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07-26-2018 - Special Meeting - MinutesCITY OF WEST COVINA CITY COUNCIL/SUCCESSOR AGENCY/ HOUSING AUTHORITY/PUBLIC FINANCE AUTHORITY THURSDAY JULY 26, 2018, 6:30 PM SPECIAL MEETING CITY COUNCIL CHAMBERS 1444 W. GARVEY AVENUE SOUTH , WEST COVINA, CALIFORNIA 91790 MINUTES CALL TO ORDER — Mayor Lloyd Johnson called the meeting to order at 6:30 p.m. PLEDGE OF ALLEGIANCE — Led by Mayor Lloyd Johnson ROLL CALL Present: Councilman Mike Spence, Councilmember James Toma, Councilmember Corey Warshaw, Mayor Pro Tern Tony Wu, Mayor Lloyd Johnson Staff Present: City Manager Chris Freeland, Assistant City Manager/Community Services Director Nikole Bresciani, Deputy City Manager Laura Biery, City Attorney Kimberly Hall Barlow, Public Works Superintendent Micah Martin, Human Resources Director Edward Macias, Assistant City Clerk RosaHa Butler, Fire Chief Larry Whithorn, Police Captain Richard Bell, Senior Planner Ron Garcia, Human Resources Management Analyst Eva Sahagun, Public Works Management Analyst Michelle Mansour, Human Resources Technician Rachel Hirota, Police Administrative Services Manager Alex Houston, Police Chief Marc Taylor, Assistant Fire Chief Vince Capelie, Police Captain Doug Murray, Police Lieutenant Dennis Patton, Interim Finance Director Judy Lancaster, Finance Management Analyst II Serena Bubenheim Thursday July 26, 2018 Mayor Johnson made an adjournment motion in memory of retired West Covina Police Lieutenant Wayne Heieck. The presentation of Item No. 1 was given before Public Comment to allow speakers to voice their concerns on all items proposed on the agenda. DEPARTMENTAL MATTERS 1) Adoption of the City of West Covina Fiscal Year 2018-19 Annual Operating and Capital Improvement Program Budget it is recommended that the City Council approve the Fiscal Year 2018-19 Proposed Operating and Capital Improvement Program Budget by adopting the following resolution: RESOLUTION NO. 2018-99 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, ADOPTING THE OPERATING BUDGET FOR THE CITY OF WEST COVINA, WEST COVINA PUBLIC FINANCE AUTHORITY, WEST COVINA HOUSING AUTHORITY, THE SUCCESSOR AGENCY TO THE FORMER WEST COVINA REDEVELOPMENT AGENCY AND THE CAPITAL IMPROVEMENT PROGRAM FOR FISCAL YEAR 2018-19 2) Adopt the additional budget related recommendations presented by staff, as summarized on Page 10 of the staff report. City Manager Freeland thanked City staff for compiling the proposed budget report, City Council for their patience and support, and the residents for their suggestions and recommendations to balance the City's budget. He also gave a brief overview regarding the history of the current budget and discussed the reductions the City had to implement to close the budget gap. Interim Finance Director Lancaster gave a PowerPoint presentation detailing the proposed budget plan for the City. In addition, she also listed all the revisions that were implemented to the preliminary budget during the Special Meeting on July 12, 2018 and discussed all ongoing adjustments that closed the budget gap of the General Fund. Furthermore, she informed the Council that there were still several financial challenges that must be resolved to sustain a balanced budget for years to come. Councilmember Toma thanked City staff for the formulation of the multiple budget reports and commended them for their hard work and dedication. He also asked for clarification regarding all future budget projections. Interim Finance Director Lancaster clarified that the Finance Department had budget projections until the year 2047. 2 Thursday July 26, 2018 PUBLIC COMMENTS ON ITEMS ON THE AGENDA John Shewmaker spoke on unfunded liability and PERS and expressed concerns regarding fee increases for residents. Brian Biddulph shared his concerns regarding the proposed layoffs in the Maintenance Department. Carole Muliner expressed concerns regarding the proposed layoffs in the Maintenance Department and shared her concerns relating to the City's budget. Rick Shield spoke on the duties of the Maintenance team and expressed concerns regarding the impact the proposed layoffs would have on the residents. Elsie Messman expressed concerns regarding the proposed tax increase and stated her disapproval regarding the proposed layoffs in the Maintenance Department. Brian Jobst expressed his disapproval regarding the proposed staff layoffs and expressed concerns regarding the level of transparency within the City. Sarah Love expressed her disapproval regarding the proposed tax increase. Bill Robinson advocated for the implementation of mandatory staff furloughs and expressed concerns regarding the proposed tax measure. Jim Grivich spoke on the substantial amount of City expenditures and expressed concerns regarding the amount of overtime compensation for public safety employees. Jerri Potras expressed concerns regarding the proposed layoffs and stated that furloughs should be implemented in every department within City Hall. Chris Miller spoke on the budget and proposed a resident funded program to reduce the amount of electricity usage in the City during high demand times. He also expressed his disapproval regarding the proposed tax increase and opposed the proposed elimination of the elected City Clerk and City Treasurer positions. Bruce Leinbach expressed concerns regarding the proposed layoffs of City employees. Shirley Buchanan expressed her disapproval regarding Item No.5 and stated that the City Clerk and City Treasurer should remain elected positions. City Manager Freeland and Interim Finance Director Lancaster gave responses to speaker inquiries. Councilmember Warshaw asked Interim Finance Director Lancaster when the City would 3 Thursday July 26, 2018 need to start borrowing money to replenish