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HomeMy WebLinkAbout08/30/2001 BAKERSFIELD Alan Tandy, City M~ a~er Harold Hanson Staff: Darnell W. Haynes Mark Salvaggio AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Thursday, August 30, 2001,4:00 p.m. City Manager's Conference Room 1. ROLL CALL Call to Order at 4:05 p.m. Present: Councilmembers Mike Maggard, Chair; Harold Hanson; and Mark Salvaggio 2. ADOPT AUGUST 2, 2001 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS Milt Younger, Attorney at Law and Executive Committee Member of the Bakersfield Symphony Orchestra, spoke about additional funding for the Symphony and provided a letter requesting a City contribution of $100,000 to the Bakersfield Symphony Omhestra for the coming year and a line item in the budget for the arts. He suggested that the City route the contribution through the Arts Council of Kern so they can obtain matching funds. Committee Chair Maggard asked staff to check on the possibility of routing contributions differently in order to obtain matching funds. 4. DEFERRED BUSINESS A. Review and Committee recommendation on policy regarding requests for financial assistance Assistant City Manager John Stinson gave an overview of an August 22nd memo from the City Manager regarding requests for financial assistance from nonprofit groups for community activities. Due to the limited funds available, staff is looking for direction relative to the Council policy on these requests. Finance Director Gregory Klimko explained every year when the budget is prepared there are budget considerations on items that must be evaluated within the context of what the City can afford ADOPTED AS SIIBHITTED ON OCTOBER 4, 2001. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Thursday, August 30, 2001 Page -2- to do. He briefed the Committee on the General Fund and provided the following information regarding outstanding financial commitments and other budgetary considerations: · Negotiated Salary Settlements @ 5% per year for three years thru 2003. · Increased Public Safety Retirement costs for Police and Fire. Police commencing 2003-04, $3.0 million and Fire commencing 2008-09, $2.5 million · Maintain Police ration @ 1.3 sworn personnel per 1,000 population Annual cost per officer $77,000 Initial equipment per officer $48,000 · Additional Southwest Fire Station - July 2003 Facility construction $1,500,000 - $2,500,000 Annual recurring personnel/operating cost - approximately $1.7 million · Additional Northeast Fire Station - JUly 2005? · Annual Capital Improvement to City buildings, parks, etc. $2 - $3 million · County airport terminal - $500,000 annually thru 2004-05 · Police substations · Replace Police Mobile Data Terminals with Mobile Data Computers · Replace/Convert Citywide Microwave Telecommunications system from analog to digital by January 2005 estimated cost - $8 million · Street and road repair and maintenance backlog $80 million The slowing national economy has an affect on our general fund as the City's single largest revenue is from sales tax. With a slowing economy, there may be a need to be very selective when considering expenditures. Committee member Salvaggio stated he felt the Committee should make a recommendation to the Council regarding the City's policy for financial assistance to nonprofit groups. He read from an August 22, 2001 memo from the City Manager: "As you are aware, requests for financial assistan(~e from non-profit groups have been on a very rapid rise lately. Some examples include Kern County Museum, Bakersfield Museum of Art, Bakersfield Music Theatre, First Night, DBA, Bakersfield Symphony and Bakersfield College, among others. Not only is the number increasing, but also the amounts requested. All of these groups do good work- as do literally hundreds of other non-profits in town - all of whom need more money." "For many years, the Council had a policy of not funding the ongoing operation and maintenance costs of non-profit groups. There have been certain exceptions including the Symphony and periodic assistance to two groups that had a long-term relationship with the City by renting City facilities - the Museum of Art and Bakersfield Senior Center. Start up or one-time activities are also done such as First Night and Vision 2020. Those, however, are not ongoing operation and maintenance costs. We also have service contracts with SPCA, CVB and KEDC - those are really purchase of services and fall into a different category." "Until the Council clarifies its policy, we will continue to be besieged by additional requests - all good causes, all in need of money, but which cumulatively we cannot afford." AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Thursday, August 30, 2001 Page -3- "A few weeks ago, staff recommended a policy that would disallow assistance to non- profits for ongoing operation and maintenance purposes with the exception of those with who we have had an ongoing relationship - the Bakersfield