2007-08 Use of Funds -General Funds are discretionary, but majority of funds are either Capital Improvement Project funds or restricted funds. State Impacts on General Fund • Educational Revenue Augmentation Fund (ERAF) -- diverts property tax revenue to education. Since 1992-93 loss totals $20,306,288 (projected through fiscal year 2007-08) • Proposition 57 - Known as the "triple flip." Provides a revenue stream State needs to secure recovery bonds by: • Reduced City share of sales tax from 1.0% to .75% • Lost sales taxis replaced by property taxes (i.e., ERAF) • Schools are made whole by Sta te general funds • VLF replacement is enacted pursuant to Proposition 1A. Property tax revenue (ERAF) is used to replace lost VLF. • Cities agree to lose VLF revenue in 2004-05 and 2005-06. Tustin's share was $1 million each year. FY 2007-08 General Fund Revenue Property Taxes $9,369,844 19.6% Property Taxes in Lieu VLF $5,089,957 10.7% Motor Vehicle in Lieu $400,000 0.8% City Council Meeting June 12, 2007 Minutes Page 2 of 5 Franchise Fees $1,380,000 2.69% Sales Tax $16,155,591 33.8% Sales Tax Backfill $4,959,409 10.4% Fines & Forfeitures $700,000 1.5% Recreation Fees $764,445 1.6% Transfers from otherfunds $2,722,450 5.7% Interest Income $450,000 0.9% Reserves $1,947,034 4.1 All other sources $2,080,813 4.4% Licenses Permits Fees $1,767,640 3.7% FY 2007-08 General Fund Expenses Police 21,266,752 44.1 Fire 5,003,200 10.4% Parks and Recreation 2,865,868 5.9% Non-Departmental 812,550 1.7% Legislation 956,412 2.0% Administration 3,555,457 7.4% Community Development 3,841,092 8.0% Public Works 9,905,698 20.5% Proposed New Positions • Assistant Director, Public Works 1 • Engineering Aide 1 • Maintenance Worker 1 • Water Distribution Operator 1 • Senior Planner 1 • Police Officer 1 • Police Service Officer 2 Additional staffing needs, i.e. Code Enforcement Officers, Maintenance Workers, Police Officers etc., may be added in the future to keep up with City growth. Expenditures-5 Years of Budgeted Vs. Actual General Fund Comparison of CI P ($103,808,171) and Operating Expenses ($105,029,430} - approximately 50/50 spent on each category. Property Tax Distribution -City receives $0.126 of every dollar. Staff noted that property assessment amounts set by County. Sales Tax Review: FY 2000/01 to FY 2007/08 -gradual increase over years; growth expected when The District at Legacy is completed. Beginning in FY 04-05, 25% of sales tax revenue diverted to the State (Proposition 57). The amount diverted is "backfilled" by the State each year in the form of property taxes. Educational Revenue Augmentation Fund total losses since 1993 have equaled $20,306,288. Staff commented that Redevelopment Project Areas have state mandated distribution formulas that differ from general city areas. Property tax rate at the Legacy site is 3.9% compared to 12.6% in general fund areas. Council requested pie chart with distribution amounts for Legacy project area and non-legacy area. FY 2007-08 Public Safety Cost versus Sales Tax Revenues Total Public Safety Costs equal $26,269,952 FY 2007-08 Capital Improvement Projects Transportation Facilities $23,879,861 Public Facilities $22,258,428 City Council Meeting June 12, 2007 Minutes Page 3 of 5 Water Facilities $20,852,214 Park Facilities $7,155,000 Traffic Control Facilities $1,226,653 Reassessment District 95-1 $346,102 Tustin Legacy $27,359,913 Flood Control Facilities $730,000 Seven Year CIP Projects 2007/08 through 2013/14 Transportation Facilities $186,359,861 Flood Control Facilities $9,050,000 Park Facilities $11,662,000 Water Facilities $37,680,214 Re-Assessment District 95-1 $596,102 Traffic Control Facilities $2,279,653 Public Facilities $23,901,404 Tustin Legacy $41,338,768* *Does not include expenses by TLCP, estimated to be $400 million Year End Projected Fund Balance Fiscal Year 2007-08 -City Manager noted that Reserves set at 19%, Council policy is 15%. Council requested percentage change with dollar amounts on charts as well as actual fund balance amounts. Proposed Capital Improvement Program FY 07/08 to FY 13114 -Legacy Project does not include developer's share of expenses. Revenue amount of $193 million is not liquid cash, includes bond debt, reserves, property value, and fixed assets. Citrus Ranch Park includes carry-over funds from FY 06-07; costs were higher than estimated - project was scheduled to be completed in phases, but was later consolidated into one phase. Council requested narrative on CIP Programs. The budget will have adjustments made throughout the year, as the Council considers new projects. Councilmember Kawashima left the meeting at 5:10 p.m. Council discussion ensued. Property taxes depicted with ERAF back-fill and without. Council requested a list of priorities for CIP Projects from 2003-2004 and 2005-2006 as well as staff recommended priorities for 2007-2008. EI Camino Real Park tot lot and parking to be addressed in coming year. Red Hill Quiet Zone project priority because of increasing train traffic. Grade separation improvements at Red Hill expected in FY 2012113 and Newport Avenue extension in progress, together over $100 million in infrastructure costs. Tim Serlet, Public Works Director noted that Metrolink Station Parking Structure design included in 2007-08 budget, but construction scheduled for the following year. Grants actively sought when available. Streaming video, website revamp, and community survey included in non-departmental expenses for FY 07-08. Final Budget meets the GFOA standards. Focus of the Council is to provide quality services and improve communication to community; examples of projects include broadcasting of all commission meetings and mapping CIP Projects. Council requested that department directors present department's goals and objectives. Council suggested that employee succession planning, customer service training for employees, and measurable outcomes, goals and objectives be included in future budgets. Council highlights in FY 07-08 include full funding for library expansion project, Senior City Council Meeting June 12, 2007 Minutes Page 4 of 5 Center Kitchen Renovation, and Citrus Ranch Park project; improved policing; improved grade improvements; enhanced reserves; and transit improvements that all address quality of life issues with no new taxes. Council thanked staff for efforts in bringing forward a balanced budget and requested that budget adoption be placed on the next regularly scheduled council meeting, which will take place on June 19, 2007. ADJOURNED-6:10 p.m. LOU BONE, Mayor PAMELA STOKER City Clerk City Council Meeting Minutes June 12, 2007 Page 5 of 5