General Fund Reserves. Councilmember Toma asked for clarification regarding the increase in City revenues during FY 16-17. Interim Finance Director Lancaster addressed Councilmember Warshaw's inquiry that this would occur during Fiscal Year 2019-2020. She also explained that the "triple flip" was responsible for the increase in City revenues during FY 16-17. In addition, she elaborated on the "triple flip," and explained that it occurred when the state of California needed to realign their General Fund and moved money around between the school districts, cities, and the state of California which was allocated over a period of seven to ten years. Mayor Pro Tem Wu expressed concerns regarding the amount of City expenditures and the amount of overtime for Public Safety employees. Councilman Spence expressed concerns regarding the lack of a Closed Session meeting to discuss the proposed budget plan. City Manager Freeland addressed Councilman Spence's concerns and stated that there was no additional direction given by Council or staff to require a Closed Session meeting. Councilmember Toma asked for an additional report from the Police and Fire Chiefs regarding the overtime amounts for Public Safety employees and detailed how much it would cost to hire additional employees rather than giving copious amounts of overtime to current staff. City Manager Freeland stated that both Police Chief Taylor and Fire Chief Whithorn would discuss the overtime issue, as well as the change in Police and Fire deployment models. Police Chief Taylor stated that while overtime is not directly correlated to vacancies, it is attributable to the current staffing model and the policy regarding time off to employees. In addition, Mr. Taylor also stated that if the Police Department were to hire additional employees, the overtime amount would increase due to training costs and court time. He also indicated that if the restructuring of the patrol model is approved, two officers would be allowed off on a crew instead of on overtime, effectively decreasing the amount of allowed overtime. Mayor Pro Tern Wu expressed concerns regarding the potential for excessive overtime, and shared his concerns pertaining to the increased liability of over worked employees. Police Chief Taylor indicated that the Police Department does not have enough officers but was given the task of cutting 10% of the budget which included the elimination of 6 positions and a change in the staffing model. He also added that the amount of overtime given to employees is closely monitored and that most of the overtime is due to contractual obligations for staff. In addition, he also stated that the WCPD has very 4 Thursday July 26, 2018 specific rules for staffing, and any change to the current deployment model or its policies, would require a meeting with the West Covina Police Officers Association. Councilman Spence expressed concerns regarding the amount of overtime allowed. Fire Chief Whithom spoke on the required staffing levels for the Fire Department and stated that they did not have discretionary overtime. He also discussed the impact the 10% budget cuts had on the department and stated that all fire fighters are paid overtime in 15- minute increments. Mayor Pro Tern Wu asked if hiring additional personnel would reduce the overtime cost. Fire Chief Whithom indicated that due to the vast number of vacancies within the Fire Department, hiring additional employees would reduce the amount of overtime allowed for current employees. However, he explained that there are still going to be employees who request time off for various reasons, which would create overtime for others. Councilmember Warshaw asked for clarification regarding the overall savings for the current staffing model as opposed to a fully staffed model. Fire Chief Whithom indicated that there would be a savings of $89,000 with the current staffing model as opposed to being fully staffed. He also stated that while a fully staffed model would reduce the amount of overtime, it would also increase the overall budget for the Fire Department. Councilmember Warshaw expressed concerns regarding the lack of contracts the City has with Union businesses and contractors. He also spoke on the Fire Department negotiations and discussed the increase in overtime for the department. In addition, Mr. Warshaw indicated that West Covina is the only city without a utility tax and expressed his approval regarding a general sales tax for the City. Mayor Pro Tern Wu shared his concerns regarding Measure H and expressed his disapproval regarding the proposed budget. Councilman Spence expressed his disapproval regarding the proposed budget plan. Councilmember Toma expressed concerns regarding the increase in PERS costs and the impact it had on City employees. Mayor Pro Tern Wu suggested for City management to implement a pay cut for staff to alleviate the budget dilemma. A motion was made by Councilmember Toma and seconded by Mayor Johnson to adopt Resolution No. 2018-99. Motion failed to be approved by a vote of 2-3, with Councilman Spence, Councilmember Warshaw, and Mayor Pro Tern Wu in opposition. 5 Thursday July 26, 2018 AYES: Toma, Johnson NOES: Spence, Warshaw, Wu ABSENT: None City Attorney Hall Barlow indicated that if the Council decided to give staff direction to commence negotiations to implement pay cuts for City staff, it would be a lengthy process and would result in litigation. She also stated that a cut to the City Management team would result in a savings of $100,000. City Manager Freeland informed the Council that further delaying the budget adoption costs the City between $50,000 and $100,000. 