Senior center, Bakersfield Museum of Art and the Symphony. The Council did not act on that recommendation due, in part, to the press of other business. Since that time, we have. received four other requests." "Staff now wants to add to the previous recommendation by adding sources and amounts as follows: Bakersfield Senior Center - $50,000 per year from the Housing and Community Development Grant (beginning with the FY 2002-03 budget) Bakersfield Museum of Art - $25,000 per year from the General Fund (beginning with the FY 2002-03 budget) Bakersfield Symphony - rent equivalent at the Convention Center (currently $46,000 per year) "In addition, staff would be instructed that when requests are received, we would write the requesting agency back indicating their request is outside of adopted Council policy. Pending requests for the *DBA, Symphony (additional funding) and First Night would be included in the decision." "If this does not meet Council's expectations or desires, staff requests a full Council policy discussion of alternatives. This is a serious matter which needs policy control that is consistently applied." *It was noted that the DBA request for assistance with the banners is already on the agenda to be considered under new business today. Committee member Salvaggio said he could be supportive of the following: 1) The Bakersfield Senior Center. The Committee needs to meet the new director and consider the financial stipulations requested by the Finance Director; 2) The Bakersfield Museum of Art, but felt we must hold the line to the $25,000 per year, as we have previously deeded the land to them valued at $295,000, recently gave $30,000 for the Sculpture Garden and $28,500 toward the Russell and Remington Exhibit; and 3) Rent equivalent at the Convention Center for the Bakersfield Symphony, currently $46,000 per year. Committee member Salvaggio stated he would like the Committee to make a recommendation to the full Council. He requested staff provide the Mayor and Council with a copy of the March 8, 2001 memo regarding requests for funds from non-profit groups. The memo contained the following: "The City annually receives a variety of requests for City funds from non-profit groups. Most are requesting use of Community Development Block Grant Funds but there are some which request General Funds as well. In order to fairly evaluate these requests the AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Thursday, August 30, 2001 Page -4- City Council has had a policy that these requests meet a certain criteria. The Council in the past has considered the following criteria when reviewing requests: · One-time expenditures rather than ongoing costs; · Capital expenditures rather than general operating expenditures; · One-time activities which are tied to specific high priority City Council goals; and · Use of City facilities by the non-profit group. The Council in the past has carefully considered how these requests are considered since there are limited funds available to meet such requests due to the financial demands of normal city operations and needs including police and fire protection, public works and other City services. The Council has also looked to non-profits making requests to provide matching funds so the City does not bear the entire costs of the proposed project or activity. The matching fund requirement is a demonstration of community support for the proposal." The Committee reviewed recent contributions which included: First Night Bakersfield, 2 years @ $15,000 = $30,000; Bakersfield Museum of Art for Russell Remington Exhibit $28,500; Centennial Celebration Foundation for Centennial Plaza $15,788 plus another $10,000; Bakersfield Senior Center, $25,000; Bakersfield Symphony annual rent, $46,000; Arts Council of Kern, $16,500; Bakersfield Museum of Art for Sculpture Garden $30,000 and deeded the land with approximate value of $295,000; Vision 2020, $25,000; Kern County Museum, $35,000 plus $300,000 CDBG funding over the next two years. Committee member Salvaggio stated he would like the Committee to support staff's recommendations. Mr. Younger spoke regarding the City's policy and that it seemed to him a "one-fits-all-policy" is unreasonable. The Committee should consider each request individually on its own merit. He presented a letter and asked the Committee to consider an additional $100,000 contribution to the Symphony. City Attorney Bart Thiltgen explained under the Brown Act because this request was not on the agenda, the Committee could not consider it today. However, the Committee could at the conclusion of this item go back to Public Statements and allow Mr. Younger to speak about his request. The Committee unanimously approved the above action. Committee member Hanson stated he supports staff's recommendations, but has concerns when looking back at recent contributions, such as the $50,000 to the Bakersfield Music Theatre and current requests, and he would like to add that anyone requesting funds should have complete financial information available to support their request. As the Council is responsible for Police, Fire, roads, road maintenance, and general operation of the City, we must have parameters. There is worthiness in every organization, but he felt organizations should not just come to the government for money, but should get their people together for fund-raising. