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HomeMy WebLinkAbout07/18/2002 B A K E R S F I E L D ~7/~/~ Mike Maggard, Chair Alan Tandy, City Marr,~er Harold Hanson Staff: Darnell W. Haynes Mark Salvaggio AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING Thursday, July 18, 2002, 4:00 p.m. City Manager's Conference Room, Suite 201 Second Floor, City Hall, 1501 Truxtun Avenue, Bakersfield, CA 1. ROLL CALL Called to Order at 4:08 p.m. Present: Councilmembers Mike Maggard, Chair; Harold Hanson and Mark Salvaggio 2. ADOPT JUNE 20, 2002 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS' 4. DEFERRED BUSINESS A. Discussion and Committee recommendation regarding request from Kern County for the City of Bakersfield to provide sewer services to the Rexland Acres neighborhood City Manager Alan Tandy provided an update. The City had requested $300,000 in financial assistance from the County to help with the rehabilitation of Jefferson pool,' which is surrounded on three sides by County residents. The County's CDBG funding for that district was committed to sewer related costs for Rexland Acres. The County indicated if the City would allow Rexland Acres sewage to flow to the City plant, that would free up the money from the Rexland Acres sewer project and they would be able to assist with $300,000 for Jefferson pool rehabilitation. It is cheaper to flow the sewers to the City plant. However the City's annexation ordinance does not allow sewer hookups without annexation, so it would require an intergovernmental agreement between the City and County. ADOPTED AS SUBI~EI~TTED ON SEPTENBER 12, 2002 AGENDA SUMMARY RE-'pi~T Budget and Finance Committee Meeting Thursday, July 18, 2002 Page - 2 - David Price, Kern County Resource Management Director, stated the County had applied for a USDA grant for the Rexland Acres sewer project. However, they were not successful in this funding cycle. There is another funding cycle coming up and it will be March 2003 before they know if they will get the grant. The USDA Grant will fund up to $2 million. The County does not have a financial plan to proceed with the sewer project without the USDA grant or other similar funding. It would make the grant application look more favorable if the possible City hookup were included. It was discussed, as the grant is not yet funded, if the County and City were to agree in concept, it could be sent to the City Council and the Board of Supervisors with the contingency that if the USDA Grant or other grant funding does not come through, we will have agreed only in principle. If the County is not able to secure the USDA Grant for the Rexland Acres sewer project, City staff recommended an expiration date of June 30, 2004 for the sewer connection to the City system, so the City will not be reserving plant capacity for something that may never come to fruition. City staff felt if the County is not able to get any grants for the Rexland Acres sewer project and it does not go forward, that would still free up the CDBG funds for that Supervisorial District to be used for the Jefferson pool rehabilitation. As HUD precludes funding Community Development Block Grant projects after they are under way, the City would need a commitment on the $300,000 for Jefferson pool rehabilitation in advance. Without the $300,000 from the County to help with Jefferson pool rehabilitation, the City will have to come up with the money from another source or reduce the scope of the project. Committee Member Hanson made a motion to forward a recommendation to the Council for the City to agree in concept with the County that the City will allow Rexland Acres to hook up to the City's sewer system and the County will commit $300,000 to the Jefferson Park pool rehabilitation with the following terms: (1) six months (January 2003) for the County's commitment to the Jefferson pool project and (2) the Rexland Acres sewer project must begin before or not later than June 30, 2004 or the agreement will expire. The Committee unanimously approved the motion. 5. NEW BUSINESS A. Discussion and Committee recommendation regarding Kern Economic Development Corporation (Kern EDC) request City Manager Alan Tandy explained that earlier in the year, Kern EDC (KEDC) requested $150,000 from the City. The City's historic contribution has been about $60,000 plus the incentive program of up to $40,000. Bakersfield was one of the founding members and a leader in the formation of KEDC. For many years we were the largest financial contributor. A few years ago KEDC started receiving a substantial amount of Welfare to Work monies from the federal program. The funding to KEDC from the Welfare to Work program has been discontinued. AGENDA SUMMARY REI~T Budget and Finance Committee Meeting Thursday, July 18, 2002 Page - 3- The Committee reviewed