2) Annual Appropriations Limit for Fiscal Year 2018-19 It is recommended that the City Council adopt the following resolution: RESOLUTION NO. 2018-101 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WEST COVINA, CALIFORNIA, SETTING THE ANNUAL APPROPRIATIONS LIMIT FOR THE FISCAL YEAR ENDING JUNE 30, 2019 Due to the delay of the budget adoption, Item No. 2 was held over to the next scheduled Special Meeting on August 2, 2018. 3) Business License Tax Analysis and Ordinance Review It is recommended that the City Council take the following actions: 1) Authorize the City Attorney to draft an ordinance amending Chapter 14 entitled "License and Business Regulations" of the West Covina Municipal Code ("Business License Ordinance") that would adopt a new fee structure for business license taxes based upon Gross Receipts - Classification Based Tax Rates; and 2) Direct staff to prepare necessary documents to allow the City Council to call for an election for voters to consider the amendments to the Business License Ordinance. Councilman Spence expressed concerns regarding the four-vote requirement for adopting the Business License Tax and commented on the 24-hour notice requirement discussed by City Attorney Hall Barlow at the previous Regular City Council meeting on July 17, 2018. Since there were not enough votes to pass Item No. 3, the item failed to be approved and Mayor Johnson requested to proceed to Item No. 4. 4) Tax Measure for the November 2018 Ballot It is recommended that the City Council discuss whether to direct staff to prepare a tax measure to place on the November 2018 Ballot. 6 Thursday July 26, 2018 City Manager Freeland gave a brief overview on Item No. 4 and stated that a special tax would only require three votes from Council instead of four. City Attorney Hall Barlow indicated that the only kind of special tax that would require four votes would be a transaction and use tax. Mayor Pro Tern Wu expressed concerns regarding the change in how many votes are necessary to approve a special tax as opposed to a general tax. He also asked how much it would cost to place the proposed measure on the ballot for the upcoming election. City Manager Freeland indicated that it would cost $9,000 to place the proposed measure on the ballot and stated that the total cost of the election would amount to $200,000. He also asked Council to provide direction to staff indicating how to proceed in this matter. City Attorney Hall Barlow stated that the Council needed to specify the type of tax desired and indicated that it could be a sale and use tax, a utility tax, or a local property tax if the City did not exceed the statutory limit. Mayor Pro Tern Wu asked for clarification regarding the percentage of the proposed tax increase. City Manager Freeland indicated that staff could bring back options but that per County and State regulations, cities could not exceed a tax rate of 10.25% or more without state legislature approval. He also specified that since the City is currently at a 9.5% tax rate, an increase of a maximum of three quarters percent could be implemented so that it did not exceed the aforementioned threshold. Mayor Pro Tern Wu expressed concerns regarding the proposed tax increase. Councilmember Warshaw expressed approval regarding a general sales tax increase. A motion was made by Mayor Johnson and seconded by Councilmember Toma to move forward with item and prepare ballot measure materials for a Sales and Use special tax. Motion was carried by a vote of 3-2, with Councilman Spence and Mayor Pro Tern Wu in opposition. AYES: Toma, Warshaw, Johnson NOES: Spence, Wu ABSENT: None Councilman Spence stated that since the deadline for placing measures on the ballot occurred on August 10, 2018, he would prefer to draft the arguments for this item at a later date. City Manager Freeland asked Council for a specific date in which the next meeting would be held to discuss the budget as well as the proposed tax measure. He also stated that the 7 Rosalia A. Btlifle.r.,. MMC Assistant City Clerk Thursday July 26, 2018 next Special Meeting would occur at 7:00 p.m. on Thursday, August 2, 2018, while the Closed Session meeting would occur at 6:00 p.m. 5) Argument in Favor of Ballot Measures on Changing the Office of the City Treasurer and the Office of the City Clerk from Elected Positions to have them Appointed by the City Manager and Potential Rebuttal Arguments It is recommended that the City Council take the following actions: 1) Consider and discuss a proposed argument in favor of the Ballot Measure to change the position of the City Treasurer from an elected official to a position that would be appointed by the City Manager based upon professional qualifications; 2) Consider and discuss preparation and submission of a rebuttal to any primary argument against the Ballot Measure, to change the position of the City Treasurer from an elected official to a position that would be appointed by the City Manager based upon professional qualifications, which may be timely submitted; 3) Consider and discuss a proposed argument in favor of the Ballot Measure to change the position of the City Clerk from an elected official to a position that would be appointed by the City Manager based upon professional qualifications; and 4) Consider and discuss preparation and submission of a rebuttal to any primary argument against the Ballot Measure, to change the position of the City Clerk from an elected official to a position that would be appointed by the City Manager based upon professional qualifications, which may be timely submitted. Council agreed to hold Item No. 5 over to the next scheduled Special Meeting on August 2,2018. CITY COUNCIL COMMENTS Mayor Johnson asked for City staff to agendize a report regarding the reconsideration of the Last, Best, and Final Offer for the Fire Department. ADJOURNMENT Mayor Johnson adjourned the meeting at 9:05 p.m. 8