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Thursday, August 30, 2001 Page -5- Committee Chair Maggard stated he is comfortable with staff's recommendation as it is worded. One word of concern he has is that over time the City may be queried as to why these three non- profits are the three that receive City assistance, and should there be sometime in the future when another non-profit should take the place of one of the three, but this discussion can wait for further consideration. In order to move this item forward, he would support the motion. Committee member Salvaggio stated that the Committee has reviewed requests on a case by case basis but if we do not have a policy, the line of requests will continue to get longer and longer. He clarified his motion that staff draft an administrative report and include the following: 1) using the March 8th memo and the June 13th administrative report, draft a Council policy regarding requests for funding from non-profits; 2) include staff's recommendations from the August 22nd memo including funding the Bakersfield Senior Center, $50,000 per year, the Bakersfield Museum of Art, $25,000 per year and the Bakersfield Symphony currently $46,000 per year, and 3) any contribution made to the Senior Center will be contingent upon approval of the financial documentation, further review and recommendation of the funding request by the Budget and Finance Committee and approval by the City Council.- The Committee unanimously approved the motion. Staff will prepare the administrative report and resolution establishing Council Policy for evaluating requests for financial assistance from non-profit groups Economic Development Director Donna Kunz spoke about the CDBG funding for the Bakersfield Senior Center and the stringent requirements of HUD. There will be an audit cost of approximately $7,500 for the Block Grant funds, a contract is required and there are monitoring requirements. The Committee recommended that any agreement with the Bakersfield Senior Center include the Finance Director's recommendations: · An audit of the Records at June 30, 2001 to obtain a clear picture of the Senior Center's financial standing. · Annual Audits if City financial assistance is to be ongoing. · Require compliance with all Federal and State laws, rules and regulations especially as they pertain to payroll records and the timely payment of employees and payroll taxes. · Require all accounting records to be kept in accordance with Generally Accepted Accounting Principles in order to have an ongoing understanding of the Senior Center's financial condition. B. Review and Committee recommendation regarding Bakersfield Senio. r Center request for financial assistance After the agenda was prepared, the City received a call from the Bakersfield Senior Center to request this item be deferred as they were not ready to present their financial information to the Committee. The Committee voted unanimously to defer this item. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Thursday, August 30, 2001 Page -6- 5. NEW BUSINESS A. Review and Committee recommendation regarding property located at 720 Lakeview Avenue Community Development Coordinator George Gonzales reported the City has received two proposals to buy City property located at 720 Lakeview Avenue. · One proposal for $14,000 was from Marty Reyna, owner of Nutri Kids, 800 Lakeview Avenue who also owns adjacent property, which he has rehabbed. He is offering market value for "as is condition" and has given the City an estimate of the cost for rehabilitating the property. He has shown evidence that he does have the money for the rehabilitation. It was noted that the other proposal was from one of his tenants. · The other proposal (verbal) for $5,000 was from the Groomed for Greatness, Inc. This non- profit agency currently operates its programs for career training and job readiness at 800 Lakeview Avenue.' They stated that their plan would be to tear it down and rebuild at a cost of $70,000. They have shown evidence they have the money, $5,000, to acquire the property and they have a contribution for $70,000. Staff had concerns that $70,000 may not be sufficient to rebuild. Staff recommended the proposal from Mr. Reyna be accepted as Mr. Reyna is a for-profit business and if the property is sold to him, it will be returned to the tax rolls. Mr. Reyna spoke regarding his proposal and his commitment to the area shown by the purchase and improvement of surrounding properties, which benefit the area. Evelyn Nelson, Executive Director and Founder of