the incentive payments to KEDC from 1998-99 to present, which were paid for job creation. The significant statistic was that in 2001-02 there was no incentive money earned for job creation. The City Manager summarized Mayor Hall's July 15, 2002 memo to the Budget and Finance Committee. (Due to the Brown Act, the Mayor cannot participate at the Committee level.). Essentially, the Mayor recommended the City grant $60,000 (actually the budgeted amount is $50,000) and treat it as a one-time circumstance to set up goals for performance expectations with the understanding that next year, if it is another year with no job-creation, there would be no further automatic renewals of the agreement. The Committee reviewed data on economic development achieved in the smaller cities, which contribute much less than Bakersfield. The City Manager expressed Bakersfield should expect a commensurate number of locates with our financial contribution. Bakersfield has 35 percent of the County~ population and deserves more emphasis and a substantial number of job creations in our community. The City contracts with KEDC essentially for a job creating entity for Bakersfield and it should be incentive based on job creation. It was discussed it is necessary to participate in KEDC at some level because of California Trade and Commerce referrals. They will only provide relocation leads to a regional EDC. Patrick Collins, President and CEO of Kern EDC, spoke regarding site selection. It is KEDC's requirement and role to be a single point contact and basically to find the requirements of the company and possible locations. They start with a list of cities for the region and then get all the opportunities on the table. However, KEDC does not have any control over where prospective businesses decide to locate. He stated he is not opposed to an incentive based performance contract, but does not want to become a broker. Committee Member Maggard stated the reality is if companies look at the whole region and KEDC cannot influence the location, there is nothing there that should make us pay more that anyone else pays. It is a level playing field if it is not affected by our geographic area or our population. It seems if $10,000 is the going fare, Bakersfield should pay $10,000. An incentive program, which would create jobs, is a good concept. If we do not spend the dollars at KEDC, then should we spend the money through ED/CD attending tradeshows to try for results? Economic Development Director Kunz explained ED/CD focuses on redevelopment projects and development support packages. Staff does not attend tradeshows and our materials are outdated. She spoke about KEDC and explained most economic efforts are regional. However, other regions offer different tiers of services and you pay accordingly for the tier of service you want. She recommended a flat rate and the City should have the option of choosing the services. This would allow KEDC to know exactly what level of service is expected. Most developers use the Internet and all the Cities are listed with what they have to offer and the type of industries that are coming there. With the tier system, all cities are equally represented and not working against each other. AGENDA SUMMARY REPii~T Budget and Finance Committee Meeting Thursday, July 18, 2002 Page - 4 - Committee Member Hanson stated he is somewhat sympathetic as he has served on the KEDC board. He likes the idea of incentives. He was not comfortable with reducing the City's contribution to KEDC to $10,000 and thought the City should go with $50,000 for this year and have the City Manager look at some incentive program over the next 12 months to use next year. With an incentive program in place if there is no job creation, we could reduce the City's contribution to $10,000 or $20,000 for next year. Committee Chair Maggard requested the City Manager to come back at the next meeting with funding options other than a reduction from $60,000 plus the incentive to a City contribution of $10,000 for this year. 6. COMMITTEE COMMENTS ' 7. ADJOURNMENT The meeting adjourned at 5:21 p.m. Staff present: City Manager Alan Tandy, City Attorney Bart Thiltgen; Assistant City Manager John Stinson; Assistant to the City Manager Darnell Haynes; Public Works Director Raul Rojas; Economic Development Director Donna Kunz; Development Services Director Jack Hardisty; and Derrill Whitten, Wastewater Treatment Plant. Others present: County Administrative Officer Scott Jones; Kern County Resource Management Director David Price; Fifth Supervisorial District Representative Dave Strong, Kern County; Kern County Engineering Services Director Charles Lackey; Patrick Collins, President and CEO, Kern EDC; Peter J. Rudy, Kuzz Radio; and James Burger, reporter, The Bakersfield Californian. D-bf02jull 8summary