Groomed for Greatness, Inc., spoke regarding their proposal. They have a welfare to work program and work with Employers Training Resource and the Department of Human Resources to assist people in transition from welfare rolls to employment. They are looking for larger space to be able to do workshops. The Committee discussed the fact that the $14,000 offer is much higher and Mr. Reyna has a good track record and has demonstrated his commitment with the purchase and improvement of surrounding properties and the operation of Nutri Kids at 800 Lakeview Avenue. In addition, Mr. Reyna is a for-profit business and when the property is sold to him, it will be returned to the property tax rolls. Committee member Hanson made a motion that the Committee support staff's recommendation to accept the offer of $14,000 from Mr. Reyna to purchase the surplus property located at 720 Lakeview Avenue. The Committee unanimously agreed and directed staff to forward the administrative report to the City Council. Committee Chair Maggard would like staff to nominate Mr. Reyna and his family for a Beautiful Bakersfield Award. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Thursday, August 30, 2001 Page -7- B. Review and Committee recommendation regarding the Downtown BuSiness and Property Owners Association and banner responsibilities Economic Development Director Donna Kunz stated the City has received a letter from the Downtown Business and Property Owners Association (DBPOA) requesting the City take back the responsibility of hanging the banners on Chester Avenue in the downtown. There was an agreement for several years and the DBPOA has been hanging the banners. The agreement expired in 1999 and the DBPOA although under no obligation has continued to hang the banners at their own expense. The DBPOA had contracted the work out and are in arrears for $1,760. They are requesting the City pay the $1,760 in order to get the banners back. The City originally purchased the banners and the cost to replace the banners would exceed $20,000. There are four seasons of banners. Staff recommended the City pay the $1,760 as the agreement had expired and the DBPOA did not have an obligation to continue at their own expense. It was discussed that this type of project falls under the Council goal of beautification and landscaping. Also staff is recommending because Public Works hangs the banners at the Convention Center and the Amtrak Station, they take over hanging the banners on Chester Avenue as well. City Attorney Bart Thiltgen explained under the original agreement with the first hanging of the banners, they would be the property of the DBPOA. If the City pays the $1,760, the banners will be returned to the City. Committee member Salvaggio directed staff to include the City Attorney's comments in the administrative report and the information that the DBPOA has continued to hang the banners when not obligated to do it. This does satisfying the criteria of a one-time expenditure tied to Council goals in the downtown. Committee Chair Maggard asked what the response is to other organizations that want to hang banners. Donna Kunz responded, the City has a program for a fee that allows organizations to hang banners in the City at their own expense. Committee member Hanson made a motion to approve staff's recommendations and buy back the banners from the DBPOA for $1,760. The Committee unanimously approved the motion. Staff will include the language requested by Committee member Salvaggio in the administrative report and forward to the City Council. C. Review and Committee recommendation regarding request for additional funding for Police overtime Committee Chair'Maggard stated he spoke with Police Chief Matlock and would like to defer this item. The Committee unanimously agreed. 6. COMMITTEE COMMENTS Committee Chair Maggard said in his Friday packet he had received a notice from Time Warner · regarding an increase in rates for RoadRunner service and he wanted to know if this is in alignment with our agreement. City Attorney Bart Thiltgen will look into the matter and report back. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE Thursday, August 30, 2001 Page -8- 7. ADJOURNMENT The meeting adjourned at 5:50 p.m. Staff present: City Attorney Bart Thiltgen; Assistant City Manager John W. Stinson; Assistant City Manager Alan Christensen; Police Chief Eric Matlock; Finance Director Gregory Klimko; Assistant to the City Manager Darnell Haynes; Economic Development Director Donna Kunz; Recreation and Parks Director Stan Ford; Community Development Coordinator George Gonzales; and Real Property Manager Don Anderson Others present: Marti Reyna, Nutri-Kids; James Burger, reporter, The Bakersfield 'Californian; Mike Russo, Downtown Business Association; Attorney Milt Younger, Chain Younger/Bakersfield Symphony; and Evelyn Nelson, Groomed for Greatness, Inc. cc: Honorable Mayor and City Council DWH:jp S:\Damell~.001 BFComrnittee~bf01 aug3Osummary.wpd